Waterloo: The death of cap and tax

In other words, the green lobby has suffered a landmark defeat, and the recriminations in the liberal press are remarkable. Either Mr. Obama didn’t sell it well enough, perfidious Big Business intervened (never mind that many CEOs were supporters), the obtuse middle class won’t sacrifice for the global good, or evil Republicans . . . Everyone is to blame but the policy itself.

In fact, the bill went down for lack of Democratic votes, in particular those from Midwest coal and manufacturing states. Voters in those states have figured out that cap and tax is a redistributionist exercise from the carbon-dependent heartland to the richer coasts. A Democrat—Jay Rockefeller of West Virginia—is also leading the charge to repeal the EPA’s climate “endangerment” regulation that imposes cap and trade though the backdoor…

Whatever one thinks of the science of climate change, cap and tax is the wrong policy response. At enormous economic cost, it would do little to reduce global carbon emissions. To the extent that it reduces growth, it would make the world less able to cope with the consequences if temperatures do rise. The richer the world, the more resources the world will have to adapt and ameliorate bad effects.