The Genius Of James Hansen's Carbon Fee

More

A reader explains:

One of the key differences between Krugman and Hansen is where the price on carbon is attached. Often when talking about cap-and-trade, the pricing of carbon is attached somewhere in the middle of the stream, not at the extraction of fossil fuels and not at the emission point. Because the price is attached in the middle, the policy gets wrangled between interest groups.

What Hansen is talking about is upstream pricing, or at the point of harvesting fossil fuels. Pricing carbon this way greatly reduces the amount of interest groups involved in making the policy to coal, oil, and gas companies.

As both point out, the companies will pass on the price downstream ultimately to consumers, but think about the policy-making ramifications. Do you write a policy that basically involves every interest group on the planet (current cap-and-trade proposals) or do you write a policy that targets the fossil fuel industry, which is already pretty easy to pick on given, among other things, their ridiculous record profits. Cap and trade can also be made to work upstream, just as a carbon tax can be made for downstream. What Hansen and Krugman argue about is not only how to price carbon, but where, and the "where" has serious policy ramifications.

[This post's headline originally had Robert Hansen, the spy, not James Hansen, the scientist. Brain fart. Apologies.]

Jump to comments

2006-2011 archives for The Daily Dish, featuring Andrew Sullivan

Get Today's Top Stories in Your Inbox (preview)

'Stop Telling Women to Smile'

An artist's campaign to end sexual harassment on the streets of NYC.


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Where Time Comes From

The clocks that coordinate your cellphone, GPS, and more

Video

Computer Vision Syndrome and You

Save your eyes. Take breaks.

Video

What Happens in 60 Seconds

Quantifying human activity around the world

Writers

Up
Down