Phil Levy jumps into the Cap And Trade vs. Carbon Tax slugfest:
The big critique of a carbon tax is that it cannot guarantee a country will come in under a pre-set emissions cap. If the desire to pollute is really, really high one year, we could find that a given tax won't serve as a sufficient deterrent, and we'll blow past our limits.
Europe, though, has had the opposite problem with their cap-and-trade system. In the first phase of the program, they printed more permits to pollute than anyone wanted. That drove the price of permits near zero, deeply annoying anyone who had paid up for the right to pollute. It also meant that the system was ineffective in restraining pollution. That would be hard to do with a carbon tax.
Also, Republicans introduced a carbon tax bill Wednesday:
[Reps. Bob Inglis of South Carolina and Jeff Flake of Arizona] call their measure "tax neutral" because it would reduce payroll taxes by however much revenue the carbon tax raises, with employers and employees splitting the payroll tax cut equally.