On Cap & Trade ( Waxman Markey) And Real World Compromises

Michael Tobis lamenting:

This is what is ironically called a "real world" compromise, in which we understand perfectly what techniques would be needed to make a world of vastly greater human dignity, beauty, mutual support and happiness (though, perhaps, a wee bit less ludicrously funny), but the "real world" of politics interferes to make a thorough bureaucratic muddle of it all.

Then quoting the N.Y. Times:

Cap and trade, ... is almost perfectly designed for the buying and selling of political support through the granting of valuable emissions permits to favor specific industries and even specific Congressional districts. That is precisely what is taking place now in the House Energy and Commerce Committee, which has used such concessions to patch together a Democratic majority to pass a far-reaching bill to regulate carbon emissions through a cap-and-trade plan.

And concluding:

The upshot is a lot of short term gain spread around to specific people, and a balancing amount of unnecessary extra long term pain spread around to nobody in particular. This is the activation energy of politics.

But then seeing the "why" of it all:

The dominant factor in the present circumstances is the upcoming Copenhagen negotiation. It makes a great deal of difference to all the other countries whether the US shows up having made real substantive cuts, by which the participants will mean, exactly, large symbolic actions that might eventually lead to real substantive cuts.

How much better off will this leave grand gesture us than did the grand gestures of the past, most notably Kyoto?

Oddly, much better, since Damocles' sword has slipped much lower, and since America would not find itself explicitly rejecting international cooperation. Maybe some of these theoretical cuts will eventually exit the "real world" of politics and enter the other (unreal?) world where the actual radiative properties of the atmosphere are changing at an unusually high and climbing rate.

Well, but that isn't the only reason for C&T over a Carbon Tax. For example, as Krugman notes, the former has already been tried once (at least) and been successful: in the case of sulfur dioxide (SO2), which contributes to acid rain. The 2nd reason is more philosophical (although, I suppose, broadly political as well). It is that C&T systems are (and have been sold politically as) more capitalistic than a carbon tax. We live and die by markets: C&T creates a market, and fuses that market to the existing ones. Thus all the virtues of capitalism are unleashed upon our particular social problem (AGW). So, although the effects of C&T vs. a tax are identical, the path to those effects are by a route more congenial to The West's reigning ideology.