“QED and out”.

I was at a party once and someone defiantly asked me “name one businessman who resembles a positive character in Atlas Shrugged.” I promptly replied, “Ed Land of Polaroid.” If I were asked again today, I would add Steve Jobs. I can't think of anyone else. I doubt Miss Rand would disagree. But her extraordinarily peculiar and still largely misunderstood book is also filled with repulsive businessmen who engage in unfair competition, monopolistic practices, lobbying for special favors, manufacture of tortious products and services that kill people, etc. etc. etc. When innovation leaves, the world they've built destroys itself. Interestingly, no one identifies themselves or others with all of those characters. Fans and critics alike misread her if they think they know who she supported or opposed, or would support or oppose. As for what happens when the creative dynamo upon whom everything depends walks away and then returns, historians of Apple, Inc. know the answer to that, as do its shareholders.

One difficulty with Pigovian tax is calculating what level of tax will counterbalance the negative externality. Political factors such as lobbying of government by polluters may also tend to reduce the level of the tax levied, which will tend to reduce the mitigating effect of the tax.

How can your suggestion that we review remedial economics not be considered an “own goal” on your part given the above quote?

Dazzle me.

One difficulty with Pigovian tax is calculating what level of tax will counterbalance the negative externality. Political factors such as lobbying of government by polluters may also tend to reduce the level of the tax levied, which will tend to reduce the mitigating effect of the tax.

How can your suggestion that we review remedial economics not be considered an “own goal” on your part given the above quote?

Dazzle me.

Better google “Pigovian tax” before getting into a debate like this again. It's hard to talk sense about something when you misunderstand it this completely.

Once more, for whatever it's worth:

Science tells us that emission level x is advised. Cap and trade starts with a cap higher than x but lower than current levels, call it x+y. The goal is to gradually make y equal to zero. As we do this we are receiving accurate feedback on the costs of the emission reductions through that miracle of markets, price discovery. This is information that we can use to adjust the rate of y's diminution or to re-evaluate the advisability of achieving x (in other words, CBA with an accurate understanding of the C part). Meanwhile, we have guaranteed that emissions actually are x+y, no more, no less.

Under a tax, we guess at a price that we think will achieve x+y emissions. Next year, when actual emissions turn out to be x+q, we guess again. If the relationship between prices and different values of y is non-linear, these guesses will be very hard to get right. Eventually, however, we get close to x+y, but our energies have been focused on figuring out a price, not on what an accurate understanding of the costs involved imply for our future course of action.

Meanwhile, I'm certain that our principled libertarian friends will restrain themselves from “taking advantage of a good crisis” and not claim that government sucks at setting prices and that this proves that reducing emissions is a misguided idea. Hahahaha!

Take your pick.

My skin's fine, thanks. Here on the toobz, snark is the coin of the realm.

P.S. Grow a skin.

Who said anything about arbitrarily? Throwing a dart at a bunch of numbers on the wall would certainly be a very stupid way to set emission targets. Of course better metrics, both economic and climatological, would be ideal, but letting the perfect be the enemy of the good is, in my opinion, unhelpful.

But if it helps you make your decision to think of cap and trade advocates as drooling idiots who have never heard of cost-benefit analysis, more power to you.

I'd be more hopeful if your argument didn't essentially consist of “I've never heard of that so it must not exist”. To the extent that my lack of persuasiveness may stem from just being a messenger, I recommend that you read the economists Nicholas Georgescu-Roegen, Kenneth Boulding, and especially Herman Daly. The ethicist/theologian John Cobb is good read on the moral issues too.

If you read some of their stuff, come away unconvinced and explain why, then I'd be happy. Dialogue, given its relative scarcity, is probably more valuable than agreement anyway.

As for the Cato crack–just calling it how I see it; maybe you can change my mind.