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I am confused….a carbon tax is five times more efficient than cap and trade?

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The US Congressional Budget Office has just released a report that argues that a cap and trade system is much less efficient than a tax. Download the report here (02-12-carbon.pdf) and see coverage by the Wall Street journal (Here).

At first glance it seems we have an apples and oranges issues where the reductions are not similar for the two scenarios. Or the design elements diverge significantly. So, one would expect lower costs if one is comparing lower targets or a less flexible policy. But these folks at the CBO are not dumb, and they consulted some big brains on this (Billy Pizer of RFF and Weitzman from Harvard) so the report needs a closer look. More to come…

Written by Dave Sawyer

February 14th, 2008 at 11:06 pm

One Response to 'I am confused….a carbon tax is five times more efficient than cap and trade?'

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  1. .

    good info!!…

    billy

    29 Jul 14 at 10:02 am

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