Re: theWatt Podcast 75 - Cap and Trade

The discussion erroneously stated that cap and trade rewards the past's big polluters. This is only true if the credits are allocated based on previous emissions. If the cap and trade program auctions the allocations, whoever pays gets them - and it really punishes those who have no invested in efficiency previously because they suddenly have to make a lot of investments or buy up allocations.

That said, a cap and trade program has vastly great transactions costs - the government has to police the credits. This costs money. A carbon tax is cheaper to impose and may be more efficient. But Americans hate taxes - we would rather pay more in an inefficient program than do something involving a new tax.