Meaner, Greener EPA

Once again, by not following economic principles, the government has made us worse off. The EPA announced on Monday that carbon was a gas that was dangerous to people’s health. This opened the door to them being able to mandate carbon emissions through taxes, regulations, and command-and-control practices.

Basically what happened is this: cap-and-trade legislation is stalled in the Senate and might not pass at all. Instead of accepting defeat or re-working his proposal in a more pragmatic manner, President Obama has found a way to bypass congress and try to accomplish his climate change vision anyway. Only this is much worse than a cap-and-trade bill.

As I've argued before, cap-and-trade, at its heart, is economically sound. The reason behind cap-and-trade has nothing to do with climate change and it’s unfortunate that this administration has hijacked it for that purpose. The current legislation proposing cap-and-trade strays from the economics behind the idea, but it’s definitely better than the alternative – an expanded and more powerful government agency.

If politicians and the American people could see cap-and-trade for what it was, and implement it in the proper way – not some perverse way that’s distorted by partisan politics (i.e. handing out carbon permits to political allies) – then this EPA threat would go away.

It’s unfortunate that Obama would resort to such barbarian tactics such as threats, circumventing the political process and advancing a political agenda against the wishes of the country. So I regret that we’ve been painted into this corner of “pass cap-and-trade or else”, but in light of the circumstances, the best bet would be to pass the cap-and-trade legislation.

As I've argued before, cap-and-trade is a good thing – from an economic standpoint; only bad things have resulted once it got dragged into a political fight. So hear this. If you were against cap-and-trade because you thought it would be a business killer, the expanded EPA will be much worse.

Cap-and-trade creates property rights and curtails pollution at the least possible cost with no taxes and very little government involvement. The Meaner Greener EPA will use taxes, regulations, command-and-control and massive oversight to accomplish its goal, which won’t be at lowest cost and will still result in less pollution reduction than cap-and-trade.

Cap-and-trade is an economists’ solution to pollution. The EPA is a politicians’ solution to pollution. I have previously written why economists are ignored by politicians. Let’s not now shun cap-and-trade only to be hit by the much worse and more damaging EPA.