Economists Debate Charges For CO₂

A panel of 18 economists, convened by the Government Accountability Office, all agreed that Congress should consider legislation that puts a price on greenhouse gas emissions using some form of market-based mechanism to reduce the impact of climate change. Unity disappeared, however, when the economists expressed their views on what that mechanism should be. Eight panelists preferred a cap-and-trade system with the government having authority to use a "safety valve" to reduce the price penalty for CO₂ emissions, seven preferred a straight tax on emissions, and three recommended a cap-and-trade system without a safety valve. Seven panelists recommended a price per ton of emissions between $1 and $10, seven urged a tonnage price of up to $20, and three recommended prices above $20 per ton. Fourteen were at least moderately certain the benefits would exceed costs, and 16 of the economists recommended that the U.S. reduce emissions regardless of other countries' actions. The GAO report (GAO-08-605) comes out as the Senate failed on June 6, by 48 to 32 votes, to achieve the necessary 60 votes to even begin a floor debate on a climate-change bill. The failure effectively punts global warming legislation to the next president and Congress.