Shout it from the Streets

This is Fred Krupp president of the Environmental Defense Fund interviewed in Wired who after noting the success of markets in acid rain avoidance says this about approaches to carbon avoidance and global warming:

…I know that capitalism works, that American entrepreneurialism works,
and we can damn well expect that private capital – not government money
– will actually solve this problem.


I hope so too - but let's not forget the critical issue that SO2 is much much easier to "scrub" out than CO2. That is what drove the acid rain market success more than anything else.

I'm all for markets too, but chemistry unfortunately has a hand in this too.

Krupp is certainly at the forefront of the environmental movement in terms of economic literacy and business acumen. As the director of environmental defense he was the broker of the environmental portion of the TXU buyout and he consistently trumpets cap and trade as the viable solution to the problem of carbon emissions.

That being said he doesn't seem to believe that a tax would work in the same way, if not better as most economists believe. He argues that utilities want a system that give them the possibility to earn money off their permits, and that they would never accept a carbon tax. Perhaps this is just a function of what he would believe is politically possible but perhaps he doesn't quite understand the efficiency argument for a Pigouvian tax...

"Without regulation, markets would not have delivered unleaded gasoline, catalytic converters on the exhausts of cars or seatbelts and airbags, nor clean air to London after the killer smogs of the 1950s."

While I'm heartened to see enviros and libertarians finally coming together on this issue, I wish they would both take a look at perhaps the most popular, most uncontroversial, and largest public works projects in American history: the interstate highway system. I think you'd find that it's a huge determinant of land use and consequently environmental degradation.

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