Amid all the current fervor about finding a solution to global warming, an interesting report quietly came out last month that doesn't follow the current political fashion.

 

Implementing a cap-and-trade system on carbon dioxide emissions currently is the popular option. It's been the preferred option for many of the presidential candidates, at least on the Democratic side, in the upcoming election. The only legislation being considered in the Senate is the Warner-Lieberman bill, which is a cap-and-trade proposal.

 

But a report issued by the Congressional Budget Office lays out the case that a carbon tax actually would be a more efficient method, and better for both the environment and for business. A carbon tax would tie the costs of emission reductions more closely with the benefits, encouraging reductions when costs are low and allowing more emissions when costs are high. In contrast, a cap-and-trade system could easily skew the cost-benefit relationship depending on whether the cap is too tight or too loose.

 

The report concluded that the net benefits to the environment with a carbon tax would be five times that of a cap system. Businesses would benefit from knowing these costs would be constant and not fluctuating.

 

The Congressional Budget Office's mandate is to make impartial analysis and not recommendations, but nevertheless the report makes a strong case for a carbon tax. Will politicians and other experts continue to be open-minded enough to take a look?

 

Carbon emissions trading would certainly benefit the environment. But it does smack a lot of a "get out of jail free" card. We pay for our sins rather than pledging to stop sinning so much in the future.

 

But getting away from the cap-and-trade concept wouldn't be easy. A lot of powerful elected officials have bought into it, and lots of infrastructure's being created. Maybe it's hard to move from one concept to another based on fairly intricate economic models.

 

But an idea that would be better for the environment and more manageable for business deserves a much closer look.

 

Allan Gerlat is editor of Waste News. Past installments of this column are collected in the Inbox archive.

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