Standing Alone on Emission Reductions

We admit were puzzled by Martin Feldstein’s op-ed on cap-and-trade in the Washington Post. Feldstein is a professor of economics at Harvard University, so he knows how to count up the beans, but his piece took a peculiar slice at cap-and-trade right up top:

Scientists agree that CO2 emissions around the world could lead to rising temperatures with serious long-term environmental consequences. But that is not a reason to enact a U.S. cap-and-trade system until there is a global agreement on CO2 reduction. The proposed legislation would have a trivially small effect on global warming while imposing substantial costs on all American households.

So, in other words, an American effort would cut emissions “trivially small” – if no other country participated. From this premise, Feldstein spins the rest of his argument:

Americans should ask themselves whether this annual tax of $1,600-plus per family is justified by the very small resulting decline in global CO2. Since the U.S. share of global CO2 production is now less than 25 percent (and is projected to decline as China and other developing nations grow), a 15 percent fall in U.S. CO2 output would lower global CO2 output by less than 4 percent.

Which we’ll assume is absolutely correct – if no other country participates. It’s fine, of course, for Feldstein to assume this as a basic premise, but it’s odd to assume as the sole scenario from which to draw conclusions. We know from looking at Congressional Budget Office and other projections that economists typically look at multiple scenarios – in this case, perhaps, the effect of cap-and-trade if China and India do participate, if they don’t but every other country does, etc. We’d really like to know what Feldstein would think then. The cost to the consumer remains the same, but presumably the social good would reach a point where Feldstein assigns it a higher worth. But where? 10% global reduction? 15%? Inquiring minds want to know.

So we’ll pass over this one lightly, since we may well be missing something. But if the Post asked Feldstein to write this, we expect the paper anticipated a more nuanced response then this.

Read the whole thing and see what you think.