Great article in the WSJ about markets in carbon trading and Richard Sandor’s Chicago Climate Exchange. Cap and trade vs. carbon tax is a fascinating debate. Great arguments for either approach exist. From the article:
Some economists argue for taxing polluters instead [of cap and trade], including Nobel prize-winning economist Joseph Stiglitz, and former chairman of President Bush’s Council of Economic Advisers, Gregory Mankiw. A carbon tax, they say, would be more transparent and less vulnerable to lobbying by industries trying to win higher caps for themselves.
