DeLong Smackdown Watch: Beveridge Curve Edition
links for 2010-07-27

Richard Schmalensee and Rob Stavins Are Horrified by the Republican Party

They provide yet another set of reasons why it would be good for all of us if we were to dry it up and let it blow away right now:

Beware of Scorched-Earth Strategies in Climate Debates: [C]onservative Republicans... should resist demonizing market-based approaches to environmental protection and reverting to pre-1980s thinking that saddled business and consumers with needless costs.... [M]arket-based policies should be embraced, not condemned by Republicans.... Ronald Reagan’s Environmental Protection Agency successfully put in place a cap-and-trade system to phase out leaded gasoline... at a savings of some $250 million per year.... George H. W. Bush... a cap-and-trade system to cut by half sulfur dioxide emissions... has cut sulfur dioxide emissions by 50 percent, and has saved electricity companies... some $1 billion per year compared with a conventional, non-market approach.... If some conservatives oppose energy or climate policies because of disagreement about the threat of climate change or the costs of those policies, so be it. But in the process of debating risks and costs, there should be no tarnishing of market-based policy instruments....

Conventional approaches advanced as “painless alternatives’’ — a plethora of standards, special-interest technology subsidies, and tax breaks — won’t do the job, and will be unnecessarily expensive.... A price on carbon is the least costly way to provide meaningful incentives for technology innovation and diffusion, reduce emissions from fossil fuels, and drive energy efficiency.... Demonizing cap-and-trade in the short term will turn out to be a mistake with serious long-term consequences...