"Cap and Trade vs. a Carbon Tax
|by Robert Frank|
|Category: Energy and Environment , Energy and Environment , Microeconomics and policy analysis|
Auctioning pollution rights makes sense because it concentrates the burden of pollution reduction in the hands of those who can accomplish it at the lowest cost. It minimizes the total cost of achieving any given air quality target—an outcome that is clearly in the interest of all citizens, rich and poor alike. The more people learn about the auction method, the less likely they are to oppose it. For instance, although environmental groups once bitterly opposed pollution permit auctions, they now endorse them enthusiastically.