Arnold Kling  

Cap and Rent-Seek

We'll Take Tim Harford... Paging Randle McMurphy...

The Washington Post reports,

Under pressure from agriculture industry lobbyists and lawmakers from agricultural states, the Environmental Protection Agency wants to drop requirements that factory farms report their emissions of toxic gases, despite findings by the agency's scientists that the gases pose a health threat.

Remember this story when people propose "cap-and-trade" programs to control pollution. Most of the "trade" under cap-and-trade will be political horse-trading, not market trading.

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Eric Hanneken writes:

This is why I'm also skeptical of carbon taxes, even if we assume we know what global warming will cost, and we agree on a discount rate. Yes, a flat carbon tax would correct a negative externality with minimal inefficiency, but politics will ensure that we'll get something resembling the income tax instead. It might be better to do nothing.

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