Espousing such “cost-free” rhetoric is the essence of the global warming scam. Perhaps man-made global warming requires drastic action. Nevertheless, these actions will not come without economic consequences and attempting to sell the regulations as if they “create more economic opportunities” than costs is disingenuous.

Energy use and economic growth go hand-in-hand. Carbon-based energy still supplies the vast majority of our current energy needs. Restricting our energy options by meaningfully capping the amount of carbon the U.S. emits will raise the country’s energy costs, at least in the short-run. As the recent rise of oil to over $80 a barrel attested, higher energy costs impose a net cost on our economy, and can be particularly painful for poorer families that are already having a difficult time making ends meet.

The Carbon emission regime could also backfire. Even if the U.S. implemented a carbon cap, worldwide carbon emissions may not be reduced; instead, the likely outcome is that carbon emissions will be simply redistributed from the U.S. to places like China and India. The economic costs borne by U.S. residents will consequently be borne in vain as there would be no net positive impact on the environment from the carbon cap policy. In fact, to the extent that the industrialized countries use cleaner technologies, the regulations could actually have a net negative impact on the environment.

In order to ensure that there is not a net negative impact on the environment, it will be necessary to impose carbon emission caps on the developing countries as well. Such a policy endangers the economic growth these countries so desperately need. China is a classic example. China’s economy has been growing at a furious pace. As a result, millions of people have been lifted out of desperate poverty. Capping emissions in China jeopardizes its economic growth and with it the country’s ability to further reduce the extreme poverty that still afflicts far too many of its citizens.

These trade-offs must be a central part of any global warming debate. Simply advocating for emissions caps while ignoring the real economic costs the caps create will not lead to sustainable environmental or economic policies. CSR is dangerous in this realm because it provides a credibly-viewed messenger that we can cap our carbon emissions without cost. We cannot.

Instead, we must ask some fundamental questions about our environmental policies: What is the problem? What are we asking for? Does this make sense? What are the implications? Are the tradeoffs worthwhile? With such basic questions answered, we will be empowered to intelligently design environmental and economic policies that do the most good. However, just as the typical “snake oil” customer discovered, if we don’t ask the right questions upfront, then we shouldn’t be surprised when the product fails to deliver on its promises.