The proper price of permits for carbon emissions should reflect the future warming costs of current emissions. That is bound to be a guess based on computer models built on guesses. Lieberman guesses that the market value of all permits would be "about $7 trillion by 2050." Will that staggering sum pay for a $7 trillion reduction of other taxes? Not exactly.
It would go to a Climate Change Credit Corp., which Lieberman calls "a private-public entity" that, operating outside the budget process, would invest "in many things." This would be industrial policy, aka socialism, on a grand scale -- government picking winners and losers, all of whom will have powerful incentives to invest in lobbyists to influence government's thousands of new wealth-allocating decisions.
Lieberman's legislation also would create a Carbon Market Efficiency Board empowered to "provide allowances and alter demands" in response to "an impact that is much more onerous" than expected. And Lieberman says that if a foreign company selling a product in America "enjoys a price advantage over an American competitor" because the American firm has had to comply with the cap-and-trade regime, "we will impose a fee" on the foreign company "to equalize the price." Protectionism-masquerading-as-environmentalism will thicken the unsavory entanglement of commercial life and political life.
McCain, who supports Lieberman's unprecedented expansion of government's regulatory reach, is the scourge of all lobbyists (other than those employed by his campaign). But cap-and-trade would be a bonanza for K Street, the lobbyists' habitat, because it would vastly deepen and broaden the upside benefits and downside risks that the government's choices mean for businesses.
McCain, the political hygienist, is eager to reduce the amount of money in politics. But cap-and-trade, by hugely increasing the amount of politics in the allocation of money, would guarantee a surge of money into politics.
Regarding McCain's "central facts," the U.N.'s World Meteorological Organization, which helped establish the Intergovernmental Panel on Climate Change -- co-winner, with Al Gore, of the Nobel Prize -- says global temperatures have not risen in a decade. So Congress might be arriving late at the save-the-planet party. Better late than never? No. When government, ever eager to expand its grip on the governed and their wealth, manufactures hysteria as an excuse for doing so, then: better never.