In a short time, global warming has graduated from niche cause to accepted fact. Though skeptics may still grumble (or shout) that the science isn’t settled, they’ve lost the battle when President Bush agrees to “seriously consider” an international climate-change treaty; when media mogul Rupert Murdoch writes that “climate change poses clear, catastrophic threats”; when conservative standard-bearer National Review runs a cover article saying that “it’s no longer possible, scientifically or politically, to deny that human activities have very likely increased global temperatures”; when Ford CEO Alan Mulally tells the Detroit News that “temperature has increased . . . mainly because of the greenhouse gases keeping the heat in”; and when New York Times everyman columnist Tom Friedman exhorts us to “go green.” Al Gore—who, less than a decade ago, dropped his nearly career-spanning obsession with climate change, recognizing that no serious politician could make it the cornerstone of a presidential campaign—now has an Oscar for the global-warming documentary An Inconvenient Truth. Some 84 percent of Americans think that human beings are contributing to global warming, with 78 percent (and 60 percent of Republicans) saying that we should do something about it “right away,” according to an April New York Times/CBS News poll.
The political answer to all this anxiety has arrived. Prominent politicians—including first-tier Democratic and Republican presidential candidates—are embracing a national “cap and trade” program to cut greenhouse-gas emissions. Powerful corporate leaders are right behind them, and the few execs still on the sidelines privately say, as one put it, that national regulation of greenhouse gases—above all, carbon dioxide—“is now as certain as death and taxes.” The mechanics of greenhouse-gas regulation are complex. But one likely result is all too clear: it will exact a significant toll on the American economy.
Cap and trade enjoys support from many free marketeers and moderate politicians because it seems, at first glance, market-friendly. If the perceived problem is power plants’ and factories’ heating up the planet by spewing too much carbon dioxide and other such gases into the air, why not impose a cost on them—currently, there isn’t one—for those damaging emissions? Just as firms pay for the carbon (coal and natural gas) that they put into their operations, the argument goes, so they should pay for the carbon that comes out (carbon dioxide).