Cap-and-Trade is Faltering in Europe, But the Problem Isn’t What You Think It Is
The problem underlying the European predicament is that politicians apparently don’t want to do all that much about climate change, at least not if they’re going to pay a price with voters. Alas cap-and-trade makes climate-change curbing effort highly visible: the more you’re trying, the higher the price of permits is, and the higher electricity prices rise as a result. Roger Pielke has pointed out repeatedly that consumers really don’t like this sort of thing. And as David Victor has argued, that makes politicians inclined to pursue policies whose costs are hidden rather than clear.
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