Chris Mooney finds Justice Scalia being proudly clueless as he prepares to decide whether the Clean Air Act requires the EPA to regulate carbon dioxide emissions, if it permits such regulation, or whether the state of Massachusetts has a right to even get into that argument.

JUSTICE SCALIA: your assertion is that after the pollutant leaves the air and goes up into the stratosphere it is contributing to global warming.

MR. MILKEY: Respectfully, Your Honor, it is not the stratosphere. It’s the troposphere.

JUSTICE SCALIA: Troposphere, whatever. I told you before I’m not a scientist.


JUSTICE SCALIA: That’s why I don’t want to have to deal with global warming, to tell you the truth.

Not surprisingly, it’s why I don’t want him dealing with it, either. I’m basically with Andrew Dessler on this case:

regardless of what the court rules, we will have to wait for ’09 to see any action on emissions reductions — but we’ll see action then regardless of what the court rules.

And the action will happen in the best place for it, Congress. I don’t know whether the argument advanced by various state governments is correct ? that carbon dioxide falls within the regulatory class of pollutants that the EPA must regulate ? is correct. I do know that the consequences and practicalities of limiting carbon emissions are a lot bigger than those of regulating lead additives to gasoline. It’s one thing to require catalytic converters, another to require electric cars, or even hybrid engines.

Carbon is at the center of the world’s economy, and even if it has all the regulatory power it needs, the EPA hasn’t got the clout or the resources to balance the economic consequences of the actions available to it against the moral and economic necessities of averting climate change. Those trade-offs belong in Congress, though implementation may well be left to agencies, for reasons I’ll discuss below the fold.

As I said, carbon is at the center of the world economy. Globalization has made the world smaller only because internal combustion engines and carbon dioxide emitting electric plants get things moving faster. Containers are packed in one country, driven to a port, loaded onto a diesel powered ship, unloaded in the port of LA or Newark, and from there are transported to your local Walmart, or your grocery store, on diesel trains or trucks. An increase in the cost of gas makes your life more expensive even if you don’t ever drive.

That’s why the consequences of regulating carbon are so widespread and so difficult to get a handle on. Those sort of sweeping decisions and trade-offsAnd the EPA couldn’t impose the solution that most economists, a lot of businesses, and most environmentalists all seem to be converging on: a carbon tax.

Carbon taxes are part of a broader class of taxes called “Pigovian” by economists. Arthur Pigou was an economist at Cambridge for the first half of the 20th century, and developed the idea of externalities: costs of economic activity that are not incorporated into the price of the goods produced. These costs remain external, and that distorts the market.

This partly answers the question Coturnix asks about supply and demand of endangered species parts, also: there are unincorporated costs in the sale of parts of an endangered species, and the solution ought to include ways of incorporating the costs back into the sale of the product. (The rest of the solution involves how we incorporate the future value of the species into sellers’ decisions, and creating ownership tends to be what people suggest as a way of overcoming this sort of tragedy of the commons).

Creating ownership in the atmosphere or the climate is less straightforward than creating ownership of populations of endangered species, or of future harvest rights for them, both solutions that have worked well for over-exploited animal and plant populations.

But a tax to incorporate the cost of climate change back into the price of actions that cause climate change ought to work well. The principle isn’t much different than raising cigarette taxes to pay for the additional costs to state medical insurance systems. The tax discourages the behavior, and anyone who doesn’t give up smoking is paying for his own impacts on society.

Al Gore, Greg Mankiw (former chief economic advisor to President Bush), and a slew of other people across the political spectrum (apparently including 65% of economists, including Paul Krugman, Alan Greenspan and Gary Becker and others) have all agreed in principle that a carbon tax is a good idea. It lets people and industry find their own solutions to lowering energy bills, and provides funds that can be used to help spur research or to mitigate the damage from climate change. The challenge is implementing a carbon tax in a way that doesn’t cause economic disruption along the way.

One way Congress handles tricky situations like that is to lay out a basic regulatory framework, the principles that guide policymaking, and leave the implementation details to executive agencies. That’s why the EPA is defending itself against the states in the case before the Court yesterday ? the EPA was given the power to regulate pollution within a broad Congressional mandate. By delegating some tough decisions to the EPA, Congress averted criticism that individual members might have faced from constituents over details of policy implementation. The Clean Air Act has been effective at addressing a host of particular pollutants that Congress didn’t know about, as well as successfully controlling the pollutants that spurred Congress to action. Deferring details of sometimes painful implementation to the EPA helped maintain support for the Act’s principles.

Whatever emerges from Congress in the new Congress or in future Congresses will probably do the same. Whether or not the states suing the EPA have standing (an issue that it looks like will rest in the hands of Justice Kennedy), and whether or not the EPA can or even must regulate carbon as a pollutant, Congress will have to step into the issue of climate change eventually. And it’s better that they do it after hearing expert testimony and maybe learning about the troposphere, not to mention understanding that climate change will cause harm (which Justices Scalia, Roberts and Alito all seemed to find doubtful).

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