Monday, November 22, 2004

Energy and Environment

Delhi-based Liberty Institute (a favorite of ours) offers this paper by Shreekant Gupta on market based approaches to reduce green house gases.

Resources for the Future, a credible American Think Tank, has now published a book spelling out similar policy options on energy and environment.

The book is reviewed by Gregg Easterbrook in The New Republic.

First, here is a Mr. Easterbrook briefly describing the Think Tank and why it is credible:

The think tank was founded in 1952 by the Ford Foundation, which charged it with warning the world about the coming exhaustion of petroleum and other primary resources. Instead Resources for the Future researchers concluded there was plenty of everything, and swam against the 1960s doomsday-chic tide by saying so.

Then the organization got interested in improved environmental protection using market-based ideas. Its triumph was the 1991 Clean Air Act revisions that created an allowance-trading program for acid rain reduction. Since 1991 acid rain has declined spectacularly--that's why you never hear about it anymore--and the trading system designed by Resources for the Future is the reason.

With this history, here are their key recommendations:

1. Higher taxes on gasoline or on any carbon-containing (fossil) fuel

2. Tradable higher federal miles-per-gallon standards on vehicles

3. A carbon-allowance trading system modeled on the acid-rain trading system

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