Editore"s Note
Tilting at Windmills

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December 6, 2007
By: Kevin Drum

FRIEDMAN AND THE CARBON TAX....Yesterday I dinged Tom Friedman for claiming that none of the leading presidential candidates supports a carbon tax. In fact, all of the leading Democratic presidential candidates support cap-and-trade plans with 100% auction of CO2 credits, which is effectively the same thing as a carbon tax. So how did Friedman come to make this mistake? Ezra Klein speculates:

I wouldn't, in this case, chalk up to ideology what I can attribute to incompetence. Instead, I'd bet that Friedman simply doesn't understand that auctioned permit plans are essentially equivalent to carbon tax plans.

Obviously we're trying to engage in mind-reading here, but I'd offer up a different reason. I don't think Friedman's mistake was ideological in the sense that he hates Democrats. And I don't think he's stupid. The average man on the street may not know that cap-and-trade has pretty much the same effect as a carbon tax, but I'll bet Friedman does.

But here's the thing: he decided to write a column that railed against America's unwillingness to take serious action to cut back on oil use. Having already admitted that Nancy Pelosi has pushed a fleet mileage increase through the House, his entire thesis would evaporate if he also admitted that every leading Democratic candidate has proposed a serious energy reduction plan. And he was simply unwilling to lose his entire thesis. So he fudged.

In other words, he acted like a politician. Maybe he should run for president.

Kevin Drum 12:20 PM Permalink | Trackbacks | Comments (37)

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Comments

"And I don't think he's stupid."

You are sadly mistaken.

Posted by: HeavyJ on December 6, 2007 at 12:26 PM | PERMALINK

A shill or just incompetent - you decide.

Ultimately it makes no difference though. Why a clown like this is given any credibility is beyond me. Oh, ok, he works for Judy Miller's old paper. My bad - I thought he had a job with a serious publication.

Posted by: alex on December 6, 2007 at 12:26 PM | PERMALINK

Matt Taibbi had the best summary of Friedman I have ever read:


http://www.nypress.com/18/16/news&columns/taibbi.cfm

Posted by: HeavyJ on December 6, 2007 at 12:28 PM | PERMALINK

"And I don't think he's stupid."

You are sadly mistaken. Posted by: HeavyJ

I agree. In fact, I think we ought to vote here and then send the results to the NYT's ombudsman (not that it will do any good, but it might at least ruin his day).

All who agree that the Mustache of Understanding it stupid, raise your hands and e-mail Kevin.

Posted by: JeffII on December 6, 2007 at 12:32 PM | PERMALINK

Um, cap-and-trade probably won't significantly reduce our oil consumption. A cap-and-trade system would mainly affect power plants, which emit about 2/3 of our nation's CO2. It's unclear how cap-and-trade would even be adopted to affect automobiles-it would probably marginally increase the price of gas if it was applied upstream to the big suppliers(although not as efficiently as a carbon tax).
If you want to reduce warming, put in cap-and-trade. If you want to focus on oil reduction, then you need a bigger gas tax, targeted at gas, and not at coal, which is the primary fuel cap-and-trade would drive out.
I made this point in the comments yesterday, and so did several other commenters.
YOU doesn't understand energy policy if you think a cap-and-trade would radically reduce oil use.

Posted by: jamie on December 6, 2007 at 12:33 PM | PERMALINK

there may be some justification for Tom's rant (or am I just being overly partial to another Tom?). A carbon tax is considered to be more economically efficient and less vulnerable to special interest group manipulation than cap and trade. Of course the rights war on language has made tax highly radioactive. The Demo candidates are choosing the more politically feasible second best option.

Posted by: bigTom on December 6, 2007 at 12:35 PM | PERMALINK

How come he's not being dinged for the outright falsehood as energetically as Klein is? In some ways, his, er, issue seems worse, as it reflect directly on the Democratic candidates.

I hope they're all writing letters of correction to him.

Posted by: gussie on December 6, 2007 at 12:39 PM | PERMALINK

Cap and trade is stupid because it still allows polluters who are large enough to buy their way out of the problem rather than correcting the polluting "behavior." Carbon tax!

Posted by: JeffII on December 6, 2007 at 12:39 PM | PERMALINK

Yes, Matt Taibbi has never benn afraid to take the fight to the enemy's camp.

I have been trying to avoid writing about Thomas Friedman. Two years ago, when I had a serious drug problem, one of the worst symptoms was a monomaniacal obsession with Friedman. I called his office regularly from overseas, sent him rambling two-page letters, harassed him in 100 different ways. Once, I even called the office of Arthur Sulzberger Jr. and, pretending to be Friedman himself, screamed at Sulzberger’s secretary. I told her that I was pissed, that "Arthur better get his car out of my fucking parking space" and that "golf this weekend [was] out of the fucking question."

I’d be curious to know how that one panned out. The poor lady seemed to genuinely believe I was Friedman and carefully took the message. But I never bothered to investigate, as shortly thereafter I got my act together and left those memories behind.
http://www.newyorkpress.com/print.cfm?content_id=8251

Posted by: beowulf on December 6, 2007 at 12:41 PM | PERMALINK

In other words, he acted like a politician.

Actually, I'd say he acted like a lawyer. (And I am one.) That is, in order to make the best case for his position he stated something that was technically correct but not the whole story.

Of course, we lawyers operate in an adversary system where the other side gets to point up what is the whole story, and that's how the truth (theoretically) gets out. And I suppose you could argue that's what's happening here, given the blogosphere response. But query whether someone who claims the mantle of journalist should operate in such a fashion.

Posted by: Glenn on December 6, 2007 at 12:41 PM | PERMALINK

oops, sorry for the typo ('been') and the last paragraph should have italicized.

Posted by: beowulf on December 6, 2007 at 12:42 PM | PERMALINK

I also don't think Tom Friedman is stupid, Kevin. But he certainly appears to have a collosal ego, as exemplified by his general unwillingness to admit he's mistaken. Rather, he would resort to the same kind of disingenuous reasoning that's become the hallmark of TIME's Joke Line.

Posted by: Donald from Hawaii on December 6, 2007 at 12:46 PM | PERMALINK

"...pretending to be Friedman himself, screamed at Sulzberger’s secretary. I told her that I was pissed, that "Arthur better get his car out of my fucking parking space" and that "golf this weekend [was] out of the fucking question."

Yeah, I read that the other day. Good stuff - I think I'll call her pretending to be David Brooks.

Posted by: HeavyJ on December 6, 2007 at 12:57 PM | PERMALINK

"It's unclear how cap-and-trade would even be adopted to affect automobiles-it would probably marginally increase the price of gas if it was applied upstream to the big suppliers"

How unclear can it be given that you spell it out in the second half of the sentence where you claim it is unclear?

A gasoline tax (or an oil tax, which is what Friedman mentioned) would, as you say, more specifically hit oil consumption but a carbon tax, which is one of the things Friedman specifically mentioned, would not do that any more than a carbon credit system. What magical reason is there that a carbon tax hits gasoline more than coal while a cap and trade does not?

Maybe Friedman's mistake is that he should not have mentioned a carbon tax, which is nearly interchangeable with an emission cap and trade as far as results (assuming that they are similarly corrupted, not magically assuming the tax is never corruputed and the cap and trade always is) and specificity to oil.

With the oil tax his gotcha makes more sense.

Of course I don't only want to be less oil dependent, I also want to reduce the eventual degree of global warming. I suspect the democratic presidential candidates are the same way. Friedman, however, seems to be in the grips of irrational Muslim fear, so probably worries somewhat more about short term oil dependence than he otherwise would and less about everything else.

So maybe he is making a deceitful argument of the form "You want to get A and B by doing X, but I only want to do A and doing Y would get A more efficiently than X (while doing nothing to get B) so you aren't serious". The candidates will tend to walk right into this by minimizing to the point of not mentioning A or B depending on their audience.

Posted by: jefff on December 6, 2007 at 1:02 PM | PERMALINK

Why does he need to run for president? He's perfectly matched in his current job....most of the chattering class play fast and loose with the facts to support their "thesis" (and it's a stretch even calling their petty biases this).

Posted by: Gillette on December 6, 2007 at 1:02 PM | PERMALINK
YOU doesn't understand energy policy if you think a cap-and-trade would radically reduce oil use.

Posted by: jamie on December 6, 2007 at 12:33 PM

How doesn't we understand, jamie? Please doesn't tell us.

Posted by: Nash on December 6, 2007 at 1:06 PM | PERMALINK

haha, i meant to say Kevin doesn't, then i said you instead...my bad.
the applying upstream thing is debatable, i'd have to study the democrats plans to see if they favor upstream or downstream sale of carbon emissions.
anyways, my main point is we should quit pretending that cap and trade solves our 'oil dependency problem.'
it won't, it's much more likely to reduce consumption of coal.

Posted by: jamie on December 6, 2007 at 1:09 PM | PERMALINK

I figure cap-and-trade will make it more likely to move manufacturing overseas

Posted by: robodruid on December 6, 2007 at 1:11 PM | PERMALINK

*carbon emissions permits.
i can't type today. that, of course, makes my main point invalid.
friedman is still wrong-he should've said he wanted an oil tax on top of a carbon tax.
but kevin is wrong too, to think that permits are just as good as a carbon tax, or that they'll reduce oil consumption.

Posted by: jamie on December 6, 2007 at 1:12 PM | PERMALINK

Jamie, I don't know if you are being intentionally obtuse, or just ignorant. Kevin never claimed anything about consumption, just that economically, there is no real difference. A tiny oil tax would have less effect than a low cap in cap-and-trade. It all depends on the details.

Are you Friedman, stalking?

Posted by: Gore/Edwards 08 on December 6, 2007 at 1:19 PM | PERMALINK

But here's the thing: he decided to write a column that railed against America's unwillingness to take serious action to cut back on oil use.
He is ssentially correct. Pie-in-the-sky hopes for future action and technologies obfuscate the fact that conservation is far and away the most practical solution to energy problems. An SUV is a fashion statement that you are a rugged outdoorsman of the old West and a triumph of selfishness over sharing of declining oil supplies.

Posted by: Luther on December 6, 2007 at 1:47 PM | PERMALINK

I am wrong to insinuate that a carbon tax would seriously reduce oil consumption when I said: since none of the leading presidential candidates has offered an energy policy that would include a tax on oil or carbon that could trigger a truly transformational shift in America away from fossil fuels.

Kevin is wrong when he replied to me and implied that cap and trade would seriously reduce oil consumption: This is flatly untrue. All three of the leading Democratic candidates have proposed cap-and-trade plans that auction 100% of their CO2 permits.

I'm also done wasting time on this thread.

Posted by: Tom Friedman on December 6, 2007 at 1:51 PM | PERMALINK

Friedman is an idiot, no real surprise there.

However, I am curious- has anyone heard any of the presidential candidates say out loud that cap and trade with auction is essentially a carbon tax?

Posted by: Yancey Ward on December 6, 2007 at 2:23 PM | PERMALINK

CAFE standards are a very poor substitute for a gas tax. CAFE standards don't do very much to reduce fuel use.

Cap and Trade actually INCREASES fuel use over the intermediate term. It is important to waste fuel and not do any cut backs until you get your share of the quota. Only after you get your share of the quota do you start cutting back.

Does anyone here agree or do you all think I am nuts?

Posted by: neil wilson on December 6, 2007 at 3:05 PM | PERMALINK

"Does anyone here agree or do you all think I am nuts?"

I don't agree, but I don't think this error reaches the level of insanity.

"your share of the quota"

Yea, a bad cap and trade system could do that.

I could, if I were poorly informed or deceitful, claim that under the carbon tax all existing emitters would get exemptions for the carbon they emit when the tax goes into effect then I could point out all kinds of bad effects of that and claim they were weaknesses of carbon taxation in general.

But I'm not poorly informed or deceitful, so I don't make such claims.

Posted by: jefff on December 6, 2007 at 3:29 PM | PERMALINK

robodruid: I figure cap-and-trade will make it more likely to move manufacturing overseas

Not a problem - there's no manufacturing left in this country anyway.

Yancey Ward: has anyone heard any of the presidential candidates say out loud that cap and trade with auction is essentially a carbon tax?

No, nor have I heard any of them say "I'm playing politics", even though every one knows they are. How objectionable this is depends on how deceitful it is. Simply avoiding the poisonous word "tax" (and ignoring Ben Franklin's observation) is far from the worst of political maneuvering.

jefff: But I'm not poorly informed or deceitful

Which explains why you don't have a NYT column.

Posted by: alex on December 6, 2007 at 3:40 PM | PERMALINK

alex,

I would worry less about it being politics or a form of deceitfulness rather than they and their staff actually thinking it isn't the equivalent of a tax. As dumb as I think Tom Friedman is, I doubt he is actually dumber than the candidates.

Irrelevant in any case- cap and trade will never make it into law in any form that is more than a charade for the very fact that it is equivalent to a tax.

Posted by: Yancey Ward on December 6, 2007 at 3:57 PM | PERMALINK

Yancey Ward: As dumb as I think Tom Friedman is, I doubt he is actually dumber than the candidates.

I have no idea whether Friedman is dumb, sloppy, or just deceitful. As to the candidates, I don't think that most of them are dumb. Dishonest, deceitful, at the very least disingenuous and willing to put politics before policy, yes. But dumb? Generally not.

cap and trade will never make it into law in any form that is more than a charade for the very fact that it is equivalent to a tax

No takers on that bet. As history shows, fact is often stranger than fiction.

Posted by: alex on December 6, 2007 at 4:17 PM | PERMALINK

A cap and trade program is not effectively the same thing as a carbon tax.

Let me provide an example. Suppose you are developing the world's cleanest power plant in a non-attainment area like Houston. Under a cap and trade system you'll have to spend millions (or tens of millions) of dollars on allowances. Accordingly, you'll be subsidizing your legacy competitors who helped create the problem and are now being rewarded with a regulatorily created asset and a barrier to entry/competitive advantage. Under a carbon tax the new clean plant will have a competitive advantage vs. its legacy competitors.

I think Friedman is correct and you and Klein need to rethink your posts.

Posted by: jim on December 6, 2007 at 4:56 PM | PERMALINK

"A cap and trade program is not effectively the same thing as a carbon tax.

Let me provide an example. "

Not again!

Your example only applies in the case where credits are given freely to existing polluters. If all credits are auctioned its effect on polluters is the similar to a tax.

The exact same problem would manifest if existing emissions were exempted from the tax.

Your new plant would buy some carbon credits, thus automatically raising the price of those credits slightly for its competitor which also has to buy the credits from the government. Theoretically this is actually better than a tax, which has to wait until the tax rate is raised for the price to go up on your competitor, but in reality assuming that the tax would be increased as necessary to meet emissions targets I don't think it would make much difference.

Posted by: jefff on December 6, 2007 at 5:56 PM | PERMALINK

I think everyone is missing the most important point: it is useful propaganda for Friedman to say stuff like this. All Democratic candidates look more moderate as a result articles like this, which gives them more wiggle room to do as much to slow down global warming as they can get away with.

The main reason to support a cap-and-trade over a tax is it is more politically palatable. Friedman made that even more so.

Posted by: Mark on December 6, 2007 at 6:09 PM | PERMALINK

I figure cap-and-trade will make it more likely to move manufacturing overseas
Posted by: robodruid on December 6, 2007 at 1:11 PM

Yep. And I'm sure we'll just export the coal that we don't burn here to China so they can power their factories and sell us more shit while we lose even more of our jobs.

Posted by: Doc at the Radar Station on December 6, 2007 at 6:40 PM | PERMALINK

This sounds like typical Friedman. In six month's he'll write another article, this time lauding the Dems for embracing his sage advice and saying as loudly as he can "I told you so" in order to puff up his ego just one little notch more than it was puffed up before. It's repetitive and very tiresome to watch.

Posted by: fred F. on December 6, 2007 at 7:14 PM | PERMALINK

Cap and trade is stupid because it still allows polluters who are large enough to buy their way out of the problem rather than correcting the polluting "behavior." Carbon tax!

I'm personally pretty indifferent to whether we enact a carbon tax or a cap-and-trade system, but statements like this drive me nuts. Guess what you're doing when you pay a carbon tax? You're buying your way out of the problem. Pollute, and then pay a fee. See? A carbon tax and cap-and-trade is the same damned thing (roughly speaking).

Posted by: Adam on December 7, 2007 at 12:41 AM | PERMALINK

A few miles outside of Las Vegas, Nevada is a 400 acre field of solar collectors that produces enough electricity for 15,000 homes. See Solar One Nevada on google and youtube. A massive program to scale up to a total solar electric, almost zero green-house gas producing way of life is a necessity now.

The effects of the existing build-up of CO2 in the atmosphere have already increased the severity of storms, drought, forest fires, coral die-off, glacial and arctic ice melting, with other disasters about to occur. Check out Global Fever by Professor William Calvin for the statistics to back up these observations.

Global warming and a dwindling supply of fossil fuels will put an end to quibbling over which insufficient, stop-gap measure should be instituted long after the problem has metastasized.

Conservatives believe the system is self-correcting by the invisible hand (or does not exist), while liberals believe in measured tinkering.

A "Manhattan Project" effort is necessary.

Posted by: deejaayss on December 7, 2007 at 7:23 AM | PERMALINK

"The average man on the street may not know that cap-and-trade has pretty much the same effect as a carbon tax..."
And the ivory tower economist modeling his paper paradigm in his oak lined library of absolutes may assume, as he did with 'Free Trade', that he understands all the parameters. But in the real world by creating tradable financial assets worth tens of billions of dollars for governments to distribute among their industries and plants and then monitor, a global cap-and-trade program also introduces powerful incentives to cheat by corrupt and radical governments and corporations. Corrupt governments will almost certainly distribute permits in ways that favor their business supporters and understate their actual energy use and emissions.

And as a secondary market emerges, as happened with currency trading in the 1980s, electricity trading in the 1990s, and as we recently witnessed with sub prime mortgages, we will see the introduction of ever-more complex and abstract carbon-based financial instruments. And as with electricity, currency and sub prime mortgage trading, an exceedingly handsome prize will go to those who can figure out how to game the system.

The United States required 23 years to eliminate leaded gasoline, in part because it created a lead trading program. Without allowing trading, Japan eliminated lead in 10 years and China in three.

Cap and Trade will not be as effective as a Carbon tax in the real world.

Posted by: freejack on December 7, 2007 at 7:56 AM | PERMALINK

Jaime

Electric power production is c. 35-40% of US carbon emission (not including agriculture). Not 66 2/3%.

Transport is another 35% or so (including 70% of all oil consumption), the balance is industry + household emissions.

Posted by: Valuethinker on December 7, 2007 at 11:32 AM | PERMALINK
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