A small advocacy group in Massachusetts has proposed a novel, market-based approach to limiting the emissions of carbon dioxide — the colorless, odorless gas that is the underlying cause of global climate change. Their plan comes even as the Obama administration has unveiled its own set of rules aimed at accomplishing the same thing.
The president’s approach is the more traditional, the kind we associate with big government regulation — what some political scientists dub “command and control.” The Bay State scheme has a far greater potential for success, however, and is grounded in the power of prices and the way they affect our behavior. If the price of butter climbs, we use less, shifting over to margarine. If it falls, we use more. The local environmentalists, who call themselves the Committee for a Green Economy, want to apply the same principles to energy.