Martin Feldstein tends to give extremely bad advice when he wades into politics. Still, he retains enough academic prestige that hs pronouncements carry some weight, deserved or otherwise. Today, he comes out against the cap-and-trade legslation working its way through Congress:
In my judgment, the proposed cap-and-trade system would be a costly policy that would penalize Americans with little effect on global warming.
And what is the basis for Feldstein's judgment? He explains:
Americans should ask themselves whether this annual tax of $1,600-plus per family is justified by the very small resulting decline in global CO2. Since the U.S. share of global CO2 production is now less than 25 percent (and is projected to decline as China and other developing nations grow), a 15 percent fall in U.S. CO2 output would lower global CO2 output by less than 4 percent. Its impact on global warming would be virtually unnoticeable. The U.S. should wait until there is a global agreement on CO2 that includes China and India before committing to costly reductions in the United States.
Obviously, this is a judgment call. I think, given the century and a half headstart we've made on industrialization, it's going to be much easier to get China and India to agree to CO2 reductions if the United States goes first. Many climate policy experts agree, as do the Obama administration and Congress—who, after all, have little incentive to impose painful energy reductions that they don't think can help spur international agreement.
There may be an argument on the other side. But Feldstein doesn't make that argument. He just says we should wait. Futhermore, I'd point out that his unsupported contention has nothing at all to do with economics, which is his specialty. If he has acquired any deep knowledge of the international CO2 negotiating climate, he does not betray it in his column. So all he's doing here is throwing around his weight as a Harvard economist behind a seat-of-the-pants (and almost certainly wrong) guess about international politics that happens to be convenient for his ideological preferences. Which is to say, his op-ed is worthless.
(Cross-posted from The Plank)
--Jonathan Chait