Yesterday the Economist endorsed the Cantwell-Collins climate legislation- The CLEAR Act- Carbon Limits & Energy for America’s Renewal. The CLEAR Act developed in part by Working Assets entrepreneur Peter Barnes proposes a Cap and Dividend scheme that differs from a Cap and Trade scheme. The Cap and Dividend would implement a science-based economy-wide cap on emissions and then the government would auction off the carbon permits to the highest bidder. The revenues would then be redistributed per capita to the American public. Energy costs would rise, but everyone would receive a carbon check to offset these costs and it would be up to each individual to reduce energy usage in order to keep more of their carbon check.

Credit: The economist

The Cap and Dividend proposal comes in at 39 pages- 1/36^th of the Waxman-Markey bill and has attracted favor by surprisingly both Greens concerned about the potential for abuse in Cap and Trade and Senate moderates concerned about the inefficiencies of Cap and Trade. The endorsement by The Economist could be a game changer that forces Congress to seriously debate this proposal. The Economist does a great job of explaining how and why Climate Change advocates should reconcile the goal of putting a cap on carbon with the current U.S. political realities. If moderates, especially moderate republicans are only willing to vote for the CLEAR act, it argues, the CLEAR act may be the only hope for a cap on carbon this year. This endorsement should resonate as it comes from a free market authority based in London- the world’s carbon trading capital.

The Economist does fail to explain why Cap and Trade appeals to experts at World Resouces Institute (WRI), the prominent environmental think tank, who have published extensive analyses of the current proposals in the Senate and direct responses to CLEAR act supporters. It is also unfair to compare the current cap and trade proposals with a new bill that has yet to go through the “Lobbyist Spanking Machine.”