“You can rank carbon regulations, carbon cap-and-trade, and carbon taxes however you wish. But at the end of the day we’re better off with no policy rather than bad policy.”

To continue from Part I yesterday, the carbon tax–on paper, on the white board, in the ivory tower–is better policy than cap-and-trade, which is better than ad hoc regulation. We could spend – and have spent – hundreds of hours explaining why cap-and-trade is a horrible idea, and why regulations are often blunt-objects that often cause huge unintended consequences, but that’s beyond this post.

And an ideal carbon tax can be shown to have only modest damage to the economy. 

But where are carbon tax proponents, particularly conservatives, wrong about carbon taxes? The answer provides a much longer list.

First, carbon taxes are not strictly a tax on “bads” (i.e.…

July 31st is the birth date of one of the great intellectuals of the freedom philosophy. Milton Friedman (1912–2006) would have been 101 today.

Friedman Legacy Day is being celebrated at 144 events: 90 in 44 states and Washington,D.C., and 54 events in 25 countries abroad. Here in Houston, a “Milton Friedman Rocks” party is tonight.

Friedman was more than a technical economist and early Nobel Laureate in this field; he was a popularizer of the case for free markets. His shorter tracts and biweekly column for Newsweek covered a variety of in-the-news issues, including energy. And he became more libertarian and appreciative of Austrian School economics (market-process economics), the rival to his Chicago School of economics, as time went on.

Friedman’s insight into the distortions from government intervention shortages are timeless.…

“PURPA has been the most effective single measure in promoting renewable energy.”

–Union of Concerned Scientists

What if Congress passed a law that forced you to buy intermittent energy for the same price as reliable energy? What if, in an attempt to promote “alternative” energy sources such as wind power, Congress passed a law that enabled wind to crowd out reliable resources? Congress actually passed that law in 1978, the Public Utility Regulatory Policies Act (PURPA). Its role has changed and its scope has narrowed, but “PURPA is still alive and kicking.”

Background

President Jimmy Carter, working from the viewpoint that the federal government had to intervene in markets to reduce demand and increase supply, formulated PURPA as part of a five-part National Energy Plan.

Oil and gas were seen as wasting resources relative to plentiful coal, so public policy needed to transfer demand from the former to the latter.…

MasterResource, which turned four last month, recorded its best quarter in history with 116,877 views, a 20 percent increase from 4Q-2011. We reached as high as #7 of 9,984 “green blogs” tracked by Technorati in the quarter and currently stand at #40.

With one in-depth post per workday, with occasional weekend fare, MasterResource is the leading voice for free-market, science-of-liberty thought in energy and related environmental issues.

MasterResource features many different writers, some academics, some think-tank analysts, and others citizen-activists.  Some areas of emphasis and impact may be mentioned.

Inconvenient Truths of Industrial Wind

Literally dozens of our writers have made MasterResource a leader of the windpower educational movement.  Turning wind into electricity is wholly government-enabled; even NIMBYSM that might be criticized in other contexts is justified given that government mandates and special, outsized subsidies enables the rural invasion of wind machinery.…