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Earth to WSJ: Global Warming is a Market Failure
by David Sassoon - Sep 6th, 2007
Any call for regulation must be based on a market "failure" -- that is, failure of private markets to provide the proper incentives for contributing to social value.
That's what it says on the op-ed page of the Wall Street Journal today, in a piece urging Congress not to mandate higher vehicle fuel economy. Curious. If global warming isn't the most spectacular example of market failure crying out for regulation, what is?
The authors claim to be subjecting regulation of fuel economy to "the piercing light of economic analysis." (Pretty soon, the rapture of free markets, too, we're sure.) And that light says regulating fuel economy is
a horribly inefficient mechanism for reducing carbon emissions because
it does nothing to reduce emissions from power plants, older vehicles,
home furnaces or industrial facilities.
True, regulating fuel economy of cars does nothing to reduce emissions from power plants, home furnaces, industrial faciltities. (Oh the piercing light!)
But it would do a lot to reduce emissions from automobiles from now on, which are responsible for a quarter or more of global warming pollution.
It's one of many things we need to do, not the only thing, and it will help a lot.
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