Stavins >> Mankiw on cap-and-trade

I generally like Greg Mankiw's blog - he is very smart, curious, intellectually honest, respectful, and concise - but he gets it wrong here, where he laments the "missed opportunity" of not being able to use cap-and-trade revenues for non-environmental purposes (deficit reduction, healthcare, tax cuts, etc.). The problem with this argument is that, even if permits were auctioned, revenues were going to go toward some combination of consumer rebates and renewables/efficiency research anyway. A cap-and-trade bill that immediately raised prices for consumers wasn't politically realistic - even as is (close to budget neutral for most consumers) it barely made it out of the house.

Another Harvard economist, Robert Stavins, is much closer to the issue. He's pleased with the bill's positioning on international competition, and while he frets about protectionism and the compromise on ag offsets, overall he is sanguine:

The Waxman‑Markey bill has its share of flaws, but it represents a reasonable starting point for Senate deliberation on what can become a national climate policy that will place the United States where it ought to be - in a position of international leadership to help develop a global climate agreement that is scientifically sound, economically rational, and politically acceptable to the key nations of the world.