How ironic that our government is considering cap-and-trade legislation at a time of economic difficulty. Yesterday, I wrote about the harm cap-and-trade could do to consumers through higher costs. Today, I want to talk about the harm it could do to our national economy by damaging our trade relationships with other countries.

Martin Feldstein was President Reagan’s Chairman of the Council of Economic Advisors. He also happens to believe that the scientific evidence suggests global warming is true. Yet he opposes cap-and-trade as the solution. Why? Because it will harm free trade. Here’s why. Different countries will issue different permits that cost different amounts. As a result, Feldstein warnes:

“A cap-and-trade system can cause serious risks to international trade. Even if every country has a cap-and-trade system and all aim at the same relative reduction in national CO2 emissions, the resulting permit prices will differ because of national differences in initial CO2 levels and in domestic production characteristics. Because the price of the CO2 permits in a country is reflected in the prices of its products, the cap-and-trade system affects its international competitiveness.”
http://www.business-standard.com/india/news/martin-feldstein-cap-and-trade-=-protectionism/362252/

So cap-and-trade is bad for consumers and bad for our national economy. Surely there is a better way to combat global warming and reduce our dependence on foreign oil. And there is: alternative energy.