In This Review

Carbonomics: How to Fix the Climate and Charge It to OPEC
Carbonomics: How to Fix the Climate and Charge It to OPEC
By Steven Stoft
297 pp, Diamond Publishing , 2008

How best to deal with climate change will be high on the international and national agendas in the coming years. The favored approach in Europe and in some proposed U.S. legislation is to allocate target greenhouse gas reductions country by country, to create a market for emissions rights, and to allow trade in such rights -- a so-called cap-and-trade system. This interesting book explains in layman's terms why a global system is needed, why a global cap-and-trade system is unattainable, and why a partial system cannot accomplish the desired objective of limiting a rise in the atmospheric concentration of greenhouse gases. Stoft proposes instead, and argues persuasively for, a harmonized global carbon tax (meaning a tax on carbon dioxide emissions) -- or, as he prefers to call it, a carbon untax, since he proposes to redistribute to American households all the U.S. proceeds from the tax, in order to offset the higher prices of electricity, fuel oil, and gasoline that any effective policy to deal with climate change will inevitably entail. The book has some idiosyncratic features, such as its discussion of fairness, but it offers a clear and cogent argument for why a carbon tax -- or, rather, a carbon untax -- is likely to be greatly superior to a cap-and-trade system.