Whats the macroeconomic effect of that?
A. I don’t have the answer for you now, but that’s something we’re looking at. I think the core point is probably right. As a good economist, I should be ecstatic about something like the CLEAR Act. It puts a simple price on carbon and rebates it to consumers. The problem is, the energy space if rife with market failures, so an economically optimal policy needs to do two things in addition to pricing carbon. It needs to take care of efficiency-market failures, which are at the left hand of the cost curve — the stuff we’re not taking advantage of even though it’s profitable today. And it needs to deal with R&D for the stuff at the right hand of the cost curve, so that when carbon prices get up to $80, $100 a ton, we have mitigation options like CCS or advanced vehicles that the private sector is not necessarily going to be able to deliver. Whether or not the American Power Act gets the balance right is a separate question, but I think it’s important that any piece of [climate] legislat
