Greg Mankiw On Democrat Debate

Economist Greg Mankiw writes about the carbon tax question at the Democrat debates.

"As a former energy secretary during the Clinton administration, Richardson has presumably studied these issues. But here he demonstrates extraordinary ignorance (or perhaps extraordinary disingenuousness) about the economic impact of cap-and-trade systems. By contrast, Obama shows extraordinary clarity and honesty about the effects of the policy he is proposing...[Hillary] offers some typical vacuous blather about requiring utility companies to help us all become more energy efficient."

And here's his view of the difference between cap and trade and a carbon tax: "The economics is straightforward and uncontroversial. Both carbon taxes and cap-and-trade systems put a price on carbon, raising the cost of producing carbon-intensive products such as gasoline. In both cases, this cost will be passed on to consumers. The government can, however, raise revenue through a carbon tax or auction and use that revenue to reduce other taxes and help offset the adverse income effect."