The point of cap and trade is to solve a problem of social cost: As an energy consumer, I am imposing a cost on society (pollution) that I do not take into account when I make the original decision to consume.
This happens all the time. My decision to drive creates traffic that imposes a cost on society. A company's decision to fish in the ocean imposes a cost on the world's common stock of fisheries. A banker's decision to take on a huge amount of risk creates danger for the economy as a whole. The problem is that none of these private actors adequately bears the cost of their decisions. So, the usual solution is to increase the price of these decisions -- with congestion charges, or private property rights, or taxes -- so that private consumers take into account social costs.
Paying for costs seems to me to be an essential part of capitalism, no?
By the way, why are we looking for hidden reasons for Sarah Palin quitting, as she says, the "Title" of Governor? She quits, and gets a cover story in Time and space to write an ignorant op-ed for the Washington Post. Do we need any other reason?
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