Pain at the Pump

Who’s paying for energy caps, like cap and trade, designed to address climate change?  You are.  Here’s CBO director Peter Orszag:

Under a cap-and-trade program, firms would not ultimately bear most of the costs of the allowances but instead would pass them along to their customers in the form of higher prices. Such price increases would stem from the restriction on emissions and would occur regardless of whether the government sold emission allowances or gave them away. Indeed, the price increases would be essential to the success of a cap-and-trade program because they would be the most important mechanism through which businesses and households would be encouraged to make investments and behavioral changes that reduced CO2 emissions.

And yet politicians like Hillary Clinton and Barack Obama keep employing cynical attacks on gas prices that are supposedly too high — while at the same time advocating climate change policy that will raise gas prices.

The way to lower gas prices is to reduce taxes on them and expand supply, not tighten the regulatory yoke.