Cap-and-Trade Could Help —Not Hurtthe Economy

Fighting climate change can be profitable: Krugman
By Jason Farago,  Newser Staff
Posted May 1, 2009 8:40 AM CDT
The Brayton Point Power Station in Somerset, Mass.   (AP Photo/C.J. Gunther, File)
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(Newser) – Now that Washington finally has the political will to combat climate change, opponents of environmentalism are pushing a new line: limiting emissions would do further damage to a battered economy. For Paul Krugman, those claims are "junk economics" to go with climate change deniers' "junk science." A cap-and-trade system would have costs, the New York Times columnist concedes, but going green would actually offer the country a net economic boost.

A gradual tightening of emission limits would have a small cost, shaving about 0.05% off the annual growth rate. But a commitment now would create "major incentives for new investment" in the free market that anti-environmentalists love so dearly, jumpstarting business activity at precisely the right moment. "We can afford to save the planet," says Krugman, "and now would be a very good time to get started."