Antidote to hysteria

Famously, there's no such thing as a free lunch. Only the meat in a wish sandwich comes without someone paying somewhere.

In any public policy debate, global warming included, cost is important. Paul Krugman reports this no-bullshit assessment of cap and trade:

If emission permits were auctioned off — as they should be — the revenue thus raised could be used to give consumers rebates or reduce other taxes, partially offsetting the higher prices. But the offset wouldn’t be complete. Consumers would end up poorer than they would have been without a climate-change policy.

But how much poorer? Not much, say careful researchers, like those at the Environmental Protection Agency or the Emissions Prediction and Policy Analysis Group at the Massachusetts Institute of Technology. Even with stringent limits, says the M.I.T. group, Americans would consume only 2 percent less in 2050 than they would have in the absence of emission limits. That would still leave room for a large rise in the standard of living, shaving only one-twentieth of a percentage point off the average annual growth rate.

The fun part is Krugman's twitting of those who call themselves free marketeers, in particular Newt Gingrich:

But if you really believe in the magic of the marketplace, you should also believe that the economy can handle emission limits just fine.