Thanks for starting this thread, FM. I've been having a similar discussion elsewhere and everyone there is against it as a national energy tax without reason. Obama says it's a jobs bill. In general, I'm all in favor of creating jobs, I'm all in favor of reducing our dependency on foreign oil, I'm all in favor of reducing CO2 emission if we can at a reasonable cost, but I'm not convinced this bill will accomplish any of those things.
I've been hoping to find someone who supports it with some real explanations on how it will accomplish those goals. I did some searching to see what I could find and found this discussion by UC Ecomonics professor, Casey Mulligan
How Much Will It Cost?
Those “reallocation” costs are hard to know because, among other things, we do not yet know the degree to which restrictions on the building of new nuclear plants will be relaxed to help attain the goal of reducing carbon dioxide emissions. One study puts these costs at about $300 per family per year, although from experience I have seen reallocation costs overestimated because the capacity for our economy to adjust to new circumstances is not adequately appreciated.
On the other hand, one reason that the reallocation costs might be underestimated is that the worldwide pattern of production can adjust so that some carbon-intensive production occurs outside the United States. To the degree that carbon-intensive production leaves the United States, the (financial) costs of cap and trade will be less, although so will be the benefits in terms of reducing global carbon emissions.
A second issue is the distribution of the emission allowances. Will emission allowances be auctioned by the government, as President Obama promised during his campaign? Or will they be given away to existing energy producers?
Reducing carbon is a goal shared by the Obama administration and a number of members of Congress. But, as with the promotion of hybrid vehicles, cleaning banks of their toxic assets, and other government ambitions, it takes more than a lofty goal to create good policy. Cap and trade is yet another example of how the details of regulation matter not only for the costs to taxpayers and consumers, but also for whether the policy actually pushes the economy in the intended direction.
I remain unconvinced that this is a good thing but would love to hear from a proponent.