Clinton: Carbon market better than carbon tax

Today’s press conference with former President Bill Clinton was pretty interesting. Asked about his motivation for running the Clinton Global Initiative, he gave two boilerplate goo-goo reasons, and then said:

And the third reason is: Because I like it. I feel like I should look for someone to pay money to every day for the privilege of being able to do this work. I mean, it’s a wonderful thing; it’s more interesting than anything I can imagine doing.

Another reporter asked Clinton if he preferred a carbon tax or a carbon market:

PRESIDENT CLINTON: Well, first of all, I think that–while we should all be personally impatient to do more on climate change–we should recognize that in the great sweep of history, typically people propose changes that are not embraced right away… People ask me all the time, you know they say, “Well, you failed to get healthcare reform, and you failed to make peace in the Middle East.” Well I say, “It’s a very good thing to fail in the right cause, because it keeps free people stumbling in the right direction.” You know, politics is an inexact Pilgrim’s Progress…. You just do these things because you know they have to be done, and sooner or later if you get really fortunate, the circumstances and the attitudes meet….

On the carbon market, we wanted one, and we had hoped to be able to persuade everybody to participate. Now, more and more economists in the U.S. and around the world believe that a carbon tax is a better policy because it is an incentive to individuals to use less carbon-producing substances, whatever they are, and to conserve more. In theory, that is right. Plus, it’s hard to develop a carbon market that you can’t evade and gain. On the other hand, I still believe that  … the green market, the market for averting the worst consequences of climate change, is underorganized, undercapitalized, with low levels of consumer understanding. Therefore I still favor the carbon market as opposed to the carbon tax. Keep in mind: Al Gore and I passed the carbon tax through one house of the Congress in 1993 and that also got beat; we got a long way on that. But I think the carbon market is better because I think it will energize all these investors and idea people and will create the kind of multifaceted change that will be really necessary to prove that we can reduce greenhouse gas emissions and grow the economy at the same time.