A carbon tax is more free market, because it just puts a price on the externality and lets the market decide how to respond. Ryan Avent, an economist who focus

A carbon tax is more free market, because it just puts a price on the externality and lets the market decide how to respond. Ryan Avent, an economist who focuses on these issues and writes for the, um, Economist, claims that there are no significant differences between the two policies: http://www.ryanavent.com/blog/?p=2011 http://www.ryanavent.com/blog/?p=2011 I haven't heard your explanation before though, so do you have any experts who support this claim? I agree with Greg Mankiw that cap and trade equals carbon tax plus corporate welfare: Um, do you really think that the US tax code is generally free from corporate welfare giveaways? If you don't, then why exactly do you think that we could pass a carbon tax that would not have corporate welfare exemptions included? Do you think that corporate lobbyists are particularly powerless when it comes to changing the tax code? It seems that giving away permits initially is superior to including an exemption in tax law. The giveaway is a one time cost; but exemptions live forever. Beyond that, I agree with conservative economists Tyler Cowen and Alex Tabarrok that Mankiew's analysis is naive and incomplete: http://www.marginalrevolution.com/marginalrevolution/2009/05/the-politics-of-cap-and-trade.html http://www.marginalrevolution.com/marginalrevolution/2009/05... ; that might be true for the ideal carbon tax with no exemptions for anyone that everyone agrees could never pass Congress. But there seems to be no point comparing a realistic cap and trade bill against an impossible to pass carbon tax. From the conservative wonks I read there's a surprising amount of support for a higher gas tax Interesting. I'd be curious which conservative wonks support a gas tax increase.