Thankfully, the American system makes it hard for colossal tax and regulatory burdens to foxtrot into law without scrutiny. So we hope our politicians will take responsibility for the global-warming policies they say they favor. Or even begin to understand what they say they favor. For a bill as grandly ambitious as Warner-Lieberman, very few staff, much less Senators, even know what's in it. The press corps mainly cheerleads this political fad, without examining how it would work or what it would cost. So allow us to fill in some of the details.
And for the most part, the politicians favor cap and trade because it is an indirect tax. A direct tax – say, on gasoline – would be far more transparent, but it would also be unpopular. Cap and trade is a tax imposed on business, disguising the true costs and thus making it more politically palatable. In reality, firms will merely pass on these costs to customers, and ultimately down the energy chain to all Americans.
So by all means let's have this debate amid $4 gasoline... If Americans are going to cede this much power to the political class, they at least ought to do it knowing the price they will pay.