Carbon Taxing - And Its Limits

Free Exchange looks at the British example:

The latest target is a 34% cut [in emissions:], compared to 1990 levels, by 2020.

Whenthe good folk at Cambridge Econometrics fed this requirement into theirmodel, it began spitting out prices of many hundreds of pounds per ton,far beyond anything that could be seen as politically plausible by eventhe most starry-eyed environmentalist. Indeed, the prices were so highthat they were pushing up against the limits of the model, and anynumbers generated...