Will Greenery Promote Growth, and Save the World (and Money)?

In Europe, consumers pay up to $9 a gallon for gasoline, in part because European Union governments tax gasoline at rates of $2 to $3 a gallon and more. What most people don’t realize is that gasoline taxes are implicit carbon taxes. Taxing gasoline at $1 a gallon is roughly equivalent to taxing the carbon dioxide emissions from gasoline at $100 per ton. So, European motorists are paying carbon dioxide penalties of $300 or more per ton. That’s about six times higher than the maximum estimated carbon permit price under the Warner-Lieberman cap-and-trade proposal.

Yet where in Europe is the miracle fuel to replace petroleum? Where are all the zero-emission vehicles? Europe is not one mile closer than we are to achieving a "beyond petroleum" transport system. In fact, from 1990 to 2004, EU transport sector carbon dioxide emissions increased by almost 26%.

Mr. Krupp and other cap-and-trade advocates ignore the main lesson of the failed Synfuels program of the 1970s, memorably expressed by MIT’s Thomas Lee, Ben Ball Jr. and Richard Tabors: "If a technology is commercially viable, then government support is not needed, and if a technology is not commercially viable, no amount of government support will make it so.