So we've had the state house now pass cap-and-trade. Leo notes comments by Rep. Kate Knuth about the transformative nature of cap-and-trade.

"Cap-and-trade will change the jobs that we have in Minnesota -- I think it will change the jobs for the better," said Knuth, DFL-New Brighton. "It will bring clean-energy jobs."

CBO director Peter Orszag, commenting on federal cap-and-trade proposals, notes that this is simply giving revenue to those who get the allowances under the cap. Proposals currently exist in S. 2191 to give away allowances that CBO values at $145 billion. We don't have a similar number for Minnesota. And if the feds pass their cap-and-trade proposal, what happens to Rep. Knuth's bill?

Orszag's idea instead: Have government sell the allowances, and use the revenues to reduce taxes. Did anyone in the DFL legislature come up with this idea of reducing taxes? Naw, they're happy to give away your air rights for a better Minnesota!

Labels: economics, Minnesota