There is a debate if winning the Nobel will push Gore into the 2008 presidential race. Only time can tell!

SCOTT JAGOW: In the State of the Union, President Bush said he wanted to mandate the use of certain gasoline alternatives like ethanol and force higher fuel economy standards for cars. I called up our economics correspondent Chris Farrell to get his thoughts on the Bush energy plan. In a nutshell, good intentions but the wrong approach.

CHRIS FARRELL: Do you really think that the government is in the best position to determine that ethanol is the right alternative fuel? What I would much rather see, what I would have really liked to have seen, now it would have been a moment, but if the President had said, ‘you know what, I’m going to join the Pigou Club. . .’

JAGOW: Come again? The Pigou Club?

FARRELL: The Pigou Club. Now this was started by Greg Mankiw and he was the former head of the Council of Economic Advisors under President Bush. He’s an economist at Harvard University. Pigouvian taxes are taxes that you impose when there’s a market failure. So the classic example are sin taxes, a tax on cigarettes as a way of discouraging people from smoking. Well he started the Pigou Club. A lot of economists have joined it. And all it says is ‘look, let’s just raise the gas tax and then let the market decide.’ If Scott wants to drive a fuel-efficient car and you raise the gas tax, there’s gonna be a lot of fuel-efficient cars out there. If Chris wants to drive a gas-guzzler, hey guess what, there’ll be gas-guzzlers available, I’m just gonna have to pay for it.

JAGOW: Wait, so Chris you’re telling me mandating certain things like ethanol use is a bad thing, but imposing a gas tax is a good thing? What’s the difference?

FARRELL: Only thing the government’s doing is saying, ‘there are some really bad effects from our lack of energy independence and our dependence on foreign oil.’ If you impose a broad-based tax, so you raise the cost, and then you unleash the wisdom of the market. You unleash the entrepreneurs in Silicon Valley. You know, they’re finding all kinds of new technologies. We don’t know if it’s ethanol, biomass, let’s just raise the price. It’s really, what’s the best way to encourage innovation. That’s really the issue.

JAGOW: OK let’s say you’re right and that a gas tax is the way to go . . .

FARRELL: A little skepticism there but OK, I’ll take it.

JAGOW: Just a healthy skepticism. Now just saying the word “tax,” if you’re running for President or if you are President or I mean who’s gonna buy this?

FARRELL: You’re absolutely right. What I would argue, if you package a gas tax, not only as part of energy security but part of attacking global warming and leading toward a more sustainable environment, there are ways that you can manipulate this situation so that the word “tax” doesn’t quite have the negative connotations which you have rightly raised. And it’s more like environmentally-conscious, attacking global warming . . .

JAGOW: OK Chris, thanks for sharing your thoughts.

FARRELL: Thanks a lot Scott.

JAGOW: Chris Farrell is the Marketplace economics correspondent.

Visit: Pigou Club

The low levels of oxygen in the water make it difficult for fish, oysters and other marine creatures to survive as well as important habitats such as sea grass beds. The cause is attributed mostly to fertilizers in the form of farm run-offs and sewage plants, but most often the utility consumers end up bearing the cost of clean up in the form of higher water usage charges.

In the US, particularly in areas with sensitive water bodies like the Chesapeake Bay, states have imposed additional duty for water usage dubbed the “flush tax”. Utility bills are expected to increase continually until 2014 to meet the demand for plant upgrades. This is due in part the US EPA mandate to reduce pollutant load enter such managed watersheds.

Does it mean the utility business will flourish? Usually not, the technology cost of clean up could run in millions of dollars. As an example, a plant that never required to meet Nitrogen pollutant limits would now need to spend millions to bring the levels down to below 3 mg/L (Parts Per Million) by the year 2010. So will the technology providers benefit from this crisis, probably a little, but cutting edge technology comes at a cost, and research consumes the majority of the profits.

So who is making the money? Clearly the only winners are the farmers, they pollute while benefiting from it, yet they never pay for the clean up. Why you may ask, faming is not a profitable business for one, with more than 50 percent of the world population involved in farming, the net GDP from farming is less than 4 percent, so there is no point going after those who can never pay, so the farming community weasels out, resulting in a bigger bill for you am I.

Read the rest of the story.

This is not just a great concept but something I personally urge everyone try, this in a way is the democratic back channel process that not only predicts potential outcome, but also help those in policy making steer key legislation to make it favorable to the collective for a change.

For a list of scientific studies on global warming and hurricane, visit net.org. For a light read on how it affects the political scenario in America, visit BBC for an op-ed by NET’s Philip Clapp.

The National Environmental Trust is a non-profit, non-partisan organization established in 1994 to inform citizens about environmental problems and how they affect our health and quality of life. Check out our campaigns and special reports (links to the left) to learn about the issues on which we currently focus.

Photo Courtesy: NASA