Well, now that we've settled that this blog is powered by love and love alone… A few days ago, The Wall Street Journal flagged a new report by the IMF that looked at the costs of tackling climate change and found that the global economy really wouldn't collapse if Al Gore gets his way:

The policies needed to reduce emissions by 60% from 2002 would leave the global economy about 2.6% smaller than it otherwise would be in 2040, the IMF projected. Even so, the global economy would grow to about 2.3 times its current size between 2007 and 2040.

There's even a chart and everything. Now, this jibes with a recent OECD study, which examined the costs of stabilizing carbon concentrations in the atmosphere at 450 parts per million—a target many climate experts recommend (we're at 383 ppm now)**. Doing that would only leave the world's economy 2.5 percent smaller in 2050 than if we did nothing—basically, it'd cost us only a year's economic growth. Of course, there are questions about how best to distribute those costs, but the basic point is that the overall goal is very affordable.

But that raises the question: If big emissions cuts are so relatively painless, how come so many countries haven't been able to do it? As Leila Abboud reports, Europe has done an awful job of curbing its carbon emissions since Kyoto came into effect. Part of the problem is that Europe's cap-and-trade regime was horribly designed. Governments miscalculated and handed out way too many pollution permits to energy-intensive industries like steel and aluminum—those companies barely had to make any changes (although they were able to raise their prices to match the opportunity cost of selling off their permits—making a tidy profit).

That's partly why so many environmentalists are complaining about Lieberman-Warner, the cap-and-trade bill that currently has the best chance of passing Congress (at least for now). Green groups—and many economists, for that matter—would rather see all of the pollution permits auctioned off, rather than given away for free, so as to make the whole thing closer to a carbon tax. I think they're right about that. (For the record, Obama and Clinton back this approach; McCain doesn't.)

In a similar vein, Japan—which hasn't met its Kyoto targets either—has been arguing that the whole Kyoto blueprint is flawed, and a new global treaty should set targets by sector, rather than for each individual country. There's a fuller explanation of that proposal here, and it's intriguing, but still very vague. Anyway, this post is my rambling way of stating the obvious: Even if tackling climate change is totally cheap and painless in the abstract, the design details matter—and have that two-horns-and-a-pitchfork quality to them.

**Then again, some scientists, like NASA's James Hansen, think we have to go even lower. Much, much lower.

--Bradford Plumer