The man who is arguably the most credible progressive expert on economics has begun to seriously weigh in on the clean energy and global warming bill (see Krugman: Climate action “now might actually help the economy recover from its current slump” by giving “businesses a reason to invest in new equipment and facilities”).

In today’s column, “The Perfect, the Good, the Planet,” he argues for the bird in the hand:

If we’re going to get real action on climate change any time soon, it will be via some version of legislation proposed by Representatives Henry Waxman and Edward Markey. Their bill would limit greenhouse gases by requiring polluters to receive or buy emission permits, with the number of available permits — the “cap” in “cap and trade” — gradually falling over time….

So is Waxman-Markey — whose language was released last week — good enough?

Well, Al Gore has praised the bill, and plans to organize a grass-roots campaign on its behalf.

[Note:  I can mostly confirm that there will be a grassroots campaign on behalf of this bill by an organization associated with Nobelist Gore.]

I’m with Mr. Gore. The legislation now on the table isn’t the bill we’d ideally want, but it’s the bill we can get — and it’s vastly better than no bill at all.

Then Krugman explicitly addresses both the issue of a carbon tax and too many free permits.

First, however, let me note that, my response to Hansen’s dissing of cap-and-trade has generated discussion on the blogosphere — see the many links in Dave Roberts’ post at Grist, “Cap-and-trade vs. carbon tax: a bird in hand is worth two on Alpha Centauri.”

I would also note that ExxonMobil prefers a carbon tax (see here), and as the Miami Herald notes, “Republican lawmakers back carbon tax (yes, that’s right),” and so does our old friend Roger Pielke, Jr (see here), but that isn’t entirely news to CP readers (see “Finally, Roger Pielke admits he supports policies that will take us to 5-7°C warming or more“).

Still it must make any pro-tax climate science activist wonder a little how flawed and/or politically infeasible a carbon tax must be for it to be embraced by the country’s top deniers and delayers.

Here’s what Krugman has to say about it:

One objection — the claim that carbon taxes are better than cap and trade — is, in my view, just wrong. In principle, emission taxes and tradable emission permits are equally effective at limiting pollution. In practice, cap and trade has some major advantages, especially for achieving effective international cooperation.

Not to put too fine a point on it, think about how hard it would be to verify whether China was really implementing a promise to tax carbon emissions, as opposed to letting factory owners with the right connections off the hook. By contrast, it would be fairly easy to determine whether China was holding its total emissions below agreed-upon levels.

Krugman is more concerned about the allocations, although not for the reason you might think:

The more serious objection to Waxman-Markey is that it sets up a system under which many polluters wouldn’t have to pay for the right to emit greenhouse gases — they’d get their permits free. In particular, in the first years of the program’s operation more than a third of the allocation of emission permits would be handed over at no charge to the power industry.

Now, these handouts wouldn’t undermine the policy’s effectiveness. Even when polluters get free permits, they still have an incentive to reduce their emissions, so that they can sell their excess permits to someone else. That’s not just theory: allowances for sulfur dioxide emissions are allocated to electric utilities free of charge, yet the cap-and-trade system for SO2 has been highly successful at controlling acid rain.

But handing out emission permits does, in effect, transfer wealth from taxpayers to industry. So if you had your heart set on a clean program, without major political payoffs, Waxman-Markey is a disappointment.

Yes, the allocation is a disappointment to many, including me.  But the pro-allocation forces had the political mojo.  And so we move on.

Still, the bill represents major action to limit climate change. As the Center for American Progress has pointed out, by 2020 the legislation would have the same effect on global warming as taking 500 million cars off the road. And by all accounts, this bill has a real chance of becoming law in the near future.

Woo-hoo (see “Pollution cuts in 2020 from House clean energy bill equal to taking 500 million cars off the road — and double that in 2030“)!

So opponents of the proposed legislation have to ask themselves whether they’re making the perfect the enemy of the good. I think they are.

After all the years of denial, after all the years of inaction, we finally have a chance to do something major about climate change. Waxman-Markey is imperfect, it’s disappointing in some respects, but it’s action we can take now. And the planet won’t wait.

Precisely.

Later in the week, I’ll discuss in more detail how I reconcile my climate science realism with my climate politics realism, but the bottom line is that in my analysis, failure to pass the bill essentially eliminates the chance we have to stabilize anywhere near 450 ppm, whereas passing the bill gives us a solid, oh, 1-in-5 chance of doing so (and maybe more).

If you don’t start moving, you just never get anywhere.