Exxon Mobil chief executive Rex Tillerson on why he wants a carbon tax of “somewhere north of” $20 a ton (really!) rather than a cap-and-trade system modeled on Europe’s.

I agree with his criticisms of cap-and-trade (can’t believe I’m saying I agree with him on anything):

Such a system was put in place in the European Union. Unfortunately, the European scheme is struggling to achieve the overall reductions that its supporters had hoped for.

One of the reasons for this is that cap-and-trade systems inevitably introduce unnecessary cost and complexity that undercut their effectiveness.

It is important to remember that a cap-and-trade system requires a new market infrastructure for traders to trade emissions allowances. This new “Wall Street” of emissions brokers will take the emphasis away from the goal of reducing carbon emissions and focus its attention on trading on price volatility. For businesses and consumers, these market gatekeepers and resultant price swings add cost and they create uncertainty. “Also, cap-and-trade systems, because of their complexity, have inherent problems with verification and accountability. They require a vast expansion of administrative and regulatory officials to ensure emissions allowances are not exceeded. This is another cost for businesses and consumers to bear.

Read on for more.