Paul Krugman must read on environmental economics

Paul Krugman, the economist and Nobel Prize winner is loathed by conservatives, partly because he is right most of the time. He constantly criticized Bush's economic policies and warned often and early about the housing bubble while everyone else slept.

He has a must read article in the NY Times magazine about environmental economics. He argues for market based solutions which conservatives constantly claim will destroy the economy despite minimal evidence to support this.

Here is a key quote from the article.

In any case, experience suggests that market-based emission controls work. Our recent history with acid rain shows as much. The Clean Air Act of 1990 introduced a cap-and-trade system in which power plants could buy and sell the right to emit sulfur dioxide, leaving it up to individual companies to manage their own business within the new limits. Sure enough, over time sulfur-dioxide emissions from power plants were cut almost in half, at a much lower cost than even optimists expected; electricity prices fell instead of rising. Acid rain did not disappear as a problem, but it was significantly mitigated. The results, it would seem, demonstrated that we can deal with environmental problems when we have to.