I distinctly remember that a huge portion of the debate around the Kyoto pact was that the US economy would be seriously harmed by the imposition of a carbon tax to fund energy research and improve efficiency. The US's experience of the past several years shows that those economists were wrong. The only thing we have to show for their mistake is lost time and a slew of fat and happy energy execs and shareholders

A major argument used during any debate about global warming is that the shock of a energy price hike would do significant damage to the economy. During the Kyoto debate and even the tepid McCain-Lieberman bill economists - usually on the dole of the oil companies and their allies - trotted out all sorts of macro-economic models that purported to show that the world's largest economy simply couldn’t handle any effort to limit carbon emissions. While those arguments weren't very strong IMO, they were provided legislators with the cover they needed to sell out future generations.

It turns out the economists were wrong. And we have nothing to show for it.

In looking at recent energy trends I was struck by the steepness of the rise in oil/energy prices since the US invasion of Iraq. I was similarly struck by the fact that despite this massive price shock the economy seems to be humming right along.

While there are real concerns about savings and the distribution of wealth, productivity, corporate profits, and the stock market are all rising. All of this has occurred despite the fact that the price of oil has more than doubled in the space of just a few years.

With this in mind, I pose everyone a 'what if'. What if say a quarter of the windfall secured by the energy companies had instead been a tax that was directed at renewable energy R&D? What if another quarter of that windfall had gone into retrofitting the homes and businesses of Americans to make them more energy efficient? What if those retrofit dollars were used to hire tens of thousands of unemployed and underemployed Americans to do the work? What if the R&D had yielded promising results that could be developed into a thriving new industry?

There are too many what ifs to mention.

But now we are where we are. We've lost precious time. Other countries are moving ahead of us. Our planet continues to warm, daily approaching a point of no return. Countless species edge closer to extinction. Energy companies continue to plunder the earth and our pockets. Our leaders cover their ears, close their eyes, and scream at us that it’s nothing to worry about. And even it is, then there's nothing we can do about it and we should simply learn to cope.

But all is not lost. We've been provided with a natural experiment on a global scale. We now know that our economies can handle an oil price shock. We now know that the nay-saying economists were all wrong. And we now know more than ever that we need to do something about it.