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Faculty & Staff Focus, General Information, Media Advisory, Research

LSU’s Joseph Mason Testifies Before Senate, Mentioned in WSJ

07/03/2014 02:30 PM

BATON ROUGE – On June 18, Hermann Moyse Jr./Louisiana Bankers Association Professor of Finance Joseph Mason testified before the U.S. Senate Environment and Public Works Committee Subcommittee on Clean Air and Nuclear Safety during a session titled “Climate Change: The Need to Act Now.” The Wall Street Journal subsequently referenced comments he made during his testimony about cap-and-trade.
 

In opening his testimony, Mason bemoaned the U.S. government’s insistence on pursing cap-and-trade mechanisms, particularly carbon.
 

“Since I am not a climate scientist I cannot opine from more than a lay perspective on whether there is a consensus in the discipline on man-made global warming,” Mason said. “Since I am an economist, however, I can say that there exists a wholesale consensus among economists that carbon is not well-suited for cap-and-trade.”
 

Laying out his argument, Mason noted that the price of carbon on cap-and-trade markets has not achieved levels to restrain output and that any effective government program will restrain economic growth. Additionally, he stated, consumers will feel the effects of any such program.
 

“Economists agree, cap-and-trade does not work for carbon,” Mason testified. “So why do politicians continue to pursue such mechanisms? It seems to me that while some paint ‘climate deniers’ as a problem in Congress, an equally troubling problem is ‘cap-and-trade failure deniers.’ Perhaps politicians think that adopting a market-based solution will get them off the hook for tough decisions on carbon tax rates. But, unfortunately for the rest of us, doing so only exposes the U.S. economy to new sources of fraud, theft and risk of loss while raising energy prices without reducing carbon output.”
 

Mason concluded that the government should take its time to research existing carbon abatement mechanisms “before embarking upon another two—or more—failed schemes that will enrich interest groups while continuing to allow carbon to grow as a national and global problem.”
 

The Wall Street Journal referenced Mason’s testimony in the July 2 article “Birth of a Climate Mafia,” which can be read here.
 

Mason’s full testimony can be found here.
 

The Department of Finance is a Chartered Financial Analyst, or CFA, Program Partner and a Certified Financial Planner, or CFP, Board-Registered Program that offers high quality curricula to undergraduate and graduate students interested in careers in corporate finance, asset management, real estate, insurance, banking, financial planning and business law. The department boasts internationally renowned research faculty in several areas, including derivatives, asset management, banking and spatial econometrics. The department’s Securities Markets Analysis Research & Trading Lab boasts the Bloomberg Professional service, the platform used by more than 300,000 leading business and financial professionals worldwide to make informed business decisions, and an extensive library of financial data bases including the Wharton WRDS System. Additionally, the department encourages, supports and conducts research in real estate by housing the nationally renowned Real Estate Research Institute.
 

For more information, visit www.business.lsu.edu/finance or call 225-578-6291.

E. J. Ourso College of Business
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