Even those who support the idea of a cap-and-trade approach to climate change think the Waxman-Markey bill, aka the American Clean Energy and Security Act of 2009, is a mess. Writing in today's WSJ, environmental law professors Richard Stewart and David Schoenbrod, argue against the bill:

Waxman-Markey is largely top-down regulation dressed in cap-and-trade clothing. It purports to set a cap on greenhouse gases, but the cap is so loose in the early years that through the use of cheap offsets the U.S. need not significantly reduce its fossil-fuel emissions until about 2025. Then the bill would require a nosedive in fossil-fuel emissions. This balloon mortgage pledge of big cuts later is unlikely to be kept.

The top-down directives come in three forms. First, electric utilities, auto makers and states get free allowances on the condition that they comply with regulations requiring coal sequestration, alternative energy sources, energy conservation, advanced auto technology and more. Second, many other provisions of the 1,428 page bill mandate outright regulation on subjects ranging from how electricity is generated to off-road vehicles and household lighting. Third, still other provisions provide subsidies for government-chosen technology "winners" such as alternate energy sources, plug-in vehicles and weatherization of old buildings.

Former Senator Tim Wirth, who sought to negotiate an international climate change agreement in the Clinton Administration, agrees that the bill is "out of control."

The WSJ reported earlier this month that the two economists credited with inventing the idea of a cap-and-trade pollution control regime, Thomas Crocker and John Dales, doubt its ability to control carbon emissions.

Mr. Crocker and other pioneers of the concept are doubtful about its chances of success. They aren't abandoning efforts to curb emissions. But they are tiptoeing away from an idea they devised decades ago, doubting it can work on the grand scale now envisioned. . . .

Mr. Crocker sees two modern-day problems in using a cap-and-trade system to address the global greenhouse-gas issue. The first is that carbon emissions are a global problem with myriad sources. Cap-and-trade, he says, is better suited for discrete, local pollution problems. "It is not clear to me how you would enforce a permit system internationally," he says. "There are no institutions right now that have that power." . . .

The other problem, Mr. Crocker says, is that quantifying the economic damage of climate change -- from floods to failing crops -- is fraught with uncertainty. One estimate puts it at anywhere between 5% and 20% of global gross domestic product. Without knowing how costly climate change is, nobody knows how tight a grip to put on emissions.

In this case, he says Washington needs to come up with an approach that will be flexible and easy to adjust over a long stretch of time as more becomes known about damages from greenhouse-gas emissions. Mr. Crocker says cap-and-trade is better suited for problems where the damages are clear -- like acid rain in the 1990s -- and a hard limit is needed quickly.

"Once a cap is in place," he warns, "it is very difficult to adjust." For example, buyers of emissions permits would see their value reduced if the government decided in the future to loosen the caps.

Dales, who died in 2007, also expressed skepticism on the utility of cap-and-trade for carbon emissions, as has David Montgomery, who is generally credited with helping to develop Dales' and Crocker's ideas.

Some cap-and-trade proponents remain undaunted, and seem surprised that the legislative effort to design a carbon cap-and-trade regime has produced such an unwieldy monstrosity of legislation. They shouldn't be. As I've argued before, the inherent complexity of a universal cap-and-trade scheme is an invitation to legislative meddling and special interest pleading. We rarely get "clean" legislation in Washington, but the more complex a legislative idea is, the more grime and grit it will collect, inducing unforeseen complications and undermining transparency.

There is a better way -- not perfect, but better. Rather than impose a carbon cap, which would require the government to develop complex rules for measuring and transacting credits, offsets, etc. -- Congress should adopt a broad-based tax on carbon, offset by reductions in other corporate and income taxes. Combined with policy measures designed to accelerate innovation in the energy sector, such as the replacement of traditional subsidies with prizes, a carbon tax would set the United States on a course of reducing its greenhouse-forcing emissions without spawning a new regulatory behemoth.