IN the debate over global climate change, there is a yawning gap that needs to be bridged. The gap is not between environmentalists and industrialists, or between Democrats and Republicans. It is between policy wonks and political consultants.

Among policy wonks like me, there is a broad consensus. The scientists tell us that world temperatures are rising because humans are emitting carbon into the atmosphere. Basic economics tells us that when you tax something, you normally get less of it. So if we want to reduce global emissions of carbon, we need a global carbon tax. Q.E.D.

The idea of using taxes to fix problems, rather than merely raise government revenue, has a long history. The British economist Arthur Pigou advocated such corrective taxes to deal with pollution in the early 20th century. In his honor, economics textbooks now call them “Pigovian taxes.”

Using a Pigovian tax to address global warming is also an old idea. It was proposed as far back as 1992 by Martin S. Feldstein on the editorial page of The Wall Street Journal. Once chief economist to Ronald Reagan, Mr. Feldstein has devoted much of his career to studying how high tax rates distort incentives and impede economic growth. But like most other policy wonks, he appreciates that some taxes align private incentives with social costs and move us toward better outcomes.

Those vying for elected office, however, are reluctant to sign on to this agenda. Their political consultants are no fans of taxes, Pigovian or otherwise. Republican consultants advise using the word “tax” only if followed immediately by the word “cut.” Democratic consultants recommend the word “tax” be followed by “on the rich.”

Yet this natural aversion to carbon taxes can be overcome if the revenue from the tax is used to reduce other taxes. By itself, a carbon tax would raise the tax burden on anyone who drives a car or uses electricity produced with fossil fuels, which means just about everybody. Some might fear this would be particularly hard on the poor and middle class.

But Gilbert Metcalf, a professor of economics at Tufts, has shown how revenue from a carbon tax could be used to reduce payroll taxes in a way that would leave the distribution of total tax burden approximately unchanged. He proposes a tax of $15 per metric ton of carbon dioxide, together with a rebate of the federal payroll tax on the first $3,660 of earnings for each worker.

The case for a carbon tax looks even stronger after an examination of the other options on the table. Lawmakers in both political parties want to require carmakers to increase the fuel efficiency of the cars they sell. Passing the buck to auto companies has a lot of popular appeal.

Increased fuel efficiency, however, is not free. Like a tax, the cost of complying with more stringent regulation will be passed on to consumers in the form of higher car prices. But the government will not raise any revenue that it can use to cut other taxes to compensate for these higher prices. (And don’t expect savings on gas to compensate consumers in a meaningful way: Any truly cost-effective increase in fuel efficiency would already have been made.)

More important, enhancing fuel efficiency by itself is not the best way to reduce energy consumption. Fuel use depends not only on the efficiency of the car fleet but also on the daily decisions that people make — how far from work they choose to live and how often they carpool or use public transportation.

A carbon tax would provide incentives for people to use less fuel in a multitude of ways. By contrast, merely having more efficient cars encourages more driving. Increased driving not only produces more carbon, but also exacerbates other problems, like accidents and road congestion.

Another popular proposal to limit carbon emissions is a cap-and-trade system, under which carbon emissions are limited and allowances are bought and sold in the marketplace. The effect of such a system depends on how the carbon allowances are allocated. If the government auctions them off, then the price of a carbon allowance is effectively a carbon tax.

But the history of cap-and-trade systems suggests that the allowances would probably be handed out to power companies and other carbon emitters, which would then be free to use them or sell them at market prices. In this case, the prices of energy products would rise as they would under a carbon tax, but the government would collect no revenue to reduce other taxes and compensate consumers.

The international dimension of the problem also suggests the superiority of a carbon tax over cap-and-trade. Any long-term approach to global climate change will have to deal with the emerging economies of China and India. By some reports, China is now the world’s leading emitter of carbon, in large part simply because it has so many people. The failure of the Kyoto treaty to include these emerging economies is one reason that, in 1997, the United States Senate passed a resolution rejecting the Kyoto approach by a vote of 95 to zero.

Agreement on a truly global cap-and-trade system, however, is hard to imagine. China is unlikely to be persuaded to accept fewer carbon allowances per person than the United States. Using a historical baseline to allocate allowances, as is often proposed, would reward the United States for having been a leading cause of the problem.

But allocating carbon allowances based on population alone would create a system in which the United States, with its higher standard of living, would buy allowances from China. American voters are not going to embrace a system of higher energy prices, coupled with a large transfer of national income to the Chinese. It would amount to a massive foreign aid program to one of the world’s most rapidly growing economies.

A global carbon tax would be easier to negotiate. All governments require revenue for public purposes. The world’s nations could agree to use a carbon tax as one instrument to raise some of that revenue. No money needs to change hands across national borders. Each government could keep the revenue from its tax and use it to finance spending or whatever form of tax relief it considered best.

Convincing China of the virtues of a carbon tax, however, may prove to be the easy part. The first and more difficult step is to convince American voters, and therefore political consultants, that “tax” is not a four-letter word.

Illustration by David Simonds

IF YOU believe what they say about themselves, big companies have never been better citizens. In the past decade, “corporate social responsibility” (CSR) has become the norm in the boardrooms of companies in rich countries, and increasingly in developing economies too. Most big firms now pledge to follow policies that define best practice in everything from the diversity of their workforces to human rights and the environment. Criticism of CSR has come mostly from those on the free-market right, who intone Milton Friedman's argument that the only “social responsibility of business is to increase its profits” and fret that business leaders have capitulated to political correctness. But in a new twist to the debate, a powerful critique of CSR has just been published by a leading left-wing thinker.

In his new book, “Supercapitalism”, Robert Reich denounces CSR as a dangerous diversion that is undermining democracy, not least in his native America. Mr Reich, an economist who served as labour secretary under Bill Clinton and now teaches at the University of California, Berkeley, admits to a Damascene conversion, having for many years “preached that social responsibility and profits converge over the long term”. He now believes that companies “cannot be socially responsible, at least not to any significant extent”, and that CSR activists are being diverted from the more realistic and important task of getting governments to solve social problems. Debating whether Wal-Mart or Google is good or evil misses the point, he says, which is that governments are responsible for setting rules that ensure that competing, profit-maximising firms do not act against the interests of society.

One after another, Mr Reich trashes the supposed triumphs of CSR. Socially responsible firms are more profitable? Nonsense. Certainly, companies sometimes find ways to cut costs that coincide with what CSR activists want: Wal-Mart adopts cheaper “green” packaging, say, or Starbucks gives part-time employees health insurance, which reduces staff turnover. But “to credit these corporations with being ‘socially responsible' is to stretch the term to mean anything a company might do to increase profits if, in doing so, it also happens to have some beneficent impact on the rest of society,” writes Mr Reich.

Worse, firms are using CSR to fool the public into believing that problems are being addressed, he argues, thereby preventing more meaningful political reform. As for politicians, they enjoy scoring points by publicly shaming companies that misbehave—price-gouging oil firms, say—while failing to make real changes to the regulations that make such misbehaviour possible, something Mr Reich blames on the growing clout of corporate lobbyists.

What will CSR advocates make of this? Few will dispute that government has a crucial role to play in setting the rules of the game. Many will also share Mr Reich's concern about the corrosive political power of corporate money. But Mr Reich has it “exactly backwards”, says John Ruggie of Harvard University. If citizens and politicians were prepared to do the right thing, he says, “there would be less need to rely on CSR in the first place.”

Thoughtful advocates of CSR also concede that companies are unlikely to do things that are against their self-interest. The real task is to get them to act in their enlightened long-term self-interest, rather than narrowly and in the short term. Mr Reich dismisses this as mere “smart management” rather than social responsibility. But done well, CSR can motivate employees and strengthen brands, while also providing benefits to society. Understanding and responding to the social context in which firms operate is increasingly a source of new products and services, observes Jane Nelson of the Prince of Wales International Business Leaders Forum. Telling firms they need not act responsibly might cause them to under-invest in these opportunities, and to focus excessively on short-term profits.

Intriguingly, Mr Reich looks back fondly to what he calls the “not quite golden age” in America after the second world war when firms really were socially responsible. Business leaders believed they had a duty to ensure that the benefits of economic growth were distributed equitably, in contrast to their modern counterparts, argues Mr Reich. What changed? Back then, big American firms enjoyed the luxury of oligopoly, he says, which gave them the ability to be socially responsible. Today's “supercapitalism” is based on fierce global competition in which firms can no longer afford such largesse.

Lenny Mendonca of McKinsey takes a different view of the post-war period. After the war business leaders realised it was in their enlightened self-interest to rebuild the global economy and reinvent the social contract, he says, and there is a similar opportunity today, given problems ranging from climate change to inadequate education, where firms' long-term self-interest may mean that they have an even greater incentive to find solutions than governments do. Certainly, in America, business leaders are advocating government action on education, climate change and health-care reform that is neither zero-sum nor short-termist, and which, indeed, may not differ much from Mr Reich's own preferences.

Though his book hits many targets, both bosses and CSR activists are likely to dismiss it as fundamentally unworldly and to agree with Simon Zadek, the boss of AccountAbility, a CSR lobby group. “The ‘whether in principle' conversation about CSR is over,” he says. “What remains is ‘What, specifically, and how?'”

THE costliest place in the world to get high is Japan, according to the United Nations Office of Drugs and Crime's annual World Drug Report. The street price of a gram of cannabis weed was $58.30 in 2005, over twice as much as in the next most expensive nation, Australia. Americans pay nearly twice as much as Canadians. Similar disparities occur in Europe. Although the Netherlands is the only Western country where cannabis can be bought legally, punters pay more there than in Germany or France. Prices are cheapest in developing countries, where enforcement is less strict.

AP

Torsten Silz/Agence France-Presse/Getty Images

The Mercedes-Benz F700 concept car is a rolling test bed of new environmental technologies, including the DiesOtto engine, which produces 238 horsepower and 295 foot-pounds of torque from just 1.8 liters.

FRANKFURT

European automakers, stung by criticisms from environmentalists and government regulators that they are late to the green party, will be using the 2007 Frankfurt motor show to showcase everything in their alternative fuel and powertrain arsenals.

The biennial show, the 62nd Internationalen Automobil-Ausstellungen Cars, will be held at the mammoth CongressCenter Messe Frankfurt convention center from Thursday through Sept. 23. Press preview days began Monday night and continue through Wednesday. Angela Merkel, the German chancellor, will open the show to the public on Thursday.

Organizers boast the show will be “the leading international fair for sustainable mobility,” and millions of euros will be spent on lavish displays touting environmentally responsible motoring. The show, spread throughout 2.5 million square feet of exhibit area, is always brutal on the podiatric health of journalists, some 10,000 of whom have reportedly received credentials. They will have to hustle to see how many of the 88 world premieres they can attend; perfect attendance is impossible because with so many introductions packed into barely two press days, multiple introductions are scheduled simultaneously, at widely disparate locations.

To pound home the sustainability theme, press shuttles are various alternative fuel and propulsion vehicles. Journalists are also being offered “eco-training” classes to learn economical driving techniques. A BioFuels Bar has information about the advantages and possible uses of biofuels and also dispenses biofuel-themed drinks. And the physically fit can hike an “Environmental Trail” around the convention center (a complex of buildings so sprawling it is served by three train stations).

The stars of the show, not surprisingly considering the host country, figure to be the German automakers. Mercedes-Benz is planning to unveil as many as 18 products, including Bluetec diesels and hybrids with both gasoline and diesel engines.

The centerpiece of the newly emancipated DaimlerMinusChrysler is the F700 concept, an S-Class-sized vehicle with five doors and 40 miles per gallon economy. The F700 is a rolling test bed of new environmental technologies, including the DiesOtto engine. This four-cylinder gasoline engine, pronounced “Dees-Otto” (not De Soto), produces 238 horsepower and 295 foot-pounds of torque from just 1.8 liters , using a new technology known as homogenous charge compression ignition. The engine has two ignition modes — compression, under light loads, and spark at other times — to boost fuel mileage. The company said the DiesOtto engine has the strong low-end torque and fuel savings of a diesel, but with emissions that are lower than a diesel.

BMW is taking the wraps off a new X6 crossover, an X5-based S.U.V.-type vehicle, powered by a gasoline-electric hybrid engine. The “sporty, coupe-like” X6, to be built in Spartanburg, S.C., seats four and has five doors. Of interest here to enthusiasts is the much anticipated 1-Series coupe. The 1-Series offerings, the 128i and 135i, are throwbacks to the nimble, quick, shoebox-sized BMWs of 30 years ago. With the same 300-horsepower turbo engine that is in some 3- and 5-Series models, the 135i should be a rocket, perhaps even “a modern BMW 2002”, as Car and Driver magazine gushes.

Another important newcomer is the Volkswagen City Expert concept, which could be VW’s most important new vehicle since the New Beetle. VW will also show the production-ready Tiguan, a smaller Touareg-themed S.U.V., and BlueTec diesel models.

Audi is displaying a new line of diesel engines that the company said have the “cleanest diesel technology in the world.” The turbodiesel powerplants employ a fuel-saving, hybrid-like stop-start system and a chemical injection system to reduce nitrogen emissions. An all-new Audi A4 sedan is also making its debut, as is the A8, the brand’s flagship sedan that has had a facelift.

Not to be outdone by all this emphasis from German automakers on green technology, even Porsche is bringing out a gasoline-electric hybrid version of its Cayenne S.U.V. here. Relax, Porsche-philes, also on tap is the new 911 GT2, the most powerful street-legal 911 ever.

General Motors’s Opel division is in fact headquartered in Frankfurt and is introducing here an Agila minivan and a hybrid concept that will have G.M.’s E-Flex propulsion system (first shown on the Chevrolet Volt concept at the 2007 Detroit auto show). In this variation, an Opel Astra-like vehicle is equipped with the electric motors and a turbodiesel engine. Since Saturn seems to get everything Opel brings out, is this related to the Saturn plug-in hybrid that was announced at the ’06 L.A. Auto Show? Hmmm.

American manufacturers certainly have increased their presence here in recent years. G.M. is expanding its Euro-only Cadillac BLS line with an “estate” or station wagon version of the sedan. The Swedish-built car is essentially a Saab 9-3 wagon in a Caddy-lite disguise. Also showing here: A Chevrolet Aveo hatchback. No crowding, please. Over at Saab, there’s a hot new Turbo X to ogle.

Dodge continues to expand its offerings here with a new Journey crossover that it will sell in Europe. The Journey is built on a stretched Avenger platform and will replace the short wheelbase Chrysler Voyager minivan sold here.

Ford, in the midst of a product realignment that will bring many European versions of its cars to America, is showing two new concepts here. The Verve is supposed to be a sneak preview of the upcoming Fiesta subcompact, due in Europe next year and North America and Asia a year or two later. The Kuga concept is a Focus-based crossover that is nearing production form.

Jaguar, which Ford has on the block, is bringing out the latest vehicle that is supposed to save the company (after previous models failed to do so): the new XF sedan. Shown at Detroit as the sleek C-XF concept, the XF has been plumped up a bit — so people will actually fit in it — and equipped with a high-horsepower V-8. Can the XF make people forget the S-Type? What couldn’t?

Aston Martin, a company also already sold by Ford, is showing that there is indeed life after Ford, with the unveiling of its DBS flagship.

Rounding out the Brit contingent here is the new Mini Clubman, which is 10-inches longer, with three more doors, than a Mini. Alas, no wood-trimmed “shooting brake” wagon.

Other European manufacturers, which don’t sell in the United States, such as Peugeot, Renault, Fiat, Skoda, are also having important debuts here. Of special note is the too-cute Fiat 500.

Asian manufacturers have a solid lineup of Frankfurt introductions, too, including the Mazda6, Mitsubishi’s Concept-cX, Toyota’s unfortunately named Endo microcar, Nissan’s Mixim electric car, and a Honda Accord wagon that may be a design precursor for the next Acura TL. Hyundai has a Veloster coupe to show here, and Kia has a Sports Coupe Concept. Chinese automakers, two of which are already selling cars in Europe, also have displays.