We’re facing two enormous problems, one short-term, one long-term – and both demanding quick, ambitious, expensive responses. I refer of course to the precarious state of the U.S. and global economies, and to climate change. The biggest question that Barack Obama will face over the next few years is how to responsibly balance these priorities – and it’s not immediately clear they can be balanced.

The working consensus right now among the developed world’s governments is to battle global warming by raising the cost of carbon emissions. Obama has proposed a cap-and-trade system with a permit auction that will oblige power companies and other industries to pay for the privilege of pumping CO2 into the air. This will raise costs for the affected industries (though they can lower them by finding ways to cut emissions). A good portion of those costs will be passed on to the consumer.

If raising energy costs in fair economic weather is considered political suicide, what happens if you raise them – even prospectively – in the middle of a global downturn?

That will certainly be the argument marshaled by opponents, who certainly know how to lobby. It has some validity as a matter of both substance and politics. However, I’m wondering if we haven’t reached the point where those normal rules don’t – and shouldn’t – apply anymore. Cap-and-trade would raise energy costs, but not immediately; and when the program gets fully underway, the revenue it generates could be quite useful plugging holes in a federal budget running massive post-bailout deficits:

If a cap-and-trade plan were passed in 2009, it would probably take effect in 2012 or so, and the revenue stream would start small the next year and then grow every year after that. That’s perfect timing. We don’t want to raise taxes right now, but a program that guaranteed a growing revenue stream starting a few years from now would help convince investors that the current budget deficit won’t last forever.

I’m also not convinced that boosting energy costs is political poison always and everywhere. Climate is a serious global crisis and it’s time to take it seriously. Real, consequential leadership (the kind Obama aspires to) does sometimes involve calling for sacrifices, and when leaders call for it people have been known to respond.

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