At the same time we are learning that global warming is far from an environmental crisis, we are also learning that ill-advised efforts to address it would make us noticeably poorer.

What is needed is balance. We must weigh the risks of global warming against the risks of global-warming policy. Otherwise, we may impose a radical environmental "cure" far worse than the warming "disease." Policymakers should pursue a course of treatment that delivers more environmental good than economic harm.

That hasn't been the case thus far.

Last year, the lead climate-change bill in Washington was the American Clean Energy and Security Act, the cap-and-trade bill sponsored by Reps. Henry A. Waxman, California Democrat, and Edward J. Markey, Massachusetts Democrat. It called for large, rapid reductions in U.S. greenhouse gas emissions - a 17 percent reduction by 2020, and an 83 percent cut by 2050.

Some proponents claimed the approach would be virtually cost-free - "only a postage stamp per day," according to President Obama. Some even claimed it would yield an economic bonanza of "green" jobs. Cap-and-trade, it seemed, would be a miracle cure for global warming.

Unfortunately, cap-and-trade is more a quackery than a cure. The only serious analysis of how it would affect temperatures concluded that, at best, the Waxman-Markey bill would lower the earth's temperature by no more than 0.2 degrees Celsius by 2100. That's a negligible amount of environmental "good." Even assuming that manmade warming poses a threat - an assumption that has all but been demolished by recent scientific evidence - measures like Waxman-Markey would do little to address it.

How about cost? The truth is, there is no cheap way to curtail carbon-dioxide emissions from fossil fuels. The reason we use fossil fuel for 85 percent of our energy is that it's far more plentiful and affordable than alternative sources of energy.

In 2008, before he latched onto the "postage stamp" rhetoric, Mr. Obama was more upfront about how he would wean America from fossil fuels. Under his plan, he said, energy prices would necessarily skyrocket. That's because cap-and-trade is really just a convoluted energy tax. It's designed to raise fossil-fuel prices to levels so painful that people are forced to reduce their consumption and, therefore, the emissions that go with it.

How high will costs rise? My Heritage Foundation colleague David Kreutzer found that Waxman-Markey would raise electricity rates by 90 percent, gasoline by 58 percent and natural gas by 55 percent. And that was only the tip of the iceberg. The total cost of Waxman-Markey works out to nearly $3,000 per household of four every year from 2012 to 2035.

Mr. Kreutzer also estimated net job losses averaging over 1 million per year - and that's after taking all those new "green" jobs into account. Some jobs will simply disappear. Others will move overseas, primarily to high-emitting nations like China or India that have no intention of hampering their growth by artificially raising energy prices. The final equation: Waxman-Markey would cost nearly $5 trillion for each one-tenth of a degree reduction registered.

Perhaps for this reason, the term "cap and trade" has become a pejorative. So now we see alternatives, such as "cap and dividend" or calls for national renewable electricity standards, which would require a certain percentage of electricity to be generated by alternative-energy sources like wind or solar power. These can be seen as scaled-back, but still very expensive, versions of cap and trade. No matter what they're called, all these approaches boil down to imposing astonishingly hefty taxes on energy to achieve minuscule reductions in temperatures.

But taxing emissions isn't the only - much less the best - way to make environmental progress. We can build a better energy "mousetrap" by letting the free market exercise its curative powers.

Free economies tend to be prosperous, and wealthy societies have the means and the desire to address environmental problems. Moreover, free economies tend to foster technological development that improves efficiencies, letting people produce more with less.

A recent study by the Cascade Policy Institute, a nonprofit public policy research and educational organization, concludes that the freest economies already boast lower carbon intensity and, thanks to constant technological improvements, those carbon intensities continue to fall.

Free-market policies - limited government, rule of law, property rights, free trade - are the best hope for a cleaner and more efficient energy future. And it's an approach that makes sense whether or not global warming turns out to be a problem.

Ben Lieberman is senior policy analyst in energy and the environment in the Heritage Foundation