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Carbon trading problems
An opinion piece in The Independent argues that carbon trading is not the most effective way to reduce emissions, and is in fact counterproductive.
I've been known to make this argument myself, so I'm glad to see it in a major UK paper. (It will be quite a wait before we see it in major U.S. media.)
Gar Lipow, a long time environmental activist and journalist with a strong technical background has spent years immersed in the subject of efficiency and renewable energy. He has written extensively on the economics of solving the global warming, and why pricing externalities (though important) cannot be the main driver of such solutions.
His on-line reference book compiling information on technology available today, “No Hair Shirt Solutions to Global Warming”, is available at http://www.nohairshirts.com.
His articles on the economics and politics of solving the climate crisis have been published in Z magazine and a number of small journals.
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Tod Brilliant Posted 3:56 am
12 Nov 2006
Real and immediate change/sacrifice needs to be made. The Stern Report, like so much of what we see in the green community, sugarcoats the issue. Solving real-world troubles with smoke-and-mirrors economics like carbon trading is a fool's errand.
My hat is off to you, Gar, for helping keep this debate alive on both sides of The Pond.
" . . . because the world doesn't matter anymore if you don't have the strength to go ahead and choose something that's really true." - Julio Cortazar
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sunflower Posted 5:03 am
12 Nov 2006
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Jason D Scorse Posted 5:19 am
12 Nov 2006
J.S.
J.S. teaches environmental economics and blogs at http://www.voicesofreason.info.
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Jason D Scorse Posted 5:22 am
12 Nov 2006
J.S.
J.S. teaches environmental economics and blogs at http://www.voicesofreason.info.
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sunflower Posted 5:37 am
12 Nov 2006
Further, morality goes far beyond the boundaries of economics. Contributing to global warming is a crime against humanity, or should be.
Without laws then murder, slavery, preemptive wars, and genocide become just issues of economics.
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Andrew Dessler Posted 5:43 am
12 Nov 2006
However, I believe there are several things wrong with your argument:
moving CO2 emission around is not like moving toxic sludge: CO2 emissions affect the global climate, it does not matter where the CO2 was emitted from. thus, the analogy with toxic sludge, which does impact the local population almost exclusively, is misleading.
any permit trading plan would include a provision that the number of permits declines with time. thus, such a policy would result in decreasing combustion of fossil fuels.
Several decades of experience with permit trading by U.S. utilities has shown that it is an effective way to reduce pollution at a low cost.
Overall, I continue to support inclusion of some type of permit trading system as perhaps the only way to address this problem.
Regards.
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Jason D Scorse Posted 5:57 am
12 Nov 2006
J.S.
J.S. teaches environmental economics and blogs at http://www.voicesofreason.info.
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sunflower Posted 6:28 am
12 Nov 2006
I have been working full time for decades on global warming mitigation. I thought we had more time, largely due to conservative climate scientists walking on thin political ice.
My plans of industrial innovation have been melted by the acceleration of warming and tipping points already occurring. It may be too late. Once Earth's albedo changes, plus melting methane, plus CO2 from warm soil, plus burning forests, and so on, then the contribution of anthropogenic CO2 won't matter a wit. And we can all party until we die. Schools and health care will not matter.
Economics is a science of probabilities and we are probably toast. The time has come to shut down coal, and replace market push with market pull.
On the moral front, it does not cost money (actually saves money) to carpool for humanity. But, that would create a hostile electorate for the carbon industries.
Cap and trade pales by comparison to carbon taxes.
I am on the war path against business as usual.
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caniscandida Posted 6:57 am
12 Nov 2006
Sunflower wrote:
<<
On a moral scale, burning fossil carbon ranks with global genocide. Proposals to buy the legal rights to murder innocents are amoral to the max.
>>
(I suspect he means "immoral," not "amoral.")
The second sentence is ethically defensible. The first one is not. But I understand the sentiment, and agree with it. And I would not characterize it as "demagoguery." We are in constant need of such wise people as Sunflower to recall to us our basic values.
More practically, I trust Andrew Dressler.
Chickens are our cousins!
So are other sensitive animals!
Enough is enough!
No more factory farms!
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sunflower Posted 7:39 am
12 Nov 2006
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Jason D Scorse Posted 7:53 am
12 Nov 2006
since energy demand is relatively inelastic it would have to be very high to get major changes anytime soon- think regressive
a tax does not guarantee a decrease in emissions, whereas cap and trade does
J.S.
J.S. teaches environmental economics and blogs at http://www.voicesofreason.info.
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Biodiversivist Posted 8:20 am
12 Nov 2006
How are you pulling that 1/2-gallon commute thing off? Just curious, is it a short but slow commute, a long one on mass transit...walking?
Tod,
The simplest and easiest way to implement your call for sacrifice would be for people to give away (via automatic deduction) most of their paychecks every two weeks to conservation and environmental organizations, and organizations doing research into renewable energy etc.
This would also hobble their own ability to consume, thus killing two birds with one stone. Sounds ridiculous? I agree. In other words, this is not going to happen.
Gar,
I'm with you on several issues. Carbon trading schemes are flawed. Government regulation is essential.
But, the most powerful force on this planet is the free market. Look at what it has done, both good and bad. The idea is to find creative ways to channel that force in environmentally benign directions. Government has all kinds of jobs only it can do. One of them is the creation of level playing fields to let the free market loose on a problem.
Consider the Internet, originally developed with public funds. As happens with many public goods it was turned over to private companies once proven successful - with infrastructure in place.
The Internet card is pulled all the time as an example of creativity in government. It was turned over to private companies to test on the free market. It hadn't been proven commercially successful, only technologically viable. No one could have predicted what happened next. If you read a history timeline of the Internet you will discover that government funded research played a very minor role in creating this thing that sits in front of us today. In fact, none of us would be using it without the super sophisticated, super cheap home computers created by the free market, which are used primarily to exchange data on the Internet. Before the Internet, personal computers in homes had little use other than to play games on, balance checkbooks, and word process. This is a classic example of technology begetting technology. We would not be exchanging these ideas here without the free market.
In the end, it all comes down to biodiversity. Help acquire and protect ecological hotspots, give to a conservation organization: http://www.saveourbiodiversity.com
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sunflower Posted 9:44 am
12 Nov 2006
Cassandra and Dave riding together use 1 gallon per day. Sandra alone in her Prius uses one gallon per day and Dave alone in his old truck (which now remains parked) uses 2 gallons per day. Total is 3 gallons per day. Cassandra and Dave riding together create a gallon of gas each, two gallons a day, out of thin air. In terms of carbon credits, Cassandra makes one gallon of gas per day. Her car makes gas.
The government giving Cassandra and Dave carbon credits would be expensive and intrusive.
A carbon tax is simple, and must escalate until substantially effective at curbing discretionary use of carbon. (A carbon tax will have far more impact on cheap coal than it will on expensive oil.)
If that does not work then we will need to make burning fossil carbon a crime with teeth.
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Jason D Scorse Posted 10:08 am
12 Nov 2006
J.S. teaches environmental economics and blogs at http://www.voicesofreason.info.
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sunflower Posted 11:09 am
12 Nov 2006
China uses cars, electric light, airplanes, nuclear reactors, computers, and so on. We can help China see the light in the sky.
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Biodiversivist Posted 12:50 pm
12 Nov 2006
In the end, it all comes down to biodiversity. Help acquire and protect ecological hotspots, give to a conservation organization: http://www.saveourbiodiversity.com
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Gar Lipow Posted 1:36 pm
12 Nov 2006
Don't want to repeat the points in my blog posts from Maxspeak. They are linked in this very short post so check them out.
If you want to lower fossil fuel consumption then regulate it - don't add an experimental unproven trading methodology to your regulations. (Yes, I said unproven. The success story of carbon trading, reducing sulfur emissions happened in an industry with fewer than 500 sources total. It happened in a an environment where sulfur emissions were already being regulated, and where the clean air act had already achieved a number of successes without trading. ) Ultimately the main way to reduce carbon emissions is a combination of regulation and public works. Infrastructure is always created through public funding; it may be given away afterwards, but begins with public subsidies. Think of transportation - canals, railroads, highways, water ports, air ports. Think of energy - rural electrification, municipal plants- key to development of our grid. Think of other utilities - gas, water and sewers.
And I have nothing against permits. But there is no real advantage to making them tradable. And there is a major disadvantage including measurability.
You want permits, here is how to make them work. Auction off carbon permits just as in the trading system. But auction them off to the fossil fuel producers. So each ton of coal, each barrel of oil, each MMCF of natural gas will already have the price of permit included in its cost. You then don't need a separate trading system. When you trade the fossil fuels you trade the permits too. You don't need a separate carbon trading system. And you can give the permits expiration dates, and reduce the number issued each year - just as in a classic trading system. You don't have to try to measure emissions at the source - which is something we don't have the infrastructure in place for at the moment. You don't have to put in place a massive new accounting system - equivalent to a VAT in complexity - to measure fuel purchased and carbon added the way you measure value added for VAT taxes. You are permitting at the point of production of fossil fuels (or at first sale if that is easier) - where gaming is most difficult. (Not impossible, as American Indian tribes who have been cheated all over the U.S. can tell you, but more difficult than anywhere else in the carbon cycle.)
But this makes sense only in context of process oriented regulations and public works for all the cases where we already know what to do. We know how to build buildings that consume virtually no outside energy for heating or cooling, and gain a great deal of natural light besides. We know how retrofit existing buildings at somewhat more expense (because we will have to include a degree of active solar). We know that modern appliances are nowhere hear their efficiency limits; tougher efficiency regulations for home appliances and office equipment can play a huge role.
We know that trains are the most efficient way transport both people and freight - and need to build more of them to move people out of cars and freight out of trucks.
We know that cars and trucks are not going to vanish in the near future, so we are going to have to make them more efficient, and run the cars (at least) mostly on electricity.
We already know how to produce wind electricity at 4 cents per kWh - sometimes less. We know how produce thermal solar electricity in the desert for around 11 cents per kWh.
So there are lots of things we can accomplish with public subsidies and processed based regulation that will help provide an the infrastructure to let the permit system I described to some good.
And so on.
What about other aspects of controlling global warming? Things like good forestry practices and soil conservation, while important are not suitable for putting a number on. We know that good agricultural and silvicultural practices are better in terms of carbon storage in soils than poor ones - but we really don't have a good means of measuring it. Carbon storage in soil varies from crop to crop. Within a given crop it varies from micro-climate to micro-climate, ecosystem to ecosystem, soil to soil, and year to year. Further carbon stored in soil may be released unexpectedly during warm weather. In short agricultural and forestry contributions to causing or fighting global warming are real, but something we can't measure very precisely. This is exactly the sort of circumstances that old fashioned process based regulation, rather than any type of tax or permitting system will work best on.
Carbon trading is worse than immoral - it is ineffective, and if you will follow the links, you will see it is counterproductive.
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Biodiversivist Posted 2:04 pm
12 Nov 2006
In the end, it all comes down to biodiversity. Help acquire and protect ecological hotspots, give to a conservation organization: http://www.saveourbiodiversity.com
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JMG Posted 2:39 pm
12 Nov 2006
It's not trading OR carbon taxes. It's both.
Whomever pointed out that carbon taxes are most effectively applied at the source (upstream) rather than at the point of use (downstream) goes to the head of the class.
Corporatists and industry constantly promote trading systems because it leaves them with the guaranteed legal right to pollute--at a big profit if you're TXU and are rushing to build 17 huge coal burners that you hope will win you a big stack of carbon allowances.
The bottom line is that we should not be rewarding anyone for releasing long-trapped carbon into the biosphere. Thus, rather than taxing consumption, we need to apply $100/ton to coal (1 ton coal is roughly 1 MWh, or 10 cents per kWh) and equivalent taxes on natural gas ($50 per ton-equivalent).
That's the upstream part.
4) Downstream, to mitigate the regressivity we employ the personal carbon allowances and permit trading--that is, each of us gets a carbon allowance that we can sell some or all of to others.
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DMavro Posted 6:41 pm
12 Nov 2006
I must say that you find me on the same wavelength with Andrew Dessler on this one.
Yes moral issues should not be disregarded but if out real target is to curb emissions, especially as far as the energy intesive industries are concerned, then we have to test the various methods and instruments, not only by running models etc but also by dicussing them and debating them with the various stakeholders and seing how everyone is affected.
I have recently carried out a project, entitled " Applying European emissions trading and renewable energy support mechanisms in the Greek electricity sector (ETRES)" and you can see on it's website (http://www.cres.gr/etres/) the various actions and methodologies followed in order to assess its impact at least on national level (although we have investigated the EU ETS scheme as a whole etc as well).
http://ecosophyingreece.blogspot.com/
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Bart Anderson Posted 7:36 pm
12 Nov 2006
I have to hold my nose when I assent to carbon trading, since the opportunities for corruption are so great. And as usual, the appetite for profits from the scheme seems to override the critical sense, so that an awareness of carbon trading's shortcomings is muted. My inner skeptic says: "Sounds like a scam."
As Ross Gelbspan writes in Toward A Global Energy Transition: International carbon trading cannot be the primary vehicle to propel a worldwide energy transition. Even if all the problems with monitoring, enforcement, and equity could be resolved, it could at best, be used as a fine-tuning instrument to help countries meet the final 10 to 15% of their obligations.
We simply can't finesse nature with accounting tricks.
A number of economists have been writing in the press about gas and carbon taxes, according to the NY Times in Raise the Gasoline Tax? Funny, It Doesn't Sound Republican (behind a paywall). Excerpt: ...In late September, as [Allen Greenspan, former chairman of the U.S. Federal Reserve] spoke to a group of business executives in Massachusetts, a question was posed as to whether he'd like to see an increase in the federal gasoline tax, which has stood at 18.4 cents a gallon since 1993. "Yes, I would," Mr. Greenspan responded with atypical clarity. "That's the way to get consumption down. It's a national security issue."
Mr. Greenspan isn't the only Republican-aligned economist to have discovered, or rediscovered, a fondness for higher energy taxes since leaving government service.
...What gives? Clearly, there is an emerging consensus among economists - right and left - that the nation would be better off, geopolitically and economically, if Americans used less gasoline.
...Others chalk up the rising chorus for a higher gas tax to a growing unity among economists across the political spectrum on the deleterious effects of global warming.
(8 Oct 2006)
Most recently, N. Gregory Mankiw (Harvard ecnomist) wrote an op-ed Raise the gas tax for the Wall Street Journal.
In sum, I think carbon and gas taxes are worth fighting for. Carbon trading, with proper oversight, could be a helpful adjunct. But it can also be a smokescreen, a justification to avoid real action.
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caniscandida Posted 7:43 pm
12 Nov 2006
Chickens are our cousins!
So are other sensitive animals!
Enough is enough!
No more factory farms!
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TokyoTom Posted 8:32 pm
12 Nov 2006
Still, mitigation approaches that move the market by creating carbon prices and sequestration incentives are the most effective and cheapest way both to mitigate and adapt. That would leave taxes and permits - with could be either at the emissions level or at the producer level, as Gar correctly notes in his follow-up comment. For the reasons he notes, distributing permits at the producer level has much lower enforcement costs. However, to soften the economic blow presented by a straight carbon squeeze, a sequestration scheme will also be needed that would allow producers to expand their permits by purchasing sequestration offsets that are recognized by some permitting authority. The market for such offsets would then fund investments in clean coal/gasification.
In preparing domestic policy we cannot forget the international linkage. To steer towards effective CO2 reductions, China and India need to be brought into the picture, and CDM is not sufficient. The West has trade policy leverage, but we will probably need to allocate these countries emissions rights above their current levels - rights that they can then sell back to the West. In other words, this will initially be a subsidy program that these countries can use to invest in the cleanest technologies.
If we set up permitting schemes at home, internationally trading can provide the funding and maximize efficiency. If we use taxes, then we will need to have another funding mechanism to providing funding to developing countries.
We will also need to focus on the huge task of helping the developing world to improve its development and resilience to unavoidable climate change. Perhaps ending the $250 million PER DAY war in Iraq will be a good start in finding funding, for investments that will improve our security much better than such military adventures.
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Gar Lipow Posted 3:24 am
13 Nov 2006
In terms of "softening" the blow - I've already suggested one means - public works. Build trains. Have something comparable to the old civilian conservation core that supplies free insulation of buildings and solar heating. (Or use target subsidies to accomplish the same thing - with some sort of criteria to make sure they don't act as a down payment on overpriced systems.) If that is enough, you have the revenue from auctioning production permits. Distribute that to consumers (as in the Sky Trust proposal) or use it as an additional source of revenue for clean energy development.
In terms of sequestration credits:
1) They are almost impossible to measure; gaming is not a secondary flaw but fundamental to the nature of the beast. We simply don't know how to measure most kinds of sequestration.
2)And a lot of sequestration in poor nations, aside from probably not reducing carbon, hurts the poor dreadfully by subsidizing projects that destroy their lives. A lot people in the South oppose the current Kyoto treaty - even though it imposes zero obligations on them. The carbon credits alone have made life miserable for enough people to generate opposition.
Auctioning off a limited number of permits to producers is the only way to institute a permitting system that would work. And even that needs to be secondary. If you don't have massive public works and efficiency regulations, all the clever permitting systems in the world will fail.
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Andrew Dessler Posted 4:10 am
13 Nov 2006
From an economics perspective, tradeable permit systems are virtually identical to a tax. I can't quite figure out how one can oppose a cap-and-trade system but be in favor of a tax(1)
No one opposed to permit systems has addressed my point that cap-and-trade systems have worked well on reducing NOx and SO2 from electric power plants.
(1)Yes, I realize there are differences between a tax and a permit system, but they are relatively minor. A permit system fixes the total quantity emitted, regardless of how much it costs to reduce to that level. A tax system fixes the cost of the last unit of emission to be cut - because emitters will cut until it is cheaper to pay the tax than cut further, then stop - regardless of how much emissions are actually reduced to reach this point. Consequently, if we are uncertain about the costs or benefits of cutting emissions, whether we prefer a tax or a permit system depends on which of these quantities - the marginal cost, or the total quantity reduced - it is more important to get right. For somewhat technical reasons, this means that a tax system is preferred when abatement costs increase sharply as controls are tightened, and a permit system is preferred when marginal damages of pollution increase sharply as controls are loosened to allow more pollution. If you really want to learn more about this, I cover it in my book.
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Gar Lipow Posted 5:36 am
13 Nov 2006
To address your first point:
A carbon trading system that WORKED would be indeed be very close to a carbon tax. We don't have the infrastructure in place to measure GHG emissions on the micro-level. And given that there are a lot of GHG's in addition to CO2, there is a real question of whether we even have the technical capability of putting accurate metering in place if we decided to do so. So there are only two forms of carbon trading that would work, and there is indeed very little to distinguish them fromm a carbon tax
Auction off permits to PRODUCERS. This is technically a tradeable permit system, since an oil driller, or coal miner who bought too many permits could sell excess permits to producers who bought too few. On another levels permits would indeed be traded extensively since every barrel of oil, MMCF of gas, or ton of coal would include in its cost the price of a permit - and thus permits would be traded along with fossil fuels. This is (just as you say) very close to a carbon tax, but with the added benefit that you are guaranteeing a ceiling on carbon emissions.
Sell carbon permits to anyone. Measure carbon usage by an accounting system similar to the VAT widely used outside the U.S. Basically make sure all sales fossil fuel consumed at any stage of production or consumption is accounted for, so that you need to buy a permit for any carbon equivalent unit you use. (Carbon already embedded in goods or services would have been paid for upstream, just as with VAT the price of an intermediate good bought will already include the cost of VAT paid.) This has no advantage over the first, but has much much higher transaction costs.
However, you will note that neither of these is what most carbon trading proponents favor. (And if that is what you support I have not objections, so long as it is proposed as part of a "three-legged stool" that also includes extensive public works, and process based regulations.
In practice people who favor carbon trading mostly favor the following:
1)Make it more complicated than a carbon tax, and thus more gameable, and thus a means of delaying reductions in fossil fuel reduction. This is especially true when sequestration is included, because we really don't know how to measure sequestration; include sequestration or project based permits (such as the CDM) and there is almost infinite room for gaming. As we have seen from the collapse of the Kyoto market, this is a non-trivial problem.
Carbon trading can be a means of bribing companies to support carbon reduction. By grandfathering in carbon credits, we allow major polluters to profit from reducing carbon emissions. I would argue that politically this kind of bribery may prove counterproductive in the long run. But aside from that if it has to be done there is a simpler method to accomplish this: allocate some of the revenue from auctioning permits at the producer level to bribery of big polluters.
Carbon trading can also be used as a way of bribing poor nations to develop in a cleaner, greener way. Again it makes more sense to simply provide "green" development aid directly.
Dresser, in terms of the "infinite power of the free market", I note you provide no rebuttal to the other examples I noted. BTW the Internet was in fact the Internet for quite some time before the cables that constitute it's core were turned over to the private hands. Also most of the "private" cable now included in the Internet backbone had to be built over public rights of way. Pipelines, roads, and so forth are classic public goods. Even if you turn them over to private industry, you still need government to grant easements over public and private lands alike - often over the protests of the private owners.
Infrastructure is not developed without extensive public works or massive subsidy and monopoly grants. Nor is it developed without extensive public regulations.
Look at economic history in the real world. For that matter look more extensively at the economic models - at the less simplified ones that incorporate human irrationality, and move beyond risk to uncertainty.
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Andrew Dessler Posted 6:17 am
13 Nov 2006
I don't know who these "people" are, but I doubt they're serious policy wonks on this issue. Serious discussion of cap-and-trade systems suggests implementing them like this: a permit for the carbon content would be required to import or to extract a unit of fossil fuel, while a new permit would be generated for each unit of carbon sequestered in a stable reservoir. The cost of the permit, like the emission fee, would follow the fuel through the economy, raising the price of carbon-based goods and services. Alternatively, an emission fee or a permit requirement can be imposed at the point where the fossil fuel is burned and the CO2 emitted. This is the approach being taken by the EU emission trading scheme.
Lipov, as you point out, there is no way to do this at the level of an individual, which is why no one is seriously talking about that approach. However, I do appreciate the straw man you've set up and then knocked down.
Regards.
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JMG Posted 6:28 am
13 Nov 2006
As for responding to your point that cap-and-trade systems have worked well on reducing NOx and SO2 from electric power plants, the main difference is probably the difference between a reaction product and a byproduct.
Carbon is not a contaminant byproduct of combustion the way SOx is, and it can't be adjusted through SCRs the way NOx can. Carbon dioxide IS the fundamental reaction product of combustion, period, whether that combustion occurs in a car, a power plant boiler, or a fireplace.
Further, as the piece on dams shows, what matters is CO2 equivalent (CO2e), not just CO2, or just methane, or NOx, or CFCs, or water vapor.
Where trading could be useful is at the consumer end--you give people ration chits that permit them to buy so much CO2e (or sell their quotas), rather than giving the allowances to producers (who then automatically produce as much CO2e as they can without exceeding their allowance). We might well find that people are more ready to limit demand than industry claims.
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sunflower Posted 6:34 am
13 Nov 2006
It's just steam from [solar dish] copper coils. It will pre-heat a customer's natural gas load which is $10 million per year. Better yet, it lessens his emissions, for which he can be fined or shut down.
Today's e-mail is from a business developer in CA who does not believe in global warming. (Sunflower is nonprofit and we gave him a free license.)
The point here is system cost was not on the table, just the fear of permits, so it is a 10% solution. If carbon tax were involved then system cost and performance would be front and center, and the penetration would be the maximum day time load (a lot more than 10%).
Infrastructure is spot on. With Swedish style district heating we can supply 100% of heat, hot water, and cooling to whole cities. Passive tax credits plus cap & trade will not create the required infrastructure.
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Bytesmiths Posted 12:26 pm
13 Nov 2006
I work at home, put under 5,000 km/year on biodiesel vehicles that I make fuel for myself from used restaurant oil, heat with scavenged wood that I haul away from construction sites, and have CO2-free electricity.
So let the bidding begin! I intend to get rich off this carbon-stuff!
(By the way, I once seriously considered killing my ex during our divorce. Since many would have considered this justified, but I didn't follow through, can I sell this "right to kill" to someone who has a need? I understand George Bush is in the market for such credits.)
:::: Jan Steinman, EcoReality: http://www.EcoReality.org ::::
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sunflower Posted 1:40 pm
13 Nov 2006
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Andrew Dessler Posted 1:43 pm
13 Nov 2006
I do not oppose a C tax. I just think it's a harder sell. I'd support whatever policy has the best chance of being adopted.
Your point about CO2 vs. NOx and SO2 is somewhat opaque. I'm not sure why one should conclude from your point that CO2 emissions are not amenable to the same market forces that worked so well for other constituents. Note that I fully acknowledge that CO2 is a harder problem technologically, but that doesn't mean that a cap-and-trade system wouldn't work.
Clearly, we have to pursue ALL greenhouse gases. Are you suggesting that this could not be included in a carbon trading scheme? It easily could (and should) by trading equivalents in GWP (greenhouse warming potential).
The idea of giving individuals permits is something that is generally felt to be too complex administratively, so is not really talked about in the policy arena.
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sunflower Posted 1:46 pm
13 Nov 2006
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sunflower Posted 2:00 pm
13 Nov 2006
I agree it is politically easier to have a worn path, especially with "us verses them", citizens capping industry.
But then begins the reign of terror, "us verses us". Carbon taxes are inevitable.
How much time will we lose to delay and hesitation?
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amazingdrx Posted 3:49 pm
13 Nov 2006
Rather than raising taxes or carbon trading, eliminate subsidies for fossil and nuclear energy corporations and agribizz fuel farming.
Then subsidize renewable distributed power generation and storage, electric powered transportation, and geothermal heat pump heating and cooling. With direct tax credits to consumers.
After 10 years or so, drop those subsidies too.
Unlike carbon trading, this will take a grassroots political effort. Carbon trading has the whimsical majic of "free" market ideology behind it.
Whimsical think tank ideology! It must be majically delicious riding in those corporate jets. Hehehey.
http://amazngdrx.blogharbor.com/blog
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Gar Lipow Posted 11:26 pm
13 Nov 2006
You have a freakin nerve. I'm talking about cap-and-trade as it actually exists - which has zero to do with your friction-free model. In the real world, this is how cap-and-trade works:
Sequestration consists largely of Eucalyptus plantations, many of which displace other forestry or even rain-forests.
CDM generates carbon credits in Africa and Latin American based on game playing consultants. Because these carbon credits are generated in nations with no caps , you have cases like the Latin American corporate charcoal burner who applied for credits on ground that without credits they would switch from wood to coal.
We have the Joint Implementation provision in Kyoto, which now comes into effect for many former Soviet nations. Unlike CDM which at least requires approval for credits from a central authority, host countries will be granted authority to approve this kind of credit without international review.
I don't object to granting clean development aid to poor nations; it would unfair not to grant such aid. But shoehorning that aid into a cap-and-trade system to generate credits in nations without caps is insane!
In the Annex I nations, permits are NOT primarily the obligation of producers or importers. Electrical utilities, Steel producers, and other large polluters are obliged to buy carbon credits. Why? Because in practice, they are not obliged to buy anything. They are granted free credits, often based on exceptional years when they polluted more than usual - so in many cases large polluters had credits to sell, without reducing emissions.
Oh and you are starting to see major pushes for repeal of carbon taxes on grounds that cap-and-trade IS a carbon tax.
As the final insult the cap and trade system does not really have caps even in the Annex I nations. There are built in reserve prices. If carbon credit prices were ever to exceed those reserve prices, additional credits would issued into the market to bring the prices down. Of course that is not a problem in practice. The other flaws I mentioned brought carbon prices down to absurdly low levels.
Serious wonks pay attention to how policy is actually implemented!
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Tod Brilliant Posted 4:16 am
16 Nov 2006
http://www.autobloggreen.com/2006/11/14/want-less-co2-pay...
" . . . because the world doesn't matter anymore if you don't have the strength to go ahead and choose something that's really true." - Julio Cortazar
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