Ark Kreitman’s Recent Comments

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  Unreasonable men

  This is a tangent, and I apologise for it, but Bart, I'm fascinated by your George Bernard Shaw quote. I can't quite get round the meaning of it, but I think it might, just might be wonderfully subtle.

  Are you suggesting that progress is being driven by unreasonable men, and therefore fails to adapt itself to the needs of the world's biosphere? That the problem is with Progress itself - as we understand it, as the Fabians understood it? That Progress, the innate stubborn selfishness ingrained within it, must be tamed by enlightened Reason if we are to learn to live in this world?

  If so, it's brilliantly subversive: I tip my hat to you sir!On Finance, energy, and the environment: markets and opportunities posted 1 year, 7 months ago 8 Responses

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  auction vs allocation

  PJD,

  I agree that the fundamental driver is that the cap is tight enough to enforce real reductions. It really depends how the cap is set - even with 100% auctions the market will still collapse if too many permits are issued. I do however honestly think that auctioning provides a simple way to avoid allegations of special interest - everyone bids equally and fairly.

  I'm not convinced by the argument that permits will help provide job security by allowing companies time to adapt. The reality is that some industries will suffer in a carbon constrained economy. Jobs will be lost. In other industries, the smart companies will see cap-and-trade coming in advance and will already be putting in place measures to adapt. Other companies will stall and try and buy time without really facing up to the problem; free permits is a sop to these companies. But the onus should be on companies to react to the challenge of global warming, not to ask for loopholes to be installed in the system. Allocating permits doesn't provide job security, it merely delays the inevitable for another ten years.On The core progressive issue in the fight over climate legislation posted 1 year, 9 months ago 25 Responses

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  way to go

  If you start from the premise that a cap-and-trade scheme is necessary to limit greenhouse gas emissions from industry, then the best (perhaps only?) way to make that scheme work effectively is through auctioning. There's no failsafe way to hand out free permits that doesn't lend itself to corruption, accusations of favouritism, and so on. In the European experience, handing out free permits actually led the carbon market to collapse in its first phase because companies over-estimated their historical emissions and so the EU doled out too many allocations.

  Now you could argue that keeping American jobs is more important than preventing climate change - that's a seperate debate. But once you've accepted the idea that the right to pollute should be decided through a  market-based system, then free permit allocations will only distort that system. Why should a company move to change its behaviour if the government is absolving it of the need to pay for what it pollutes by providing free handouts?On The core progressive issue in the fight over climate legislation posted 1 year, 9 months ago 25 Responses

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  Setting the cap

  I agree completely, auctions are 100% the way to go.

  Under ACSA, how often is the emissions cap going to be revised? In the EU's Emission Trading Scheme, countries' targets are revised every four years or so - and the facility is built in whereby free permits based on benchmarks can gradually transition to auctioning.On The core progressive issue in the fight over climate legislation posted 1 year, 9 months ago 25 Responses