Comments naturescene has made

some thoughts

This is as much a case of "government failure" as it is "market failure".  Since there never has been a functioning free market I don't see how anyone can seriously argue that a free market philosophy of limited government has been an abject failure.  It's never been tried! And it never will be. So let's go ahead and get past meaningless platitudes.

The people involved in this are NOT free marketeers - they have NO principles.  They're for whatever helps them out at the moment.  

As easy as it is to blame this entire thing on greedy Wall Streeters, or even all the people taking loans they knew they couldn't afford, we should also remember that the regulatory system in place encouraged and in some cases required many banks to lend money to people who otherwise wouldn't qualify for a loan - all in the name of affordable housing.  At the same time, as the dot-com bubble burst, money flooded the construction industry.  Construction lobbyists were successful in getting many communities to allow poor-quality housing, built at 2-4 units per acre, and sold at inflated prices -- all in the name of "Smart Growth" or (supposed) "Low-Impact Development" (a concept I think is past time for a new discussion among environmentalists).  These problems were compounded by mark-to-market accounting requirements, hold-overs from the 30s, that forced companies to undervalue assets, almost encouraging them to file bankruptcy.

Wall Street isn't innocent, but neither is the government.  We don't need more regulation (or deregulation - those terms are becoming meaningless), but we do need smarter rules put in place.  Thankfully a 1999 act repealed some of the regulatory barriers between investment banks and commercial banks that were set up by the Depression-era Glass Stegall Act.  Doing so is the only reason that JP Morgan was allowed to buy Bear Stearns and that Bank of America was allowed to buy Merrill Lynch.  Here's a case of deregulation that actually kept this crisis from being even worse.

But there is no fundamentalist case to be made for either regulation or deregulation.  There must be oversight, but at the same time regulations should not create perverse incentives.  Oh how I wish it was easy.

Now to the bailout.  Everytime I read about it I see "there is no alternative" or "if we don't have the bailout, things will be even worse!"  

There's a strategy here: Say something enough times and people will start to believe it.  You don't need facts, or even explanations.  Kinda like WMDs and the Iraq War.

There are alternatives.  For one, the capital gains tax could be lowering, likely encouraging money to flow back to the markets.  

A contraction and some pain at this point is unavoidable.  What the bailout does is put it off for a while - so new politicians have to deal with it.  But it doesn't fix anything.  

When someone tells you that the bailout is the only option, ask them how exactly it will work?  How does a government, which itself has bad or toxic debts, have the ability to buy up other bad debts and make things ok?  It doesn't.  The bailout ensures that certain companies will continue to exist rather than making sure that there is a functioning market.

It's time for some of Schumpeter's creative destruction of the market to take over.  Let the giants fall and new markets emerge.  It'll hurt in the short term, no doubt, but in the long-term it's advantageous.  The bailout is a short-term band-aid with disastrous long-term effects.On Friends of the Earth says anti-regulation approach causes environmental destruction posted 1 year, 2 months ago 25 Responses

not socialism, markets

Wolverine,

I believe you're overlooking the fact that this proposal is advocating a market-based system for fisheries, in which individuals are allocated quotas, but the quotas are transferable.  In other words, it's a market-based cap-and-trade for fisheries.

Sorry to burst your bubble.On Allocating individual quotas could save many fisheries, study says posted 1 year, 2 months ago 4 Responses

none of this

directly refutes Sean's assertions that good carbon policy should provide penalties as well as incentives.On Empirical data and theory both show that emissions taxes get passed to consumers posted 1 year, 7 months ago 6 Responses

Re: Jonas

Fertilizers save the environment.

It depends on your perspective here and what you define as the environment.  Yes, fertilizer applications can increase the productivity of a plot (supposedly "saving" rainforest), but only up to a point.  But fertilizers can also have negative effects on waterbodies and fisheries.  Should we blindly advocate increased fertilizer use, even when the consequence of doing so may reduce other food supplies?

To my knowledge, no one here is arguing for the complete abandonment of fertilizers.  But recognizing that increased fertilizer use can result in a trade-off with another food source, is it not reasonable to want to reduce or minimize the external effects of fertilizer use?

Since there are diminishing marginal returns on fertilizer application (and subsequently on each dollar spent), better soil science in agriculture could go a long way to determining optimal fertilization rates that are in sync with seasonal variations and other environmental factors.  

Right now there is a disconnect between the private costs of fertilizer applications and the other external costs, imposed on either other individuals or on the public.  Getting these costs more in-line, or allowing those affected by the external effects of fertilizer use to legally defend their property rights can only be a step in the right direction.On Nitrogen fertilizer is in short supply posted 1 year, 7 months ago 53 Responses

Adam,

If you're unclear about the two interpretations of additionality I know of a few sources that can help clarify (note that I don't always agree with the conclusions of some of these arguments, I'm simply pointing out that I'm not alone in making this distinction):

• First, simply check out the Wikipedia page for the CDM, it's a great place to start.

• There is a discussion of environmental vs financial additionality tests in Robert Dixon's book  The UN Framework Convention on Climate Change Activities Implemented Jointly

There is no financial test in the world that can show that a project actually offsets emissions.  The financial test actually undermines the concept behind additionality.  If you can provide an example of a non-additional project that can only be excluded on financial grounds I may be better able to address your concern.

I'll make it clear again that I agree with the concept of additionality, but I think the financial tests for it are a poor approach and actually undermine what we want to achieve - which with offsets is the ability to reduce the costs of emissions cuts.

Capster, let me try to address your concerns:

- You'd end up paying for projects that would be done anyway;
 - With the flood of non-additional projects because of no financial additionality, the market prices would go to near zero, and none of the real, additional projects would get built;
 - Credibility would be missing without assurance of financial additionality;
 - Financial additionality does not hinder projects from getting done, it provides incentives for projects to get done;
 - The rules are not as subjective and arbitrary as some would say - if you read the various protocols (almost all of which have financial additionality), you'll see some fairly straightforward rules.

The first issue can't be proven one way or the other as I've already clarified several times, but even if you do provide more revenue to a project that would have occurred anyway, what does that matter?  The point of additionality is to ensure that emissions are actually offset - whether or not a project makes a profit has no bearing on that.  As Sean pointed out, you can actually discourage the best offsetting projects by directing offset funds towards projects that can't make it on their own, and this suboptimal investment leads to greater costs - the exact opposite goal of offsets!  

If I understand your view, offset payments should only go to "new" projects, not ones that were already planned or undertaken.  But does that make sense from an investment risk perspective?  Not in my head. I don't understand how a new risky project is more credible than one that can stand on its own, and I don't understand how a financial test is going to lend any credibility to the offset.

Unless you're the person selling offsets, I'm not sure why you're so worried about a low price of them.  The point is to reduce the costs of meeting emission requirements, and a lower cost per ton does just that!  Financial tests can't prove whether or not a project actually offsets carbon emissions (that it is additional), so it's disingenuous to say that projects that would still exist at a low price are non-additional.

Financial additionality tests, as both Sean and I have argued, can in fact discourage good projects from being undertaken.  The fact that they can provide incentives for suboptimal investments does not help me sleep at night.

The CDM protocol is ripe with qualifying language such as the word "unlikely," leaving an incredible amount of discretion to those doing the certification.  This creates a moral hazard for potential offsetters to distort the finances of a proposed project and to exaggerate the barriers of a particular project.  This is precisely why none of the financial tests can prove additionality.

Financial additionality tests reward suboptimal investments while doing nothing to reward proven technologies - I suspect that the motive behind this has more to do with a desire for economic justice than the actual goal of offsetting carbon emissions.  Trying to say that a project is additional based on a financial test undermines the actual concept of additionality.

Ok... release the hounds.On Almost always, but the reason is more subtle than you think posted 1 year, 7 months ago 11 Responses

It took me a while to understand this,

but I think I follow you.

My research background with market solutions is with water quality - so I've been extrapolating most of my knowledge of those systems to try and join the debate on carbon policies.  In water quality cases, we want a mass cap, so at first I didn't understand why that doesn't work as well for carbon dioxide.

I wasn't convinced the first time I read through this, but now it's starting to make sense to me.  I think I agree, but I'm going to have to give it more thought before I can add anything useful.On The solution: Output-based standards posted 1 year, 8 months ago 72 Responses

environmental vs. project additionality

I think this needs to be made more clear, since there is some confusion over the concept of additionality.  

On the one hand we have environmental additionality - the concept that a reduction project is going to lead to an overall reduction in emissions.  I'm pretty sure this is what Gar is talking about when he says additionality, but that is not always the understood meaning of the term.  For such a test, we must first establish a baseline of emissions; therefore, it may be advantageous to refer to this concept with terms such as baseline analysis or something along those lines.

Project or financial additionality is what Sean was writing about and what CDM uses to assess a project.  Whether or not a project would have been undertaken without CDM can never be known with certainty, and really isn't something we should be worried about.

Environmental additionality/baseline analysis = great

project/financial additionality = not so greatOn When additionality always matters posted 1 year, 8 months ago 18 Responses

Gar

what is this "iron-clad additonality" of which you speak?  What is the objective test for it?  How do you determine whether or not a project would have occurred without the financial incentives of trading or offsetting? Do you somehow have knowledge of every carbon reducers finances?  If so, that's great!On When additionality always matters posted 1 year, 8 months ago 18 Responses

Yep.

On the surface, the intrigue of both a tax or permit trading program is that they can reduce the costs of reducing carbon dioxide.

Focusing on these promised cost savings, however, does nothing to explain what actually drives costs down.  Under a tax, emitters face a financial incentives to reduce emissions to an optimal point.  Under permit trading, emitters face those same private financial incentives, but other players also now have incentives to create new ways to reduce emissions.  

Profit, greed....whatever you want to call it, is the incentive for people to start investing in new ways to reduce emissions.  Since you can't profit under a tax, the incentive is nonexistent and these reduction projects may not ever come to fruition.  It seems then, that there are no incentives created by a tax to go beyond the "optimal" reductions, whereas a functioning carbon market could create such incentives through potential profits.
On Carbon taxes vs. carbon trading posted 1 year, 8 months ago 5 Responses

one thing i don't like

is that the major environmental groups share member address information.  

I donated to the Nature Conservancy because their methods are most compatible with my personal philosophy.  But now, I receive mailers from NWF, Audubon, and the Sierra Club, etc., every few months.  I understand the reasoning behind it, but I don't like it.  If I want to donate to one of those groups I will, but the constant mailers aren't likely to sway my opinion.  

I can already opt out of credit card offers, how do I opt out of Sierra Club mailers?On More on Catalog Choice and the Do Not Mail registry posted 1 year, 8 months ago 8 Responses

well, i agree in principle, but...

given that this war has been financed largely by debt, can we really say that we could take those funds and divert them towards other projects?

Don't get me wrong, I'd much rather go into debt to build solar panels than bombs.  I'm just saying...On The money we've spent on the five-year Iraq War could have shifted the world to renewables posted 1 year, 8 months ago 13 Responses

thanks for this coverage

This is an idea I came across a few years ago and have tried to promote on Grist in the past.

Ecosystem Marketplace has a great website that provides a lot of info on already functioning ecosystem markets.On On the oddity of privatizing nature posted 1 year, 8 months ago 31 Responses

more...

I'm generally a fan of the cap-and-trade approach, although my ideal solution would be to first establish a property right to carbon for every citizen, and let them sell "carbon stock" to businesses in need.

But there's no doubt that Terry Anderson hit the nail on the head about the political economy of USCAP (I can do without the other two people and their arguments).  I would have posed his question slightly differently, since by now we should realize that cap-and-trade won't "cripple the economy," but it sure could increase the costs of doing business for a lot of companies, many of which are competitors with GE and will not be able to withstand these extra costs.  GE's motivation is not environmental... it is anti-competitive.  Anderson was making a very valid point, grounded in economic theory and evidence of rent-seeking behavior in the face of coming regulations.

I know first-hand that the "ideologues" at PERC understand that there is no such thing as a true free market.  The point of their work is to support "freer markets," and it is largely based on empirical research and pragmatism.  

I encourage you to check out the PERC website, (www.perc.org) and even if you don't agree with their basic philosophy, you will see a striking difference between the tone there and the tone at say, CEI.  One is constantly finding new ways to bash any and all things environmental, while the other works to show how markets can be made to work for the environment.  On GE CEO explains practical realities to free marketeers posted 1 year, 8 months ago 11 Responses

empricial evidence is great, Gar,

In fact, here are some papers with empirical evidence on how trading does encourage innovation that leads to cost-savings.  Both papers acknowledge that innovation in the real world deviates from theory, but show that, nonetheless, the innovations encouraged by trading are very real.

http://www.rff.org/Documents/RFF-DP-00-38.pdf

The 1990 U.S. Clean Air Act Amendments (CAAA) instituted a national program in tradable sulfur dioxide (SO2) emission permits, referred to as "emission allowances," in the U.S. electricity sector.
This paper provides a survey and assessment of the SO2 allowance trading program with a focus on the role of innovation. Over the last decade the cost of compliance has fallen dramatically compared with most expectations, and today the total cost of the program is 40- 140% lower than projections (depending on the timing of those projections and the counter-factual baseline considered). Marginal costs of reductions are less than one-half the cost considered in most analyses at the time the program was introduced.
Innovation accounts for a large portion of these cost savings, but not as typically formulated in economic models of research and development (R&D) efforts to obtain patent discoveries. Innovation under the SO2 allowance trading program involves organizational innovation at the firm, market and regulatory level and process innovation by electricity generators and upstream fuel suppliers. An important portion of the cost reductions that are evident was already in the works prior to and independent of the program. Nonetheless, the allowance trading program deserves significant credit for providing the incentive and flexibility to accelerate and to fully realize exogenous technical changes that were occurring in the industry. This marks a significant departure from conventional approaches to environmental regulation, which would not be expected to capture these savings. The ongoing transition to restructuring of electricity markets and expanding competition in electricity generation complements the design of the SO2 allowance trading program by providing firms with full incentives to reduce costs of pollution
control.

Impact of emission trading on innovation

This article seeks to appraise the potential innovation impacts that may be triggered by the European emission trading system starting on 1 January 2005. To this end, our paper provides a review of the theoretical and empirical literature on the potential innovation effects triggered by the pioneering US emission trading schemes (ETS). Our review's basic empirical results are that the innovation effects were initially limited, partially because of lenient or even non-constraining targets in the first years, but there is empirical evidence on a vast range of low-cost compliance strategies. Yet, the substantial body of theoretical literature provides no consensus on the issue of whether or not emission trading generally triggers more innovation than other policy instruments, such as regulation standards.

When physicists suddenly become economists

You get information about as useful as if I were to write up an article explaining string theory.  Nothing in that article explains the subtitle "rising cost of oil pushes value of the dollar down."

We have a plunging dollar thanks to the Fed's policy of lowering interest rates every other week... not because of the spectre "housing crisis" and "decelerating economy."  And for those of you who don't know... lowering interest rates is Fed speak for printing more money. Aha! Inflation: the more money there is in circulation the less valuable each dollar is. (Interestingly enough, after the 3rd or 4th rate lowering, the headline on CNN was Bernake: Now worried about Inflation.  That's our Fed chairman: captain obvious).

Couple domestic inflation to a global monetary system where many international currencies have been more or less tied to the dollar since the early 70s, and it's no wonder that investors are moving their wealth to the Euro, and things like oil and gold.  But do rising oil prices cause devaluation of the dollar?  No.  The rising prices are a reflection of the weaker dollar in a market with high demand.

Another note:  The U.S. still has the highest standards of living in the world.  The real prices of luxury items continue to fall, so more people are able to afford them than any other time in history.  The "war on the middle class" isn't a product of economic discrimination but rather that members of the so-called middle class have increased their standards for living.  Today, being middle class means you have a 2 story house, a big screen TV with cable & Tevo, a car, high-speed internet, it goes on...On Rising cost of oil pushes value of the dollar down posted 1 year, 8 months ago 27 Responses

Dear Patrick,

If you had read my comment more carefully you would have noticed that I clearly understand that most power plants are located in less affluent areas, hence the following:

The underlying assumption here is that power plants in more affluent areas (if there are any) must have lower marginal costs for abating CO2 than those in the poorer areas.

So moving forward: Since most power plants are located in less affluent areas, carbon trading means that emissions are going to be reduced in some poor areas while possibly increased in others.  But it's not the carbon that EJ or you seem to be worried about, it's the other pollutants.  So I ask: if your main concern is the directly harmful pollutants, why not focus on getting those limits tightened rather than indirectly addressing the issue by opposing carbon trading?On Cali EJ groups reject cap-and-trade in strong terms posted 1 year, 9 months ago 28 Responses

more

Another point:

Trading carbon permits won't allow plants to start releasing more of the other pollutants (mercury, sulphur, etc.) into the atmosphere than they already are.  

So the problems caused by those pollutants are already there - they won't be caused by a carbon trading program.On Cali EJ groups reject cap-and-trade in strong terms posted 1 year, 9 months ago 28 Responses

hmm

Carbon dioxide isn't harmful to humans, and it also dissipates into the atmosphere rather evenly.

So I'm confused.  Is EJ's opposition to pollution trading an opposition of carbon trading?  If so, it seems pretty nonsensical.

There's no such thing as a carbon hot spot.  If they were talking about mercury or some other heavy metals, then they have a point... but I don't think they are.On Cali EJ groups reject cap-and-trade in strong terms posted 1 year, 9 months ago 28 Responses

Best - enemy of the good?

The rent seeking behavior in a tax system has the potential to cause a number of economic distortions.  While such behavior also exists in C&T systems, the effects are likely to be distributional without economic distortions.

Anyone telling you that one is hands-down better than the other (ahem Carbon Tax Center) is pulling one over on you.  The way I see it is that Cap and trade has the political momentum, so the effort should be spent on making that system better rather than trying to undermine it with a tax system that is also going to have a number of issues that must be dealt with.

Check out Common Tragedies, the Resources for the Future Blog, and what they have to say on this issue.

In theory there is no difference between theory and practice. But in practice...

"Don't let the best be the enemy of the good, particularly when the best could be the worst"On No carbon reduction program is a silver bullet posted 2 years ago 10 Responses

i like this paragraph

... But we're also intrigued by the possibility of allowing polluters to get carbon credits for protecting intact ancient forests. Conceivably, it could radically alter the financial incentives in national forests and elsewhere so that timber companies and others could make more money by helping restore forests than logging them. But, if not carefully managed, there's also potential for abuse. Such a system is largely dependent on having a robust cap-and-trade or cap-and-auction system in place as well; if we adopt a carbon tax, does that mean that forests and other native ecosystems won't benefit from the massive investments in tackling the climate crisis?

From a perspective that is concerned with ecosystems and biodiversity, the concept of creating financial incentives for creating, restoring, and even protecting ecosystems is a great one.  

From a perspective that is only concerned with climate and carbon, the ability of vegetation to "offset" other emissions is still difficult to measure at best - nonexistent at worst.  That's why you have to have institutions in place that protect against abuse.  

I think the point about a cap and trade scheme (there can still be trading even if permits are auctioned!) being more more in tune with the issues of incentives for the restoration of ecosystems is an important one, and one that is often overlooked.  

I've mentioned this at least twice before (one time was this week) that if it turns out that vegetation is not a good tool in reducing carbon emissions, that does not mean that we should abandon the concept of bringing ecosystem creation/restoration/protection to the market.  All it takes is to stop calling them carbon offsets and start calling them something like biodiversity, ecosystem, or habitat credits.  

I think that if a policy that caps carbon is enacted, the use of offsets to fill allowance requirements should be limited and should probably not include very difficult to measure projects like planting vegetation.  But as long as they remain a completely voluntary mechanism, I don't think there's much of an issue.

As far as a question goes:  I would like to know what he thinks about offset projects involving forests vs. projects such as landfill gas capture.
On Thursday event in D.C. seeks carbon questions posted 2 years, 2 months ago 15 Responses

a straw man

I'd bet most carbon offset projects that plant trees are far bigger than your backyard project, but forget about that.  

No one, except maybe a handful of people, argues that offsets are a silver bullet for global warming.  

At this point, I don't understand attacking the merits of offsets.  The voluntary carbon markets have hit the ground and taken off running, you're not going to stop it but you can provide information to make them better.  

The only message I would take away from this piece is that buyers of carbon offsets should research what they are actually buying and decide if they think that's adequate to meet their desires for emissions reduction.On Can planting trees offset your carbon footprint? posted 2 years, 2 months ago 20 Responses

Is it a macro vs micro issue?

I'd agree with Sean that the predictive ability of macro-economic models is extremely limited, but I think that's a characteristic of macro-economics rather than economics in general.

Entire populations don't actually have marginal cost curves (although macro-economists try to aggregate individual MC curves), therefore there can be no "scientific" predictions.

On the other hand, at the micro-level it is possible to know a marginal cost curve and demand elasticity beforehand, so we can predict an individual (or firm's) behavior changes in response to price changes.

One of my econ professors once said that macro-economics does not truly exist, and I think that what I just went over has something to do with his assertion.  Micro-economics is much more scientific, although I don't like calling economics a science at all.On WSJ on the carbon tax vs. cap-and-trade debate posted 2 years, 2 months ago 17 Responses

bad graphic

That graphic makes it appear as though a $15 dollar tax is equivalent to a 15% cut.  I hope WSJ and Grist readers are smarter than that.On WSJ on the carbon tax vs. cap-and-trade debate posted 2 years, 2 months ago 17 Responses

I brought this issue up

with my former boss one day.  I asked what she thought about electricity deregulation, and she replied that the California experience had shown her that deregulation was not all it was cracked up to be.

I asked her how keeping price controls in place could possibly constitute deregulation.  All I got in return was a blank stare.

The California debacle set back efforts among economic and evironmental thinkers alike to show that deregulation is beneficial.

Thanks for bringing up this issue again.

"Just calling something a market does not make it a market."
On The high price of electricity deregulation posted 2 years, 2 months ago 7 Responses

this is one problem

with allowing allowing the government to control water resources.  Water is far too precious to be in the hands of short-sighted politicians and unaccountable bureaucrats.  Why do we generally assume that government workers and officials actually do what they promise and work in the interest of the public good?  

It's time to wake up.

The old wisdom goes like this:  Water belongs to everyone. Therefore it is a public good, and public goods are best managed by government.  

Yet, when we allow the government to control the resource which supposedly belongs to us we implicitly give our common ownership rights to the government.

We place a trust in the federal government to use our tax money towards projects that benefit us all.  But federal tax revenue spending is disconnected from voting.  We don't vote on public expenditures, we yell.  And some people yell louder than others (or speak softly and carry a big wad of cash) - the special interests.

The iron triangle leaves most citizens out of the loop.

Instead of relying on a failed system to wisely manage our common resources (or hoping in vain that a new school will replace the incumbent corrupt), we should consider reclaiming our rights over things like water.  Allow government to build and maintain infrastructure, but do not let it control day to day activities.  

In a free and open market for water, in which the right to water is first granted to individual citizens, those who want more water could purchase it from those who have a surplus.  Agribusiness wouldn't get water as a gift, it would have to buy all of it at market prices.  I know plenty of water market schemes have been viewed negatively or have simply failed, but I'd attribute this to poor market design rather than the markets themselves.  On Interior Dept. plans huge water giveaway to Big Agribiz posted 2 years, 3 months ago 2 Responses

Nonprofit, if I understand correctly

you're saying that I'm receiving funding from oil companies because I think that price mechanisms are the most effective, environmentally and economically?  You're also implying that I somehow don't care for the Earth and should change my name?

good one.  

Call market mechanisms "corporate" all you want, but until you can provide substance instead of name calling, realize this -- you represent the reactionary environmental movement that is on its way out.  Progressive environmentalism embodies the reality that we don't have to pit the environment vs. economics, and we can in fact use economic thinking and mechanisms to improve environmental policy.  

You showed me a funding list that includes a variety of privately funded and government funded grants.  The government grants are used to fund specific projects while most of the private grants do not go to specific projects.  So, what exactly is your point?  Or better yet, where do you expect funding to come from if not government and industry?

Maybe I'll change my name to sockpuppet.
On Correcting two misunderstandings posted 2 years, 3 months ago 19 Responses

No, Gar

It's not an assumption of unlimited carbon reduction opportunities, but an understanding that carbon reductions from more efficient agricultural practices are fundamentally the same as carbon reductions from more efficient buildings.  

Here's a paper by Danny Ellerman of MIT explaining cap-and-trade with specific references to the So2 market and the RECLAIM program.  Below I've included what he writes on the RECLAIM programs apparent failure.

This exceedence of the NOx cap is unfortunate, but it must be placed in context.
The events of 2000-01 in California's electricity market led to an extraordinary call on old generating plants in the Los Angeles Basin that were not equipped with NOx emission control devices because heretofore they have been dispatched for only a few hours a year to meet peak demand (Joskow, 2001). The unanticipated call on these units to meet electricity demand increased the demand for RTC credits to cover the resulting NOx emissions beyond what could be provided within the temporally constrained time period within which RTC credits are valid (one year with some banking and borrowing possible because of overlapping compliance cycles). The result was 1) unprecedented high prices (up to $90,000/ton), 2) the establishment of the $15,000/ton mitigation fee, 3) the temporary removal of electric utility units from the cap-and-trade system, and 4) the imposition of mandates on those units to retrofit NOx emission control devices. These units are now proposed for re-entry into the NOx cap effective January 1, 2004.
The relevant question in assessing this performance is how the command-and-control program that RECLAIM supplanted would have fared under the same circumstances. For one thing, the exceedences would not have been recognized, much less compensated. The only argument for better environmental performance by the alternative system is that it would have succeeded in having NOx abatement equipment installed, prior to the summer of 2000, on the generating units that were the source of the problem, thereby avoiding the large spike in emissions. The prior low utilization of these units and the high cost of capital-intensive retrofits make such an assumption debatable at best. Also, given the high price of NOx allowances since the summer of 2000, it is hard to imagine that owners of these units would have resisted retrofitting these units, unless they expected the units to return to the earlier level of low utilization. Accordingly, mandating the retrofit of these generating units will have the effect either of prescribing what would have been done anyway in response to the higher prices and expected higher utilization, or of providing very high cost protection against future allowance price spikes.

The real handwaving here is that you haven't explained why a price mechanism can't work alone, though you may think that you have.  Like I said before (as well as odograph) we can set the cap as low as we like - the problem isn't the mechanism, it's political will.
On Correcting two misunderstandings posted 2 years, 3 months ago 19 Responses

varying marginal costs

Gar,

It seems you're arguing that since a price on carbon won't encourage every actor to conserve the maximum amount possible, that carbon prices can't do the job alone.

While I might agree with the general sentiment, I think your example and argument are pretty bunk.  A carbon price works precisely because actors have different marginal cost structures.  The thing is, we don't need every actor to reduce emissions to the max.  Instead we need to set an emissions reduction goal and try to reach it at the lowest possible costs - hence the carbon price.  I know you know this, but I'm trying to figure out where your departure comes from.

Your info on green buildings is far too general.  Unfortunately, not all green buildings operate on the same cost structures you envision, and not all upgrades pay for themselves in just a few years.  Specifics, not generalizations, are much more useful in this case, and also show why carbon pricing, rather than standards are a more versatile tool.

Finally, there's no inherent shortcoming in a pricing system.  A cap on carbon emissions can be set as low as we want.  The problem is not with the mechanism, it's the political will to use it.  That's holds just as much for traditional regulations.On Correcting two misunderstandings posted 2 years, 3 months ago 19 Responses

Dave,

I believe you're hitting on the crux of the argument here:

markets and market-based policies don't lead to pre-defined specific solutions; rather, they create the atmosphere in which innovation, creative destruction, and the entrepreneurial drive excel.

Whereas Galbraith, and others I presume, are completely sure that an overhaul in transportation infrastructure is necessary, I wouldn't jump on that yet.  It may be sufficient (it may not), but necessary?  With all the carbon reduction possibilities out there right now, how do we decide which ones are necessary?  I have my own concerns about the wisdom of more investment in public transit, but I'll leave that aside for now.

It's an interesting question, so I'll give it a little thought experiment:

First, why do we not already have more public (or mass) transportation?  Answer: it is relatively expensive compared to other means.

Why is it more expensive?  Well, one reason is that public transportation is historically a government granted monopoly - thus there are no incentives to reduce costs.  Competition is needed in the public transportation market.  Policies that promote competitive contracting of services would be one step.  
Another step would be to shift the focus away from just rail.  Buses are less expensive to invest in, and more versatile - yet the majority of public transit funds go to rail.  Alternatives like buses offer a bigger bang for the buck.On One economist says no posted 2 years, 3 months ago 58 Responses

Galbraith does a disservice to the cause

Make no mistake about it, pricing carbon is far superior to certain types of planning and allowing government to pick the technologies of the future.

This argument should be all but dead and buried, and we should be focusing on which pricing mechanism to use.  Note, a tax or a cap-and-trade are pricing mechanisms, not markets.

The Carbon Share program is the truest "market" policy approach to carbon reductions - more so than a carbon tax, more so than any of the other cap-and-trade proposals.  It's a shame that it is not getting any attention.On One economist says no posted 2 years, 3 months ago 58 Responses

We can agree

I agree with you about long transfers, especially ones that go to arid areas.  I hope anyone that thinks about moving to a city in the southwest considers the relative scarcity that they will have to deal with.

By all means, I think states can improve institutions that govern water transfers.On Can it happen here? posted 2 years, 3 months ago 26 Responses

In Georgia

The EPD only allows interbasin transfers for municipalites that reside in two watersheds, sitting on the ridge.  This is common in North Georgia.  IBT's are only granted if other resources are being allocated elsewhere, or they determine that there are no other feasible options.

Both receiving government and those in the watershed from which water is drawn must submit population and economic growth projections.  

There are a variety of environmental factors that must be met in order for the transfer to be allowed.  

There is currently a movement to update these laws and include instream flow requirements and drought provisions.

Under the right institutional framework, in which the stakeholders are allowed an opportunity to provide input, transfers can be done without destroying ecosystems and other processes as you suggest.On Can it happen here? posted 2 years, 3 months ago 26 Responses

I tend to see both sides of it

On one hand, there seems to be an inherent ecological correctness or beauty in the idea that water shouldn't be transfered between watersheds - man shouldn't interfere with nature.

On the other hand, I think, the demand is there for water, why not use it?  We're really not in danger of using up the absolute amount of fresh water right now, but even if we were - we could adapt through methods like conservation, recycling, and desalination.  

The hydrologic system is chaotic.  Storm events happen due to the confluence of a large number of factors.  The same is true for where rivers form, as it is also a function of geologic chance.

The human system is also chaotic - we have no choice over where we come into existence (and although some people have the resources to be able to move, not everyone does).  

So our natural access to water is the result of thousands of factors and the chance that they all provide the right conditions together.

As far as IBT's go, I'd say you can't make a sweeping generalization - some are more harmful than others.  We should seek to reduce our negative impact.  For these reasons, I am also a fan of soft engineering over hard engineering.On Can it happen here? posted 2 years, 3 months ago 26 Responses

Dave

I'd imagine that the costs 100% closed loop water system would be extremely prohibitive.  There would also be issues of continued economic and population growth in the context of artificially limited supplies of water.On Can it happen here? posted 2 years, 3 months ago 26 Responses

Gar,

Good points about some of the people that might lose out in a total carbon share system.  I think a compromise makes sense.  On More on carbon trading posted 2 years, 3 months ago 9 Responses

off the topic a bit

Gar,

What do you think of the Carbon Share program advocated by some people in California?

As far as I know, this isn't really on the table anywhere, but the idea is interesting:  allocate the rights to citizens, for free, on a per capita basis.  Then allow those citizens to sell the permits on the  open market.

I really haven't run across this idea until this afternoon, but after a quick readthrough it makes a lot of sense to me.  If the transaction costs were manageable (i.e. an online permit exchange), then this seems like the best option, especially coming from my libertarian-leaning viewpoint.

Carbon Share would essentially give citizens property rights over carbon, rather than giving them to companies for free or to the government (on behalf of citizens).  Each and every citizen would then be free to sell his permits to companies, or keep the permits if he so desired.

Companies don't get any welfare, the government doesn't get any unneeded revenue, and the carbon exchange would be closer to a true market than any other scheme.  Everyone would be able to participate, meaning that conservation groups could purchase credits and set them aside -- essentially tightening the cap.

Giving the rights directly to the people sounds pretty grassroots to me.  Your thoughts?
On More on carbon trading posted 2 years, 3 months ago 9 Responses

what about in developing countries though

I understand the argument against bottled water for people that have access to clean systems.

But what about in developing regions of the world?  I'm kinda surprised Jason didn't hint at this at all, but it seems he's only concerned with domestic use.

I'd imagine the infrastructure throughout the developing world isn't a good as in the US.  I've also read before that tap water in some parts of Africa costs much more than bottled water (do I hear corrupt government?)

I'm fine with reducing bottled water consumption in the US, but I think more information needs to be gathered before we turn this into something global.On Water, that is posted 2 years, 3 months ago 11 Responses

should have previewed

I typed "quoteblock" instead of "blockquote" to finish Gar's quote.  

Maybe a kind administrator could fix my mistake?On Give away rights or sell them? posted 2 years, 3 months ago 7 Responses

but Jon

we have a mixed economy now.  The question is towards which end does it tend to lean?  So what you're saying is that you don't like the mix now, and would like to see it lean a little more towards the central planning side?On Pelosi's plan to save the polar bears -- and poor kids, too ... posted 2 years, 3 months ago 45 Responses

hmm

...about production prospering when different functions are in proximity together with your example of building an airplane. It's preferable that all of those engineers can talk to each other, in person, and look at the processes and parts they are building, to get instant feedback.  "Throwing it over the wall", as I've heard it referred to, wherein one group forgets about a design as soon as they are finished, is counterproductive.

Sure, and thus we have the theory of the firm and economies of scale.  

I think it's a bold move to extend the theory of the firm to the national level in which the government is directing this.On Pelosi's plan to save the polar bears -- and poor kids, too ... posted 2 years, 3 months ago 45 Responses

Gar

What exactly is your issue with the "trade" part of cap-and-trade?On Give away rights or sell them? posted 2 years, 3 months ago 7 Responses

yikes

Jon,  you'd like this idea of dynamic comparative advantage actually.  It seems to play into your infant-industry argument.  I was too quick to post it, thinking it was supporting what I said - my mistake.

But the problem still lies with government choosing which infant industry to protect, etc.  

I think the short-term issue is overblown.On Pelosi's plan to save the polar bears -- and poor kids, too ... posted 2 years, 3 months ago 45 Responses

your flaw as well as EPI's and even Ricardo's

Is thinking about a global economy in terms of nation-states and political boundaries.On Pelosi's plan to save the polar bears -- and poor kids, too ... posted 2 years, 3 months ago 45 Responses

jon

I'd be careful advertising something you found on wikipedia as an "economic concept."

So, it would be advantageous of every large country/region had their own independent capacity to produce most parts of an industrial system

Sounds like there is a real economic concept that you should try to learn more about: comparative advantage.On Pelosi's plan to save the polar bears -- and poor kids, too ... posted 2 years, 3 months ago 45 Responses

knock, knock

anyone home?On In a prominent op-ed posted 2 years, 3 months ago 12 Responses

other points to ponder

1. Ending all subsidies for energy is the way to go

2. Raising US corn prices might help some developing farmers, but it will also harm low-end consumers who live off corn-based staple foods.

3. Corn ethanol can have devastating effects on aquatic systems due to the fertilizer required.  Is that worth it?

4. Maybe enviros did tout ethanol.  Some people (notably environmental economists) have been warning about ethanol the entire time.  It's just that now people are choosing to listen.
   

maybe you meant

administrative costs instead of transaction costs?On In a prominent op-ed posted 2 years, 4 months ago 12 Responses

Chris

We're talking about the environment here.

Zero fun is allowed.  Didn't you know that?On Brangelina argue over politics posted 2 years, 4 months ago 7 Responses

excellent response

Thanks, Adam.  

Don't get me wrong when I almost conceded that offsets are a "fraud."  I never meant to imply that the motives weren't good.  (You'll also see that I'm a big fan of offsets for many other reasons besides the carbon reductions.)

You've pretty much cleared this thing up for me.  More or less, I'm in the same position I was before I started these comments.  I'm a supporter of the voluntary carbon market, but I do acknowledge that it will take some time and effort to tweak it in order to get the biggest possible benefit.On Having survived Biosphere, she's ready to enter the offset debate posted 2 years, 4 months ago 18 Responses

more

this has been explained somewhere on this site before, by someone else.  But here it is again.  

The differences in allocation systems, under a C&T, are simply differences of where the property rights over carbon emissions are granted.  It is inherently a legal and political aspect of the system, not an economic one.

A C&T with free permits is basically a carte blanche starting point:  Until now there have been no rights over carbon emissions, so they're up for grabs.

under a system with auctioned permits, the government is laying claim to emissions rights and industry must pay the government for the use of those rights.On In a prominent op-ed posted 2 years, 4 months ago 12 Responses

right.

most of the politicians that are proposing some kind of pricing mechanism understand the fundamentals: there needs to be a price on carbon if we want to create incentives to shift to a low carbon economy.

Unfortunately, Dingell doesn't seem to understand that a cap on emissions is fundamentally the same thing as a tax on emissions.  Both systems will raise the price of carbon.  

So I'm not sure I understand his comment about how Congress may enact a cap-and-trade system, only without a carbon fee, since the cap meets the same goal.
On In a prominent op-ed posted 2 years, 4 months ago 12 Responses

subsidies for ethanol

is one of the issues that most economists, libertarians, and environmentalists could probably agree on.  It's a bad idea.  
On His new piece says so in downright shrill terms posted 2 years, 4 months ago 10 Responses

hmm, thanks Dave and Adam

maybe in some twisted way I do think offsets are a "fraud" then, I don't know though - I still think they're useful.  But I've mentioned on here multiple times that I don't think we should be calling them "carbon offsets" at all.  Call them renewable energy credits or habitat protection credits.  I think I've expressed my sentiments that a narrow focus on carbon as the major environmental issue is the wrong path to take.

So maybe that's one of the big differences here.  I guess if I was only concerned about reducing carbon emissions, then I would be much more wary of offsets.  But, even through the carbon uncertainty, I see so many potential benefits, such as investments in alternative energies, habitat restoration and creation, and the potential for money to flow from developed countries to developing countries.  I see offsets as the way to break open a larger market for ecological goods and services.

Maybe Adam is right, that the additionality of some projects can be measured (or at least reasonably estimated).  Also, thanks for splitting the additionality and baseline concepts for me, that clears some things up conceptually.

I guess I also am more sympathetic to the arguments against tree offsets now (although like I mentioned above, I think there is room for these in a larger market for environmental goods & services).  

What do you think, Adam.  Is it a matter of technological ability to measure additionality and baselines, or are there some projects for which these will always be elusive?On Having survived Biosphere, she's ready to enter the offset debate posted 2 years, 4 months ago 18 Responses

I'm not sure I like NativeEnergy's explanation

Usually phrased as the question "is the project reducing emissions in a way that is business as usual, or is it beyond business as usual," the concept of additionality reflects people's gut feeling that if a project was or is reducing emissions regardless of the prospect of offset revenues, we shouldn't be giving it offset revenues.  Instead, we should give offsets revenues only to those projects that really need them.

I'm not so sure about the "gut feeling" about giving money only to offset projects "that really need them"

In markets you don't necessarily pay money to people that "really need" revenue.  You pay money to people that offer products or services that you want.  On Having survived Biosphere, she's ready to enter the offset debate posted 2 years, 4 months ago 18 Responses

it's not some meaningless point

I'm asking anyone who knows.  What sort of test is used to determine that an offset project doesn't meet the additionality requirement?

I think the article is interesting too, and when I got to the part about additionality, I really thought about it for a moment.  I decided that yeah, the principle makes sense, but I couldn't come up with a way to prove that the offset would have occurred under "business as usual".  So that got me to thinking that there are no pragmatic teeth to this argument, no matter how sound the principle is.

If you want to avoid discourse, that's fine. You don't have to respond, you know.  But next time you decide to, don't call my arguments weak and then avoid explaining why.On Having survived Biosphere, she's ready to enter the offset debate posted 2 years, 4 months ago 18 Responses

"unproven doesn't mean inarguable"

what kind of BS rhetoric is that?

I'm not saying I don't agree with the principle.  I'm saying it's pretty much impossible to say what would be "business as usual."

As for your "weakest argument" thing.  That's nice.  But why don't you explain for the rest of your readers why you think so?On Having survived Biosphere, she's ready to enter the offset debate posted 2 years, 4 months ago 18 Responses

I've always been a beliver that

the beauty of solar (and other alternatives) is the ability to decentralize energy distribution.  On No surprises here, please posted 2 years, 4 months ago 2 Responses

no no

I'm not asking how you measure the offset to make sure that the emissions don't happen.

What I'm saying is that I don't think the additionality thing is really provable.  You can't know everyone's microeconomic picture and the opportunity costs they face.  Thus, you can't know whether the carbon sequestration would have occurred under "business as usual."

If you can't know that, you can't use the additionality argument against offsets now can you?On Having survived Biosphere, she's ready to enter the offset debate posted 2 years, 4 months ago 18 Responses

good point

on the regressivity GreenMom.  That right there, pretty much makes the gas tax a political loser.On It's not the same as a carbon tax, and it's not cool posted 2 years, 4 months ago 13 Responses

there was a time

I remember agreeing with one of JMG's posts.  The 5% annual emissions reduction goal, is a smart, practical approach to the problem.

However, since then he has been sliding down a path toward complete delusion.On Here are some posted 2 years, 4 months ago 32 Responses

say it with me now

end all subsidies. period.  none for biofuels, wind, solar, nuclear, coal, oil, etc.

take the politics out of energy.On Your government at work posted 2 years, 4 months ago 7 Responses

it's like

you've been reading my mind (or my posts)!

you can give $ to "plant trees and improve water quality, increase wildlife habitat and help restore public lands damaged by natural disasters such as wildfires", and people do, but not in the numbers that we'd like to see.

Elsewhere I mentioned that there is no point to call  them "carbon" offsets and we could easily switch to calling them something simple like "environmental protection credits" or "ecological credits".  But carbon is in the center of the the environmental "movement" these days.  There's also a lot of it, so it makes for a big market.

The whole point is to eventually move into a completely open market for ecological goods and services like habitat, water filtration, buffering, etc.  The offsets serve as the intermediary to that realization.On Can't we offset something other than carbon? posted 2 years, 4 months ago 9 Responses

price volatility

that should read "some price volatility is necessary and welcome"On Moderate senators are ready to get on board posted 2 years, 4 months ago 3 Responses

it has to do with investment ability

and not really costs for the automakers.

Diesel technology is easier to invest in than hybrid technology, simply because there are more companies focusing on diesel than on hybrid.  Right now, it's the better option, and it's looking like the better option for a few years down the road.

But things can change.On GM will offer clean diesel passenger cars in 2010 posted 2 years, 4 months ago 22 Responses

precursor to this article

The future: hybrid or diesel?On GM will offer clean diesel passenger cars in 2010 posted 2 years, 4 months ago 22 Responses

another good one

Thanks for voicing another beneficial aspect of offsets.  

I'm seeing the beginning of a huge market for ecological services...On Just when you thought it was over posted 2 years, 4 months ago 15 Responses

here's an interesting story

Can market mechanisms revive dead zones?On Thanks in part to that 'green' fuel, corn-based ethanol posted 2 years, 4 months ago 32 Responses

surely

you understand that "cost" to economist is opportunity cost not just the amount of cash spent?On Don't let your ambition limit your reality posted 2 years, 4 months ago 12 Responses

hmm

"increase employment by 241,000 jobs in the year 2020."

From what year?  From now?  From 2019?  When?  The study never explains what these predicted increases are increases from - for any of the numbers they give.

"In addition, consumers will save billions of dollars on gasoline"

Save?  Or spend on the new fuel that will power their vehicles?  

Other things that I would want to look at more:  they assume perfect price elasticity on vehicles - is that true.

In order to trust the model (that uses 21 "economic factors!) they use we need to verify all of the assumptions.

All in all, it's interesting, maybe slightly biased, worth looking into more, but definitely not the final word.On Contrary to what you might have heard posted 2 years, 4 months ago 3 Responses

That is the point

You found it!  The fact that offsets may be a tool in combating multiple problems (global warming and biodiversity/habitat loss) is what it's all about.

There are certainly things to be said for making sure we measure and monitor offsets better, but in no way do these concerns make a case for dropping offsets and voluntary environmental markets from the toolbox.On Trees should play a bigger role posted 2 years, 4 months ago 27 Responses

this is bad logic

and a complete misunderstanding of politics and the legislative process.

"it would be better to wait..."

I thought what you guys have been saying all along is that there is no time to wait!  Which is it?On It's weak posted 2 years, 4 months ago 7 Responses

an excellent article

good job, biodiversivist!  It looks like some people are finally coming around to the ideas of environmental markets for ecosystem services - offsets being just one example.On Trees should play a bigger role posted 2 years, 4 months ago 27 Responses

Yeah but

That's a bad argument.  For one, it doesn't really look like a half-ass carbon tax at all.  Putting something on the table isn't a setback, it's a step forward.  Do people really expect that the holy grail of climate legislation is just around the corner, waiting to save them?On He proposes a carbon tax, assuming it will fail posted 2 years, 4 months ago 12 Responses

here's something interesting

jellyfish mucus perfect for cosmeticsOn Overfishing, pollution contribute to exponential rise posted 2 years, 4 months ago 8 Responses

hey

A great post, David.  One of the few times I agree with you 100%.On Many offset critics appear to be shadowboxing posted 2 years, 4 months ago 76 Responses

multiple markets

A multiple market in ecosystem services could put an end to the belief that planting trees isn't always a good thing, while giving property owners more incentives than ever before to preserve and protect habitat and other resources.

If property rights over ecosystem services were well defined and enforced, then markets could form for all sorts of goods and services: habitat, water filtration, storm buffers, flood control, carbon sequestration, etc.  Not every ecosystem could generate credits for each of those things, but it would probably be able to generate a few.  More credits to sell gives more landowners the incentive to get into the business of protecting ecosystems.

The myopic focus on one issue - global warming - and even more narrowly, carbon dioxide, seems to have made too many people forget that we have other battles to fight as well.On Trees are good for a lot of things; carbon offsetting isn't one of them posted 2 years, 4 months ago 27 Responses

bernardo

The advocates of offsets that you speak of wouldn't be as quick to oppose regulations that use market mechanisms rather than across-the-board standards to reduce emissions/pollution with economic efficiency.

Economic efficiency is a good thing because being cost-effective means that there is more free capital that can be directed to other endeavors.

So yes, companies are typically opposed to standards because standards take no consideration of economic situations while markets allow actors to make economic calculations.

The real question is, why do you think it is necessary to harm businesses in order to address climate change?  We would like to see some changes in the way businesses function, but that in and of itself does not imply that we must harm businesses to do so.

I think that environmentalists need to drop the anti-corporate position.  Most environmental groups that are doing real good in the world have already distanced themselves from this position.   Regardless of what you think of the "mainstream enviros", they are the ones that are getting things done.  ED is constantly forming partnerships with polluters to reduce pollution.  The Nature Conservancy uses its funds to directly protect habitat rather than paying for lobbyists to persuade politicians to protect habitat.  The people that whine about groups that are doing good in the world are either holding personal egos above results or just want to stall progress.

The best approach would be a completely voluntary carbon market, but that can only exist in a world where property rights over carbon exist.  In a next best world, we must use the next best solution.On Carbon offsets are tricky business posted 2 years, 4 months ago 17 Responses

myopic environmentalism

This is what happens when you get so focus (obsessed?) with one issue.  You lose sight of the bigger picture.  Though you think that you're the one looking at the bigger picture.  Greenhouse gases are not the only issue we face as environmentalists, as humans.

There is no logical argument that can be made that investing in habitat protection & creation or energy alternatives & efficiency is a bad thing.  The only thing is that we need to be sure we get what we pay for.  We can do this.

Go ahead and call it indulgences, but realize that by doing so you are only helping to stall action and progress.On Offsets should be the last thing you need to turn to posted 2 years, 4 months ago 31 Responses

Sean

So ethanol may not be all bad.  But this highlights the problems with government mandates, does it not.  Do we want government to choose corn ethanol as the winner when a better form (or something else entirely) could just be years away?On Predicts rabbit out of hat in three years, too posted 2 years, 5 months ago 32 Responses

but Sean

I was under the impression that the carbon reduction benefits of many types of ethanol aren't all that great in the first place.  So your reasonable assumption might not actually hold.On Predicts rabbit out of hat in three years, too posted 2 years, 5 months ago 32 Responses

"No rules of the road exist"

That's about to change.  Witness some self-regulation in the voluntary carbon markets.On Taking 'em to the mat posted 2 years, 5 months ago 7 Responses

good post

auctions are part of the ED/NRDC plan and have been all along.

I'm pretty sure the only economists that are pushing for free allocation would be those that receive their paychecks from DuPont, GE, etc.On I'm sure whoever has the best argument will win, right? posted 2 years, 5 months ago 8 Responses

but

people should be able to drive what they need or want to -- but they should also have to pay for the costs they impose on others by doing so.  Increasing the gas tax would make that happen.

 On After many years of trying, we're moving in the right direction at last posted 2 years, 5 months ago 21 Responses

make the government play in the market

The government and its vast expansive glory is probably a huge emitter of carbon.  Make government agencies participate in the carbon markets.On What good carbon policy should -- but often doesn't -- reward posted 2 years, 5 months ago 13 Responses

in theory

tax and cap-and-trade are equally efficient.  After that, there are a lot of political economy reasons that either a tax or cap-and-trade might be less efficient.  There are also some other ideological reasons that one may be biased in favor of one over the other.

If we're talking on a national scale here, I think that we should have a cap-and-trade scheme with auctioned permits.  Put the money in an environmental trust, give it back to citizens, or... whatever - that's a secondary issue.  The main issue is cutting carbon, so we should be focused on what the cap should be.  Everything else should be considered after this primary goal.  

I probably wouldn't be opposed to a higher gas tax either.On What good carbon policy should -- but often doesn't -- reward posted 2 years, 5 months ago 13 Responses

it was incredibly dusty

but that's what happens when you have a drought in Tennessee and 80,000 people walking around.On Did someone call for a smog machine? posted 2 years, 5 months ago 3 Responses

three words

water quality tradingOn Phosphorus Is Bad Phor Us posted 2 years, 5 months ago 2 Responses

but of course

more important than having a sweeping effect on industry and infrastructure is reducing carbon.  Plain and simple, that's the goal here.  We need not lose sight of that.

One thing that bugs me about carbon tax advocacy is that it keeps focusing on the ideal situation of rebates after the tax, but that is being compared to C&T with free allocation.  That's a faulty way to compare the two.

Also, the more arguments I read for a carbon tax, the less they talk about actually reducing carbon.  Almost all of them break down into issues of tax redistribution and revenue building.  Those things are great and all, but the primary purpose of legislation should be to reduce carbon, not raise revenue.On Carbon tax v. cap and trade -- the hottest arguments since McCartney v. Lennon posted 2 years, 5 months ago 8 Responses

hmm

"We will only be successful in fighting global warming via a transition to renewable energy."

Wasn't there a recent study that argued that efficiency is far more important than renewables in the attempt to address climate change?

I'm all for renewables for other reasons, such as decentralization, but I do wonder about this assertion that renewables are the only way to avoid damaging climate change.On Getting carbon cap and trade right for renewables posted 2 years, 5 months ago 2 Responses

i used

to wonder what the big deal was about invasives and non-native species.  In fact, many times I came to the same conclusion as Erik - partly due to the fact that I think the idea of a steady-state ecosystem is dubious and flawed.

However, now I work in the field and part of my job is monitoring and controlling invasive species.  Why?  Because for every exception to the rule, there are many invasives that do exactly what we imagine - they invade and dominate ecosystems until all that is left is a thriving population of a single non-native species.  Now, it's silly to think we can eradicate them once they're here, but we can try to manage them so that they do not become a threat.

Are "alien" species intrinsically bad?  I don't think so, but on practical grounds and (more often than not) for the sake of biodiversity, invasive species prevention should be a top priority and careful management of invasives is necessary.On They may not all be bad. posted 2 years, 5 months ago 82 Responses

question

How complicated does a tax rebate or credit system make the prospect of a carbon tax?  Do these administrative issues measure up to the institutional and administrative issues of cap-and-trade?On Conservative critique of the carbon tax posted 2 years, 6 months ago 8 Responses

second

"ending natural resource subsidies of all kinds should be the #1 priority for environmentalists."

I second that.On Senators call for a worldwide end to fishing subsidies posted 2 years, 6 months ago 20 Responses

it all depends on the function of parks

Are national parks meant to be tourist attractions so that people may enjoy the beauty of America or are they there to ensure the preservation of a natural landscape?

I think the answer probably lies somewhere in between.  I can understand why some people are up in arms -- there is an equity issue -- but I am in favor of park fees.  Additionally, I think there are ways to implement the fees that will provide the greatest benefits.

For one, the fees should be put back into a separate Park fund rather than going into the general fund.  Park managers would be able to use these funds to make park improvements, etc.

Consistent rates set by a central authority seem foolish to me.  Each park should be allowed to set its own rate, based off of what it sees fit.  Different parks may have different goals or mindsets.  For example, Yellowstone may strive to attract crowds while the Congaree Park may draw fewer crowds and focus more on preservation of an old growth swamp.

Price discrimination is one way to address the equity issue.  For example, charge less for children, seniors, and students.  Perhaps geographic discrimination?  Maybe all citizens of the state a park is located in can enter for free or at a reduced fee.  On This Land Was Paid By You and Me posted 2 years, 6 months ago 3 Responses

still

government holding onto the revenues isn't the biggest problem with the tax anyway.

The biggest problem is that taxes will not be set at perfect levels the first time around, and any subsequent efforts to raise them will be met with a lot of political opposition.  Even if they do get raised, there is still no guarantee that they will meet desired emissions reductions.  

That is simply why quantity controls are better than price controls when your goal is to reduce the quanitity of something.On Those people are smart posted 2 years, 8 months ago 11 Responses

Same

Could you elaborate on the "market use" vs. "reduction credits" idea, I might be able to comment if I understood what you were getting at.

If not all carbon credits are equal, then an exchange market structure would not be the best way to go about establishing the market.  Either bilateral trades (with or without brokers) or a clearinghouse stucture would be more appropriate.  Transaction costs increase with bilateral trade stuctures, but it would also provide an opportunity for buyer liability that would address the phantom credit problem.  The clearinghouse (carbon bank) structure could also address the phantom problem by placing liability on the clearinghouse.On Those people are smart posted 2 years, 8 months ago 11 Responses

the "split"

David,

I think the "split" you're referring to has happened in the past, but the two-party system eventually mends any prior splits.  

Think about it, when Republicans are in power, more and more "conservatives" start looking to other outlets - remember Ross Perot.  But eventually, an election like Al Gore vs. Bush reunites them under the Republican banner.  When the Dems are in power, more "liberals" start looking to other outlets like the Green Party, and the Dems just haven't figured out how to reign them all back in as well as the Republicans have.On Some call for action posted 2 years, 8 months ago 17 Responses

jjwfmme

That's fair enough.  I had already been through the science debates of global warming for about a year or so before I saw the movie.  I guess I expected more than I should have.  I'll leave it alone.On Share with friends and family posted 2 years, 9 months ago 42 Responses

not crazy or paranoid.

I like David's writing on a variety of things, although I do wish there was more attention paid to a broader scope of environmental issues.  I may disagree with him a lot, but I'd rather read his stuff than something from people I see completely eye-to-eye with.

You're certainly welcome to feel admiration or affection for Al Gore for doing what he has done.  If you really think that he is the best voice behind action on climate change, that's perfectly fine.  In my opinion, all he has done is popularize the issue but he hasn't put forth any good suggestions on how to deal with it.  I found the movie lacking for that reason.  It wasn't enough for me.

I just think that it's getting carried too far, and the focus here has become about Al Gore and not about climate change.  

If it's that serious of an issue, why are we content to just slap him on the back and say "job well done" when in fact, still nothing is being done?On Share with friends and family posted 2 years, 9 months ago 42 Responses

thanks

Thanks for putting my incoherent babbling in better terms than I did, Green Granny.  On Share with friends and family posted 2 years, 9 months ago 42 Responses

some ideas

Issue 1: What are some possible market mechanisms to ameliorate environmental problems?

Here are some environmental market mechanisms aside from taxes (these provide incentives, taxes offer punishment):

• water quality trading schemes such as nutrient/sediment trading to help control nonpoint source pollution

• cap n' trade on air emissions

• transferrable quotas for fisheries

• the use of conservation easements and tradable development rights to protect land and habitat

Issue 2: What common ground can be found for removal of subsidies among green and conservative thinkers?

That's a tough one if you're talking about getting politicians on board.  Subsidies line their pockets with money from oil, agriculture, and auto industries.  
In the short run, nothing is going to change the politicians.  You have to keep hammering the subsidies=bad to their contituents - the ones that vote for them, not the ones that pour money on them once they've been elected.  It's a tough job, but it's a job I don't see anyone working on.  Where are the protests?  Where are the movies about the damage that subsidies do?

Issue 3:  Shouldn't the question be what real-world support is available from Republicans and/or Democrats.  

Last time I checked, the Dems had control, and I still don't see any of these issues about market environmentalism or subsidy removal being brought up.  Not all Democrats are environmentalists, not all Republicans are anti-environment.  

I'm no soothsayer, but I'd say that support from the conservatives is coming.  For one, I think we're about to find out that the religious right is losing their control of the Republican Party.  They had their chance to yell and scream for 8 years - most moderate Republicans are tired of it.   It'll become political strategy, if the Repubs keep alienating the moderates, more and more will keep voting for Democrats.

Second, I think it has to be sold differently to conservatives.  Don't try to sell impending ecological doom.  Don't even sell the words "environmentalist" or "conservationist".  Start campaigns like "Save the Natural Beauty of America."  

It has to be about tradition and heritage, that's what conservatives love.  Remind them that the heritage of America is independence and natural beauty.On There's a coalition waiting posted 2 years, 9 months ago 60 Responses

nice

Maybe this will be the subject of the next X-files movie?On Aliens! posted 2 years, 9 months ago 6 Responses

how did this get on libertarians anyway?

Why does libertarianism always get associated with the Right?  Where are you people learning your political science?  Libertraian philosophy is neither Right nor Left.  Although libertarians have mostly been associated with the Republicans due to a similar view on economic policies, they shun other aspects of Republicans.  In this wonderful two-party system that America has, people with libertarian leanings have often had to choose the "lesser of the two evils" based on their beliefs.  Many of them thought that lied with the Republicans.  

NEWS FLASH:  A hefty number of people in America have libertarian leanings.  They are not members of the Libertarian Party (how libertarian is it to have an organized party?).  Please stop confusing the two.  The LP is stubborn, most people with libertarian leanings are not.  When you lump them together you start to lose those that don't associate with the LP.  

Want an interesting view as to why Democrats won the elections recently?  libertarians.  Small l.  Those voters that had always thought the Republicans were the lesser of the two evils finally grew some balls and voted against the party that has payed lip service to their principles but stabbed them in the back repeatedly.  

When certain jackasses start interchanging libertarian and conservative, they show how ignorant they are.  They also come off as as stubborn as the jerks that run the LP.  Those of us left with libertarian leanings are ignored, but we're the silent majority.  If you don't give us a reason to listen to you and work with you, we won't.  Voters with libertarian principles helped sway the recent elections -- read that, most people are willing to compromise -- but compromise and working together is a two-way process.On There's a coalition waiting posted 2 years, 9 months ago 60 Responses