Comments dcrawford has made

Free permits based on production

This is something I've though of recently. However, the fact that I've never heard it elsewhere likely means there is something very stupid about my idea I have not noticed.

Every producer of electricity gets an amount of credits based on how much they produce. Call them megawatt points. A 800 megawatt solar plant gets 800 points, a 1000 megawatt coal plant gets 1000 points. However, the coal plant obviously emits more than the solar plant, so it has to buy credits. The "carbon value" of a megawatt point goes down over time, so 1000 points now might allow for 1000 tons, but maybe in 5 years only allows for 900 tons. It rewards immediate action by dirty producers and instant incentive for renewable energy, and rewards them for having been built already.

Money can be made by taxing the trading of permits rather than auctioning them off, so it doesn't look like the government is selling a public good.

This seems really simple to me, but there's probably something I am overlooking. And obviously it only works for electricity, but it could be applied to other industries too, though probably not on an individual level. Let me know what you think. On The silver-lining of Lieberman-Warner's demise posted 1 year, 5 months ago 11 Responses