<![CDATA[Grist - Comment Feed for Carbon taxes, cap-and-trade, and getting things right]]> Grist Comment Feed en Comment #1 by BruceMcF http://www.grist.org/article/my-reply-to-bloombergs-speech-in-seattle/ Sat, 03 Nov 2007 02:55:26 -0700 http://www.grist.org/article/my-reply-to-bloombergs-speech-in-seattle/1 Thanks for that expansion ...

... and, indeed, because the difference in the two cap systems are so substantial, it is worthwhile to simply call the better system cap-and-auction.

One substantial question concerns whether there is a  "safety valve" in the cap-and-auction in case the price goes so high that it threatens to throw the economy into recession.

The common "safety-valve" is to cap the permit price ... which explicitly requires handing out additional permits to allow the market to clear at the maximum price.

A far better "safety-valve" would be to cap the revenue drawn out of the permit auction, with any surplus over that maximum going back to people, recycling the purchasing power that is being withdrawn ... but of course with the playing field tilted in favor of goods and services with lower carbon inputs.

I'd split the surplus into two equal funds ... one half of the surplus handed back in an equal amount per person, and the other half of the surplus handed back in proportion to payroll tax payments.

Virtually Yours, BruceMcF Energize America 2020


]]> Thanks for that expansion ...

... and, indeed, because the difference in the two cap systems are so substantial, it is worthwhile to simply call the better system cap-and-auction.

One substantial question concerns whether there is a  "safety valve" in the cap-and-auction in case the price goes so high that it threatens to throw the economy into recession.

The common "safety-valve" is to cap the permit price ... which explicitly requires handing out additional permits to allow the market to clear at the maximum price.

A far better "safety-valve" would be to cap the revenue drawn out of the permit auction, with any surplus over that maximum going back to people, recycling the purchasing power that is being withdrawn ... but of course with the playing field tilted in favor of goods and services with lower carbon inputs.

I'd split the surplus into two equal funds ... one half of the surplus handed back in an equal amount per person, and the other half of the surplus handed back in proportion to payroll tax payments.

Virtually Yours, BruceMcF Energize America 2020


]]> Comment #2 by Sam Wells http://www.grist.org/article/my-reply-to-bloombergs-speech-in-seattle/ Sat, 03 Nov 2007 03:02:07 -0700 http://www.grist.org/article/my-reply-to-bloombergs-speech-in-seattle/2 Rate of Progress

Question - which system would be similar to "Rate of Progress" (ROP) as defined under the Clean Air Act? As background, ROP required "x" percent reductions in air emissions such as over 3-year intervals. Any reductions beyond that moving cap could be banked, traded, credited, or whatever. It's more complicated but - what do you think?  /sam

Onward through the fog

]]> Rate of Progress

Question - which system would be similar to "Rate of Progress" (ROP) as defined under the Clean Air Act? As background, ROP required "x" percent reductions in air emissions such as over 3-year intervals. Any reductions beyond that moving cap could be banked, traded, credited, or whatever. It's more complicated but - what do you think?  /sam

Onward through the fog

]]> Comment #3 by Charles Komanoff http://www.grist.org/article/my-reply-to-bloombergs-speech-in-seattle/ Sat, 03 Nov 2007 08:10:26 -0700 http://www.grist.org/article/my-reply-to-bloombergs-speech-in-seattle/3 Two questions for Eric

Hi Eric --

I like Sightline Institute a lot. Really liked your July post too, "Your mileage may vary: Why bicycling is 25 percent better than you thought." What I don't get is why you're willing to settle for opaque, cumbersome carbon cap-and-trade instead of the gold standard of carbon pricing, a carbon tax, especially since (as you acknowledge), the tax provides all-important price certainty.

Two questions:

Just what is "the appropriate amount" by which GHG emissions need to be reduced?

Do you (and Sightline) support Warner-Lieberman?

Best,

Charles http://www.komanoff.net

]]> Two questions for Eric

Hi Eric --

I like Sightline Institute a lot. Really liked your July post too, "Your mileage may vary: Why bicycling is 25 percent better than you thought." What I don't get is why you're willing to settle for opaque, cumbersome carbon cap-and-trade instead of the gold standard of carbon pricing, a carbon tax, especially since (as you acknowledge), the tax provides all-important price certainty.

Two questions:

Just what is "the appropriate amount" by which GHG emissions need to be reduced?

Do you (and Sightline) support Warner-Lieberman?

Best,

Charles http://www.komanoff.net

]]> Comment #4 by Eric de Place http://www.grist.org/article/my-reply-to-bloombergs-speech-in-seattle/ Mon, 05 Nov 2007 01:53:10 -0800 http://www.grist.org/article/my-reply-to-bloombergs-speech-in-seattle/4 Replies to Charles

Hi Charles,

Thanks -- I'm a huge fan of yours actually. And at the risk of getting into a debate with someone much smarter than me, I'll hazard a couple of responses here.

First off, I wrote this post in about 15 minutes. If I had to do it over again I would have made it clearer that Sightline's not opposed to carbon taxes -- not all -- and, in fact, we've been promoting taxing shifting since we published our book "Tax Shift" in 1998. So I'm thrilled that heavyweights like Bloomberg are finally behind a pollution tax.

What I was objecting to in Bloomberg's speech was his straw man criticism of cap-and-trade. He correctly pointed out a number of flaws to the grandfathering (or free allocation) system, but did a disservice by essentially ignoring the many benefits of cap and auction. I just wanted to set the record straight.

In any case, the reason I support c&t is because it puts a firm cap on emissions. Price certainty isn't "all important," but reductions certainty is.

Taxes, while simpler and quicker to implement, don't provide certainty of reductions -- and they'd require a constant re-jiggering to find the correct level of reductions. Nonetheless, I believe taxes and c&t could be complimentary. And I'd love to see a carbon tax come online now, as a stop-gap measure, until we can put a hard limit in place and systematically drive emissions down under c&t.

Finally, in answer to your two questions:
I'll punt to science. As you know, everyone's arguing for 80% by 2050. That seems okay to me unless scientific understanding is leading us elsewhere.
I/we haven't taken a close enough look at Warner-Lieberman to take a position on it. We don't intend to.

Best,

Eric

]]> Replies to Charles

Hi Charles,

Thanks -- I'm a huge fan of yours actually. And at the risk of getting into a debate with someone much smarter than me, I'll hazard a couple of responses here.

First off, I wrote this post in about 15 minutes. If I had to do it over again I would have made it clearer that Sightline's not opposed to carbon taxes -- not all -- and, in fact, we've been promoting taxing shifting since we published our book "Tax Shift" in 1998. So I'm thrilled that heavyweights like Bloomberg are finally behind a pollution tax.

What I was objecting to in Bloomberg's speech was his straw man criticism of cap-and-trade. He correctly pointed out a number of flaws to the grandfathering (or free allocation) system, but did a disservice by essentially ignoring the many benefits of cap and auction. I just wanted to set the record straight.

In any case, the reason I support c&t is because it puts a firm cap on emissions. Price certainty isn't "all important," but reductions certainty is.

Taxes, while simpler and quicker to implement, don't provide certainty of reductions -- and they'd require a constant re-jiggering to find the correct level of reductions. Nonetheless, I believe taxes and c&t could be complimentary. And I'd love to see a carbon tax come online now, as a stop-gap measure, until we can put a hard limit in place and systematically drive emissions down under c&t.

Finally, in answer to your two questions:
I'll punt to science. As you know, everyone's arguing for 80% by 2050. That seems okay to me unless scientific understanding is leading us elsewhere.
I/we haven't taken a close enough look at Warner-Lieberman to take a position on it. We don't intend to.

Best,

Eric

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