This was, or should have been, big news last week. Passed the US House, barely. Faces an apparently bigger fight in the Senate. I've been following it some. Doing a google search shows lots of opinions, good and bad. What do we think about this deal? Is it Good, Bad or Ugly?
http://www.businessweek.com/magazine/content/09_11/b4123022554346.htm
[size] Obama's Cap-and-Trade Plan
The U.S. Chamber of Commerce is gearing up to rally coal-state politicians to alter the President's plan to control carbon emissions
By John Carey
As a candidate, Barack Obama said he'd tackle climate change by imposing caps on emissions of greenhouse gases. Now, as President, he's doing exactly that. He proposes reducing U.S. emissions 14% below 2005 levels by 2020 and 83% below by 2050. And he'd raise $646 billion from 2012 to 2019 by auctioning the rights to emit such gases—in effect putting a price on carbon emissions. With Congress also serious about the climate, business knows the battle has been joined for real and is trying to shape a compromise bill likely to emerge this year. "We are now playing with live bullets," says the Environmental Defense Fund's Mark Brownstein, who works with a group of companies that supports the plan.
The bullets are already flying—but mainly over details of the plan, not the general idea. While there are still fierce opponents of emissions limits, such as the U.S. Chamber of Commerce, much of business is supportive. The Obama Administration "is very close to right on the climate plan," says John W. Rowe, chief executive of Exelon (EXC), a Chicago-based utility.
In theory, a workable cap-and-trade market for carbon emissions would give business executives more certainty about future energy costs, helping them make better investment decisions. A market price on carbon would boost energy efficiency and renewable energy efforts, already beneficiaries in Obama's stimulus package. Nuclear power plants, such as Exelon's, would become more valuable. "I have great hope for the 'green' stimulus, but it won't fulfill its potential unless there is a price on carbon," says James E. Rogers, chief executive of Duke Energy (DUK). Also, there's little chance of getting China and India to agree to binding limits, which American companies insist is needed to keep the international playing field level, unless the U.S. takes action at home.
The real fight, therefore, is not whether to impose carbon limits but how to do so and at what cost to business. Obama proposes that companies buy an allowance, or permit, for each ton of carbon emitted, at an estimated cost, to start, of $13 to $20 per ton. (Those permits could also be bought and sold.) Even at the lower range of $13 per ton, energy companies and utilities would likely pass along the added cost to consumers. It's estimated the price of gasoline would go up by 12 cents a gallon and the average electricity bill by about 7% nationally—and far higher in states more dependent on coal. Unfair, say many executives. "It is a clear transfer of the middle part of the country's wealth to the two coasts," says Michael G. Morris, CEO of American Electric Power (AEP), a coal-heavy power generator based in Columbus, Ohio, that supplies electricity in 11 states.
Morris intends to target the 50 U.S. senators in the 25 coal-centric states "to see if we can bring some rationality to the program," he says. The U.S. Chamber of Commerce, meanwhile, plans to hold "climate dialogues" in as many as 16 cities, hammering home a similar message in coal-rich states with Democratic senators. The Obama plan "is now a very expensive tax used to transfer wealth. It has nothing to do with climate change," charges William L. Kovacs, a Chamber vice-president.
The Obama team points out that its cap-and-trade plan returns much of the money raised by permit sales to consumers nationwide in the form of lower taxes, so many people come out ahead. And the Environmental Defense Fund has created a map of 1,200 alternative energy or energy-efficiency companies in key manufacturing states that stand to benefit from the climate plan. While the Midwest will bear a higher cost from reducing carbon emissions, the region will also benefit from the most new jobs, the EDF argues.
Lots of other details remain to fight over. Dow Chemical (DOW) and others want credit for emission cuts they have already made, for example. So prepare for months of negotiations. But a deal is likely. Says Dow lobbyist Peter A. Molinaro: "Somewhere out there is a rational policy that could actually get the votes."
Carey is a senior correspondent for BusinessWeek in Washington.
The stock market has no regulatory problems. How could there ever be problems with this. /end sarcasm.
I am sure Obama will respond to this challenge to a crucial piece of legislation with the fierce advocacy he has shown since his inauguration.
Good if done properly. Can be no so good if Obama continues his trend of compromising by adopting insanity from both sides. Will never be nearly as bad as the right wing idiots claim it is.
Quote from: Faeelin on July 02, 2009, 01:53:54 PM
I am sure Obama will respond to this challenge to a crucial piece of legislation with the fierce advocacy he has shown since his inauguration.
Ouch :pinchL
Both Bad and Ugly.
I don't see any better solution on the horizon. The alternative is a directed reduction with about one bazillion loopholes, each paid for with a campaign donation.
Quote from: derspiess on July 02, 2009, 02:11:03 PM
Both Bad and Ugly.
If Spicy is against it, surely it is worth trying? :lol:
Wouldn't it make more sense to destory all our technology and live as savages?
Quote from: Neil on July 02, 2009, 02:19:32 PM
Wouldn't it make more sense to destory all our technology and live as savages?
The Battlestar Gallictica solution! :w00t:
Canada has their own cap and trade in the works. regulations have been published, comment period is now open, and will be extended until we get a better read on the US positions. the goal is to harmonise as much as possible, and create a NA market.
Grist.org has had the best ongoing coverage of the congressional cap and trade dance btw
I am rather optimistic as a year ago, this was not on the legislative radar in either country so it seems to have momentum. Pricing pollution is an excellent idea. I think the danger is to give away too many credits for free, which would essentially reward polluters for past behaviour.
the second danger lies in maintaining the value of credits. like, if I plant 100 hectares of trees tomorrow, I'll eventually get credits because my forest is a carbon sink, which I then sell on the market to some rich polluter , but say in 16-20 years I harvest those trees because they are fast growing hybrids and I want to cash out, and I reintroduce the CO2 I sequestered back in the atmosphere, what happens to the credits I generated 16-20 years ago? do they still exist or has their value changed? and would whoever owns those credits now know about it? the room for corruption makes my head hurt.
now, a carbon flat tax would avoid the complexities of a cap and trade system, and take immediate effect. we would pay for pollution, pound for pound, every single day we bought or consumed something.
Quote from: saskganesh on July 02, 2009, 02:53:33 PM
the room for corruption makes my head hurt.
Exactly. We have a hard enough creating a system that trades something that is real nevermind creating a system that trades something completely notional. Forget the old saying "I have a bridge to sell you." I now have some carbon credits to sell you.
About 20 years ago the Canadian government had a tax credit system for companies conducting scientific research. The program had to be stopped because corruption and fraud was rampant. People were setting up companies just to claim the tax credits without ever conducting any research. I remember reading that the vast majority of companies claiming the credits were entirely fraudulent. I can see a similar thing happening here.
Quote from: saskganesh on July 02, 2009, 02:53:33 PM
the second danger lies in maintaining the value of credits. like, if I plant 100 hectares of trees tomorrow, I'll eventually get credits because my forest is a carbon sink, which I then sell on the market to some rich polluter , but say in 16-20 years I harvest those trees because they are fast growing hybrids and I want to cash out, and I reintroduce the CO2 I sequestered back in the atmosphere, what happens to the credits I generated 16-20 years ago? do they still exist or has their value changed? and would whoever owns those credits now know about it? the room for corruption makes my head hurt.
Wouldn't you have to buy credits to cut down those trees?
If they really believed carbon emmisions are so bad for us they would outlaw them completely, not make a market for selling permits to pollute. Don't know, seems like more feelgoodism to make it look like they care for the enviroment while making money out of it.
Quote from: DGuller on July 02, 2009, 03:10:07 PM
Quote from: saskganesh on July 02, 2009, 02:53:33 PM
the second danger lies in maintaining the value of credits. like, if I plant 100 hectares of trees tomorrow, I'll eventually get credits because my forest is a carbon sink, which I then sell on the market to some rich polluter , but say in 16-20 years I harvest those trees because they are fast growing hybrids and I want to cash out, and I reintroduce the CO2 I sequestered back in the atmosphere, what happens to the credits I generated 16-20 years ago? do they still exist or has their value changed? and would whoever owns those credits now know about it? the room for corruption makes my head hurt.
Wouldn't you have to buy credits to cut down those trees?
good point.
ok, supposed my trees are flattened by a tornado and the carcasses are devoured by mutant Korean pine beetles. same end result. do I have to buy insurance, or does that come bundled with the original credits and is transferred with the sale. and what kind of verification trace scheme will be in place to trace destruction of forests in one place to a smug credit holder in another?
Quote from: lustindarkness on July 02, 2009, 03:19:15 PM
If they really believed carbon emmisions are so bad for us they would outlaw them completely, not make a market for selling permits to pollute. Don't know, seems like more feelgoodism to make it look like they care for the environment while making money out of it.
the idea is to use free market mechanisms to make money off pollution so that players will use the money to fund a post carbon economy within 41 years.
the alternative is to tax pollution so government will make money to fund a post carbon economy within 41 years.
I think an overnight switch down wouldn't suit most people.
Quote from: lustindarkness on July 02, 2009, 03:19:15 PM
If they really believed carbon emmisions are so bad for us they would outlaw them completely, not make a market for selling permits to pollute. Don't know, seems like more feelgoodism to make it look like they care for the enviroment while making money out of it.
1) That's impossible.
2) Just because something is bad doesn't mean you can't put a price on its "badness".
3) That's economically stupid. The point of cap-and-trade is to reduce emissions in the most economically efficient way possible. Industries that don't really need to emit lots of carbon, but do it anyway because it's free to do so, would have economic incentives to stop. Industries that can't really do it, on the other hand, would pay rather than be forced to undergo very expensive retooling, or being legislated out of existance altogether.
Quote from: saskganesh on July 02, 2009, 02:53:33 PM
now, a carbon flat tax would avoid the complexities of a cap and trade system, and take immediate effect. we would pay for pollution, pound for pound, every single day we bought or consumed something.
Well, that would certainly take care of the budget deficit, wouldn't it?
Quote from: saskganesh on July 02, 2009, 02:53:33 PM
like, if I plant 100 hectares of trees tomorrow, I'll eventually get credits because my forest is a carbon sink, which I then sell on the market to some rich polluter , but say in 16-20 years I harvest those trees because they are fast growing hybrids and I want to cash out, and I reintroduce the CO2 I sequestered back in the atmosphere, what happens to the credits I generated 16-20 years ago? do they still exist or has their value changed? and would whoever owns those credits now know about it? the room for corruption makes my head hurt.
Credits only are the equivelent of a ton's carbon production. Every year you have the farm, you can sell a year's worth of credits.
Quotenow, a carbon flat tax would avoid the complexities of a cap and trade system, and take immediate effect. we would pay for pollution, pound for pound, every single day we bought or consumed something.
A carbon tax wouldn't reduce carbon emissions directly, and would be subject to massive political pressures if one wanted to increase the tax to cut production. Taxes are generally an unweildy way to control consumption, are generally unpopular, and are more directly subject to political presure than quotas.
Quote from: crazy canuck on July 02, 2009, 03:02:22 PM
Exactly. We have a hard enough creating a system that trades something that is real nevermind creating a system that trades something completely notional. Forget the old saying "I have a bridge to sell you." I now have some carbon credits to sell you.
About 20 years ago the Canadian government had a tax credit system for companies conducting scientific research. The program had to be stopped because corruption and fraud was rampant. People were setting up companies just to claim the tax credits without ever conducting any research. I remember reading that the vast majority of companies claiming the credits were entirely fraudulent. I can see a similar thing happening here.
Yes, your example is an excellent argument against the tax-based approach.
Quote from: lustindarkness on July 02, 2009, 03:19:15 PM
If they really believed carbon emmisions are so bad for us they would outlaw them completely, not make a market for selling permits to pollute. Don't know, seems like more feelgoodism to make it look like they care for the enviroment while making money out of it.
The Battlestar Galactica approach only works in fiction.
The concept behind creating permits and then allowing the market to determine their value is that companies can make cost-benefit tradeoffs on pollution control technology. Some would reduce pollution more than the "required amount" because it would allow them to sell the "unconsumed pollution" on the market (or avoid having to buy them in the first place, depending one how much foreknowledge they had of the effectiveness of their new controls).
Quote from: grumbler on July 02, 2009, 03:37:43 PM
Yes, your example is an excellent argument against the tax-based approach.
And how does the cap and trade system stop people from selling fradulent credits? The buyer doesnt care. They just want the credits so they can keep polluting. There is no market force at work here to keep anyone invovled honest.
Quote from: saskganesh on July 02, 2009, 03:22:57 PM
good point.
ok, supposed my trees are flattened by a tornado and the carcasses are devoured by mutant Korean pine beetles. same end result. do I have to buy insurance, or does that come bundled with the original credits and is transferred with the sale. and what kind of verification trace scheme will be in place to trace destruction of forests in one place to a smug credit holder in another?
If your trees are no longer absorbing tons of CO2, you couldn't sell the credits. You may, indeed, want to buy insurance for your forest if you want to be sure of generating credits or being compensated for being unable to.
Quote from: crazy canuck on July 02, 2009, 03:43:28 PM
And how does the cap and trade system stop people from selling fradulent credits? The buyer doesnt care. They just want the credits so they can keep polluting. There is no market force at work here to keep anyone invovled honest.
The mechanism is the same as that for currency. The reason people care about being able to distinguish between good currency/credits and bad currency/credits is because you cannot spend bad currency or bad credits. Every year, you have to file a sort of "carbon tax return" showing that you have purchased the credits necessary to offset your tons of pollution.
Credit enforcement, like currency enforcement, will be necessary, but that is equally true of a carbon tax.
This should be okay. The policy isn't totally unknown so the American government will be able to learn good and bad stuff from other examples such as the Canadian and European systems.
Personally I think it's not nearly enough and there should be a carbon tax but that's just not possible.
I see.
Quote from: grumbler on July 02, 2009, 03:48:33 PM
The mechanism is the same as that for currency. The reason people care about being able to distinguish between good currency/credits and bad currency/credits is because you cannot spend bad currency or bad credits. Every year, you have to file a sort of "carbon tax return" showing that you have purchased the credits necessary to offset your tons of pollution.
Credit enforcement, like currency enforcement, will be necessary, but that is equally true of a carbon tax.
I dont think that is a good comparison. The reason why a buyer of currency credits worries about whether it is not fraudulent is because the buyer will in turn want to trade them along in some form. In the case of carbon credits the buyer doesnt care. He is not going to try to convince another buyer to take them. He is going to use them against his own pollution. All he cares about is whether the government regulator will accept them which brings me back to the huge problems encountered with the research tax credits.
Whether we are talking about taxation or cap and trade it all comes down the a government regulator ensuring that the process is not abused. In the case of Cap and Trade there is a lot of room for abuse and indeed if a buyer can get cut rate credits some a fraudulent source the potential for abuse is significant.
Quote from: Sheilbh on July 02, 2009, 03:53:47 PM
the American government will be able to learn good and bad stuff from other examples such as the Canadian and European systems.
You are not going to learn anything from us. We are not going to implement this until the US does.
Polluting generates a lot of costs that people have to pay for in health-care and the like. If this tax helps decrease this distortion, it'll have been a good idea. I'd rather go for a flat tax, though. And not just CO2, sulfur, dioxins, heavy metals an such as well.
Terrible idea.
The sad reality is that there may be no practical way to meaningfully reduce CO2 emissions on a global scale. Increasing the cost of CO2 in the US, which is what this is theoretically doing, is only going to push carbon intensive industries offshore or lower the cost of carbon based fuels so that parties previously priced out of the market can use them. I can't imagine a future in 20-30 years where major oil fields are left untouched because the price of oil is too low, which is the only way to mark success.
The border adjustment idea is needed to keep blatant offshoring from happening, but I have doubts it can really be effective. For example, if electricity costs here begin to get too expensive, that is just one more incentive to offshore IT functions to India, and imagine a tariff regime stopping that.
I'm not terribly enamored of initiatives with end dates after the proposer leaves office.
Quote from: Admiral Yi on July 02, 2009, 04:37:19 PM
I'm not terribly enamored of initiatives with end dates after the proposer leaves office.
The biggest problem with politics (and business in general) is the disincentive to produce policies the provide long term gains. Showing short term gain is all important despite the long term implications.
Quote from: crazy canuck on July 02, 2009, 03:55:43 PM
I dont think that is a good comparison. The reason why a buyer of currency credits worries about whether it is not fraudulent is because the buyer will in turn want to trade them along in some form. In the case of carbon credits the buyer doesnt care. He is not going to try to convince another buyer to take them. He is going to use them against his own pollution. All he cares about is whether the government regulator will accept them which brings me back to the huge problems encountered with the research tax credits.
Well, he has to worry about whether the government will accept them, as well as whether or not anyone else will accept them if the buyer over-purchases and wants to sell any excess. That brings us back to the huge problem of fraud, whether tax fraud (as in your examle) or other kinds of fraud (as in mine).
QuoteWhether we are talking about taxation or cap and trade it all comes down the a government regulator ensuring that the process is not abused. In the case of Cap and Trade there is a lot of room for abuse and indeed if a buyer can get cut rate credits some a fraudulent source the potential for abuse is significant.
Agred that regulators need to regulate, whether the system is a taxation issue as in your example, or a "commodity" system. I don't see this as an argument for or against either system.
Quote from: grumbler on July 02, 2009, 04:50:07 PM
Agreed that regulators need to regulate, whether the system is a taxation issue as in your example, or a "commodity" system. I don't see this as an argument for or against either system.
I agree with that. It is an argument against using both systems though.
In addition to the problem of fraud we are discussing AR makes a good point about the effect of making carbon more expensive in North America. The whole logic of such a system of artificially creating incentives to innovate would be lost if rather then innovate companies could simply re-locate to avoid that the artificially imposed carbon cost.
Quote from: crazy canuck on July 02, 2009, 05:06:52 PM
I agree with that. It is an argument against using both systems though.
It's hard to regulate pollution without regulations and regulators.
Quote from: crazy canuck on July 02, 2009, 05:06:52 PM
In addition to the problem of fraud we are discussing AR makes a good point about the effect of making carbon more expensive in North America. The whole logic of such a system of artificially creating incentives to innovate would be lost if rather then innovate companies could simply re-locate to avoid that the artificially imposed carbon cost.
True enough, but equally true of all systems that impose limits on commercial activity for perceived social gains. Labor laws increase the cost of labor and therefor drive jobs overseas. Shipping safety laws increase the cost of shipping and therefor drive some shipping to using other ports and flags.
This is no different. It is a benefit that comes at a cost. I'd rather see money going into this than $75,000-a-year dog catchers in NY State, though.
Quote from: grumbler on July 02, 2009, 05:30:41 PM
True enough, but equally true of all systems that impose limits on commercial activity for perceived social gains. Labor laws increase the cost of labor and therefor drive jobs overseas. Shipping safety laws increase the cost of shipping and therefor drive some shipping to using other ports and flags.
This is no different. It is a benefit that comes at a cost. I'd rather see money going into this than $75,000-a-year dog catchers in NY State, though.
The problem I see with cap and trade is that there are potentially no benefits at all. Manmade global warming is the effect of the cumulative greenhouse gases that have been released from fossil fuels since the beginning of the industrial revolution, so even if there are modest unilateral reductions in the US level of consumption that aren't offset by increases elsewhere I do not see much hope for a significant change.
But then assuming that US reductions are not offset by increases elsewhere is almost certainly false. The high level of the cost of oil in the middle of a major economic downturn should be a flashing neon sign that the historic balance of supply and demand is now tilted toward excess demand. There isn't any secret where that demand is coming from: countries such as China and India. Even if production of goods and services isn't outsourced to those countries because of cap and trade, why won't they will take advantage of a reduction in fossil fuel demand in the US to purchase more themselves (at the resulting lower cost)?
We essentially have two methods to reduce greenhouse gas emissions: reducing the supply of fossil fuels, or reducing the demand. Without question the approach that would be easier from a regulatory perspective would be to reduce the supply. That solution isn't even on the table, because everyone knows that going to Saudi Arabia and asking them to leave half of their oil fields untouched is not going anywhere. There isn't even the political will to bring up telling West Virginia that it can only produce 1/2 the coal it currently does. But the idea that we are going to back into that type of supply reduction by unilaterally implementing a byzantine regulatory regime on the demand side seems insane to me.
Quote from: alfred russel on July 03, 2009, 01:27:41 PM
There isn't any secret where that demand is coming from: countries such as China and India. Even if production of goods and services isn't outsourced to those countries because of cap and trade, why won't they will take advantage of a reduction in fossil fuel demand in the US to purchase more themselves (at the resulting lower cost)?
China is trying at least as hard as we are to get out of the carbon business, at least if news reports can be believed.
Quote from: alfred russel on July 03, 2009, 01:27:41 PM
The problem I see with cap and trade is that there are potentially no benefits at all. (snip)
That is true of all public policy initiatives, including those I used in my examples which you quoted.
If oe wants to argue for a "do nothing about the causes and just try to kitigate the effects" approach, that is certainly logically viable (
The Economist took that position some years ago).
However, if one is going to do something, cap and trade seems to me to make the most sense.
Quote from: alfred russel on July 03, 2009, 01:27:41 PM
We essentially have two methods to reduce greenhouse gas emissions: reducing the supply of fossil fuels, or reducing the demand. Without question the approach that would be easier from a regulatory perspective would be to reduce the supply. That solution isn't even on the table, because everyone knows that going to Saudi Arabia and asking them to leave half of their oil fields untouched is not going anywhere. There isn't even the political will to bring up telling West Virginia that it can only produce 1/2 the coal it currently does. But the idea that we are going to back into that type of supply reduction by unilaterally implementing a byzantine regulatory regime on the demand side seems insane to me.
It seems to me that the argument is usually that it's up to the civilized world to suck it up and develop new technologies, something that we won't do unless some sort of a regulatory regime is in place to impose the need. Once the technologies exist, they can be forced on the rest of the world.
Quote from: grumbler on July 03, 2009, 02:02:45 PM
If oe wants to argue for a "do nothing about the causes and just try to kitigate the effects" approach, that is certainly logically viable (The Economist took that position some years ago).
Interesting article in this month's Atlantic that states that mitigating the effects of global greenhouse gases through "geo-engineering" is potentially orders of magnitude cheaper than reducing the output of such gases. The article doesn't ultimately recommend pursuing such technologies, but it's still a quite interesting read.
I should have remembered to look online:
http://www.theatlantic.com/doc/200907/climate-engineering
Quote from: grumbler on July 03, 2009, 02:02:45 PM
Quote from: alfred russel on July 03, 2009, 01:27:41 PM
The problem I see with cap and trade is that there are potentially no benefits at all. (snip)
That is true of all public policy initiatives, including those I used in my examples which you quoted.
I dont think that is true. One of the policy areas you cited was labour laws. While they do increase costs they are also effective at achieving the standards they attempt to enforce. The reason for that is the system is a complaint driven process. The government does not have to expend resources to hunt down where violations of labour laws might be occuring. They count on the employees to do that.
The situation is quite different in a cap and trade system where there is no obvious person who will complain to ensure the carbon credits being sold are legitimate. Its all really just a paper transaction with no assets to back it up.
I know your point is the same thing exists with currency trades but as we discussed the difference with a currency trade is that there are a web of people involved that need to have confidence in the currency being traded. For this to work carbon would have to be commodified in the same way as currency in order to be tradeable but carbon is only being used as a set off in this scheme not as a commodity which will continue to be traded.
A carbon tax on ther hand can be very simple and easy to administer. Take for example the tax we have here in B.C. A percentage is added to the cost to the buyer of fossil fuels (mainly at the gas pump). Straight forward, direct and impossible to evade.
Quote from: grumbler on July 03, 2009, 02:02:45 PM
Quote from: alfred russel on July 03, 2009, 01:27:41 PM
The problem I see with cap and trade is that there are potentially no benefits at all. (snip)
That is true of all public policy initiatives, including those I used in my examples which you quoted.
If oe wants to argue for a "do nothing about the causes and just try to kitigate the effects" approach, that is certainly logically viable (The Economist took that position some years ago).
However, if one is going to do something, cap and trade seems to me to make the most sense.
It makes the most sense? To me, it makes almost the least. Under a system that you give away permits to incumbent companies and have border adjustments, which seems to be where we are headed, you are going to have a system ripe for political distortions virtually everywhere. First, it is anti-competitive: imagine I want to set up a chemical company to compete against yours, you have been given carbon offsets that I must buy. The effect is that I have another set of costs to set up my business, and in this case the costs will actually go to subsidize my competition. Second, the border adjustments are rife for political influence and arbitrary rulings. Determining the carbon inherent in a good coming into the country is not feasible: are you going to investigate whether that shoe shipment from China is from a coal burning region or a location supplied with electricity from the Three Gorges Dam? Or are we going to waive the detailed analysis, and use general rules--such as Nike lobbies that so that we assume shoes come in from low carbon regions, while Ford and GM lobbies that any future Chinese car imports come from high carbon regions?
A few ideas that make more sense from my point of view: a carbon tax (you will still have the border adjustment problems, but at least it won't have the anti-competitive issues), a major research initiative along the lines of NASA, a vigorous assessment of how to prepare our cities for the global warming we will probably be unable to prevent, or a serious conservation effort (the only way I can think of doing this would be to have a national nuclear power program plus a much higher gasoline tax).
Quote from: alfred russel on July 03, 2009, 01:27:41 PM
But then assuming that US reductions are not offset by increases elsewhere is almost certainly false. The high level of the cost of oil in the middle of a major economic downturn should be a flashing neon sign that the historic balance of supply and demand is now tilted toward excess demand. There isn't any secret where that demand is coming from: countries such as China and India. Even if production of goods and services isn't outsourced to those countries because of cap and trade, why won't they will take advantage of a reduction in fossil fuel demand in the US to purchase more themselves (at the resulting lower cost)?
Doesn't this assume that China and India's leaders are just as shortsighted as America's? I find that hard to believe.
Quote from: ulmont on July 03, 2009, 01:37:33 PM
Quote from: alfred russel on July 03, 2009, 01:27:41 PM
There isn't any secret where that demand is coming from: countries such as China and India. Even if production of goods and services isn't outsourced to those countries because of cap and trade, why won't they will take advantage of a reduction in fossil fuel demand in the US to purchase more themselves (at the resulting lower cost)?
China is trying at least as hard as we are to get out of the carbon business, at least if news reports can be believed.
And yet they keep investing more and more in coal. It isn't the case that China and India are evil countries that want to ruin the planet (or that they don't care). But take our current cap and trade bill--when it was estimated that it would cost around $150-$200 a household, the assumption was that was less than expected and not too bad. But try justifying that in a third world country where that is a sizable portion of the household income for a lot of families. There is no way the country's leadership is going to put that big of a burden on its population.
Quote from: Faeelin on July 03, 2009, 05:35:16 PM
Quote from: alfred russel on July 03, 2009, 01:27:41 PM
But then assuming that US reductions are not offset by increases elsewhere is almost certainly false. The high level of the cost of oil in the middle of a major economic downturn should be a flashing neon sign that the historic balance of supply and demand is now tilted toward excess demand. There isn't any secret where that demand is coming from: countries such as China and India. Even if production of goods and services isn't outsourced to those countries because of cap and trade, why won't they will take advantage of a reduction in fossil fuel demand in the US to purchase more themselves (at the resulting lower cost)?
Doesn't this assume that China and India's leaders are just as shortsighted as America's? I find that hard to believe.
See my post before this one. But actually, of course they are every bit as shortsighted, and probably even moreso. Our government may be corrupt and incompetent, but that doesn't mean second and third world countries have better governments.
Quote from: Neil on July 03, 2009, 02:17:39 PM
It seems to me that the argument is usually that it's up to the civilized world to suck it up and develop new technologies, something that we won't do unless some sort of a regulatory regime is in place to impose the need. Once the technologies exist, they can be forced on the rest of the world.
If our current government was around in 1960 and Obama announced plans to go to the moon, this is how it would unfold:
Republicans would denounce it as big government and say it is best left to the private sector. While skeptical of the entire project, they would promise to block any "public option."
The Democrats would cave on the "public option," and reach out to Republicans by promoting growth of the aerospace industry through tax breaks to all aviation related industries. These tax breaks, to companies such as Boeing, would add billions to the price tag of the project, but still the project would fail to find more than a handful of Republican votes. Much of the money in the Democrats' plan would go to low interest loans to startup companies who had ideas for moon related technologies. There would also be significant funds used to provide grants and loans to help with tuition for engineering students.
Ten years later we would not be on the moon. But we would have a new industry of private companies funded by the grants. These companies wouldn't be profitable, and in many cases their contribution to the space program might be obscure. But each of them would be sending teams of lobbyists to Washington to make sure their "loan" funding kept coming. Much of the Board of Directors and management of these companies would consist of former Congressmen.
Quote from: Faeelin on July 03, 2009, 05:35:16 PM
Quote from: alfred russel on July 03, 2009, 01:27:41 PM
But then assuming that US reductions are not offset by increases elsewhere is almost certainly false. The high level of the cost of oil in the middle of a major economic downturn should be a flashing neon sign that the historic balance of supply and demand is now tilted toward excess demand. There isn't any secret where that demand is coming from: countries such as China and India. Even if production of goods and services isn't outsourced to those countries because of cap and trade, why won't they will take advantage of a reduction in fossil fuel demand in the US to purchase more themselves (at the resulting lower cost)?
Doesn't this assume that China and India's leaders are just as shortsighted as America's? I find that hard to believe.
India's certainly is. It's harder to say with China.
Democracy generally reinforces short-sightedness.
Heh. I ran into some teabaggers today outside the post office, protesting health care rationing and cap and trade.
When I asked them why they were opposed to cap and trade, they looked around for a moment, then handed me a pamphlet covered "Al Gore, Covered in Gore."
The main point of this legislation is for Congress to shake down businesses for contributions in order to be granted emmission permits. It will crush small business if ever really implemented since they don't have the political leverage that big business has. The bill is full of thousands of bizarre costly directives that don't really have anything to do with CO2 emmissions but create massive new costs. None of these regulations were ever actually analyzed since nobody had read the bill prior to the vote. Actually, there was no bill prior to the vote, only fragments of bills that were meshed together after the vote had already been taken. Most of the carbon reductions are scheduled to be phased in after 2020 so it is dubious whether they will ever happen at all, particularly since the job losses if it were implemented would number in the millions.
And what would be the impact on global warming for the trillion of dollars spent and millions of jobs lost (if the cuts were ever implemented), even assuming that there was a link between CO2 emmissions and global warming (none of which has been detected to date)?
The globe would warm by 0.001 percent less than if we did nothing at all. :lmfao:
I oppose cap-and-trade because it does nothing to eliminate the lower peoples. Before we cap emissions, we must cap the population of the uncivilized continents.
Quote from: Hansmeister on July 07, 2009, 05:17:48 PM
even assuming that there was a link between CO2 emmissions and global warming (none of which has been detected to date)?
I was under the impression that was pretty much established. The climate guys seem to have nailed that down.
Quote from: Neil on July 07, 2009, 06:31:47 PM
Quote from: Hansmeister on July 07, 2009, 05:17:48 PM
even assuming that there was a link between CO2 emmissions and global warming (none of which has been detected to date)?
I was under the impression that was pretty much established. The climate guys seem to have nailed that down.
Nope, they have models that don't even remotely work and as far as establishing a link between the two they have only done in as far as adapting the link as a foregone conclusion, ruling out any other possibilities without examination, and then come up with fancyful excuses every time the weather refuses to act the way they've predicted. There is zero evidence of either correlation or causation between the two, it is a pure pseudoscience, like eugenics was.
We need a ruling here. Does Godwin's law apply to eugenics?
Quote from: DGuller on July 07, 2009, 07:48:45 PM
We need a ruling here. Does Godwin's law apply to eugenics?
Eugenics was the principal foundation of the entire progressive movement, so it's kinda silly to try to play godwin's law with it.
Quote from: Hansmeister on July 07, 2009, 07:46:16 PM
Quote from: Neil on July 07, 2009, 06:31:47 PM
Quote from: Hansmeister on July 07, 2009, 05:17:48 PM
even assuming that there was a link between CO2 emmissions and global warming (none of which has been detected to date)?
I was under the impression that was pretty much established. The climate guys seem to have nailed that down.
Nope, they have models that don't even remotely work and as far as establishing a link between the two they have only done in as far as adapting the link as a foregone conclusion, ruling out any other possibilities without examination, and then come up with fancyful excuses every time the weather refuses to act the way they've predicted. There is zero evidence of either correlation or causation between the two, it is a pure pseudoscience, like eugenics was.
The google machine seems to have beaten your claims.
Quote from: DGuller on July 07, 2009, 07:48:45 PM
We need a ruling here. Does Godwin's law apply to eugenics?
No.
Quote from: Hansmeister on July 07, 2009, 07:54:08 PM
Quote from: DGuller on July 07, 2009, 07:48:45 PM
We need a ruling here. Does Godwin's law apply to eugenics?
Eugenics was the principal foundation of the entire progressive movement
Not so much. Eugenics didn't come around until rather late in the 19th century. Gladstone had been Prime Minister for twenty years by then.
This seems like a lose-lose scenario, at least for the short-term:
In scenario one, where the credits are issued for net reductions over a given period, those companies that "don't really need to" have the high level emissions they do have every incentive to spike their emissions to peak levels right before the model takes effect, for maximum economic gain.
In scenario two, where the credits are given on a quantity basis for carbon-reducing measures, no company is at zero emissions or has the capital to make themselves look so on paper, so there's going to be no seller's market for the credits without widespread fraud: the vast majority of the credits would simply be hoarded until all reach the same ultimate destination: the regulatory enforcement officer. In that case, there's no free-market drive behind the measure, and it becomes just yet another expensive regulatory scheme.
Quote from: Neil on July 07, 2009, 08:15:57 PM
The google machine seems to have beaten your claims.
Hans appears to be using speaking notes circa 2003-4 when such denials were still being made. We must assume that new speaking notes were never issued.
Quote from: crazy canuck on July 08, 2009, 10:09:50 AM
Quote from: Neil on July 07, 2009, 08:15:57 PM
The google machine seems to have beaten your claims.
Hans appears to be using speaking notes circa 2003-4 when such denials were still being made. We must assume that new speaking notes were never issued.
older. it's all from Big Tobacco's playbook. create doubt, sow confusion, and above all keep possession of the ball.
anyhow, more on the subject, this is a good site: http://www.skepticalscience.com/
Nonsense. Actually, disagreement about the impact of CO2 on the climate has only grown, which is why the EPA had to forbid its scientists from challenging the global warming hysteria. There is no science that supports the global warming theory.
Quote from: Hansmeister on July 08, 2009, 10:37:29 AM
Nonsense. Actually, disagreement about the impact of CO2 on the climate has only grown, which is why the EPA had to forbid its scientists from challenging the global warming hysteria. There is no science that supports the global warming theory.
Is that true, or is it sort of like how disagreement about the existance of evolution has only grown, which is why the government had to forbid its scientists from challenging the evolutionary orthodoxy?
Quote from: Hansmeister on July 08, 2009, 10:37:29 AM
Nonsense. Actually, disagreement about the impact of CO2 on the climate has only grown, which is why the EPA had to forbid its scientists from challenging the global warming hysteria. There is no science that supports the global warming theory.
So...it is all a giant conspiracy? :tinfoil:
Quote from: Hansmeister on July 08, 2009, 10:37:29 AM
There is no science that supports the global warming theory.
Me thinks you protest too much. You might disagree with the science (although that is becoming very hard to do as the evidence mounts) but to suggest there is no science is absurd.
Quote from: crazy canuck on July 08, 2009, 10:51:54 AM
Me thinks you protest too much. You might disagree with the science (although that is becoming very hard to do as the evidence mounts) but to suggest there is no science is absurd.
I am sure he means no science in some sense that there actually is no science. Like there is no science with universal consensus or something.
Quote from: Valmy on July 08, 2009, 10:52:56 AM
I am sure he means no science in some sense that there actually is no science. Like there is no science with universal consensus or something.
There is no spoon?
Quote from: Hansmeister on July 07, 2009, 07:54:08 PM
Eugenics was the principal foundation of the entire progressive movement, so it's kinda silly to try to play godwin's law with it.
OMG The Bull Moose Party were NAZIS!
Hans sez: Teddy Roosevelt = Hitler.
Quote from: Valmy on July 08, 2009, 10:50:08 AM
Quote from: Hansmeister on July 08, 2009, 10:37:29 AM
Nonsense. Actually, disagreement about the impact of CO2 on the climate has only grown, which is why the EPA had to forbid its scientists from challenging the global warming hysteria. There is no science that supports the global warming theory.
So...it is all a giant conspiracy? :tinfoil:
It is a pseudoscience ... just like eugenics was. There is absolutely no evidence of either correlation or causation between CO2 emmissions and global warming. Just a lot of people depending on this to be true for their economic and political livelihood, which is why all the "science" in the field has been focused on starting with the conclusion, looking for anything that can be used to support it while ignoring anything that doesn't. then create models that will support your foregone conclusion and when they fail (as they all have), either excuse them, or design a new model that will prove your foregone conclusion. And then repeat over and oer again. None of the comports with the scientific method. The problem is that we don't know nearly enough about how the climate works to even apply the scientific method effectively to determine anything at all about the changes in the climate (if any). Indeed, even the global temperature data we have isn't very accurate.
Quote from: Hansmeister on July 08, 2009, 10:59:25 AM
Indeed, even the global temperature data we have isn't very accurate.
Indeed, everyone who has noticed that the permafrost and glaciers are melting is delusional. We ought to round them all up so that they cannot continue to perpetuate the Big Lie.
QuoteJust a lot of people depending on this to be true for their economic and political livelihood
What? Are you honestly suggesting there are fewer people who depend on their economic and political livelihood that this not be true? The major reason we do not act forcefully on this issue (which if the chicken littles are correct would be logical) is because of the economic costs.
So basically you are implying these people are completely and irredeemably evil. They made something up to cause tremendous problems and economic pain because it may slightly enhance their own career and make them a bit more money. Oh and they know they are wrong but they conspire to advance the lie anyway.
I mean who does that? Somebody so black hearted I have a hard time believing they exist.
But you do this all the time. Your opponents are not simply wrong and disagree with you, they are completely evil.
Not that alot of people who support climate change don't do that same thing...but man it gets tiresome.
I don't understand the worries about fraudulent permits. Just maintain a central clearing house.
Quote from: Valmy on July 08, 2009, 10:50:08 AM
Quote from: Hansmeister on July 08, 2009, 10:37:29 AM
Nonsense. Actually, disagreement about the impact of CO2 on the climate has only grown, which is why the EPA had to forbid its scientists from challenging the global warming hysteria. There is no science that supports the global warming theory.
So...it is all a giant conspiracy? :tinfoil:
Well, I suppose you could say so, although I don't think that the climate-change-deniers are organized enough to be a real 'conspiracy'. Still, their methods seem to be identical to the evolutionary-denial conspiracy, so I suppose that it's not impossible.
Quote from: Valmy on July 08, 2009, 11:07:06 AM
So basically you are implying these people are completely and irredeemably evil. They made something up to cause tremendous problems and economic pain because it may slightly enhance their own career and make them a bit more money. Oh and they know they are wrong but they conspire to advance the lie anyway.
I mean who does that? Somebody so black hearted I have a hard time believing they exist.
How is that irredeemably evil? I don't have a problem who want to get rich on the backs of having us pollute less (because even if it doesn't stop the globe from warming, it can't be a bad thing to be creating less pollution). :tinfoil:
Quote from: Hansmeister on July 08, 2009, 10:59:25 AM
There is absolutely no evidence of either correlation or causation between CO2 emmissions and global warming.
I think we've seen a great deal of data that indicates that high concentrations of atmospheric CO
2 result in elevated temperatures, via the greenhouse effect.
Quote from: Hansmeister on July 08, 2009, 10:59:25 AM
Quote from: Valmy on July 08, 2009, 10:50:08 AM
Quote from: Hansmeister on July 08, 2009, 10:37:29 AM
Nonsense. Actually, disagreement about the impact of CO2 on the climate has only grown, which is why the EPA had to forbid its scientists from challenging the global warming hysteria. There is no science that supports the global warming theory.
So...it is all a giant conspiracy? :tinfoil:
It is a pseudoscience ... just like eugenics was. There is absolutely no evidence of either correlation or causation between CO2 emmissions and global warming. Just a lot of people depending on this to be true for their economic and political livelihood, which is why all the "science" in the field has been focused on starting with the conclusion, looking for anything that can be used to support it while ignoring anything that doesn't. then create models that will support your foregone conclusion and when they fail (as they all have), either excuse them, or design a new model that will prove your foregone conclusion. And then repeat over and oer again. None of the comports with the scientific method. The problem is that we don't know nearly enough about how the climate works to even apply the scientific method effectively to determine anything at all about the changes in the climate (if any). Indeed, even the global temperature data we have isn't very accurate.
Maybe a new study has been done, but the largest EPA study done during the tobacco debates was unable to conclusively show that second hand smoke caused cancer. The problem isn't that second hand smoke doesn't cause cancer, it is that in the real world outside of a lab there are too many variables to control.
There is good evidence that temperatures and CO2 levels have been generally increasing together in recent years, there is geological evidence that CO2 levels and global climate are related, and there is a strong scientific model in place.
I think sask is on to something with the big tobacco playbook analysis.
Quote from: garbon on July 08, 2009, 11:11:55 AM
Quote from: Valmy on July 08, 2009, 11:07:06 AM
So basically you are implying these people are completely and irredeemably evil. They made something up to cause tremendous problems and economic pain because it may slightly enhance their own career and make them a bit more money. Oh and they know they are wrong but they conspire to advance the lie anyway.
I mean who does that? Somebody so black hearted I have a hard time believing they exist.
How is that irredeemably evil? I don't have a problem who want to get rich on the backs of having us pollute less (because even if it doesn't stop the globe from warming, it can't be a bad thing to be creating less pollution). :tinfoil:
I'm sure the people who lose their jobs and fortunes would disagree.
Besides, we're in an interglacial right now. If we don't do something, the glaciers will come back.
Quote from: Neil on July 08, 2009, 11:23:27 AM
Besides, we're in an interglacial right now. If we don't do something, the glaciers will come back.
:yes:
I not only think that we are causing global warming, but I also think global warming is a good thing.
The ability to farm all across Canada and Siberia? Good thing.
Tropical weather in the American South? Good thing.
Temperatures so hot the poors living in the equatorial regions are roasted alive? Good thing.
Quote from: Caliga on July 08, 2009, 11:25:17 AM
Temperatures so hot the poors living in the equatorial regions are roasted alive? Good thing.
You forgot flooding.
Quote from: Neil on July 08, 2009, 11:23:27 AM
I'm sure the people who lose their jobs and fortunes would disagree.
I'm still not sure that said people would be irredeemably evil...unless their motivation behind the ruse was simply to cause people to lose their jobs and fortunes.
Quote from: Caliga on July 08, 2009, 11:25:17 AM
Tropical weather in the American South? Good thing.
All those retards who think that it's alright to ignore vaccinations and 'listen to your body' dying of horrible tropical diseases? Double-plus good.
Quote from: garbon on July 08, 2009, 11:27:10 AM
Quote from: Caliga on July 08, 2009, 11:25:17 AM
Temperatures so hot the poors living in the equatorial regions are roasted alive? Good thing.
You forgot flooding.
That's not so bad.
Quote from: Caliga on July 08, 2009, 11:25:17 AM
I not only think that we are causing global warming, but I also think global warming is a good thing.
The ability to farm all across Canada and Siberia? Good thing.
Tropical weather in the American South? Good thing.
Temperatures so hot the poors living in the equatorial regions are roasted alive? Good thing.
I watched the 'Day After Tommorow'. Global Warming is going to cause all places white people live to be covered with a gigantic ice sheet over night. We will all be refugees in the 3rd world countries.
Quote from: Neil on July 08, 2009, 11:29:12 AM
All those retards who think that it's alright to ignore vaccinations and 'listen to your body' dying of horrible tropical diseases? Double-plus good.
:yes: Plus, I've always wanted to catch sleeping sickness. No matter what I can never get like more than 6-7 hours of sleep a night. :(
Quote from: Valmy on July 08, 2009, 11:29:49 AMI watched the 'Day After Tommorow'. Global Warming is going to cause all places white people live to be covered with a gigantic ice sheet over night. We will all be refugees in the 3rd world countries.
A film put out by a BUNCH OF LIBERALS, no doubt. :rolleyes:
Quote from: Neil on July 08, 2009, 11:29:35 AM
That's not so bad.
I didn't mean to suggest it was.
Quote from: alfred russel on July 03, 2009, 01:27:41 PM
so even if there are modest unilateral reductions in the US level of consumption that aren't offset by increases elsewhere
that's something you could technically offset by taxing the entire CO2 (there's other foul gasses too but lets just use this for ease) cycle throughout production.
Suddenly that stupid toy made in China or India wouldn't be so cheap anymore, something which would (theoretically) result in:
either the people not buying the imported goods anymore because they're too expensive, which might then lead to the return of some jobs to places closer by.
either the people continue to buy the now more expensive goods, knowing that they're paying added tax for their polluting ways.
Problem is that it's pretty damn nasty to calculate the amount of pollutants created along the entire process of any good.
Quote from: Admiral Yi on July 08, 2009, 11:07:36 AM
I don't understand the worries about fraudulent permits. Just maintain a central clearing house.
Its the cost of such a clearing house that is the problem. It would not be able to rely on market forces to self regulate.
Quote from: Caliga on July 08, 2009, 11:25:17 AM
The ability to farm all across Canada and Siberia? Good thing.
Unlikely, the soils in the areas of Canada that are not currently under the plow are not very fertile and if temperatures keep increasing farming on current arable land will become less viable.
Quote from: crazy canuck on July 08, 2009, 12:15:53 PMUnlikely, the soils in the areas of Canada that are not currently under the plow are not very fertile and if temperatures keep increasing farming on current arable land will become less viable.
My crackpot, paper-thin theory which took me three seconds to dream up cannot possibly be wrong. :mad:
Quote from: Crazy_Ivan80 on July 08, 2009, 12:04:23 PM
Quote from: alfred russel on July 03, 2009, 01:27:41 PM
so even if there are modest unilateral reductions in the US level of consumption that aren't offset by increases elsewhere
that's something you could technically offset by taxing the entire CO2 (there's other foul gasses too but lets just use this for ease) cycle throughout production.
Suddenly that stupid toy made in China or India wouldn't be so cheap anymore, something which would (theoretically) result in:
either the people not buying the imported goods anymore because they're too expensive, which might then lead to the return of some jobs to places closer by.
either the people continue to buy the now more expensive goods, knowing that they're paying added tax for their polluting ways.
Problem is that it's pretty damn nasty to calculate the amount of pollutants created along the entire process of any good.
You can use border adjustments to try to prevent substitution in imports (and we are attempting to do that). But that is only a small amount of the substitution that takes place (even in China, exports to the US are a relatively minor portion of their GDP). For example, when the price of oil went up, Americans drove less miles. Presumably if the US reduces its demand, prices will fall allowing other countries to increase their consumption.
Quote from: Caliga on July 08, 2009, 12:17:15 PM
My crackpot, paper-thin theory which took me three seconds to dream up cannot possibly be wrong. :mad:
The rest of it sounded pretty accurate.
Quote from: crazy canuck on July 08, 2009, 12:21:10 PMThe rest of it sounded pretty accurate.
66% is at least passing (in some schools). :yeah:
Quote from: Crazy_Ivan80 on July 08, 2009, 12:04:23 PM
Problem is that it's pretty damn nasty impossible to calculate the amount of pollutants created along the entire process of any good.
Fixed. That's the problem with a "carbon tax." You have no way of measuring what you are taxing, and the companies and governments in foreign countries have no incentive (and plenty of disincentive) to cooperate with your tax scheme.
Quote from: crazy canuck on July 08, 2009, 12:11:37 PM
Its the cost of such a clearing house that is the problem. It would not be able to rely on market forces to self regulate.
Nopt "market forces," but self interest, would mitigate against counterfeiting. Anyone who buys bogus permits (of this, or any other type) is risking the loss of their entire investment if caught.
Quote from: alfred russel on July 08, 2009, 12:19:29 PM
You can use border adjustments to try to prevent substitution in imports (and we are attempting to do that). But that is only a small amount of the substitution that takes place (even in China, exports to the US are a relatively minor portion of their GDP). For example, when the price of oil went up, Americans drove less miles. Presumably if the US reduces its demand, prices will fall allowing other countries to increase their consumption.
It is the same problem in a way, as mandating milage standards for automobiles. Presumably, higher milage reduces demand and lowers price, but that just makes it cheaper for people in other places to drive even
more miles in highly-polluting cars.
Quote from: grumbler on July 08, 2009, 12:33:44 PM
Nopt "market forces," but self interest, would mitigate against counterfeiting. Anyone who buys bogus permits (of this, or any other type) is risking the loss of their entire investment if caught.
What investment? They are trading for the right to pollute. What is the government going to say if the credits they bought turn out to be fraudulent - ask them to take the carbon out of the air? There is absolutely no incentive for a company to do due diligence past not being accused of being a party to such a fraud.
I say we bring back the Stanley Steamer. :)
Quote from: grumbler on July 08, 2009, 12:37:00 PM
It is the same problem in a way, as mandating milage standards for automobiles. Presumably, higher milage reduces demand and lowers price, but that just makes it cheaper for people in other places to drive even more miles in highly-polluting cars.
Yes, although historically the mileage standards have been about energy independence and localized pollution (not CO2). So while high mileage standards in the US may contribute to the pollution nightmare that is Mexico City, they are still successful from the US perspective. But if the goal is to reduce CO2 emissions globally, then the offshoring of CO2 generation is not only pointless, but possibly counterproductive (as other countries become more dependant on cheap fossil fuels, they will presumably be less willing to agree to deals limiting their use).
Quote from: crazy canuck on July 08, 2009, 12:39:24 PM
What investment?
The money they invest in buying permits.
QuoteThey are trading for the right to pollute. What is the government going to say if the credits they bought turn out to be fraudulent - ask them to take the carbon out of the air?
I don't understand this question. It is like any other permit. If you commit an act that is illegal without a permit, you get fined and/or charged with a crime. At least in the US. In Canada, if you fish with a fraudulent fising license, is the government going to ask you to brig the fish back to life?
QuoteThere is absolutely no incentive for a company to do due diligence past not being accused of being a party to such a fraud.
Given that they will suffer whatever penalty a company that doesn't buy permits at all would suffer, I suppose you are right. All permit-based rationing suffers from the potential problem of fraud. So does taxation (as you yourself noted).
Quote from: alfred russel on July 08, 2009, 12:44:34 PM
Yes, although historically the mileage standards have been about energy independence and localized pollution (not CO2).
Historically, this is true. It is not true of the debate over the recently-passed new US milage standards, though.
Quote from: grumbler on July 08, 2009, 12:30:57 PM
Fixed. That's the problem with a "carbon tax." You have no way of measuring what you are taxing, and the companies and governments in foreign countries have no incentive (and plenty of disincentive) to cooperate with your tax scheme.
I don't know if you are differentiating the carbon tax from the cap and trade plan, but they both run into the same problem in this regard.
Quote from: grumbler on July 08, 2009, 12:47:19 PM
The money they invest in buying permits.
No, they are buying a credit from someone who is representing to them that they have carbon offsets to sell. This is fundamentally different then a permit scheme where the permit is obtained directly from the government. In the former case there is no incentive on the seller of the credit to not be fraudulent other then the risk of being caught. In the latter case we can rely on the bona fides of the government issuing the permit.
Quote from: grumbler on July 08, 2009, 12:30:57 PM
Quote from: Crazy_Ivan80 on July 08, 2009, 12:04:23 PM
Problem is that it's pretty damn nasty impossible to calculate the amount of pollutants created along the entire process of any good.
Fixed. That's the problem with a "carbon tax." You have no way of measuring what you are taxing, and the companies and governments in foreign countries have no incentive (and plenty of disincentive) to cooperate with your tax scheme.
it has been done for a few products, butn it's not 100%.
And foreign governments don't need tocooperate, the taxation is done at your borders when the goods cross them.
basically you tax the miles travelled of the finished product, the energy used producing it, the miles travelled of the resources needed to produce the good, the energy needed to refine the resources, the miles travelled... well, you get the point.
this from the assumption that people will still want to buy similar goods meaning that producing them closer to the region where they'll be sold is an incentive (as are using less polluting methods)...
The tax basically has the consumer pay for the pollution he "outsources".
Not a big fan of it myself, but I can see where it could be useful in order to cut down on such frivolities as catching shrimp where I live, flying it over to Morocco to have it peeled and then fly it back here for selling.
Quote from: Crazy_Ivan80 on July 08, 2009, 01:54:27 PM
The tax basically has the consumer pay for the pollution he "outsources".
Not a big fan of it myself, but I can see where it could be useful in order to cut down on such frivolities as catching shrimp where I live, flying it over to Morocco to have it peeled and then fly it back here for selling.
Food is likely the thing that would be impacted the most - Fresh fruit and vegetables when not in season locally would become expensive.
Quote from: alfred russel on July 08, 2009, 11:19:53 AM
Quote from: Hansmeister on July 08, 2009, 10:59:25 AM
Quote from: Valmy on July 08, 2009, 10:50:08 AM
Quote from: Hansmeister on July 08, 2009, 10:37:29 AM
Nonsense. Actually, disagreement about the impact of CO2 on the climate has only grown, which is why the EPA had to forbid its scientists from challenging the global warming hysteria. There is no science that supports the global warming theory.
So...it is all a giant conspiracy? :tinfoil:
It is a pseudoscience ... just like eugenics was. There is absolutely no evidence of either correlation or causation between CO2 emmissions and global warming. Just a lot of people depending on this to be true for their economic and political livelihood, which is why all the "science" in the field has been focused on starting with the conclusion, looking for anything that can be used to support it while ignoring anything that doesn't. then create models that will support your foregone conclusion and when they fail (as they all have), either excuse them, or design a new model that will prove your foregone conclusion. And then repeat over and oer again. None of the comports with the scientific method. The problem is that we don't know nearly enough about how the climate works to even apply the scientific method effectively to determine anything at all about the changes in the climate (if any). Indeed, even the global temperature data we have isn't very accurate.
Maybe a new study has been done, but the largest EPA study done during the tobacco debates was unable to conclusively show that second hand smoke caused cancer. The problem isn't that second hand smoke doesn't cause cancer, it is that in the real world outside of a lab there are too many variables to control.
There is good evidence that temperatures and CO2 levels have been generally increasing together in recent years, there is geological evidence that CO2 levels and global climate are related, and there is a strong scientific model in place.
I think sask is on to something with the big tobacco playbook analysis.
Actually there is no correlation at all between CO2 output and global temperatures, unless you only count the period from 1973-1998 and exlude the time before and after these dates, which is kinda laughable to use as a baseline.
Quote from: Hansmeister on July 08, 2009, 02:07:20 PM
Actually there is no correlation at all between CO2 output and global temperatures, unless you only count the period from 1973-1998 and exlude the time before and after these dates, which is kinda laughable to use as a baseline.
Should we put this on the same pile as your statement that there is no science to support the global warming theory.
Hans is trying to run a psyop on us.
Quote from: Neil on July 08, 2009, 02:54:58 PM
Hans is trying to run a psyop on us.
I hope he is more successful in his day job.
Quote from: crazy canuck on July 08, 2009, 02:57:04 PM
Quote from: Neil on July 08, 2009, 02:54:58 PM
Hans is trying to run a psyop on us.
I hope he is more successful in his day job.
Well, he's got a harder sell here. We're not a bunch of Afghani tribesmen who he's trying to convince to support America.
Quote from: crazy canuck on July 08, 2009, 12:54:14 PM
No, they are buying a credit from someone who is representing to them that they have carbon offsets to sell. This is fundamentally different then a permit scheme where the permit is obtained directly from the government. In the former case there is no incentive on the seller of the credit to not be fraudulent other then the risk of being caught. In the latter case we can rely on the bona fides of the government issuing the permit.
The US system works much differently than the Canadian one. Allowances can only be obtained in the US from the Feds at a quarterly auction (with escalating floor prices). If a company wants to offer offsets in lieu of allowances, it is up to the company to demontrate that the offsets exist and are effective (as well as being required to demonstrate their permanence or time limits). In the US, offsets are limited to a national total of 2 billion tons per year.
If Canada allows anyone (who wants to) to issue "credits," I can see why you would object. But that is a flaw in a silly system, and not an objection to cap and trade per se.
Canada doesn't have any silly system like this at all. In fact, any kind of carbon restrictions are unconstitutional.
Quote from: alfred russel on July 08, 2009, 12:50:53 PM
I don't know if you are differentiating the carbon tax from the cap and trade plan, but they both run into the same problem in this regard.
Correct. Neither is a prevention to offshoring pollution. Cap and trade at least has the benefit of directly "taxing" the item whose decreased output is desired: CO2. A carbon tax downstream doesn't do this, nor does it directly reward reductions in CO2 output.
Quote from: Crazy_Ivan80 on July 08, 2009, 01:54:27 PM
it has been done for a few products, butn it's not 100%.
And foreign governments don't need tocooperate, the taxation is done at your borders when the goods cross them.
basically you tax the miles travelled of the finished product, the energy used producing it, the miles travelled of the resources needed to produce the good, the energy needed to refine the resources, the miles travelled... well, you get the point.
this from the assumption that people will still want to buy similar goods meaning that producing them closer to the region where they'll be sold is an incentive (as are using less polluting methods)...
The tax basically has the consumer pay for the pollution he "outsources".
Not a big fan of it myself, but I can see where it could be useful in order to cut down on such frivolities as catching shrimp where I live, flying it over to Morocco to have it peeled and then fly it back here for selling.
I admit that I have no idea how this tax is supposed to cut down on CO2 emissions. If it forces me to use local products made with electricity from coal-burning plants rather than import them from someplace where they are made using Hydroelectric power, the tax will actually increase CO2 emissions.
Quote from: grumbler on July 08, 2009, 08:37:06 PM
I admit that I have no idea how this tax is supposed to cut down on CO2 emissions. If it forces me to use local products made with electricity from coal-burning plants rather than import them from someplace where they are made using Hydroelectric power, the tax will actually increase CO2 emissions.
Or there'd be no net change; you'd also have to factor in the carbon consumption of the transportation itself; over a long enough distance, the vehicular emissions would outweigh the greener production method.
Quote from: DontSayBanana on July 08, 2009, 08:44:36 PM
Or there'd be no net change; you'd also have to factor in the carbon consumption of the transportation itself; over a long enough distance, the vehicular emissions would outweigh the greener production method.
That's possible, but transportation is only a small percentage of total CO2 emissions. Cap and trade attacks the problem directly (though only at the largest scale). It has the advantage of encouraging actual reductions in emissions.
You could, of course, combine it with a carbon tax on gasoline and diesel, since the carbon output of those are pretty well-known. I'm not sure how directly linked fuel efficiency is to CO2 emissions, though.
Quote from: grumbler on July 08, 2009, 08:51:13 PM
That's possible, but transportation is only a small percentage of total CO2 emissions. Cap and trade attacks the problem directly (though only at the largest scale). It has the advantage of encouraging actual reductions in emissions.
You could, of course, combine it with a carbon tax on gasoline and diesel, since the carbon output of those are pretty well-known. I'm not sure how directly linked fuel efficiency is to CO2 emissions, though.
The simple thing to do would be to use the odometer and emissions testing during inspection to come up with the rate, and maybe make it a little more palatable by having the vehicle owner pay it up front and then claim a refund on mileage not used with the tax return.
Excellent idea, of course. You guys do this cap and trade thing, while we in Hong Kong continue to enjoy our coal-fired power stations :menace:
Quote from: Monoriu on July 08, 2009, 09:28:02 PM
Excellent idea, of course. You guys do this cap and trade thing, while we in Hong Kong continue to enjoy our coal-fired power stations :menace:
And your non-ventilated apartments. By 2050, you'll have enjoyed your coal-fired power stations and all died of carbon monoxide poisoning. :menace:
Quote from: DontSayBanana on July 08, 2009, 09:52:26 PM
Quote from: Monoriu on July 08, 2009, 09:28:02 PM
Excellent idea, of course. You guys do this cap and trade thing, while we in Hong Kong continue to enjoy our coal-fired power stations :menace:
And your non-ventilated apartments. By 2050, you'll have enjoyed your coal-fired power stations and all died of carbon monoxide poisoning. :menace:
Winds, my dear, winds. The benefit (in terms of lower electricity bill and stable supply) is mine. The pain is spread around the globe. I see no reason why we should do it :evil:
Quote from: grumbler on July 08, 2009, 08:37:06 PM
I admit that I have no idea how this tax is supposed to cut down on CO2 emissions. If it forces me to use local products made with electricity from coal-burning plants rather than import them from someplace where they are made using Hydroelectric power, the tax will actually increase CO2 emissions.
you'd also be paying for the co2 produced at those coal-centers. It's not just transportational-co2 that's being taxed. It's all of it (as far as possible). So if you're a nation that used mostly coal-based powergeneration, you'll be paying for that too.
as far as I understand it (there's been a few articles on it here and there on the concept) it's basically a way to raise prices to get people to vote with their wallets for
-cleaner transport
-less transport
-less poweruasage
-cleaner powergeneration
etc.
all in order to get an overall decrease in production of co2. Which is why it is such a bitch to effectively calculate how much co2 is produced throughout the entire productioncycle, cause one can go very far with a detailed calculation. That was one of the main conlusions that came out of the few cases where it was indeed tried.
Not sure if it'll ever move beyond the experimental but then again, nuttier things have happened.
Quote from: Monoriu on July 08, 2009, 09:55:09 PM
Quote from: DontSayBanana on July 08, 2009, 09:52:26 PM
Quote from: Monoriu on July 08, 2009, 09:28:02 PM
Excellent idea, of course. You guys do this cap and trade thing, while we in Hong Kong continue to enjoy our coal-fired power stations :menace:
And your non-ventilated apartments. By 2050, you'll have enjoyed your coal-fired power stations and all died of carbon monoxide poisoning. :menace:
Winds, my dear, winds. The benefit (in terms of lower electricity bill and stable supply) is mine. The pain is spread around the globe. I see no reason why we should do it :evil:
as the misery gets worse the rest of the globe might not put up with shenanigans like that anymore. fun times
CI, what you state above ("raise prices to get people to vote with their wallets") is the objective of both systems.
The carbon tax depends on the political system to get the tax rate right in order to achieve the abatement desired (and limit the exceptions). Cap and trade regulates the abatement directly. If the tax rate isn't right, it requires the political system to have the will to change the tax rate, against all the resistance tax rate changes face.
Cap and trade has the advantages of (1) regulating the problem directly, and (2) it has been used successfully. In the US, sulfer dioxide emissions have been under a cap and trade regime since 1990, and emissions have dropped by 40% without any noticable increase in electricity prices attributable to it.
So, I say to let the politicians figure out what the level of pollution is, and let the businessmen figure out what it will cost. That's a division of labor that make more sense than having the politicians figure out the cost of pollution and then the businessmen deciding on the levell of it.
Quote from: grumbler on July 08, 2009, 08:33:48 PM
Cap and trade at least has the benefit of directly "taxing" the item whose decreased output is desired: CO2. A carbon tax downstream doesn't do this, nor does it directly reward reductions in CO2 output.
If I'm an incumbant company given enough allowances for my current level of production, I'll pay no taxes at all—direct or indirect. If I'm an upstart company, wanting to compete with the incumbent, I need to pay companies (such as the incumbent) for the initial permits. Under the current plan of giving away a bunch of permits at the outset, the entire plan should not be described as a tax—though it does seem like a cleverly designed scheme to protect current business from future competition. If anything, it is a tax on new business formation.
What it seems as though is also missing from the discussion is that most non vehicle emissions result from electricity generation, which is typically produced from state regulated utilities. Since the state rate formulas tend to involve some sort of cost plus calculation, it isn't clear that significant increases in cost will prompt these companies to reduce their emissions. That could produce some seriously out of whack economics: the economy gets a certain number of permits, the electric utilities don't especially care to reduce cost so they buy them up passing on costs to consumers, leaving hardly any for the rest of industry. Another problem that would not be present with a direct carbon tax.
Hmm, interesting point. Market solutions do tend to work poorly without market incentives.
Quote from: grumbler on July 08, 2009, 08:29:39 PM
The US system works much differently than the Canadian one. Allowances can only be obtained in the US from the Feds at a quarterly auction (with escalating floor prices). If a company wants to offer offsets in lieu of allowances, it is up to the company to demontrate that the offsets exist and are effective (as well as being required to demonstrate their permanence or time limits). In the US, offsets are limited to a national total of 2 billion tons per year.
If Canada allows anyone (who wants to) to issue "credits," I can see why you would object. But that is a flaw in a silly system, and not an objection to cap and trade per se.
So, the US government is going to try to simulate a real market by doing its own due diligence to try to figure out whether the offsets provided by third parties are actually legitimate and then selling those in an auction to people who want to pay for the priviledge of polluting.
And you dont see this as silly system? How effective do you think the government will be at this sort of due diligence and how much do you think it will cost to create a system that can actually do this effectively.
If the credits the government is selling do not actually provide the off sets the government believes it is selling then all this expense is for nothing.
By the way, this is system is also not a licencing system. If the government doesnt do proper due diligence then this has all the same problems of the system you called "silly" except that it will be even worse as it will have the added expense of the government becoming part of the sale of something that doesnt actually exist.
Somebody will get rich though. Those people that can put themselves into a position to sell carbon credits for more then they are actually worth - ie they are able to inflate the value of the carbon they are selling since there are no real market forces to determine whether the carbon reduction they are selling is real or not.
QuotePresident Barack Obama's push for quick action by Congress on climate change legislation suffered a setback on Thursday when the U.S. Senate committee leading the drive delayed work on the bill until September.
Senate Environment and Public Works Committee Chairman Barbara Boxer said her self-imposed deadline of early August for finishing writing a bill to combat global warming has been put off until after Congress returns from a recess that ends in early September.
"We'll do it as soon as we get back" from that break, Boxer told reporters. Asked if this delay jeopardizes chances the Senate will pass a bill this year, Boxer said, "Not a bit ... we'll be in (session) until Christmas, so I'm not worried about it."
But Boxer did not guarantee Congress will be able to finish a bill and deliver it to Obama by December, when he plans to attend an international summit on climate change in Copenhagen.
That fucker Sherrod Brown better hold out so Ohio can get more delicious federal funds. If Kaptur can do it, that retard can too.
Ugly, leaning toward bad.
There is a right way and a wrong way to do this. The right way is carbon tax. The wrong way is everything else.
Quote from: alfred russel on July 09, 2009, 09:17:00 AM
If I'm an incumbant company given enough allowances for my current level of production, I'll pay no taxes at all—direct or indirect. If I'm an upstart company, wanting to compete with the incumbent, I need to pay companies (such as the incumbent) for the initial permits. Under the current plan of giving away a bunch of permits at the outset, the entire plan should not be described as a tax—though it does seem like a cleverly designed scheme to protect current business from future competition. If anything, it is a tax on new business formation.
Can you give me a citation for these claims? Or is this simply a series of "ifs" constructed to yield the desired result?
I could just as easily asay "if i am an incumbant company with an exemption to the carbobn tax, i pay no taxes at all—direct or indirect. If I'm an upstart company, wanting to compete with the incumbent, I need to pay taxes on any carbon I (produce? consume? not sure what is being taxed in a carbon tax scheme). The entire plan should not be described as a tax—though it does seem like a cleverly designed scheme to protect current business from future competition. If anything, it is a tax on new business formation."
QuoteWhat it seems as though is also missing from the discussion is that most non vehicle emissions result from electricity generation, which is typically produced from state regulated utilities. Since the state rate formulas tend to involve some sort of cost plus calculation, it isn't clear that significant increases in cost will prompt these companies to reduce their emissions. That could produce some seriously out of whack economics: the economy gets a certain number of permits, the electric utilities don't especially care to reduce cost so they buy them up passing on costs to consumers, leaving hardly any for the rest of industry. Another problem that would not be present with a direct carbon tax.
You point out, of course, the huge disadvantage of the carbon tax scheme: since the cost of the tax is passed directly to the consumer, the utility has no incentive to cut CO2 emissions at all. It especially has no incentive to invest in any CO2 reduction schemes, since they will pay no profit. In a cap-and-trade system, any reduction in actual CO2 output generates a profit or reduces losses. Your claim that a tax system avoids the problem is mere wishful thinking.
Quote from: The Minsky Moment on July 09, 2009, 01:29:09 PM
Ugly, leaning toward bad.
There is a right way and a wrong way to do this. The right way is carbon tax. The wrong way is everything else.
:lmfao:
Well done. You could be a TV talking head, since you have the system of "avoid actual reasoning as it just slows things down and nobody cares about it anyway" down pat.
Quote from: grumbler on July 09, 2009, 02:21:45 PM
You point out, of course, the huge disadvantage of the carbon tax scheme: since the cost of the tax is passed directly to the consumer, the utility has no incentive to cut CO2 emissions at all.
That would only be the case if energy demand at the consumer is perfectly inelastic, which is demonstrably not so.
Quote from: grumbler on July 09, 2009, 02:23:48 PM
Quote from: The Minsky Moment on July 09, 2009, 01:29:09 PM
Ugly, leaning toward bad.
There is a right way and a wrong way to do this. The right way is carbon tax. The wrong way is everything else.
:lmfao:
Well done. You could be a TV talking head, since you have the system of "avoid actual reasoning as it just slows things down and nobody cares about it anyway" down pat.
I answered the question. It did not call for any reasoning. :contract:
Quote from: The Minsky Moment on July 09, 2009, 02:32:13 PM
That would only be the case if energy demand at the consumer is perfectly inelastic, which is demonstrably not so.
So it must be "perfectly" inelastic? Any lessor sort of inelasticity will not do?
Since the tax is on carbon, and not energy demand, I am not sure what effect this tax will have. Who buys carbon, anyway?
Quote from: The Minsky Moment on July 09, 2009, 02:33:49 PM
I answered the question. It did not call for any reasoning. :contract:
The questions were "What do we think about this deal? Is it Good, Bad or Ugly?" :contract:
Quote from: grumbler on July 09, 2009, 02:21:45 PM
Can you give me a citation for these claims? Or is this simply a series of "ifs" constructed to yield the desired result?
I could just as easily asay "if i am an incumbant company with an exemption to the carbobn tax, i pay no taxes at all—direct or indirect. If I'm an upstart company, wanting to compete with the incumbent, I need to pay taxes on any carbon I (produce? consume? not sure what is being taxed in a carbon tax scheme). The entire plan should not be described as a tax—though it does seem like a cleverly designed scheme to protect current business from future competition. If anything, it is a tax on new business formation."
I could give links, but I don't think any of the concepts are contested and anyone here is just as capable at googling as me. If you want more specifics, then here is one:
Incumbant Company A: A paper mill using a coal powered steam plant. Initially receives allowances to cover most of its production.
New Company B: A startup paper mill that will not receive any allowances and will have to purchase them for its steam plant.
Am I wrong that the plan would work this way?
Quote
You point out, of course, the huge disadvantage of the carbon tax scheme: since the cost of the tax is passed directly to the consumer, the utility has no incentive to cut CO2 emissions at all. It especially has no incentive to invest in any CO2 reduction schemes, since they will pay no profit. In a cap-and-trade system, any reduction in actual CO2 output generates a profit or reduces losses. Your claim that a tax system avoids the problem is mere wishful thinking.
I never made the claim that a tax system avoids the problem--in fact it doesn't.
A utility company's profits are tied to rates, which are set by the state with an eye on the company's P&L. In either the case of either a carbon tax or cap and trade, I question what incentive there is in such an environment. If the incentive turns out to be weak, under a cap and trade system the result would be too few credits for the rest of the economy, while under a carbon tax you would have excessive emissions.
Quote from: The Minsky Moment on July 09, 2009, 02:32:13 PM
Quote from: grumbler on July 09, 2009, 02:21:45 PM
You point out, of course, the huge disadvantage of the carbon tax scheme: since the cost of the tax is passed directly to the consumer, the utility has no incentive to cut CO2 emissions at all.
That would only be the case if energy demand at the consumer is perfectly inelastic, which is demonstrably not so.
Or if regulators looked to ensure a certain return on investment, which may be so.
Quote from: alfred russel on July 09, 2009, 05:37:16 PM
[I could give links, but I don't think any of the concepts are contested and anyone here is just as capable at googling as me.
I do not know what this means.
QuoteIf you want more specifics, then here is one:
Incumbant Company A: A paper mill using a coal powered steam plant. Initially receives allowances to cover most of its production.
New Company B: A startup paper mill that will not receive any allowances and will have to purchase them for its steam plant.
Am I wrong that the plan would work this way?
It sems to me that you are wrong. Company B is only not granted the same status for a quarter, since the sales are quarterly. Why do you have tht I don't?
QuoteI never made the claim that a tax system avoids the problem--in fact it doesn't.
A utility company's profits are tied to rates, which are set by the state with an eye on the company's P&L. In either the case of either a carbon tax or cap and trade, I question what incentive there is in such an environment. If the incentive turns out to be weak, under a cap and trade system the result would be too few credits for the rest of the economy, while under a carbon tax you would have excessive emissions.
Yes, and since excesive emissions are porecisely what we ant to avoid, it seems natural to me to directly stop what we want to avoid, rather than having a system that giuesses (if all goes well) towards that point.
That's really the main advantage of cap and trade (as has been demonstrated, unlike taxes): it yields the result desired, at a hopefully desired cost, rather than hopefully yielding a desired result at a known cost.
If one is serious about reducing CO2 emissions to stop global warming, I don't know how this is even a controversy.
Quote from: alfred russel on July 09, 2009, 05:39:44 PM
Or if regulators looked to ensure a certain return on investment, which may be so.
Or if the law was designed to limit CO2 emissions, in which case one is barking up the wrong tree.
Regarding the article Armyknife posted, so the talking heads that published said report are nay-saying untested political methods, but have no qualms about proposing solutions based on flawed or non-existent technology? :tinfoil:
Quote from: DontSayBanana on July 09, 2009, 09:39:11 PM
Regarding the article Armyknife posted, so the talking heads that published said report are nay-saying untested political methods, but have no qualms about proposing solutions based on flawed or non-existent technology? :tinfoil:
Most technologies are non-existant, you can't let that stop you.
Quote from: grumbler on July 09, 2009, 09:19:44 PM
It sems to me that you are wrong. Company B is only not granted the same status for a quarter, since the sales are quarterly. Why do you have tht I don't?
It could be I'm wrong--it has happened before. I've just read that we are grandfathering people in during the early years, but it wouldn't surprise me if that is incorrect. If it is, how is the system working off quarterly sales?
Quote
Yes, and since excesive emissions are porecisely what we ant to avoid, it seems natural to me to directly stop what we want to avoid, rather than having a system that giuesses (if all goes well) towards that point.
That's really the main advantage of cap and trade (as has been demonstrated, unlike taxes): it yields the result desired, at a hopefully desired cost, rather than hopefully yielding a desired result at a known cost.
If one is serious about reducing CO2 emissions to stop global warming, I don't know how this is even a controversy.
It does come to a tradeoff. With a cap and trade system, if predictions go askew the economy can take a major hit, whereas if they do in a tax system we will go over our emissions targets. I'm skeptical this is going to have much of a global impact, so I'd much rather move toward the latter.
Quote from: grumbler on July 09, 2009, 09:21:10 PM
Quote from: alfred russel on July 09, 2009, 05:39:44 PM
Or if regulators looked to ensure a certain return on investment, which may be so.
Or if the law was designed to limit CO2 emissions, in which case one is barking up the wrong tree.
I wasn't arguing that CO2 emissions won't be limited, I'm just pointing out that utilities aren't really a free market and may not respond well to cap and trade incentives.
Quote from: DGuller on July 09, 2009, 09:59:55 PM
Most technologies are non-existant, you can't let that stop you.
You can bank on derivative tech, but a lot of these solutions are based in science that's still in the hypothetical stage. Take cars. It takes more fossil fuels to make enough hydrogen to power a car, and we're still faced with the problem of very large lithium batteries having a tendency to explode without warning. There needs to be
some grounding for projections.
Quote from: grumbler on July 09, 2009, 05:00:05 PM
Quote from: The Minsky Moment on July 09, 2009, 02:32:13 PM
That would only be the case if energy demand at the consumer is perfectly inelastic, which is demonstrably not so.
So it must be "perfectly" inelastic? Any lessor sort of inelasticity will not do?
Correct. It's a sliding scale. More demand elasticity, the more the incidence falls on the producer.
QuoteSince the tax is on carbon, and not energy demand, I am not sure what effect this tax will have. Who buys carbon, anyway?
It is in substance a tax on energy products. The carbon content just determines the proportional effect.
Economically, a carbon tax and cap & trade are identical in the sense that the two relevant economic variables are quantity and price. You can havea policy to impact quantity - which then leads to a derived price; or you can have a policy that impacts price, which then gives rise to a derived quantity.
Administratively, they aren't the same though - and we have long experience with quotas and quantity controls that suggests that such measures are significantly more problematic to administer then levying a tax. In terms of economic impact, while either policy can be calibrated to make sure that average prices and quantities over any significant time frame would be the same, both policies could be subject to significant fluctuations over short periods. In the case of taxation, the fluctuations come in terms of quanitites demanded, which isn't really a problem because it is a relatively simple matter to build and liquidate stocks. In the case of cap and trade, the short-term fluctuations come in terms of high price volatility - which is more problematic because it disrupts rational business planning and imposes significant hedging costs.
Quote from: alfred russel on July 10, 2009, 08:41:09 AM
I wasn't arguing that CO2 emissions won't be limited, I'm just pointing out that utilities aren't really a free market and may not respond well to cap and trade incentives.
But they HAVE responded well to cap and trade systems already!
QuoteIn government, failure is success. That's what I call DiLorenzo's First Law of Government. When the welfare state bureaucracy fails to reduce poverty, it is rewarded with more tax dollars and more responsibilities. When the government schools fail to educate children, they are rewarded with more tax dollars and more power to meddle in education. When NASA blows up the space shuttle, it is rewarded with a large budget increase (unlike a private airline, which would likely go bankrupt). And when the Fed causes the worse depression since the Great Depression, it is rewarded with a vast expansion of its powers.
DiLorenzo's Second Law of Government is that politicians will never assume responsibility for any of the problems that they cause. No one in society is more irresponsible than politicians, especially ones like President Obama who blame today's economic crisis on an alleged lack of responsibility in the private sector. They will always blame capitalism for our economic problems, even when capitalism is not even the economic system that we live under (it's economic fascism, to end the suspense). Nothing is more irresponsible than knowingly destroying what's left of our engine of economic growth with more and more governmental central planning, even if it is given the laughable name of "public interest regulation."
DiLorenzo's Third Law of Government is that, with one or two exceptions, all politicians are habitual liars. The so-called "watchdog media" is a myth, for pointing out the lies of politicians is the best way to end one's career as a "prominent journalist." Do this, and your sources of governmental information will be shut off.
Today's Biggest Governmental Lie is that financial markets are unregulated and in dire need of more direction, regulation, control, and in some cases, nationalization, by the Fed or by a new Super Regulatory Authority. This is all a lie because, according to one of the Fed's own publications ("The Federal Reserve System: Purposes and Functions"), the Fed already has "supervisory and regulatory authority" over: bank holding companies, state-chartered banks, foreign branches of member banks, edge and agreement corporations, U.S. state-licensed branches, agencies, and representative offices of foreign banks, nonbanking activities of foreign banks, national banks, savings banks, nonbank subsidiaries of bank holding companies, thrift holding companies, financial reporting procedures of banks, accounting policies of banks, business "continuity" in case of economic emergencies, consumer protection laws, securities dealings of banks, information technology used by banks, foreign investment by banks, foreign lending by banks, branch banking, bank mergers and acquisitions, who may own a bank, capital "adequacy standards," extensions of credit for the purchase of securities, equal opportunity lending, mortgage disclosure information, reserve requirements, electronic funds transfers, interbank liabilities, Community Reinvestment Act sub-prime lending demands, all international banking operations, consumer leasing, privacy of consumer financial information, payments on demand deposits, "fair credit" reporting, transactions between member banks and their affiliates, truth in lending, and truth in savings. And of course it also engages in legal price fixing of interest rates and creates inflation and boom-and-bust cycles with its "open market operations." This is the Washington, D.C. establishment's definition of "laissez faire" in financial markets. (Note that I didn't even mention other financial market regulators such as the SEC, Comptroller of the Currency, Office of Thrift Supervision, and dozens of state regulatory agencies).
DiLorenzo's Fourth Law of Government is that politicians will only take the advice of their legions of academic advisors if it promises to increase their power, wealth, and influence, even if they know the advice is bad (or even devastating) for the rest of society. The academics happily play along with this corrupt game because it also increases their notoriety and wealth. The most glaring example of this phenomenon today is the fact that there has been virtually no discussion at all by government officials or the media of the vast literature of the gross failures of government regulation to protect "the public interest," a literature that documents the failures of government regulation for more than a century.
There has always been some kind of government regulation of economic activity in America, but the regulatory state got its first big boost with an 1877 Supreme Court case known as Munn v. Illinois. The two Munn brothers owned a grain storage business, and the powerful farm lobby in their state wanted to essentially steal some of their property from them by having the Illinois state legislature pass a price control law that forced the price of grain storage down below the free-market price. Such laws had previously been ruled as an unconstitutional taking of private property or a violation of the Contract Clause of the Constitution, but no longer. The plunder-seeking farmers prevailed, and it was hailed by the Court as a great victory for "public interest" regulation. Thus, the first example of "public interest" regulation was unequivocally an act of legalized theft for the benefit of a powerful and unscrupulous political special-interest group at the expense of honest, hard-working small businessmen.
Either through ignorance or corruption (or both), academics – including the founders of the American Economic Association, such as Richard T. Ely – sang the "public interest" tune with regard to economic regulation for decades, creating the popular myth that markets always fail, and government regulation is always benevolent, omniscient, and correcting. They did this despite the glaring evidence all around them that regulation was always and everywhere a special-interest phenomenon. As historian Gabriel Kolko wrote in his 1963 book, The Triumph of Conservatism, big business in the early 20th century sought government regulation because the regulation "was invariably controlled by leaders of the regulated industry, and directed toward ends they deemed acceptable or desirable." "Government regulation has generally served to further the very economic interests being regulated," legal scholar Butler Shaffer wrote some thirty years later in his book, In Restraint of Trade. Kolko called this "the new Hamiltonianism" and "a reincarnation of the Hamiltonian unity of politics and economics," referring to the mercantilist aspirations of the nation's first treasury secretary.
Most academic economists, seduced by the prestige and money that came from being governmental advisors, ignored all of this reality and instead spent roughly fifty years – from the pre-World War I years until the 1960s – inventing factually empty theories about the alleged "failures" of markets and the need for benevolent and presumably omniscient government regulators to "correct" these alleged failures. It was all based (and still is) on the quite fraudulent technique of proclaiming that markets are not "perfect," but that government was, and would therefore correct any imperfections in real-world markets (as though anything on this earth is "perfect"). Economist Harold Demsetz mockingly labeled this approach to the study of markets "the Nirvana Fallacy."
The Austrian School of Economics is the only school of thought within the economics profession that never participated in this corrupt charade. The same cannot be said of the famous "Chicago School" whose acknowledged founder, Henry Simons, embraced many "market failure" theories and was an interventionist by any day's standards.
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But the Chicago School performed a penance of sorts beginning in the 1960s with research and publications about the actual effects of government regulation, including analyses of who benefits and who loses from it. Unlike the rest of the economics profession (with the exception of the Austrian School), they no longer simply accepted the unfounded assumption that government regulation was unequivocally a good thing. Hundreds of books and thousands of academic journal articles were published that essentially rediscovered the old truth that "as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit," as Nobel laureate George Stigler wrote in 1971. Stigler was awarded the Nobel Prize in Economics for his research on "the economics of regulation."
This research was expanded over the years to account for different kinds of regulation, such as regulation that is sought by one producer group that does not necessarily harm consumers but competing producers. Large corporations often lobby for onerous government safety and environmental regulations, for example, because they know the regulations will likely bankrupt their smaller competitors and deter the entry of potential rivals. In any event, there now exists a gigantic literature on the economic effects of regulation that shows that, for over 100 years, it has rarely, if ever, benefited consumers despite all the pro-consumer/public interest rhetoric that is attached to it. All of this literature is studiously ignored by Ivy League "superstars" like Fed Chairman Ben Bernanke, the former chairman of the Princeton University economics department. It is a shameless act of academic fraud, but unlike normal academic fraud, it will have tremendous negative real-world economic consequences.
A major thrust of this literature is the recognition that, historically, businesses that have tried to form cartels have always failed. Even the infamous OPEC Cartel only had the power to raise world oil prices for about seven years during the 1970s before it collapsed. Private attempts to cartelize or monopolize markets always fail because of the powerful temptation to cheat on the cartel agreement by cutting prices. Once one member of the cartel cheats in this way, the whole thing breaks down as everyone else "cheats" while the cheating is good and there are still profits to be made.
Businesses long ago discovered that the only way to have a permanent or at least long-lasting cartel is to have the cartel agreement enforced by government regulation, with the threat of heavy fines and/or imprisonment for cheating. Thus, the railroad and trucking industries were cartelized by the Interstate Commerce Commission, which set industry prices and was controlled for decades by those industries. The Civil Aeronautics Board cartelized the airline industry in a similar way for about half a century until it was deregulated in the late 1970s. There was vigorous competition and price cutting in the electric utility industry until it was ended by government regulation and the creation of franchise monopolies by government in most cities in America. AT&T enjoyed a telephone industry monopoly thanks to state government regulation that made competition illegal for decades. The list is almost endless.
Perhaps most importantly, the Fed was created to facilitate the creation of a banking industry cartel and the creation of cartel profits in that industry as well. As Murray Rothbard wrote in A History of Money and Banking in the United States, "the financial elites of this country . . . were responsible for putting through the Federal Reserve System, as a governmentally created and sanctioned cartel device to enable the nation's banks to inflate the money supply . . . without suffering quick retribution from depositors or noteholders demanding cash."
In other words, giving the Fed even more regulatory "authority" is like giving an alcoholic another bottle of whisky, a murderer another gun, or a bank robber another ski mask. It is bound to make things worse, not better. "We the people" have no ability to regulate the regulators in any way. Our only hope is to end the Fed before it creates an even greater depression than the one it has created for us today.
June 19, 2009
Thomas J. DiLorenzo [send him mail] is professor of economics at Loyola College in Maryland and the author of The Real Lincoln; Lincoln Unmasked: What You're Not Supposed To Know about Dishonest Abe and How Capitalism Saved America. His latest book is Hamilton's Curse: How Jefferson's Archenemy Betrayed the American Revolution – And What It Means for America Today.
QuoteThomas J. DiLorenzo . . . author of The Real Lincoln; Lincoln Unmasked: What You're Not Supposed To Know about Dishonest Abe and How Capitalism Saved America. His latest book is Hamilton's Curse: How Jefferson's Archenemy Betrayed the American Revolution – And What It Means for America Today.
So he is some kind of idiot, I gather.
Quote from: The Minsky Moment on July 21, 2009, 08:39:49 AM
QuoteThomas J. DiLorenzo . . . author of The Real Lincoln; Lincoln Unmasked: What You're Not Supposed To Know about Dishonest Abe and How Capitalism Saved America. His latest book is Hamilton's Curse: How Jefferson's Archenemy Betrayed the American Revolution – And What It Means for America Today.
So he is some kind of idiot, I gather.
He is way too over-zealous, but his general point is correct.
Quote from: Tamas on July 21, 2009, 08:43:49 AM
He is way too over-zealous, but his general point is correct.
Disagree. He is a wacko. Statements like "pointing out the lies of politicians is the best way to end one's career as a 'prominent journalist'" are so obviously false on the face of them that he has zero cred with anything I cannot verify myself.
Quote from: grumbler on July 21, 2009, 08:48:33 AM
Quote from: Tamas on July 21, 2009, 08:43:49 AM
He is way too over-zealous, but his general point is correct.
Disagree. He is a wacko. Statements like "pointing out the lies of politicians is the best way to end one's career as a 'prominent journalist'" are so obviously false on the face of them that he has zero cred with anything I cannot verify myself.
Yeah he is very wrong on that. the reason there is no substantial media coverage for laisez faire approach is that the overwhelming majority of journalists are lefty potheads of FB fame. And the rest are untalented.
Quote from: Tamas on July 21, 2009, 08:50:56 AM
Yeah he is very wrong on that. the reason there is no substantial media coverage for laisez faire approach is that the overwhelming majority of journalists are lefty potheads of FB fame. And the rest are untalented.
Why would there be "media coverage" on a non-existent "approach?"
Let's take a look.
He's written a book alleging Abe Lincoln was a malignant, dishonest tyrant, and another blaming all of America's woes on Hamilton's policy of federal assumption of state debt. Check.
He names economic and political "laws" after himself. Check.
He advocates the Lochner doctrine. Check.
He attacks people who are much smarter and more accomplished than him as "academic frauds". Check.
He quotes Murrary Rothbard and spouts conspiracy theories about the Fed. Check.
The guy is a grade F flake.
Quote from: grumbler on July 10, 2009, 04:40:41 PM
Quote from: alfred russel on July 10, 2009, 08:41:09 AM
I wasn't arguing that CO2 emissions won't be limited, I'm just pointing out that utilities aren't really a free market and may not respond well to cap and trade incentives.
But they HAVE responded well to cap and trade systems already!
How so, the program isn't even in place yet?
Quote from: alfred russel on July 21, 2009, 09:07:25 AM
How so, the program isn't even in place yet?
"Cap and trade" is a mechanism, not a CO2 abatement program
per se. There is not cap and trade in CO2 yet, but there is one for sulfur dioxide, and it has worked well above initial expectations. I mentioned it some time ago in this very thread.