...and change. It looks like John McCain may have come to his senses, and dropped cap and trade. Let's just hope that he doesn't attempt to revive it after he wins.
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11 Comments
Jason wrote:
Apparently both candidates have been switching their positions like oscillators gone mad. At this point I don't believe anything either one says:-(.
Fortunately I've already decided who I'm going to vote against, and I don't think there's anything likely to happen between now and November that will change that.
Steve wrote:
Don't tell Jim Harris, he'll drop a valve.
Karl Hallowell wrote:
I favor a "soft" cap and trade system. Namely, a certain number of pollution credits are alloted and traded on an open market. In addition, the granting authority sells additional credits at increasing cost as demand increases. The idea is that the overall number of pollution credits is not fixed. You avoid the pathological supply inelasticity problems of a regular cap and trade market when demand is near the cap. Also, if the granting authority buys these credits back as price declines, it can act as a simple marketmaker and help stabilize the markets.
Mark wrote:
"...a 'soft' cap and trade system."
This sounds like the kind of thing that a person would want only if he imagines that the people deciding how many additional credits to sell at what price, and when to buy them back and how much to pay for them, will act with exquisitely-well-tuned judgment. The people who will be making these decisions will be politically-appointed bureaucrats.
Karl Hallowell wrote:
Well, how about this then. What is a good mechanism to handle perceived externalities like CO2 emissions?
Jim Breeding wrote:
"Well, how about this then. What is a good mechanism to handle perceived externalities like CO2 emissions?"
Change your perceptions? CO2 is not a problem to be handled. Ignore it.
Big D wrote:
How about we focus on methane, which is supposedly far worse than carbon dioxide?
There's a simple solution, too... kill all of the worst methane-emitting animals on the planet, starting with cows.
There... problem solved.
Leland wrote:
There's a simple solution, too... kill all of the worst methane-emitting animals on the planet, starting with cows.
I'll do my part, because cows are tasty.
ech wrote:
"What is a good mechanism to handle perceived externalities like CO2 emissions?"
Enconomists seem to say that on a theoretical basis, cap and trade is the best way. HOWEVER, the practical implementation will likely lead to all kinds of political intervention that will result in a suboptimal result. For example, there might be dedicated allocations to favored industries. One negative side effect will be the creation of a new government agency to handle the system.
What many seem to prefer is a straight carbon tax on fuels. There are already mechanisms in place to collect such taxes, there are fewer places the tax has to be collected, and fewer options for regulatory capture by powerful interests.
Anonymous wrote:
"Well, how about this then. What is a good mechanism to handle perceived externalities like CO2 emissions? "
Change your perceptions. CO2 emmissions are not a problem. Ignore them.
Karl Hallowell wrote:
Change your perceptions? CO2 is not a problem to be handled. Ignore it.
That's not a good answer because people don't change their perception for your convenience. My point here is that we have a disagreement about the cost and consequences of CO2 emissions. How do we resolve this? The problem above with any cap and trade system is two-fold, it assumes, a priori, that CO2 emissions are a problem and it centralizes to an extent the CO2 emission credit granting authority.
What I'm wondering here is whether we can put together a system (I'd prefer a market-based solution) that doesn't assume ahead of time that there is or isn't a problem and which can flexibly adjust to either the presence or absence of a potential externality.
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About this Entry
This page contains a single entry by Rand Simberg published on July 9, 2008 12:16 PM.
Apparently both candidates have been switching their positions like oscillators gone mad. At this point I don't believe anything either one says:-(.
Fortunately I've already decided who I'm going to vote against, and I don't think there's anything likely to happen between now and November that will change that.
Don't tell Jim Harris, he'll drop a valve.
I favor a "soft" cap and trade system. Namely, a certain number of pollution credits are alloted and traded on an open market. In addition, the granting authority sells additional credits at increasing cost as demand increases. The idea is that the overall number of pollution credits is not fixed. You avoid the pathological supply inelasticity problems of a regular cap and trade market when demand is near the cap. Also, if the granting authority buys these credits back as price declines, it can act as a simple marketmaker and help stabilize the markets.
"...a 'soft' cap and trade system."
This sounds like the kind of thing that a person would want only if he imagines that the people deciding how many additional credits to sell at what price, and when to buy them back and how much to pay for them, will act with exquisitely-well-tuned judgment. The people who will be making these decisions will be politically-appointed bureaucrats.
Well, how about this then. What is a good mechanism to handle perceived externalities like CO2 emissions?
"Well, how about this then. What is a good mechanism to handle perceived externalities like CO2 emissions?"
Change your perceptions? CO2 is not a problem to be handled. Ignore it.
How about we focus on methane, which is supposedly far worse than carbon dioxide?
There's a simple solution, too... kill all of the worst methane-emitting animals on the planet, starting with cows.
There... problem solved.
There's a simple solution, too... kill all of the worst methane-emitting animals on the planet, starting with cows.
I'll do my part, because cows are tasty.
"What is a good mechanism to handle perceived externalities like CO2 emissions?"
Enconomists seem to say that on a theoretical basis, cap and trade is the best way. HOWEVER, the practical implementation will likely lead to all kinds of political intervention that will result in a suboptimal result. For example, there might be dedicated allocations to favored industries. One negative side effect will be the creation of a new government agency to handle the system.
What many seem to prefer is a straight carbon tax on fuels. There are already mechanisms in place to collect such taxes, there are fewer places the tax has to be collected, and fewer options for regulatory capture by powerful interests.
"Well, how about this then. What is a good mechanism to handle perceived externalities like CO2 emissions? "
Change your perceptions. CO2 emmissions are not a problem. Ignore them.
Change your perceptions? CO2 is not a problem to be handled. Ignore it.
That's not a good answer because people don't change their perception for your convenience. My point here is that we have a disagreement about the cost and consequences of CO2 emissions. How do we resolve this? The problem above with any cap and trade system is two-fold, it assumes, a priori, that CO2 emissions are a problem and it centralizes to an extent the CO2 emission credit granting authority.
What I'm wondering here is whether we can put together a system (I'd prefer a market-based solution) that doesn't assume ahead of time that there is or isn't a problem and which can flexibly adjust to either the presence or absence of a potential externality.