tag:blogger.com,1999:blog-4900303239154048192.post8500986829916931322..comments2024-03-06T06:34:42.881-05:00Comments on EconoSpeak: The Attack on Carbon CapsUnknownnoreply@blogger.comBlogger21125tag:blogger.com,1999:blog-4900303239154048192.post-5932491972164971682009-12-10T22:53:58.977-05:002009-12-10T22:53:58.977-05:00david (and everybody else),
There is something el...david (and everybody else),<br /><br />There is something else that really needs to be kept in mind here. For better or worse, the Kyoto Protocol is now international law, and has been since Russia ratified it (unlike the US), which was partly pulled off thanks to the deal that gave them all those credits. We did not ratify given the unanimously passed Byrd-Hagel Resolution, still officially in place, that says we are not going to limit ourselves unless China and India do so.<br /><br />The Copenhagen meeting is formally to develop the successor to the Kyoto Protocol. The rest of the world views it as international law and the US as scofflaw rogues for not being a part of it. Especially given that the cap and trade part of it, now in place in Europe, was put in at our insistence, it is completely unacceptable that people from the US should be at this point going and saying "no, no, no, you must completely change how things are done under the international law that we refuse to be a part of." This is the real context of this discussion.<br /><br />BTW, of course cap and trade evolved out of a command and control system, strict quantity controls. It was eventually realized that cap and trade was the way to do those controls with the minimum of economic damage, and in a recessionary period of high unemployment, that is something that must be kept seriously in mind. As it is, passing anything through the US Senate is going to be a miracle.rosserjb@jmu.eduhttps://www.blogger.com/profile/09300046915843554101noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-63520191995325395812009-12-10T15:42:30.552-05:002009-12-10T15:42:30.552-05:00My old school, UVA.
I don't think there's...My old school, UVA.<br /><br />I don't think there's a Republican who will vote for much of anything that is worth a damn, and we'll see about a vote for cap and trade. The health care debate has been instructive if dispiriting. I'm so old I remember when McCain was going to stand up on this issue, etc.....<br /><br />Shifting tax burdens onto carbon and off of employment seems a more likely path. Not as good as a green bank! And of course I'll take a cap -- hard cap - if I can get one.<br /><br />Peter, I don't think it's impossible to game the tax by any means, just that I think it'll be gamed less. I also think the tax shift possibilities could mitigate against carbon credits, and that the credits themselves are more likely to be pernicious when put into a trading system, because there's even more incentive for them, and for toying with them.<br /><br />I'll read your piece tonight, I swear.davidnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-35458259871120393432009-12-10T14:02:03.801-05:002009-12-10T14:02:03.801-05:00david,
Do also keep in mind that it is quite poss...david,<br /><br />Do also keep in mind that it is quite possible for Michaels to be a prick, while also having not unreasonable views on the climate, just as it is possible for Phil Jones and Michael Mann to be in violation of proper professional conduct, even as they may also be mostly right about their scientific views. A great irony is that when the original hockey stick controversy blew up, Michaels and Mann were in the same department, Environmental Science at the University of Virginia. Neither is there now.rosserjb@jmu.eduhttps://www.blogger.com/profile/09300046915843554101noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-2770256227864964642009-12-10T13:40:19.449-05:002009-12-10T13:40:19.449-05:00david,
Actually, cap and trade is the more flexib...david,<br /><br />Actually, cap and trade is the more flexible (and thus politically sellable) version of command and control, which traditionally involved quantity controls, that is, the cap.<br /><br />Regarding the politics here, in case you have not been following it, there might actually be some Republicans who will vote for a cap and trade in the Senate, after they get some goodies, such as more offshore drilling and more nuclear power (I am not opposed to the latter all that much). No GOPster will vote for any tax, period. If you think that is not true, name one, just one, anywhere in the Congress.rosserjb@jmu.eduhttps://www.blogger.com/profile/09300046915843554101noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-5745266450254691172009-12-10T11:59:13.915-05:002009-12-10T11:59:13.915-05:00To all:
1. I hope my more recent post makes the e...To all:<br /><br />1. I hope my more recent post makes the economic reasoning about taxes vs caps as clear as possible. It is interesting that no one has responded to it.<br /><br />2. What's this about taxes being more resistant to offsets than permits? The name for offset in the tax world is "tax credit", and, last time I looked, the US tax code was thick with them.Peter Dormanhttps://www.blogger.com/profile/00093399591393648071noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-21875473225436947782009-12-10T09:55:49.091-05:002009-12-10T09:55:49.091-05:00Oh dear I've made Barkley angry and had his co...Oh dear I've made Barkley angry and had his contempt visited upon me. Yikes. Haven't seen that since the the halcyon days of being condescended to about comparative advantage. <br /><br />Anyway, what Gar said. Credits are easier to work in in cap and trade, trading off volatility is more of a risk, and it's easier to diffuse the reputed carbon reductions across too many sources (just wait until the real estate folks have their full say...) <br /><br />Command and control and public investment are the best bets, at this point most likely politically too, not just US but globally, I'd be willing to bet. And no, Barkley, I don't think you know much more about US politics than I do, and I see nothing in what you say that isn't the same level of assertion. No way no how uh-uh isn't much of an argument. <br /><br />My original complaint stands. People who go on about cap and trade and its problems aren't comparing a pristine carbon tax to it, and the idea that there's an "economics" that nobody else but economists should talk about on the issue is about as strong as Gary Becker asking to have the minimum wage reduced.<br /><br />Whatever on Michaels, he sure does seem like a prick to me, his recent comments on the emails being confirmation.<br /><br />The fruitcake comment was meant to have a smily face after it....<br /><br />I hate signing in. I post as david on the rare occasions I do, and see that I misunderstood your sign-in system. Sorry to be contemptible.davidnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-80838027093046670222009-12-09T10:55:04.894-05:002009-12-09T10:55:04.894-05:00Gar,
Ah yes, of course you are right about the BT...Gar,<br /><br />Ah yes, of course you are right about the BTU tax. Forgot the details. Coal favored. Presumably a tax now would be on carbon, thus favoring nat. gas over coal.<br /><br />Regarding how tight or strong either one is, it is all a matter of the rates set. Remember, in priinciple they are equivalent, or can be. A lower tax rate might be easier than a tighter cap on a cap and trade system, quite aside from all the bells and whistles and exemptions either one can have.rosserjb@jmu.eduhttps://www.blogger.com/profile/09300046915843554101noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-14146380070537309362009-12-09T00:27:53.238-05:002009-12-09T00:27:53.238-05:00Barkley, no BTU tax favored coal over natural gas....Barkley, no BTU tax favored coal over natural gas. Tax was per BTU (unit of energy) not amount of carbon. Since natural has has more BTUs per carbon molecule (because a lot of the energy in natural gas is hydrogen) Natural gas would end up taxed more heavily per amount of greenhouse gas emissions than coal. Thus the BTU tax actually favored coal over natural gas, or at least provided not much advantage. (Still a little advantage because natural gas can provide more electricity per BTU than coal, but not much.)<br /><br />And I agree that a tax is not happening right now. But neither is a cap-and-trade that will significantly cut emissions. The only reason cap-and-trade is on the table is because you can pass a cap-and-trade the is much weaker than it appears. And you might not even get that. Build a new coalition over green infrastructure/green stimulus. Pass that and build on it to get some C&C regulations. (There is even one bill out there to do both.) Then move on to the carbon price. If grassroots political energy that has gone into pushing for cap-and-trade had gone into pushing for green infrastructure, especially the energy that went into pushing for Waxman-Markey when people were not yet used to fucking 10% unemployment as something to grin and bear we could have won something by now.Gar Lipowhttp://www.nohairshirts.comnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-7232796289046286462009-12-08T21:50:34.659-05:002009-12-08T21:50:34.659-05:00Gar,
Long time no see. I do support public inves...Gar,<br /><br />Long time no see. I do support public investment in alternative energy sources. I also support at least some direct C&C regulatory approaches, such as tighter building regs, which have been used with some results in Germany and other countries. But, these will probably not suffice. Is it not the case that the S02 cap and trade has worked pretty well?<br /><br />Gar, I think you meant to say that the BTU tax would have favored natural gas over coal, right? <br /><br />Gordon,<br /><br />Your account of Gore's role at Kyoto was precisely because that effort was such a political flop in the US, whereas, for better or worse, cap and trade is sellable, at least somewhat (still not clear that even the messy proposal up now can get through). The important history that cannot be undone is that Europe and Japan did go along with cap and trade to try to please us (and failed, thank you Byrd-Hagel resolution), with Europe having now adopted cap and trade under Kyoto, not about to be undone. Again, public investment and regs can be done, but will probably not suffice without some sort of cap and trade. Taxes will not happen, not in the US, not no how, not no way.Barkley Rosserhttps://www.blogger.com/profile/13114257724762074636noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-30624031290443301702009-12-08T20:54:44.900-05:002009-12-08T20:54:44.900-05:00And no evidence of being a wingnut either. Don'...And no evidence of being a wingnut either. Don't know if you have encountered some the major lunatic Al Gore obsessions out there.Gar Lipowhttp://www.nohairshirts.comnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-46779774596085843162009-12-08T20:53:22.264-05:002009-12-08T20:53:22.264-05:00Just to clarify Gordon "Wingnut Lurkers"...Just to clarify Gordon "Wingnut Lurkers" was not aimed at you. You post in comments, by definition not a lurker.Gar Lipowhttp://www.nohairshirts.comnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-59255248145923663642009-12-08T19:50:07.897-05:002009-12-08T19:50:07.897-05:00I have found this useful old post through followin...I have found this useful old post through following Gar Lipow's links:<br /><br />http://www.grist.org/article/cap-and-trade-filling-up-the-political-space-that-should-be-used-for-real-s/#CarbonTrading<br /><br />Thanks, Mr Lipow, but I'm still looking for a more complete version of how cap-and-trade took over the debate.gordonnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-15862147713626925622009-12-08T19:11:07.033-05:002009-12-08T19:11:07.033-05:00Mr Lipow, "wingnut lurkers" don't wr...Mr Lipow, "wingnut lurkers" don't write English as good as mine.<br /><br />There are a couple of posts up at Naked Capitalism on cap-and-trade, including one which predicts the onset of carbon derivatives trading! Sheesh!<br /><br />http://www.nakedcapitalism.com/2009/12/guest-post-woman-who-invented-credit-default-swaps-is-one-of-the-key-architects-of-carbon-derivatives-which-would-be-at-the-very-center-of-cap-and-trade.html<br /><br />http://www.nakedcapitalism.com/2009/12/guest-post-head-of-californias-cap-and-trade-offsets-program-cap-and-trade-wont-work-its-a-scam.htmlgordonnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-68277680666692249332009-12-08T18:41:55.194-05:002009-12-08T18:41:55.194-05:00I hate to feed possible wingnut lurkers with this,...I hate to feed possible wingnut lurkers with this, but Gore parachuted in and pushed cap-and-trade. Worse he pushed offsets. If you search my stuff on Grist you can find a slightly longer narrative with links to sources.<br /><br /><br />BTW, while I think the debate over cap-and-trade vs. carbon tax is sterile as the main thrust, I will say that there is one point people who support more or less decent forms of cap-and-trade overlook. Yes, Cap-and-Dividend and other forms of cap-and-trade along those lines are not horrible. But the whole reason for favoring cap-and-trade over a carbon tax is because it is easier to slip game playing in. Note, not impossible. Offsets and the equivalent of permit giveways in particular are much easier to to do, and much harder to summarize the problem with in sound byte. The ability to give away permits was initially cited as the main advantage of cap and trade by early supporters. Offsets are newer, but again a big reason for supporting. The equivalent of giveaways would have to be refundable credits given to large polluters or straight out cash grants. A lot easier to call out. I'm sure there is a way to do offsets in a tax system too, but I'm damned if I could figure out one that would not be really obvious. In general if carbon pricing is seen as reinforcement rather than the main driver of change, then the simplicity of a carbon tax really is an advantage. Simple not in the sense of modeling purity (though even in a pure model a carbon tax is slightly simpler and more transparetn) but in the politics of slipping stuff in people can't follow.<br /><br />If you want a real world comparsion, look at the Gore/Clinton proposal for a BTU tax and compare that to cap-and-trade under Kytoto or Waxman-Markek/Boxer-Kerry. Horrible as the Clinton/Gore proposal was, it is not nearly as bad as W/M. (Basically it would have slightly favored coal/over natural gas, but favored non-fossil fuel power sources like wind and solar over both.Gar Lipowhttp://www.nohairshirts.comnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-66762695432405578392009-12-08T18:06:15.075-05:002009-12-08T18:06:15.075-05:00Gar Lipow: "By making carbon pricing the cent...Gar Lipow: "By making carbon pricing the center of the policy debate, the environmental community has made both a policy and a political mistake".<br /><br />Once upon a time, the "environmental community" certainly didn't make carbon pricing the centre of the policy debate, in fact the "environmental community" was in general opposed to it. Cap-and-trade was visited upon the global warming policy debate in the context of Kyoto, and was the brainchild of US representatives. It bacame part of mainstream policy debates only because the US insisted on it and since the US was at that time the biggest emitter, everybody wanted to get the US involved with Kyoto and were prepared to make big concessions to do so. Cap-and-trade was one of the concessions. <br /><br />I wish I could quote chapter and verse offhand, but that is my memory of the course of the debate. Maybe Mr Lipow or others who have followed it in detail and have better notes than I have can fill in the details.gordonnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-79081803371526727382009-12-08T16:38:57.525-05:002009-12-08T16:38:57.525-05:00The debate over cap-and-trade vs. carbon tax is st...The debate over cap-and-trade vs. carbon tax is sterile because both assume putting a price on carbon is the primary driver of reductions. <br /><br />We need massive public investment (whether from taxes on rich, reductions in war spending or revenue from permit auctions or whatever). We need all fashioned so-called command & control regulation where this can be done simply (in buildings emission rules per square foot or per inhabitant/full time employee equivalent, in transport per passenger mile or per ton mile, in electricity generation per kWh. Plus a few other specialized types of C&C where they make sense such Japanese style "front-runner" standards for appliances, standards for industrial electric motors and pumping, and requirements that boats when docked and airplanes when grounded, and diesels when parked run off the electric grid rather than their internal engines)<br /><br />Carbon fees or cap-and-trade is the supplematry source. By making carbon pricing the center of the policy debate, the environmental community has made both a policy and a political mistake. Policy because carbon pricing is the least important part of controlling global emissions. Political because both carbon taxes and cap-and-trade are the least popular means of lowering emission. Every single poll that compares them shows that public investment is the most popular policy (people love the idea of public money for solar and wind and efficiency). Regulation is the second most popular. (CAFE much more popular than gas taxes, to take an easy example.) <br /><br />Carbon pricing in any form, even cap-and-dividend is less popular than either. Of course whether this is accidental depends on who is doing the proposing. EDF, for example has always been about getting elite buy-in rather than building a popular movement. So it makes sense for them to take this approach. I'm not so sure it is smart for environmentalist who think building a grass-roots movement is important.Gar Lipowhttp://www.nohairshirts.comnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-47214010648746904502009-12-08T14:06:58.165-05:002009-12-08T14:06:58.165-05:00Anonymous (note: I have contempt upfront for peopl...Anonymous (note: I have contempt upfront for people who post here as "Anonymous"),<br /><br />Hansen is not an economist. He is a climatologist. What the hell does he think he is doing commenting on the economics of this, especially when he makes it clear he does not know what he is talking about? Gag.<br /><br />Michaels attack on Hansen was overdone and unfair, but the attack back on him was also overdone and unfair. I am willing to take you on with regard to that one if you want. That Michaels shoots off his mouth and is very ideological should be a distinct matter from what these guys say about the climate (and I would lay odds that you do not know what Michaels's position actually is).<br /><br />In the end your argument is made simply by assertion, without any support. Do you live in the US or have any knowledge whatsoever about US politics? If either is true, then where on earth did you come up with this assinine "enough with US politics can't take a tax stuff, that's probably not true"? Heck, even the watered-down and full of goodies cap and trade bill may not be able to get through the US Senate. Any tax proposal would be as dead as it was when Al Gore sent the idea up the flagpole back in the early 90s.<br /><br />Regarding the claim that a tax cannot be "gamed" as easily as a cap and trade, I note that there is little evidence of gaming for the US SO2 program, although I think gaming is more likely for CO2. But then, you have no comeback at all to the argument that powerful industries would get themselves out from a tax, just as they have gotten free credits given to them under Waxman-Markey. The same political forces would be at work through the same channels, quite aside from a tax proposal being DOA anyway.<br /><br />Well, maybe we are "all fruitcakes," although I think some here agree with you on C&C and ind. policy, but those will have even less chance of getting through the US political system than even a tax proposal. For better or worse, it will be cap and trade or it will be not a damned thing.rosserjb@jmu.eduhttps://www.blogger.com/profile/09300046915843554101noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-72157290703850835652009-12-08T12:23:53.432-05:002009-12-08T12:23:53.432-05:00in over his head? And you're quoting Pat "...in over his head? And you're quoting Pat "this email scandal is the real scandal" Michaels? Please.<br /><br />Nobody is comparing a pristine tax against an ugly cap and trade system. That's just patronizing bullshit. The comparison is between which systems are more likely to be more effectively gamed, and the answer falls pretty clear on cap and trade far as I'm concerned. Your arguments here just aren't all that convincing, because they don't address the core issue -- which one gets gamed worse?<br /><br />Credits seem much more likely to be part of a cap and trade system than a tax system, btw. And enough with US politics can't take a tax stuff, that's probably not true, though it could be made to be, but if it is true then US politics won't able to take a cap and trade system worth a good goddamn either.<br /><br />And it's not entirely crazy to think the herd effect is more powerful when social justice issues will allow the rich to use carbon emissions conspicuously. That could be true for trade rather than tax, though I'm not convinced. <br /><br />Then again, I think you're all fruitcakes, and command and control + industrial policy is the way to go. Too bad we didn't nationalize those banks and set up one big government bank that could have helped make it happen. Shock doctrine can work both ways.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-12345891542685486662009-12-08T11:38:26.294-05:002009-12-08T11:38:26.294-05:00The Hansen op-ed was stuck on stupid: ignorant and...The Hansen op-ed was stuck on stupid: ignorant and harmful.kevin quinnhttps://www.blogger.com/profile/04880872194080353414noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-63418625184676070182009-12-08T11:09:24.799-05:002009-12-08T11:09:24.799-05:00What looks most disturbing about cap and trade at ...What looks most disturbing about cap and trade at the global level is the large number of credits Russia is sitting on due to the deal the EU gave them to ratify the Kyoto Protocol and make it legal. <br /><br />Those pushing taxes always compare an idealized textbook version with an ungainly actual cap and trade as the Europeans have in place (and are not about to give up for some promise by the US to go for a tax, which will never, and I repeat, never, pass the Congress in any form whatsoever). If a tax were pushed, the same interests who are getting breaks under Waxman-Markey and so on would pull the political strings to get ones under a tax.<br /><br />Also, internationally, taxes would need to be harmonized at borders. Several years ago the Scandinavian countries agreed to do this and tax carbon. They have still been unable to agree on the border harmonization. If they cannot do it, do you think the US and China will be able to do it? This is fantasyland stuff, and makes me think that Pat Michaels's denunciations of Hansen have some merit. The guy is in way over his head and making an utter fool of himself.rosserjb@jmu.eduhttps://www.blogger.com/profile/09300046915843554101noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-2978739019632874612009-12-07T18:41:20.103-05:002009-12-07T18:41:20.103-05:00"...there is immense inertia that stands in t..."...there is immense inertia that stands in the way of serious climate policy".<br /><br />I think the "inertia" is really about the belief that everybody should bear a fair share of the burden. There is an increasing feeling that cap-and-trade is riddled with loopholes and will simply put all the burden on households without any compensation. This feeling militates against cap-and-trade and is a big contributor to what you call "inertia". Increasingly, cap-and-trade is seen as inequitable and unfair.<br /><br />Your counter to Hansen illustrates this point. You admit that the SUV driver can get away with it because he/she is rich. Most people - including me - don't like that.<br /><br />Frankly, I don't see much progress being made in emissions reduction unless we embrace wartime-style rationing and price controls.gordonnoreply@blogger.com