On Sat, Aug 2, 2008 at 8:53 AM, ehrbar <[EMAIL PROTECTED]> wrote: > > In order to better understand the implications of carbon rationing, I > went through the math of solving a consumer choice problem with a > simple utility function and carbon rationing. The paper in its > present version is on my web site at > > http://www.econ.utah.edu/~ehrbar/cccr.pdf >
Some thoughts on this: No amount of carbon rationing will build trains. Unless your transmission grid is "merchant" transmission it won't produce grid improvements there - and even then it requires tendatious assumptions about how consumer demand translates into capital investment. That, by the way, is a criticism of any system that relies on price as a primary driver of change. Fundamentally what you are trying to drive is an infrastructure change, massive capital investment. A price or rationing system many contribute to this, but it will never be the primary driver. If you want ta historical example, think of war conversion in the U.S. during WWII. A rationing system did play an important role, but the fundamental drivers was the government turning to industry and saying "you build cars and trucks: build tanks. you build civilian ships: build a fighting fleet. Here are orders for planes, and guns and bullets." Rationing was reinforcement. My criticism is the same that it has been all along. You are assuming too much about how infrastructure gets transformed without paying enough attention to the actual history of how such changes take place. Also, when you mention the problems a rationing system has in dealing with changes in carbon pricing: all existing proposals based carbon price depends on an incrementally increasing price. So I do want to compliment you on your intellectual integrity in exposing a flaw in your own system. (Not irony - all academics are supposed to do this; but it is seldom honored as much in practice as much as it is in principle.) _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
