Hi Gar,
Sorry to take so long to reply. I wrote something out the day before
yesterday, and then lost it in a power surge. Oh well....So I'll try again to
reply. The good part of this is that I can now blame my lack of eloquence
on having lost all the really good formulations with the power surge. <g>.
> > * An important issue raised by your note concerns planning. We seem
> > to have a somewhat different ideas about what planning is. I think that the
> > type planning that we need must include the direct regulation of
> > production.
> > True, all sorts of things can be called planning, and really are planning
> > *in
> > some sense or other*. No doubt various environmentalists talk of "planning",
> > and yet mean some very neo-liberal types of things. Relying mainly on
> > subsidies to industry, setting up a cap and trade market, setting the price
> > for a carbon tax, are all planning of a sort. But they are alternatives to
>
> Nowhere did I imply this, I'm talking about things like regulating
> emission per square foot and per person, regulating emissions per
> passenger and ton mile, regulating emissions per kWh. And direct
> public investment like upgrading rail systems, building electric power
> lines, creating efficiency utilities that provide residential
> efficiency upgrade paid for out of utility bills (and subsidized
> besides). Also a combination direct public ownership of wind and solar
> farms with neoliberal subsidies for private wind and solar farms.
>
Oops. Sorry to have created confusion about your views. In part, this is
because I couldn't quite make out what your views were on planning. But I
should have asked questions instead of proceeding as I did.
But the other thing that comes up in this paragraph is that I had some
points that *I* wanted to make about planning with respect to market
measures. There *is* a sort of "planning" involved with cap and trade and
other market measures: the government really does have to work at creating
the artificial emissions market, no doubt bureaucracies get set up for this
and for the "Clean Development Mechanism" (although part of this bureaucracy
is privatized), and so on. But it's planning for the sake of market measures,
and not direct planning or traditional environmental planning. Similarly,
subsidies and public expenditures of various types don't distinguish between
market measures and direct environmental planning, because neo-liberalism
makes liberal use of subsidies and other government actions in order to
promote its market fundamentalism.
> > * You say that the biofuel fiasco is a result, not of the market
> > measures, but of poor planning. I don't agree. It is actually a prime
> > example
> > of the lack of a system of overall environmental planning.
>
> But did not say it was poor environmental planning. It was poor
> planning. More specifically it was not a case of a carbon tax or a
> cap-and-trade or of anything resembling it. Of course it was an
> interaction between planning and markets, in short a result of the way
> real markets work as opposed to neo-liberal wet dreams of the way they
> are supposed to function. But it specifically is not a case of carbon
> taxes or of carbon-tax like things failing.
Here you seem to denigrate that the biofuel fiasco is the fiasco of
market measures, by saying that it is a matter of poor planning, and then you
distinguish between "poor environmental planning" and "poor planning". I
don't understand at all the distinction that you are making.
You also say that the biofuel fiasco is "a result of the way real
markets work as opposed to neo-liberal wet dreams of the way they are
supposed to function." This is very well put, and I agree. I just don't see
how this fits in with the rest of the sentence about "an interaction between
planning and markets". You identify the issue as that of the way markets
*really* work, and you avoid the neo-liberal twaddle about distortion of the
market. So how then is the biofuel fiasco a result of "interaction" of
markets and planning, other than in the same sense in which carbon trading
too is a result of "interaction" of markets and planning, because the
government has to carry out neo-liberal planning to set up the artificial
emissions market?
Moreover, for that matter, carbon trading actually was involved with the
expansion of the production of Brazilian and Asian biofuel. The EU Emissions
Trading System (ETS) resulted in firms looking for more and more biofuel, and
I believe European firms were involved in these purchases. And the fact that
the ETS had this result wasn't a flaw of the system, but flowed naturally
from its operation. The ETS is supposed to mean that firms, following price
signals and the "invisible hand" of Adam Smith, simply do what they have to
do to improve their balance sheet to the max. Buying biofuel was one way to
meet their obligations under the ETS and make money. They weren't supposed to
worry about where the biofuel came from or what an increase in overall
biofuel production meant, and they didn't.
American corn ethanol wasn't a matter of cap and trade, true. But I never
said that cap and trade and the carbon tax are the only market measures that
exist. In the case of corn ethanol, the government used subsidies and
regulations to make it profitable to produce ethanol. You say that corn
ethanol was a result of poor planning, and I agree that the government did
plan *in a certain sense*. But the plan was to make ethanol profitable, and
encourage farmers and firms to jump in along the lines of, simply, "the more
the better". That's planning, but -- in the my opinion --the same type
planning that also occurs in market measures like cap and trade.
> Incidentally I don't agree that biofuels could have been a force for
> good except on a very small scale. Past a certain point we can't grow
> biofuels without either displacing food production, fiber production
> or wildlife habitat. We can produce some, but not a huge amount, I
> would save a maximum of 11 percent of current world energy production
> could be produce sustainably via biofuels, more realistically 7
> percent and perhaps as little as 3 percent. And if you notice that
> this range has almost a 4 to 1 ratio between minimum and maximum, that
> is because I think our ignorance of what constitutes sustainability in
> biofuels is that great.
I couldn't say about the exact figures, but the general idea you develop
here seems right to me. In my writing on biofuels I say things such as that
"At best, they [biofuels] can supply only a small part of energy needs and
be one limited component of an overall environmental plan. And for them to
play this role, there will have to be more research as well as careful
attention to their effect on farming practices and overall land utilization."
("Al Gore's Nobel Peace Prize and the fiascos of corporate
environmentalism.") And I poke holes in the claim that cellulosic biofuel has
solved all the problems of corn ethanol.
Of course, the world is going to continue to need a lot of energy, even
for environmental purposes, and it certainly seems reasonable to do research
into various sources including the various types of biofuel. Getting
experience through the production and use of small quantities also seems like
an appropriate thing to do. Instead, the bourgeoisie created a biofuel
bubble, because it would be profitable to various capitalist interests, and
also because the bourgeoisie no doubt likes the idea that all that has to be
done as far as environmentalism is a slight change of fuel. It seems to me
that it's an example of market methods (Al Gore's "using market capitalism as
an ally") turning what might be a small, limited good into a major pain.
> > Well, take the generation of electrical power. I
>
> Umm no. In energy jargon generation of electrical power is usually
> considered separately from manufacturing. I agree that electrical
> generation is area where regulation and public investment will work.
In considering the issue of efficiency, you raise the difference between
electrical power and manufacturing. You distinguish between "most sectors of
the economy" and manufacturing. You develop this further:
> And I would say the argument for a carbon tax or
> auctioned permit price is even stronger under capitalism -
> specifically for manufacturing. Now if you read some of the stuff
> I've written on Grist you will see I've gone into this in more detail.
> That is in most sectors planning makes more sense than price driven
> means of reducing emissions. But manufacturing is the exception. It
> is not that price does not have many of the same flaws in
> manufacturing as it has in other sectors. It is just that, unlike
> other sector, in manufacturing the other choices are worse.
I don't agree with this distinction. As far as I am aware, the case for
traditional envrionmental (and safety and health) regulations as opposed to
market measures is as strong in manufacturing as in other sectors. When
documents like "Carbon trading: a critical conversation" show that emissions
trading is worse than regulation, I don't think they make a distinction
between manufacturing and other sectors.
I would like to see your articles that do make this distinction, and I
would appreciate it if you could give me some references. As of now, I've
seen some material from you that doesn't seem to make this distinction. For
example, take your article "Carbon trading: a carbon tax, blindfolded and
handcuffed, with its shoelaces tied together" (nice phrasing! even if I don't
agree that the carbon tax really is any better). It makes no distinction
between other sectors of the economy and manufacturing, and even uses an
example from manufacturing ("a hated pig-iron manufacturer"). But in your
reply to me, you say an "auctioned permit price" (i.e. cap and trade with the
original emission certificates distributed by auction) and carbon tax are
suitable "specifically for manufacturing", and that this is so even under
socialism.
At this point, I would like to ask something. This seems to say that,
in your conception, the carbon tax and/or auctioned permit system would only
be for manufacturing. Is that really what you are saying? And if so, how do
you have a carbon tax only for manufacturing? As I have seen you say in your
articles, the price of the carbon tax gets passed on by the manufacturer.
That is, once its imposed on the manufacturer, it filters through the whole
system. I'm confused here about what you conception is. Could you clarify?
But back to the problem of regulating manufacturing. I don't think that
this is as hard to deal with as you seem to think. Environmental, safety and
other regulations have at times in the past been imposed on manufacturing,
and there's been workplace inspection. And the additional ones for global
warming would probably amount to banning various bad processes, as well as
demanding the efficiency of the products manufactured; these are things
which, I believe, have been done successfully in the past.
To show the difficulty, you raise the issue of deciding how to
distinguish between super-efficient plants (i.e. with low carbon emissions)
and inefficient ones. But this is mainly a problem with respect to cap and
trade and similar systems, not the traditional regulation. If bad processes,
for example, are banned, then super-efficient factories which have already
given up these processes have no problem. With cap and trade, there is always
the problem of how to hand out the original certificates (which will then be
used or traded as the various recipients wish). This is a problem which, I
believe, you have illustrated in various of your articles on cap and
trade,.And, as you say, "It is not that price does not have many of the same
flaws in manufacturing as it has in other sectors." It's just that for some
reason you think anything but price-driven efforts flops really badly in
manufacturing.
Now, in the illustration in your reply to me of how things would work,
you seem to put in effect a form of cap and trade system. (I'm don't really
understand how you would make the original distribution of permits. You
mention both setting an initial total amount of certificates, and a price,
and bidding. But in any case, it seems to the me that the auctioned cap and
trade system represents "bipartisanship" in market methods -- the problems
of both cap and trade and the carbon tax, all rolled into one.)
What it seems to come down to, is that you look toward price-driven or
In market-driven system for emission control in manufacturing.You refer to
real and shadow prices, depending on weather the system is capitalism, market-
socialism (the system which would be socialism except that it's not), or
socialism. I think this is the same type of belief in prices that leads other
environmentalists to talk about establishing the "true price" of things. In
my opinion, even if this is restricted to the manufacturing sector (and a
system of prices might not make much sense if it is restricted to the
manufacturing center), this caves in to neo-liberal illusions about the
market. Prices are not really a rational system of planning: they are the
agency for the law of value under capitalism, and shadow prices are a way of
introducing the shadow of capitalism into any system they dominate.
So thuse are some of the things that occurred to me in thinking about
your last note.
Regards,
Joseph Green
_______________________________________________
pen-l mailing list
[email protected]
https://lists.csuchico.edu/mailman/listinfo/pen-l
