Sorry for the delay in answering. Joseph Green sees inconsistencies in my thinking because I am in favor of the artificial market of feed-in tariffs but opposed to the artificial market of cap and trade. With cap and trade my inconsistency seems even worse to him because I reject it under the name "cap and trade" but support it under the name "carbon rationing."
If you look at markets, you always have to ask what options the market participants have when reacting to market outcomes. Feed-in tariffs are so effective because they take the initiative away from the incumbent energy firms. They leave it up to millions of individual "prosumers" to decide how much investment goes into renewable energy. They don't allow the electric utilities to slow down renewable energy under the pretext of cost or grid stability or transmission availability or how it fits together with their sunk investments. The importance to take this veto power away from the incumbent energy firms is stressed by Hermann Scheer in http://www.youtube.com/watch?v=_z7cdDYP_zg&NR=1 look especially minutes 51-60 I assume the same principle is valid with carbon markets. If individual end consumers trade carbon rations with each other, they will reduce aggregate demand for fossil fuel products and shift demand elsewhere in a much swifter and more radical way than if you give the carbon credits to the incumbent energy firms to play with. Marxists and everybody interested in energy policy can learn a lot from Scheer. Scheer played an important role in the German renewable energy law. After his death, the official history of the Energy Wende has pretty much whited him out of the picture, they try to pretend he never existed. Hans G Ehrbar _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
