On Sun, May 19, 2013 at 2:36 PM, <[email protected]>wrote:
> > Gar gives the following argument against cap and trade: > > > Someone might end up with surplus permits to sell, not > > because they actually reduced emissions more than planned > > but because measurement error shows them as reducing > > emissions more than planned. > > I agree, but this argument does not apply to tradable carbon > quota. In a world with tradable carbon quota, someone will > end up with surplus permits to sell only if their > consumption is less carbon intensive than the average at > this phase of the decarbonization. These are individuals. > There will be safegards discouraging individuals from > speculating in carbon rations, for instance these rations > have an expiration date and they can only be held by > individuals, not by corporations. > I go out of my way to confuse disagreement with a failure to understand, but in this case you clearly have not understood what I said. I'm not talking about the purposeful game playing that corrupts all current carbon trading systems. I'm talking about unavoidable honest error, due to lack of precision and accuracy. To review, peer reviewed literature shows that average measurement error in the sector where measurement is most precise and accurate is more than 50% higher than the most ambitious annual reduction proposed by any government(Bolivia) and three to four times typical annual targets. That will be worse on the unit level in other sectors. To take a concrete example under carbon rationing. Joe and Sue both currently have emissions of five percent above target. Joe and Sue both buy electricity from equally carbon intensive grids. Joe increases his electricity consumption by 1%, and Sue reduces hers by 5% from the same baseline. But due to measurement error, Joe's grid is measured to be 17% less carbon intensive than it really is, and Sue's grid is measured to be 17% more carbon intensive than it really is. Sue and Joe both drive efficient diesel cars. Both reduce their driving by 5%. But, unknown to him Joe was sold a faulty filter, which means his diesel release more black carbon per gallon of diesel fuel burned than Sue's does, enough to ensure that his car is a third more greenhouse gas intensive per gallon consumed than an average diesel car. Sue was sold a decent filter , and her car produces an average amount of GHG pollution per gallon burned. To oversimplify let us assume that electricity and driving are responsible for most of the GHG pollution of Joe and Sue. Sue's GHG pollution is below the per person cap, but due to measurement error, she needs to buy more permits. Joe's consumption is above that same cap, but doe to measurement error, he has permits to sell. Note that simplifying does not stack the deck. Embedded emissions in food and other consumer products have far higher possible error rates. One problem with trading with a commodity (even and artificial one like GhG permits) is that the trading multiplies errors. A simple greenhouse gas pollution fee (GHG emissions) tax will still have a high degree of error. That is unavoidable.. Error in tax rate has to match error in measurement of what is being taxed. But again at least with a tax, only the scale is wrong, never the sign. > Carbon rationing is a way to coordinate the necessary shifts > in consumption. Decarbonizing consumption is not the same > as "left austerity." Decarbonizing is not "Left austerity", but carbon rationing is. Because you are requiring people to put time and atteniton into stuff that is not in their control. It is not Joe's fault that his grid is more carbon intensive than Sue's. he has zero control of that in the short run and little influence in the long run. Sue is not virtuous because she was not cheated when she bought the filter for her car. .A GHG fee with the revenues divided equally among residents of the area covered by the fee has the same progressive impact that giving 100% of rations to consumers does. But they don't have to spend a lot of time doing atomiistic pain-in-ass calculations about stuff they have not control over. Instead they have money to compensate for the increased price of energy and energy intensive goods, and at the same time, where opportunities exist to save money by decreasing their carbon footprint, they can take advantage of it. But because a carbon fee can be levied upstream the impact hits the corporations who are most able to make the changes needed first. Further since even with regressive taxes, tax incidence on consumers is seldom 100%* , some of that tax is coming out of their pocket, meaning they have a strong incentive to to reduce emissions in addition to long term lost sales. A fee system as opposed to a ration system focuses about the right amount of attention on individual consumption - some but not a lot. Most of the incentive to pay attention is on businesses both because of that portion of costs they can't pass on to consumers and due to lost business to the extent they do pass costs on . Consumers have a reasonable incentive, and the opportunity to save money if they find a way to cut consumption but are not punished if they cannot cut. When you count time and attention (transaction cost not just in money but in time) the GHG fee is much less "austere" feeling. Again, a GHG fee is only reinforcement. Private investment can be driven by public investment, and by efficiency regulations to a much greater extent than by price. Price is a needed reinforcement, but only that. *Studies comparing gasoline prices after tax across states have shown that after tax gasoline prices vary less than gasoline taxes do, meaning that some of the cost of gas taxes is not paid by consumers in spite of the regressive nature of the tax, the low elasticity of product demand, and the monoploy position of the seller. Tax incidence on consumers for gasoline taxes is estimated to be as low as 50% according to some studies, and no more than 65^ in any study. Studies of other consumer products yield similar results. Hans G Ehrbar > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Facebook: Gar Lipow Twitter: GarLipow Solving the Climate Crisis web page: SolvingTheClimateCrisis.com Grist Blog: http://grist.org/author/gar-lipow/ Online technical reference: http://www.nohairshirts.com
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