Well, the European version of cap-and-trade is a known disaster, but pretty much any serious economist knew that it would be from the start. When you try to start a market by flooding it with free goods, you don't have much of a market. I don't think that necessarily dooms the Democrats' plan, but it certainly illustrates that it's an easy approach to screw up, especially if you don't manage the politics carefully.
Once the original owner of the allotment chooses to re-sell his allotment, the cost will still be passed onto the consumer. Since they no longer receive a kickback from the resale, they become a net loser in the process.
I'm not seeing it. This proposal is essentially a tax on the basic fuel input. That certainly raises the price all the way down the value chain, but it should have a relatively constant net effect on the end consumer, regardless of how many times it changes hands. Why do you see the end-consumer's cost changing due to allotment resale? Efficient-market theory would seem to argue otherwise, and while I don't actually believe in that theory very far, I do tend to find it a decent rule of thumb.
(Keep in mind that this proposal is *not* cap-and-trade, and has somewhat different dynamics. It'll have problems, but probably not the same ones.)
This also assumes that companies can't overbuy during the initial sale. I'll bet you dollars to donuts that companies will do everything they can to get spare allocations, as this will give them a cartel position in the new artificial market for pollution.
Yep -- that would definitely have to be dealt with. I don't see a good reason to believe it can't be, though -- cartels are an old fact of life, and there are reasonably well-established regulatory approaches for managing them.
I stopped believing in AGW last year as I dove into Climategate.
Not getting into that particular argument, because the reductio ad absurdam comes down to the simple fact that science requires interpretation. I've been following this one pretty closely for a long time, and while I'm willing to grant that there are no certainties about the end result, the *ridiculous* preponderance of evidence points to major climate change happening on a global scale, extremely rapidly by geologic standards. It's essentially a gigantic accidental science experiment being conducted mainly on the basis of wishful thinking, and I have little desire to be in the middle of it.
So seriously: you're going to interpret the data as you like. But by now there is essentially no chance that you're going to convince me that we're not seeing pretty wild change happening, albeit chaotic and hard-to-predict change...
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Date: 2010-02-17 03:41 pm (UTC)Once the original owner of the allotment chooses to re-sell his allotment, the cost will still be passed onto the consumer. Since they no longer receive a kickback from the resale, they become a net loser in the process.
I'm not seeing it. This proposal is essentially a tax on the basic fuel input. That certainly raises the price all the way down the value chain, but it should have a relatively constant net effect on the end consumer, regardless of how many times it changes hands. Why do you see the end-consumer's cost changing due to allotment resale? Efficient-market theory would seem to argue otherwise, and while I don't actually believe in that theory very far, I do tend to find it a decent rule of thumb.
(Keep in mind that this proposal is *not* cap-and-trade, and has somewhat different dynamics. It'll have problems, but probably not the same ones.)
This also assumes that companies can't overbuy during the initial sale. I'll bet you dollars to donuts that companies will do everything they can to get spare allocations, as this will give them a cartel position in the new artificial market for pollution.
Yep -- that would definitely have to be dealt with. I don't see a good reason to believe it can't be, though -- cartels are an old fact of life, and there are reasonably well-established regulatory approaches for managing them.
I stopped believing in AGW last year as I dove into Climategate.
Not getting into that particular argument, because the reductio ad absurdam comes down to the simple fact that science requires interpretation. I've been following this one pretty closely for a long time, and while I'm willing to grant that there are no certainties about the end result, the *ridiculous* preponderance of evidence points to major climate change happening on a global scale, extremely rapidly by geologic standards. It's essentially a gigantic accidental science experiment being conducted mainly on the basis of wishful thinking, and I have little desire to be in the middle of it.
So seriously: you're going to interpret the data as you like. But by now there is essentially no chance that you're going to convince me that we're not seeing pretty wild change happening, albeit chaotic and hard-to-predict change...