tag:blogger.com,1999:blog-8524070301101240472.post8248397427393750164..comments2023-09-28T08:13:11.489-07:00Comments on Only In It For The Gold: Cap & Trade vs Emissions TaxMichael Tobishttp://www.blogger.com/profile/08229460438349093944noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-8524070301101240472.post-84420459098476210542009-05-07T14:56:00.000-07:002009-05-07T14:56:00.000-07:00I agree with Sachs this time but in general it's o...I agree with Sachs this time but in general it's only randomly that that occurs.Marion Delgadohttps://www.blogger.com/profile/09493068399042656060noreply@blogger.comtag:blogger.com,1999:blog-8524070301101240472.post-84522195292842281662009-05-07T14:03:00.000-07:002009-05-07T14:03:00.000-07:00In some sectors, a cap and trade system, to trade ...In some sectors, a cap and trade system, to trade within and between sectors, may work. Doing this economy wide seems <br />difficult to me. For example, caps and tradable emissions on cement industry, power industries, and pulp and paper industries (and so on) could be implemented, monitored, and the market regulated. But what about small sources of carbon emissions, from small and medium businesses, or consumers, that still significantly add up? Here, it would be easiest to just tax their carbon fuel inputs, without monitoring and regulating them, because it would be difficult and relatively more expensive than for larger emitters. Maybe have tax credits if they can show they've not emitted all the carbon that was initially taxed when they purchased their fuel.<br /><br />So I think you should do both.<br /><br />One thing that bothers me is the idea that a cap would provide certainty of emissions. What if that assumption is wrong? It's more likely to be right if the system is well designed: but designing a system with just large emitters involved would be easier to design than a comprehensive system over all sources of emissions. <br /><br />So I would say that we should try hard to design a cap system that covers not all emissions economy-wide, but only all emissions within certain sectors where a trade and monitoring would work well.crfhttps://www.blogger.com/profile/10726414637021391906noreply@blogger.comtag:blogger.com,1999:blog-8524070301101240472.post-7314315229600444352009-05-07T12:11:00.000-07:002009-05-07T12:11:00.000-07:00Yes, exactly. There do need to be independent crit...Yes, exactly. There do need to be independent criteria, but since what you are counting is quite simple, it's quite doable. It's essentially a cap with no trade.<br /><br />Yes, either can be done well or badly, and yes, either can be targeted toward a cap, or fixed revenue, or whatever. <br /><br />It just seems very odd. David Roberts for instance is practically apoplectic about people getting off the ranch about this. <br /><br />I can't make any sense of it: to me given a choice between an elegant solution and an inelegant one there needs to be a strong argument why the elegant one doesn't work. <br /><br />I see no sign of that here.<br /><br />As for the $1000/ton, who knows, but if that's what the needed explicit tax is, that is what the implicit cap and trade tax will end up as, I figure.<br /><br />Of course I'm a bear of little brain, so maybe someone smarter than me can explain it to me in terms I can understand. So far, the explanations I have seen are even dumber than I am. My BS meter was already wiggling but given this article it is definitely above zero now.Michael Tobishttps://www.blogger.com/profile/08229460438349093944noreply@blogger.comtag:blogger.com,1999:blog-8524070301101240472.post-54870667461324799572009-05-07T12:00:00.000-07:002009-05-07T12:00:00.000-07:00Hi Michael - I for one don't care one way or the o...Hi Michael - I for one don't care one way or the other; taxes can be very complex too when politicians get into them, and if one is more likely to be implemented than the other, well, why not go with that?<br /><br />Also, Joe Romm has claimed taxes would have to be extraordinarily high ($1000/ton) to have much of an impact. I'm not sure how accurate that is, but it could be limiting in the effectiveness of the tax approach, while with a cap you supposedly know exactly how much will be emitted, and it forces people to emit less whether or not they're willing to pay $1000/ton.<br /><br />However, I'm not sure I understand your question about "The time constant of the problem is thirty years; the time constant of a tax rate is what? "<br /><br />Is your point that one can regularly adjust a tax rate (like the Fed adjusts interest rates) in order to make it high enough to limit emissions to whatever level is needed?<br /><br />In order to make such regular changes it would need to be administered by an independent body with clear criteria on limiting emissions, not directly by any elected officials. Otherwise there will be intense pressure not to increase rates when needed - just look at the federal gas tax, still stuck at 18 cents after decades!Arthurhttps://www.blogger.com/profile/06249922708053689717noreply@blogger.com