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sorry, what? A tax is simple, like a sales tax or VAT, and there is a strong incentive to collect it at a centralized source that is pretty easy to monitor. Ho
by RockyMcNuts 10y ago
sorry, what? A tax is simple, like a sales tax or VAT, and there is a strong incentive to collect it at a centralized source that is pretty easy to monitor.
How is that complex vs. creating a new commodity in the form of carbon credits, and checking that the emission is backed up by credits?
At best, cap-and-trade is equivalent to a carbon tax plus some corporate welfare to return the tax to the polluters.
In the most likely scenario, it's an opportunity for rent-seeking politicians to dole out the credits to those who either currently pollute most or just have their ear, for worst current polluters to cash in on opportunity to reduce pollution, for financiers to make big bucks trading credits.
At worst, it's a fraud where people will buy credits from people who don't reduce pollution or would have done so anyway.
- tomjen3 10y agoYou still have to check if everybody has paid their emission tax. Also a tax has to be high enough to offset the average cost of lowering Co2 emissions (since you force everybody to lower their emissions), whereas in a cap-and-trade system the price will the the lowest cost to lower the emissions, since anybody who would pay a higher price will be better of buying the emission permissions and anybody who can save co2 cheaper will be better of selling them. Thus a cap-and-trade system is always going to be more efficient.
- pjc50 10y ago> You still have to check if everybody has paid their emission tax Presumably the tax attaches to fossil fuel importers and vendors, rather than trying to tax each individual consumer.
- tamana 10y agoAnd every time I go shopping at the department store, I get 30% off, so the more I buy, the more money I get.
- aoeuasdf1 10y agoI think you're confused about the mathematics here - cap and trade for cap (C tons) is EXACTLY equivalent to some carbon tax (T dollars) in the behaviors it incentivizes.
- tomjen3 10y agoNo, I am not. See my other comment here https://news.ycombinator.com/item?id=12110917 https://news.ycombinator.com/item?id=12110917
- rayiner 10y ago> In the most likely scenario, it's an opportunity for rent-seeking politicians to dole out the credits That's not how the credits work.
- RockyMcNuts 10y agoHow the eff does it work? Who gets the credits to start with? Why do you think the companies prefer cap-and-trade? of course it's more complicated to end up monitoring both the pollution and who owns what credits. the whole point of cap-and-trade is to avoid the word 'tax', and to create a vast rent-seeking system and potential for gaming the system, and make it politically palatable by paying off the people who might object. http://www.telegraph.co.uk/finance/newsbysector/energy/6912667/Carousel-frauds-plague-European-carbon-trading-markets.html http://www.telegraph.co.uk/finance/newsbysector/energy/69126... http://www.france24.com/en/20160503-france-trial-multi-billion-carbon-emissions-trading-fraud-opens-paris http://www.france24.com/en/20160503-france-trial-multi-billi...
- rayiner 10y agoThe ethanol credits are linked to ethanol production.
- RockyMcNuts 10y agomy comment referred to a choice between carbon tax vs. cap-and-trade for reducing emissions, which seems unrelated to ethanol credits. I just think taxing coal/oil/natural gas as it's produced and sold, based on how much carbon it contains, is easy and effective, enforcing a carbon credit system is hard and prone to shenanigans, fraud, corruption. Economically they're essentially the same and the shenanigans are a massive bug. But politically, shenanigans are a feature.