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Pollution is a problem for the whole planet - we already know this. What is the sense in "letting the market decide" (whatever that means. Markets don't make an

Pollution is a problem for the whole planet - we already know this. What is the sense in "letting the market decide" (whatever that means. Markets don't make any decisions, but I digress) if we already know the outcome we want. Legislate what we want to do and let's move on with our lives.

aidenn0 9y ago
We don't want H2 cars or bikes or cleaner diesel engines. We want less pollution. Making it more expensive to pollute than to not pollute is the most direct way of attacking the problem. "Letting the market decide" just means that the government ought not care how we reduce pollution. To respond to the GP post, IMO something like Cap and Trade makes more sense than tax for most forms of pollution; taxes only make sense for pollution when we have the ability to clearly quantify the harm done by the pollution. Most of the time we merely want to cap the amount of pollution, and cap-and-trade will more easily meet that goal than taxation.
- wallace_f 9y ago
  Thanks for explaining the economics to the other user >IMO something like Cap and Trade makes more sense than tax for most forms of pollution Economists argue about this at length. Among those who write a lot to the public, you'll find figures like Mankiw among the most vocal supporters of a tax, and DeLong as one of the biggest supporters of cap and trade. Krugman, from what I have seen, seems to just want either one of them. IMO the problem with Cap and Trade is that it needs to be implemented perfectly. So far it has had problematic corruption. For example, in some cases the greatest offenders (coal generators) have been handed allowances... For free... Which they can then sell on the market at their fair market value. So if anything, it has been a reward for being the first to harm others. Not only that, then you have Wall St entering the picture, and in 2008 they proved their marketplaces dont always work so well. Bureaucrats and politicians, attorneys and accountants, endless committees, and endless meetings... It's going to be another War on Poverty all over again, where trillions are spent and the problem is not only never solved, but there has arguably never been evidence the problem has even been reduced. Finally, how would cap and trade reward and incentivize micro and household economics? Are we going by an honor system on our tax returns to tally up our carbon allowances and deduct how many car pools, telecommutes, bike rides, stairs, cold showers, etc? This is all lunacy. Why try to do this in a heavy-handed way when this is the type of thing which markets are actually brilliant at solving. Probably because all those industry experts dont want to be obsoleted overnight.
  - aidenn0 9y ago
    Yes, handing the credits to companies for free is stupid. They should be auctioned off. Giving the coal companies credits is tantamount to saying those companies own the environment! For CO2 at least the microeconomic incentives are simple because the amount of CO2 generated by burning fuel is fixed, so you can just require that retail sales of fuel come with a CO2 credit. For NOx, the emissions of which depend on many variables it's much more complicated, but I can't think of a good way of taxing those either.

aidenn0 9y ago

We don't want H2 cars or bikes or cleaner diesel engines. We want less pollution. Making it more expensive to pollute than to not pollute is the most direct way of attacking the problem. "Letting the market decide" just means that the government ought not care how we reduce pollution. To respond to the GP post, IMO something like Cap and Trade makes more sense than tax for most forms of pollution; taxes only make sense for pollution when we have the ability to clearly quantify the harm done by the pollution. Most of the time we merely want to cap the amount of pollution, and cap-and-trade will more easily meet that goal than taxation.

wallace_f 9y ago
Thanks for explaining the economics to the other user >IMO something like Cap and Trade makes more sense than tax for most forms of pollution Economists argue about this at length. Among those who write a lot to the public, you'll find figures like Mankiw among the most vocal supporters of a tax, and DeLong as one of the biggest supporters of cap and trade. Krugman, from what I have seen, seems to just want either one of them. IMO the problem with Cap and Trade is that it needs to be implemented perfectly. So far it has had problematic corruption. For example, in some cases the greatest offenders (coal generators) have been handed allowances... For free... Which they can then sell on the market at their fair market value. So if anything, it has been a reward for being the first to harm others. Not only that, then you have Wall St entering the picture, and in 2008 they proved their marketplaces dont always work so well. Bureaucrats and politicians, attorneys and accountants, endless committees, and endless meetings... It's going to be another War on Poverty all over again, where trillions are spent and the problem is not only never solved, but there has arguably never been evidence the problem has even been reduced. Finally, how would cap and trade reward and incentivize micro and household economics? Are we going by an honor system on our tax returns to tally up our carbon allowances and deduct how many car pools, telecommutes, bike rides, stairs, cold showers, etc? This is all lunacy. Why try to do this in a heavy-handed way when this is the type of thing which markets are actually brilliant at solving. Probably because all those industry experts dont want to be obsoleted overnight.
- aidenn0 9y ago
  Yes, handing the credits to companies for free is stupid. They should be auctioned off. Giving the coal companies credits is tantamount to saying those companies own the environment! For CO2 at least the microeconomic incentives are simple because the amount of CO2 generated by burning fuel is fixed, so you can just require that retail sales of fuel come with a CO2 credit. For NOx, the emissions of which depend on many variables it's much more complicated, but I can't think of a good way of taxing those either.