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Government creating thinly traded markets that gatekeep essential services is always a bad idea. It funnels huge fees to wall street and creates opportunities f

by rsj_hn 4y ago

Government creating thinly traded markets that gatekeep essential services is always a bad idea. It funnels huge fees to wall street and creates opportunities for financial manipulation. It is Clinton-era neoliberal grift. I thought the fiasco of energy de-regulation made people a bit more realistic about inserting Wall Street into the middle of everything, but apparently there are still true believers in market solutions to what are major energy infrastructure issues, not consumer choice issues, or how-do-I-run-a-business-efficiently issues. As always, demand-side engineering to incentivize hard supply side problems only serves to make things more expensive and enrich bad actors. If you don't believe that, then understand that many industries battle with high energy prices and are already doing their best to be more efficient. Your carbon tax is not going to be the difference maker. If you want to shift to a different form of energy, then build a power plant which provides the energy you want and take a power plant that you don't like offline. Do this one plant at a time until all have been changed. Same for shipping -- you don't like existing shipping tech, then create a replacement. Oh, that's too hard? Then why do you think the free market will solve a hard problem you can't? Don't go this roundabout way where you think you are incentivizing end users to pool their money together and build their own privately funded energy breakthrough. By refusing to directly provision the replacement, what the government is doing is washing its hands and shifting the burden of hard R&D onto the private sector, which cannot bear this burden very well. So all it does is make stuff more expensive at a time when we are fighting inflation globally, and Europe is rapidly de-industrializing because of high fossil fuel prices.

klabb3 4y ago
> It funnels huge fees to wall street and creates opportunities for financial manipulation. It is Clinton-era neoliberal grift. I thought the fiasco of energy de-regulation made people a bit more realistic about inserting Wall Street into the middle of everything[...] Not saying you're wrong, but how does Wall Street capitalize from this? It looks more like a government money grab to me (if you want the cynical take), since the implementation is quite literally a tax. That said, totally agree it's also an energy infrastructure problem – that governments have been incredibly stupid and naive with the last couple of decades.
- rsj_hn 4y ago
  Wall street can make money by charging financial service fees for: - market making - organizing sales of credits - organizing purchase of credits - selling hedging and insurance products so firms have some guarantees to support long term planning That's in the "honest grift" category, then all sorts of nonsense can happen under the category of market manipulation, such as Enron style buying up credits to cause a price spike, or denying credits to competitors, etc. > That said, totally agree it's also an energy infrastructure problem – that governments have been incredibly stupid and naive with the last couple of decades. Exactly. Build more power plants, connect them to the grid, take older plants offline. No need to yell at people or tax basic human needs like transportation or electrical usage. For ships, the government can fund research on alternate fuels for ships, and the private sector can be brought in with research prizes and grants, etc. But the idea that a shipper -- which doesn't even build any ships -- is going to somehow innovate to create new shipbuilding designs and get into the business of building non-fossil fuel consuming ships -- doesn't make a lot of sense. All that will happen is that shipping becomes more expensive, which has terrible negative externalities. Only the strongest market fundamentalists want to leave basic R&D and long term investment to the magic of the free market.
legitster 4y ago
That's the thing. We don't need R&D breakthroughs. We have infrastructure solutions today - they are just not cost effective for the suppliers because the free-market cost of carbon is $0. Of course a carbon tax won't invent fusion - but I think it would be madness to make the case that people or industries don't adjust their consumption to adapt to taxes. Keep in mind we have 30 years of data that shows cap and trade programs achieve their objectives and are pretty stinking cost effective.
- rsj_hn 4y ago
  > We have infrastructure solutions today Prove it. If you say it's a solved problem, then go ahead and deploy the replacement. What should power ships if not fossil fuels? Sail? Batteries? Hydrogen? Go ahead and tell me the replacement and then deploy it at scale. If it needs some money to be cost effective, then subsidize it so that it's cost effective and deploy the replacement. No wall street needed. No trading needed. Just deploy the replacement and subsidize it as needed. > Of course a carbon tax won't invent fusion - but I think it would be madness to make the case that people or industries don't adjust their consumption to adapt to taxes. Yes, but we do not want industries to use less energy, which is all that cap and trade will accomplish. What we need is replacement energy. >Keep in mind we have 30 years of data that shows cap and trade programs achieve their objectives and are pretty stinking cost effective. No we don't. You are conflating the reduction of energy usage (which creates global famine and de-industrialization) with the deployment of a replacement. We do not have 30 years of data that cap and trade is effective at solving the problem of transforming our energy infrastructure, cap and trade is only effective at reducing usage. And it does not follow that reducing usage of fossil fuels will, by a type of inevitability, cause replacements to appear that are powered by market magic. It will just mean less shipping, which again means famine and de-industrialization.
  - legitster 4y ago
    If you build more nuclear or renewable, that takes pressure off of the oil and gas markets. With cheaper oil and gas, it would start making sense to switch shipping from bunker fuel (literally the dregs of the fuel process) to a fuel source that is a little less polluting. Coal is dying in the US - not because of government R&D or political efforts (perhaps in spite of them) - but because of the prevalence of cheap natural gas and industry's ability to adapt when presented with a price incentive. The whole point of cap and trade is that it's easier for some sectors to adapt than others, and it's easier to just have them sort it out amongst themselves.

by rsj_hn 4y ago

klabb3 4y ago

> It funnels huge fees to wall street and creates opportunities for financial manipulation. It is Clinton-era neoliberal grift. I thought the fiasco of energy de-regulation made people a bit more realistic about inserting Wall Street into the middle of everything[...] Not saying you're wrong, but how does Wall Street capitalize from this? It looks more like a government money grab to me (if you want the cynical take), since the implementation is quite literally a tax. That said, totally agree it's also an energy infrastructure problem – that governments have been incredibly stupid and naive with the last couple of decades.

rsj_hn 4y ago
Wall street can make money by charging financial service fees for: - market making - organizing sales of credits - organizing purchase of credits - selling hedging and insurance products so firms have some guarantees to support long term planning That's in the "honest grift" category, then all sorts of nonsense can happen under the category of market manipulation, such as Enron style buying up credits to cause a price spike, or denying credits to competitors, etc. > That said, totally agree it's also an energy infrastructure problem – that governments have been incredibly stupid and naive with the last couple of decades. Exactly. Build more power plants, connect them to the grid, take older plants offline. No need to yell at people or tax basic human needs like transportation or electrical usage. For ships, the government can fund research on alternate fuels for ships, and the private sector can be brought in with research prizes and grants, etc. But the idea that a shipper -- which doesn't even build any ships -- is going to somehow innovate to create new shipbuilding designs and get into the business of building non-fossil fuel consuming ships -- doesn't make a lot of sense. All that will happen is that shipping becomes more expensive, which has terrible negative externalities. Only the strongest market fundamentalists want to leave basic R&D and long term investment to the magic of the free market.

legitster 4y ago

That's the thing. We don't need R&D breakthroughs. We have infrastructure solutions today - they are just not cost effective for the suppliers because the free-market cost of carbon is $0. Of course a carbon tax won't invent fusion - but I think it would be madness to make the case that people or industries don't adjust their consumption to adapt to taxes. Keep in mind we have 30 years of data that shows cap and trade programs achieve their objectives and are pretty stinking cost effective.

rsj_hn 4y ago
> We have infrastructure solutions today Prove it. If you say it's a solved problem, then go ahead and deploy the replacement. What should power ships if not fossil fuels? Sail? Batteries? Hydrogen? Go ahead and tell me the replacement and then deploy it at scale. If it needs some money to be cost effective, then subsidize it so that it's cost effective and deploy the replacement. No wall street needed. No trading needed. Just deploy the replacement and subsidize it as needed. > Of course a carbon tax won't invent fusion - but I think it would be madness to make the case that people or industries don't adjust their consumption to adapt to taxes. Yes, but we do not want industries to use less energy, which is all that cap and trade will accomplish. What we need is replacement energy. >Keep in mind we have 30 years of data that shows cap and trade programs achieve their objectives and are pretty stinking cost effective. No we don't. You are conflating the reduction of energy usage (which creates global famine and de-industrialization) with the deployment of a replacement. We do not have 30 years of data that cap and trade is effective at solving the problem of transforming our energy infrastructure, cap and trade is only effective at reducing usage. And it does not follow that reducing usage of fossil fuels will, by a type of inevitability, cause replacements to appear that are powered by market magic. It will just mean less shipping, which again means famine and de-industrialization.
- legitster 4y ago
  If you build more nuclear or renewable, that takes pressure off of the oil and gas markets. With cheaper oil and gas, it would start making sense to switch shipping from bunker fuel (literally the dregs of the fuel process) to a fuel source that is a little less polluting. Coal is dying in the US - not because of government R&D or political efforts (perhaps in spite of them) - but because of the prevalence of cheap natural gas and industry's ability to adapt when presented with a price incentive. The whole point of cap and trade is that it's easier for some sectors to adapt than others, and it's easier to just have them sort it out amongst themselves.