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The greatest irony is that a preponderance of oil actually made energy stocks go down. In that sense, Scott Aaronson gets the relationship between oil in the gr

The greatest irony is that a preponderance of oil actually made energy stocks go down. In that sense, Scott Aaronson gets the relationship between oil in the ground and long stock in energy companies completely backwards. Indeed, the S&P energy sector index, for example, has been strongly positively correlated with oil prices for at least the last two years that I've checked. This is sort of a pedantic point: selling your shares in Shell substitutes, not reinforces, pumping more oil out of the ground. In that sense, divestment achieves its goal of keeping oil in the ground, for sure. But sometimes, if your company can pump more oil from the ground, and Saudi doesn't also pump more oil, you've made money and your stock rises. Sometimes, if you pump more oil from the ground, everyone's stock falls. It's complicated. What's most persuasive? If you had listened to the divestment folks back in 2012, when many of these movements took off, you would be on a great big pile of cash right now. So it actually makes a lot more sense to pitch big academic endowments: "You'll make a ton of money if you divest from energy stocks." There's just no way you could have known that would work in 2013, especially in the midst of an oil boom. My recommendation: Make as much money as possible, and lobby for cap-and-trade pollution credits. Then you can buy all the credits you want, and simply not use them. It is a far more direct and economically predictable way to achieve environmental change.

toomuchtodo 11y ago
> My recommendation: Make as much money as possible, and lobby for cap-and-trade pollution credits. Then you can buy all the credits you want, and simply not use them. It is a far more direct and economically predictable way to achieve environmental change. I very much agree with this solution. I'd also consider the funding of genetic research into bacteria that could convert oil in situ into something stable in the ground so it could never be pumped into the future, pumping said bacteria into wells using the same equipment used for hydraulic fracturing. We as a species have a terrible track record as stewards of our planet. We can, and should, do better.
WalterBright 11y ago
The cap-and-trade thing never made much sense to me. If you want to reduce something, simply tax it.
- YokoZar 11y ago
  Cap-and-trade systems offer more directly defined caps. If you have confidence about how much of something is "correct", a cap-and-trade regime can just set its cap to that amount and let the price be whatever it may be. Cap-and-trade also has the advantage of being sometimes politically easier to implement as the status quo -- just set the cap to whatever current usage is, hand out credits to whoever is currently using the resource, and then no current stakeholder loses as a result of turning on the policy. Taxes, by contrast, require some amount of tweaking the tax every time you think the resource is being overconsumed. Even if there's political consensus to do something now, there's a very real danger of undershooting, the resource being still overconsumed in the future, but the political will to raise the tax again no longer being present (example: imaging trying to raise consumer gas taxes in the US today). Both regulations have the same basic goals -- raise the price of the thing to reduce usage, maybe collect some revenue in the process. Which regulation makes more sense depends a bit on the political reality (and future reality), and the relative diffculty of administering a tax vs a cap. It depends on context.
  - Scoundreller 11y ago
    > hand out credits to whoever is currently using the resource Sounds like the IPv4 allocation system. I agree it's politically palatable, but if a nation is going to distribute a good, it's more sensible to allocate an even chunk to every resident/citizen, and have them get paid for its usage.
  - deleted 11y ago
    [deleted]
  - ZeroGravitas 11y ago
    Your criticisms of a carbon tax seem to apply directly to cap-and-trade if the incorrect amount is chosen. Later governments can change the cap upwards or accelerate it's downward descent too, and may well need to if the science changes or other governments do nothing. And if you want to hand billions in tax credits to current carbon polluters so they don't fight the tax, you can do that with a carbon tax too. I'd actually recommend doing this for ordinary people, so that you don't hurt people with current high-carbon lifestyles too much, but still offer an incentive to save carbon/money, possibly a phase in would be required as is generally proposed for cap and trade. I'm also wondering how a carbon cap and trade system could be effective and yet not result in a raise in gas prices in the US? That's surely the whole point?

toomuchtodo 11y ago

> My recommendation: Make as much money as possible, and lobby for cap-and-trade pollution credits. Then you can buy all the credits you want, and simply not use them. It is a far more direct and economically predictable way to achieve environmental change. I very much agree with this solution. I'd also consider the funding of genetic research into bacteria that could convert oil in situ into something stable in the ground so it could never be pumped into the future, pumping said bacteria into wells using the same equipment used for hydraulic fracturing. We as a species have a terrible track record as stewards of our planet. We can, and should, do better.

WalterBright 11y ago

The cap-and-trade thing never made much sense to me. If you want to reduce something, simply tax it.

YokoZar 11y ago
Cap-and-trade systems offer more directly defined caps. If you have confidence about how much of something is "correct", a cap-and-trade regime can just set its cap to that amount and let the price be whatever it may be. Cap-and-trade also has the advantage of being sometimes politically easier to implement as the status quo -- just set the cap to whatever current usage is, hand out credits to whoever is currently using the resource, and then no current stakeholder loses as a result of turning on the policy. Taxes, by contrast, require some amount of tweaking the tax every time you think the resource is being overconsumed. Even if there's political consensus to do something now, there's a very real danger of undershooting, the resource being still overconsumed in the future, but the political will to raise the tax again no longer being present (example: imaging trying to raise consumer gas taxes in the US today). Both regulations have the same basic goals -- raise the price of the thing to reduce usage, maybe collect some revenue in the process. Which regulation makes more sense depends a bit on the political reality (and future reality), and the relative diffculty of administering a tax vs a cap. It depends on context.
- Scoundreller 11y ago
  > hand out credits to whoever is currently using the resource Sounds like the IPv4 allocation system. I agree it's politically palatable, but if a nation is going to distribute a good, it's more sensible to allocate an even chunk to every resident/citizen, and have them get paid for its usage.
- deleted 11y ago
  [deleted]
- ZeroGravitas 11y ago
  Your criticisms of a carbon tax seem to apply directly to cap-and-trade if the incorrect amount is chosen. Later governments can change the cap upwards or accelerate it's downward descent too, and may well need to if the science changes or other governments do nothing. And if you want to hand billions in tax credits to current carbon polluters so they don't fight the tax, you can do that with a carbon tax too. I'd actually recommend doing this for ordinary people, so that you don't hurt people with current high-carbon lifestyles too much, but still offer an incentive to save carbon/money, possibly a phase in would be required as is generally proposed for cap and trade. I'm also wondering how a carbon cap and trade system could be effective and yet not result in a raise in gas prices in the US? That's surely the whole point?