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#21
11-09-2007, 04:18 PM
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Re: Carbon Tax or Cap and Trade
[ QUOTE ]
[ QUOTE ] [ QUOTE ] [ QUOTE ] So you are suggesting that the price elasticity of energy consumption is zero and people will consume the same amount of energy regardless of the price. I think you are probably the only person on earth who holds that opinion. Hanging v firing squad on a social level would depend on which (if either) has greater deterrence value or which provided more comfort to the victim's family, depending on the stated goals in carrying out the capital punishment. [/ QUOTE ] What we're getting at is this. Why do you assume energy consumption is bad, and have a desire to curb it? [/ QUOTE ] My short answer to that would be that the net present value of a inhabitable planet is damn near infinity therefore any non-trivial chance that the planet might be rendered uninhabitable should be taken very seriously. If there is a 1% chance that our current policy will do irreparable damage to the Earth then it seems to me prudent to take reasonable steps to change that policy. But look, if you think it is a scam or a figment of Al Gore's imagination then just say, "whichever one is cheaper" and there's your answer. All this undergrad-level reasoning is annoying as hell and I don't suggest you try it with your boss or peers in the real world. [/ QUOTE ] Pascals Wager? Seriously? [/ QUOTE ] This is the worst post ever in the history of the world. Seriously. 
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#22
11-09-2007, 04:22 PM
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Re: Carbon Tax or Cap and Trade
[ QUOTE ]
[ QUOTE ] [ QUOTE ] [ QUOTE ] [ QUOTE ] So you are suggesting that the price elasticity of energy consumption is zero and people will consume the same amount of energy regardless of the price. I think you are probably the only person on earth who holds that opinion. Hanging v firing squad on a social level would depend on which (if either) has greater deterrence value or which provided more comfort to the victim's family, depending on the stated goals in carrying out the capital punishment. [/ QUOTE ] What we're getting at is this. Why do you assume energy consumption is bad, and have a desire to curb it? [/ QUOTE ] My short answer to that would be that the net present value of a inhabitable planet is damn near infinity therefore any non-trivial chance that the planet might be rendered uninhabitable should be taken very seriously. If there is a 1% chance that our current policy will do irreparable damage to the Earth then it seems to me prudent to take reasonable steps to change that policy. But look, if you think it is a scam or a figment of Al Gore's imagination then just say, "whichever one is cheaper" and there's your answer. All this undergrad-level reasoning is annoying as hell and I don't suggest you try it with your boss or peers in the real world. [/ QUOTE ] Pascals Wager? Seriously? [/ QUOTE ] This is the worst post ever in the history of the world. Seriously. [/ QUOTE ] Why do you say that?
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#24
11-09-2007, 04:45 PM
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Re: Carbon Tax or Cap and Trade
[ QUOTE ]
Why do you say that? [/ QUOTE ] Let's review this thread... OP: Simple question Tom: Useless (and incorrect) reply about fallacies. Tom: Eventually answers question with question of his own. OP: Gives reasonable sounding answer. Tom: Replies with horrible analogy, continuing to not respond to a single point. Here's the difference between Pascal's wager and what OP said: Pascal's wager is an argument based on a hypothetical probability that can never be measured. It prescribes no specific behavior because there are too many hypothetical scenarios. We can moreover never know that specific actions will lead to desired (hypothetical) outcomes. OP gave a response based on measurable probabilities of a specific outcome occurring, and one which the scientific community seems to take seriously. He is attempting to understand which of two actions would have a better outcome. The affect of said actions can actually be studied. Do you see how these things are not the same? One might as well state that not leaving your job at the government is similar to not running away from a concentration camp...
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#25
11-09-2007, 05:59 PM
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Re: Carbon Tax or Cap and Trade
[ QUOTE ]
Tax - administrative efficiency. EDIT: plus it's more economically accurate. Say we cap CO2 emissions at 10 million tons/year. 10 million tons/year will be produced, even if the least-valuable CO2 use is less (or more) valuable than the marginal harm of that use. If it's a properly-set tax, only those CO2-producing activities that do more good than harm will be done. [/ QUOTE ] Attempting to right this thread again, Greg Mankiw, a prominent economics blogger posted the following economics equation: Cap-and-trade = Carbon Tax + Corporate Welfare. First of all when you auction off tradeable permits you have to realize that you're giving an implicit subsidy to large incumbent firms that can afford to buy those permits. It raises barriers to entry and thus stifles innovation in the energy sector, which isn't something we want since demand for energy is going to increase rapidly in the coming decades and we are already facing severe supply constraints. Also realize the way quotas are going to be auctioned will be gamed politically, with favored companies lobbying for some "quota breaks". This will add the advantage enjoyed by incumbent firms, because these permits will undoubtedly increase in value as energy demand grows. In Econ 101 you learn that you can design a percentage tax that has the same effect as a quota. So for example if you wanted to cap emissions at 10 billion tons (I have no idea even the proper range is here, don't feel like looking it up) there is some tax rate t you can implement that gives you the same quantity of carbon supplied at the same price. The difference between the two policies happens when demand increases - when a percentage tax is levied, government captures some of the producer surplus. When there is a quota, suppliers get to keep more of the producer surplus. Look these terms up in Wikipedia to get a clearer understanding (everyone should really understand simple AD-AS curves IMO). Suppliers LOVE quotas, and try their hardest to lobby for government rules that enforce them - unfortunately when they try to enforce quotas amongst themselves there is too great an incentive to cheat, where a competing firm has big incentives to grab some of that "lost" surplus it forgoed when it formed a cartel.
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#26
11-09-2007, 06:00 PM
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Re: Carbon Tax or Cap and Trade
Oh and there's Bobman's point too.
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#27
11-09-2007, 06:09 PM
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Re: Carbon Tax or Cap and Trade
sorry, what is the quota? there is a cap on the total amount of emissions permitted. how is that a quota?
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#28
11-09-2007, 06:12 PM
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Re: Carbon Tax or Cap and Trade
[ QUOTE ]
sorry, what is the quota? there is a cap on the total amount of emissions permitted. how is that a quota? [/ QUOTE ] Quota on the total amount of C02 emissions in the U.S. Also quota's on which each entity gets as far as CO2 emissions initally I believe.
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#29
11-09-2007, 06:14 PM
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Re: Carbon Tax or Cap and Trade
so why would suppliers lobby for a quota? right now they can pollute (emit) all they want for free. would a quota be preferable to an energy supplier over an equivalent tax?
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#30
11-09-2007, 06:24 PM
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Re: Carbon Tax or Cap and Trade
[ QUOTE ]
so why would suppliers lobby for a quota? right now they can pollute (emit) all they want for free. would a quota be preferable to an energy supplier over an equivalent tax? [/ QUOTE ] Not sure, sounds like they get an edge on their competition. If you're a big enough player you can basically make your competition pay higher prices for the same thing because you can control price since you're a bigger player. Also you can lobby Congress to get special treatment and get it since you've got more dough.
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