Slashdot Mirror
Pollution Allowance Auctions
In high school debate, twenty years ago, I ran a case for auctioning pollution permits, the application of the free market to pollution. We did pretty well because there was nothing written against it. In the last week, it's hit the headlines. Wired points out that sulfur dioxide went on the market in 1993. Paul Krugman argues that the market fails in the case of local pollutants like mercury (though his research has been questioned).
And after reading WorldChanging's take on pollution permits, I have to wonder, why aren't these sold on E*TRADE? If I want to take 5 tons of pollution off the market, why should I have to go through a broker? And if I buy 5 tons, what stops Congress from releasing 10 more tons tomorrow?
If it was a contract to cut then the conservationists had no right to tie that land up forever. If it was a purchase of the land in question then they could do whatever they want.
Presumably it was a contract to cut and that means the proper land owner was selling rights to his land but not selling the land itself. Also, one can assume that the rightful owner of that land generates income from selling those rights. Why do you want to deny that person income? If the conservationists want to protect the forest maybe they should buy all the rights instead of just some of them.
Of course this interpretation has nothing to do with liberal or conservitive thinking but that won't stop you from getting a pot shot in, will it?
AFAIK these are traded on the futures exchanges, check the CME, CBOT, NY mercatile before you decide they aren't tradeable. There was a story about a group of school kids who raised money for a sulfer emisssion permit, that was then kept by the school reducing emissions at their onset. The EPA says that anyone can buy NOx and SO2 permits including members of the general public, and they list several suspiciously non power company sounding names in the winners list (I'm pretty sure Bates College Environmental Economics doesn't operate a small coal fired plant).
If you offer Cantor a reasonable return on their investment, I'm sure they would sell them to you (you do the math on how much they paid. Their contact number is listed on the broker page (and they bought 25,000 units). Enron (don't worry they sold the trading business to UBS) will likely have to short them (and then buy from Morgan or Cantor).
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
The idea is that they are given (or sold, it makes no difference to the outcome just the relative incomes of the industry) to all the potential pollutors in the industry. Lets say there are 3 power plants in a vally and each emits 1 kg of SO2 per Megawatt. The citizens of the town decide that they are tired of SO2 pollution, and are willing to pay extra for reduced emissions (currently they draw 1,000 MW. The easiest choice is to limit output per company to 75 kg. This works well, but does not provide any incentive to further reduce emissions.
The efficiencies of the market appear when one company can spend $100 extra on coal to reduce their production of SO2 to 50 kg/MW they cut theirs to well below the minimum and sell their rights to emit to a producer that might have more difficultly using the new coal, or could not affort the widget. You take advantage of the differences in cost of cleaning the pollution (letting the innovative companies clean up more and profit from it) while less innovative companies clean up less, rather than force efficient producers to pay the average cost of clean up. The permits take the decisionmaking (beyond an acceptible level of total emmissions) out of the hands of governments and let producers who are able to clean more effectivly clean more emisssions and producers less able to clean clean less. It works very well on highly mobile pollutants where 1 kg removed in one location affects most other locations.
If you sold a license to pollute at the cost of clean up, you have to know in advance the cost of clean up, missing in either direction is bad. This way you say we want this much and no more and the comapnies decide who should clean and who should pay for the right to pollute.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
I always thought that selling license to polute should be priced at the extimated cost of cleaning up the polution.
Cleaning up the pollution is only part of the cost. The rest of the cost of pollution (increased asthma and other lung ailments as well as quality-of-life costs) are borne by us
It's simple: I demand prosecution for torture.
Didn't pay for it? Maybe you hang around with the wrong activists. Some people were donating at the same time that they petitioned and protested. Even my doctor is doing tht; he's even planning to retire over in Africa to help with time and energy. There are a LOT of programs right here in Boston working to help lower-income people in the US and all over the world get the meds they need to deal with HIV/AIDS, and i am amazed how many of those noble and selfless people
are reaching into their own wallets to do it.
My mum, for example, worked with RI project AIDS for a long time, most of my childhood, and she did that on a regular basis and taught the rest of us to do so. She also gave to other AIDS foundations, and if you really feel strongly about the idea that these lives are worth more than money, i can help put you in contact with charities who will help your donation go farther.
"I'd say 'Have a good time,' but arson is still illegal.
Scientists restrict study to entire physical universe; creationist
The goal of the government in selling rights to pollute or log is more than just a matter of granting the right to do whatever the auction-winner wishes to do. The goal of the government, in part, is to encourage economic activity that creates jobs, exportable goods, and additional tax revenues. If someone buys the right to pollute, mine, or log, but does not use it, they are , at some level, not compensating the government and public for the full impact of their withholding of that resource from economic use.
The implicit social contract is that the buyer will exercise these rights for an economic gain that benefits others too. Its analogous to the platform ecosystem business model -- you have a platform that others can create products around. You sell access to the platform but let entrants extract value too. The goal of the creating platform or in auction public resources is to enlarge the economic pie for all.
One solution might be to limit the term of the right. Rather than granting in-perpetuity ownership to a pollution right or old-growth forest logging right, the term would be limited to some reasonable length of time. For instance, five years might be sufficient time to encourage peope to buy the right and make the needed invetsment to use the right. Every 5 years, that right would be reauctioned. This ensures that one group or company can't lock-in and inefficiently use these rights. If the former owner is not making money off the right they won't have money to buy the next 5 years worth. If another group has a better use, then they can take over for a better price.
Two wrongs don't make a right, but three lefts do.