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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?
I think that the majority of people haven't picked up on this yet, even though it's been around for 10 years. This is because there are still millions of blinking VCR lights...
I agree with you, what is the purpose b/c the govt will turn around and release more. The govt is all for major industries that use pollutants, like energy sources, etc. If the public were too buy them all up they would turn around and rerelease more "blocks".
Now let's suppose that a large group, like a co-op gets together and buys everything, all of the EPA auctions. Would society collectively turn it's head and say "hey, let's find a new source of energy, or a new source of whatever". I think that would be an interesting day...
UID 1000000 is just around the corner.
This was meant for businesses not individuals. I wouldn't be surprised if 2 rules gets implemented that state: 1 Only those entities that release these chemicals may own these allowances. 2 Once the entity releases 0 amount in their pollution emission, the allowance will automatically revert back to the governmental pool.
Actually, I believe the permit program sells permits for 1 ton of emissions in a given year. Though you are allowed to "bank" emissions, such that if you emit less than your permits, you can roll that over into next year (to give incentives to people to start cleaning up earlier, and to reduce the pain of the transition between stage 1 and the significantly stricter stage 2 of the SO2 program. There are some nice graphs out there showing how the step function of the governmental program was nicely smoothed through the banking program. See Ellerman, et al., "Markets for Clean Air" for a good book on the subject.).
But it is not "1 ton per year for perpetuity".
On the other hand, permit _allocation_ is sometimes done that way: a coal plant will be assigned X number of permits every year, often based on "grandfathered" emissions. But we won't get into allocation issues in this post...
-Marcus