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US House May Pass "Cap & Trade" Bill
jamie found this roundup on the status of the Waxman-Markey climate change bill, which is about to be voted on by the US House of Representatives. (The article notes that if the majority Democrats can't see the 218 votes needed for passage, they will probably put off the vote.) The AP has put together a FAQ that says, "[The bill, if passed,] fundamentally will change how we use, produce and consume energy, ending the country's love affair with big gas-guzzling cars and its insatiable appetite for cheap electricity. This bill will put smaller, more efficient cars on the road, swap smokestacks for windmills and solar panels, and transform the appliances you can buy for your home." The odds-makers are giving the bill a marginal chance of passing in the House, with tougher going expected in the Senate.
You know, I can't buy the old school hydrochlorofluorocarbon [wikipedia.org] to use as a refrigerant in my new car. The new stuff doesn't work as well (it's close) but it's a lot better for the environment. Small things like this can be important to entities like the EPA.
R-134a is actually not very efficient compared to R-11/R-12, and overall it may be *worse* for the environment. Don't confuse "doing something" with "doing the right thing" -- banning CFCs and HCFCs in cooling systems was not necessarily the best choice. Among other things, cooling systems were not a huge contributer to atmospheric CFCs (particularly modern, low-pressure chillers which cannot leak), and the ozone hole is actually not nearly as bad as we imagined when we started banning things. But now, 25 year later, greenhouse gasses are a much larger concern, and you know what the CFC/HCFC ban did without question -- raise energy usage in cooling systems by lowering efficiency.
You see, in our rush to do something to "save the environment" (i.e. generate political capital) we just rushed out and banned the first thing we could find that had a potential negative environmental impact and didn't have a strong lobby to protect it. We could have done something useful like reducing sulphur levels in diesel (we put that off for another 20 years), but instead we did something that is, at best, a wash for the environment, and quite possibly detrimental. Can we please not make the same mistake twice in a row?
The tax rate's gone up, but if consumption has gone down, what is the real cost to average family? Do you really trust a group to be unbiased or accurate whose mission statement starts: "The TaxPayers' Alliance is Britain's independent grassroots campaign for lower taxes."
First: the fundamental problem: We live in a global economy. This will absolutely increase the cost of domestically produced carbon-intensive goods relative to foreign produced carbon intensive goods from countries that are not affected by the program (unless we implement an import tariff to match the internal effective tax).
That doesn't mean it's a bad idea, but it is a fact which must be weighed when considering the program.
I still like the idea, though I would want the allotment (see below) to be high enough that it would be more of a gentle nudge than a baseball bat.
That's the problem, and my take, on the general concept. As for this specific embodiment, it is going to be a gigantic corruption engine, passing money from the biggest polluters to the most unscrupulous politicians, regulators, and lobbyists. But it can be solved, if you like the gentle nudge idea (or even if you like the baseball bat idea).
The first step in a cap-and-trade program sets a limit on the amount of gases that can be released into the atmosphere. That is the cap. Companies with facilities that are covered by the cap will then receive permits for their share of the pollution, an annual pollution allowance. This bill initially would give the bulk of the permits away for free to help ease costs, but they still would have value because there would be a limited supply.
So, what portion of those initial free credits do I get? Who decides how much each company gets? Is it based on industry? Revenue? Profit? Market cap? Campaign contributions?
My guess is that this is going to be another gigantic paean to incumbents and the big shaft for startups.
Here's my proposal:
Every U.S. voting citizen gets an equal share, to do with as they please, apportioned annually. Corps don't get any -- they have to buy them from citizens. Give yours to your employer, sell it, sit on it, whatever. After all, this is a public good that is up for sale, right? What possible fair system could be established for the government picking which corps to give them to?
To keep the prices reasonable at first, start with massive over-subscription. Allot 1,000,000x what we're producing now. That should solve the problems of the initial market not existing. Then just lower the rate by 10x per year until we get to the desired level. But don't just hand these things out to the biggest incumbents and screw new business.
Note that this approach would achieve exactly the objective:
People who want to "be green" can sit on their credits, and forgo the money.
People who consume less carbon-intensive products would pay less of the "passed on" cost from companies that have to buy lots of credits.
People who are willing to pay for carbon intensive goods can, and the glorious free market hands that money to people who make sacrifices to reduce carbon consumption.
Adjusting the annual allotment naturally adjusts the price.
No single person, whether CEO, laborer, politician, lobbyist, or EPA regulator, gets any disproportionate share of the public good.
Companies that cut carbon emissions can put their products on the market at a lower price.
The solution as proposed only achieves the last piece, and that only in an extraordinarily corruption-sensitive way.
Stop-Prism.org: Opt Out of Surveillance
True. But people do have a choice in where they choose to live. and choosing to live a commute from work in a hot region has consequences. And when we as a society decide that individuals must PAY THE COST OF THEIR OWN CHOICES... as we would with appropriate energy costs that take into account external costs we have gotten used to being shielded from... then people will have to deal with those consequences.
it sucks for the first people who have to change... such as me, who stupidly bought a house a half hour from my office and can't sell it, so I must commute as I don't have time for 3 hours of biking a day, minimum... but hey, thems the breaks. We also had the benefit of stupidly cheap energy for a long time, which is more than anyone coming after us will be able to say.
This is an optional tax. We can use less energy. We may not be able to do it with 70 degree thermostats year round, 30 MPG cars if we're lucky, and without planning our trips to the store a little better, but it can be done. This removes our ability to ignore the consequence of our actions. Nothing more.