19 April 2012

California Carbon -- and how NOT to screw up

California is implementing a cap and trade system for carbon (H/T to SS).

While I question the impact of such a system on global climate change (akin to trying to drain the Pacific Ocean with a pail), I agree that auctions (like this design) are the best way to distribute/re-allocate permits.

I also think that the State should forget about keeping/spending the money from the auctions. Better to just rebate it back to citizens (or taxpayers or -- best -- voters). Then, if there's no impact, at least there's been a tax on pollution that's gone BACK to citizens instead of wasted on boondoggles like the high speed train or a solar cooker on every roof.


Anonymous said...

In your book you champion "idealism", stating that its better to have an ideal in sight rather than only focusing on the obstacles that may be in the way of achieving a certain goal. Or something along those lines..

Well, doesn't this policy fit that description? Obviously, the impact of CA's carbon program will be negligible in the grand scheme of things, but doesn't this set a valuable precedent for other states, or countries, that don't have such policies? The fact that CA is trying to force polluters to pay for the true social cost of their production is, in my mind, a worthwhile step toward greater corporate responsibility and accountability, regardless of the overall outcome of the program.

writ of summons said...

I'd like you to defend your high speed rail "boondoggle" description in real terms. "Real" being economic, of course, relative to choices. These are 1. Do nothing 2. Expand roads 3. Expand airports 4. Expect that CA population & economy contract & oil prices go down. Add more as you see fit.

I'm not unaware of the rising price tag of the thing. But it is far easier to label a big project such as this a "boondoggle" than it is to examine the choices and offer which one you think is optimal over a long time period.

David Zetland said...

@anon -- I do indeed support idealism, but realism forces me to oppose carbon markets in CA, since they will have no practical impact on world carbon pollution.

@writ -- calculate the cost per rider of high speed rail (Coyote does this all the time). WRT your choices, you appear to worry about road congestion, which is NOT a problem between N and S Cal. If it were, it would be possible to price the roads (horrors!), which would constrain demand. Note that rail will do NOTHING to resolve local congestion, little to reduce pollution, and add no flexibility to current transport patterns.