Comments on: Carbon cap: Be careful what you wish for http://www.standupeconomist.com/blog/economics/carbon-cap-be-careful-what-you-wish-for/ What is (and isn't) funny about economics Sat, 06 Mar 2010 19:15:02 -0700 http://wordpress.org/?v=2.8.6 hourly 1 By: Don Fullerton http://www.standupeconomist.com/blog/economics/carbon-cap-be-careful-what-you-wish-for/comment-page-1/#comment-210 Don Fullerton Sun, 11 Oct 2009 21:40:59 +0000 http://www.standupeconomist.com/?p=589#comment-210 Good point, except that most cap-and-trade systems have exemptions that mean those outside the trading sector still can reduce total carbon emissions by reducing their own carbon emissions. See my own blog, at: http://businesspublicpolicy.com/?p=220 Good point, except that most cap-and-trade systems have exemptions that mean those outside the trading sector still can reduce total carbon emissions by reducing their own carbon emissions. See my own blog, at: http://businesspublicpolicy.com/?p=220

]]> By: Eli http://www.standupeconomist.com/blog/economics/carbon-cap-be-careful-what-you-wish-for/comment-page-1/#comment-202 Eli Thu, 08 Oct 2009 19:43:23 +0000 http://www.standupeconomist.com/?p=589#comment-202 I agree that offsets are a bad idea, and with the general position that some sort of carbon tax would be preferable, but I have a question about this: "You can buy a hybrid, but in the big picture it will have exactly zero climate benefits under a hard cap." I thought this bill only regulates certain industries. So if you're not in a regulated industry, you don't require a permit to emit carbon. Therefore reducing emissions in non-regulated industries would still reduce overall emissions. Is that correct? Or will they simply issue more permits until the total emissions go up to the proposed cap? If your argument is correct then this is a very bad idea, because it will almost certainly be politically impossible to get congress to lower the cap enough to have the kind of effect that is needed. There is another counterargument you didn't mention, though. The Copenhagen summit is coming up. If we haven't passed something by then, it may weaken the credibility of the US on the issue and reduce chances of getting a good international agreement. I'm not sure this is sufficient reason to pass a bad bill, but it's worth thinking about. I agree that offsets are a bad idea, and with the general position that some sort of carbon tax would be preferable, but I have a question about this: “You can buy a hybrid, but in the big picture it will have exactly zero climate benefits under a hard cap.”

I thought this bill only regulates certain industries. So if you’re not in a regulated industry, you don’t require a permit to emit carbon. Therefore reducing emissions in non-regulated industries would still reduce overall emissions. Is that correct? Or will they simply issue more permits until the total emissions go up to the proposed cap?

If your argument is correct then this is a very bad idea, because it will almost certainly be politically impossible to get congress to lower the cap enough to have the kind of effect that is needed.

There is another counterargument you didn’t mention, though. The Copenhagen summit is coming up. If we haven’t passed something by then, it may weaken the credibility of the US on the issue and reduce chances of getting a good international agreement. I’m not sure this is sufficient reason to pass a bad bill, but it’s worth thinking about.

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