cap and trade versus a carbon tax

[Starving Steve]

Re: cap and trade versus a carbon tax

And I oppose both the cap-and-trade and the carbon tax for the simple reason that global warming has hardly been proved.

Notice how the radical environmentalists now take global warming as a fact--- which it isn't--- and then shove the cap-and-trade down our throats or give us the choice of a carbon tax instead. I am sick of being bullied about.

The latest rubbish to come out of Obama's mouth is that buildings may be heated and powered by hot water pumped from deep within the Earth; again, all of the economic details of geo-thermal energy are left out. Such buildings according to Obama, could be net-energy producers.:rolleyes:

Of course, the deficits in the U.S. can not go on, so why not cut government spending? And for new taxes, why not be more direct and open about taxation: How about a value added tax ( a VAT ) or a simple federal sales tax?

If the eco-bunch are that worried about carbon in the atmosphere, maybe they could plant trees.

Many years ago, some teachers and myself along with the kids in the San Jose School District got together and planted 120 trees, mostly redwood and sequoia (sp?) trees, on school grounds. Tree planting might do more to solve the carbon build-up in the atmosphere than any cap-and-trade or carbon tax from government.;)

[santafe2]

Re: cap and trade versus a carbon tax

And I oppose both the cap-and-trade and the carbon tax for the simple reason that global warming has hardly been proved.

I hope I'm not sorry I asked this...but are you not swayed by the pollution, jobs or security arguments? These seem to me to be more compelling than the AGW argument.

[santafe2]

Re: cap and trade versus a carbon tax

3) How will the initial permits be distributed and how will new permits come into existence?

After we get a Senate version and committees true up the two bills I'm planning to talk to our local utility, (PNM), about the Four Corners Coal Fired Power Plant to find what information is publicly available. If it proves to be difficult to get straight forward answers regarding the count, value and revenue distribution of the permits, I'll talk to our PRC and our Senators and Representatives. That's the great thing about living in the State Capital and in a fairly unpopulated state.

This is a classic coal fired plant. It's in a remote area, the locals get little benefit from the plant but suffer 100% of the pollution. Their incidence of asthma and other lung disease is about twice the state average. As others have pointed out, this is a possible, maybe probable issue with any carbon pricing program. The money will go to support renewable energy programs which the poor in these areas can't afford and/or it will be distributed equally to all customers.

http://www.pnm.com/systems/4c.htm

[Starving Steve]

Re: cap and trade versus a carbon tax

I hope I'm not sorry I asked this...but are you not swayed by the pollution, jobs or security arguments? These seem to me to be more compelling than the AGW argument.

I would agree with the need for jobs in America and also the national security argument that the country should not depend upon importing oil from the Middle East forever. So why not let oil companies develop America's own oil reserves? We know light oil exists off of the coast of Santa Barbara and Los Angeles. We know where oil exists in the Gulf of Mexico. We know places to explore for oil such as off of the East Coast.

Oil shale reserves might be developed in Montana and North Dakota. Upgraded heavy oil from Alberta could be imported, and the reserves of heavy oil in Alberta are one to two hundred years, or more. Oil is available off of the coast of Newfoundland in the Hibernia field. Saskatchewan has oil, especially in south-east Saskatchewan. Manitoba has oil in south-west Manitoba.

As far as job creation for unskilled people like myself, why not have tree planting brigades? How about building more hydro-electric dams, especially in places like British Columbia? These dam projects could provide work for everyone.

How about getting going on the upgrading of the St. Lawrence Seaway so that the seaway could accommodate all modern vessels? Both Canada and the U.S. could work on that project, and many jobs could be created.

How about building the laterals for the trunk lines that now exist for natural gas in British Columbia? That could provide jobs in a province that now is in deep recession, but that would take new thinking in Victoria. Imagine: every home in BC having central heating? What a wonderful idea!

How about building those nuclear power plants and letting everyone help work on doing something in their construction--- like pouring the cement? Nuclear power is needed nearly everywhere in North America. True morons like me could help pave the driveway to such plants or decorate the driveway with native trees.

How about upgrading North America's rail system so that more goods could be shipped by rail which saves energy? A fully upgraded high-speed track network between Mexico, America, and Canada would provide many jobs for people, and the result of such a project is that more people could travel by rail on this continent.

And the Great Plains are just begging for windmills, so how about more windmill farms on the Great Plains? Those windmill farms could provide for plenty of new jobs.

[c1ue]

Re: cap and trade versus a carbon tax

Thanks c1ue. I wasn't following your argument. I don't think it's correct to characterize cap and trade as a shield. Today, that tax does not exist. When it does it will raise the price of domestic products. Other nations who do not share our values and don't have the same cost burden, should be taxed at the border to allow us to exert our will and our values as a customer.

SF2,

I'm sorry, but perhaps you did not notice that your above statement reinforces what I said.

Specifically that the cost of goods in the US will rise with the increase becoming revenue going to the US government.

Now how is that different than a straight out tax? With the bonus of discriminating against imports?

If indeed pollution was the issue, then perhaps the revenue generated from the increased prices of goods would be sent to China to decrease pollution there. That would make more sense ecologically.

Do try to distinguish what is said vs. who benefits.

[jk]

Re: cap and trade versus a carbon tax

Specifically that the cost of goods in the US will rise with the increase becoming revenue going to the US government.

Now how is that different than a straight out tax? With the bonus of discriminating against imports?

If indeed pollution was the issue, then perhaps the revenue generated from the increased prices of goods would be sent to China to decrease pollution there. That would make more sense ecologically.

i think initially the permits will be distributed free, albeit then potentially sold but with the benefit to the seller, not the gov't. but overall you raise an interesting point about the "bonus."

[santafe2]

Re: cap and trade versus a carbon tax

SF2,

I'm sorry, but perhaps you did not notice that your above statement reinforces what I said.

Specifically that the cost of goods in the US will rise with the increase becoming revenue going to the US government.

Now how is that different than a straight out tax? With the bonus of discriminating against imports?

If indeed pollution was the issue, then perhaps the revenue generated from the increased prices of goods would be sent to China to decrease pollution there. That would make more sense ecologically.

Do try to distinguish what is said vs. who benefits.

c1ue - In fact, my statements lend no support to your argument that cap and trade is protectionist. We both agree that it is a tax. You characterize the tax as discriminating and I disagree with that point of view and supported my position. Instead of taking that head on you've done an end run and changed the issue to one of government benefit. If you'd like to discuss that, fine but let's drop this and move on to that.

But even the part about government benefit is incorrect because the majority of the benefit will go to utilities. Again, if you'd like to discuss who benefits from this, we could open that discussion but I was making a narrow point when I responded to your contention that cap and trade is protectionist. I will restate:

When a nation and it's people desire a non-economic objective that their trading partners do not or will not support the have the right, and I would argue, the obligation to align policy with objectives. These objectives will normally be met through negotiation but in the rare instance where a trading partner will not comply with the objectives of their customer, a tariff may be the only solution. China has until 2020 to begin to comply with our upcoming law. I think they will work with us over the next 10 years to bring their production in line with our policy.

[radon]

Re: cap and trade versus a carbon tax

SF2,

If indeed pollution was the issue, then perhaps the revenue generated from the increased prices of goods would be sent to China to decrease pollution there. That would make more sense ecologically.

You lost me here. How would this make sense ecologically? Are you suggesting that somehow the increased profit would find its way in to cleaning up industry there? I think they would just keep the money and continue on with business as usual.

[c1ue]

Re: cap and trade versus a carbon tax

SF2,

I'm sorry, but your livelihood is interfering with your sense here.

You say that we pressure China to follow child labor laws, etc etc.

Yet we don't tax incoming Chinese products to force them to comply.

Why then is carbon so different?

Perhaps it is because the US now finds itself in a unique position of no longer benefitting from its own free trade dogma - and more importantly the WTO and its various hounds.

Perhaps it is because Obama and Co. have been counting on hundreds of billions of new revenue from the carbon tax - or $60B/year averaged out.

http://www.forbes.com/2009/03/05/oba...publicans.html

Obama's budget estimates auction revenues from a cap-and-trade system would raise $646 billion between 2010 and 2019. This will be passed on to consumers in the form of higher prices and to workers and investors in the form of reduced output. As a CBO analysis explains:

"Most of the cost of meeting a cap on CO2 emissions would be borne by consumers, who would face persistently higher prices for products such as electricity and gasoline. Those price increases would be regressive in that poorer households would bear a larger burden relative to their income than wealthier households would. In addition, workers and investors in parts of the energy sector--such as the coal industry--and in various energy-intensive industries would be likely to experience losses as the economy adjusted to the emission cap and production of those industries' goods declined. Such losses would probably be limited to current workers and investors. Job losses in those industries would be likely to impose a fairly large burden on a relatively small number of households; investors' losses, by contrast, would tend to impose a smaller burden on a much larger number of households (because, typically, investors hold diversified portfolios)."

In testimony last year, then-CBO Director Peter Orszag (now Office of Management and Budget director) estimated the burden on different income classes of a plan similar to that proposed by Obama. These are shown in the following table:

Quintiles of Income	Annual Cost Increase in 2006 Dollars	Cost Increase as Percentage of Average Income
Lowest	680	3.3
Second	880	2.9
Middle	1,160	2.8
Fourth	1,500	2.7
Highest	2,180	1.7

If the above 2 were not true, then I might be more inclined to believe that the carbon tax and/or cap&trade are purely altruistic endeavors.

As for the assumption that the lowest quintile will be shielded from the effects of this new tax - this is bulls**t of the highest variety.

The poor have never been able to avoid any taxes except possibly income tax (due to lack of income). Do they avoid sales tax? Payroll tax? Property tax?

The only way a poor person can avoid the effects of a carbon tax is to stay permanently poor, pubicly housed and on welfare.

Hardly an ideal tradeoff.

You lost me here. How would this make sense ecologically? Are you suggesting that somehow the increased profit would find its way in to cleaning up industry there? I think they would just keep the money and continue on with business as usual.

If the true goal were to clean up the earth and soak up excess man made generated carbon - taking the revenue generated by 'carbon taxes' and using them to install cleaner power plants, more efficient power distribution networks, and so forth in China is the best use of the cash. China would be happy to do it if they could afford it - but they cannot.

As has been explored before - the US is already very efficient carbon wise vs. China. Discouraging carbon use internally via a tax but then using the tax revenue generated to pay for other things is completely disingenuous. It is exactly the same situation as cigarette taxes: the excuse is to repay the systemic medical costs posed by cigarette smoking lung cancer patients whereas in reality the lifetime medical costs of the cigarette smokers are a net gain.

http://www.law.umaryland.edu/marshal.../97-1053_E.pdf

Smoking has apparently brought financial gain to both the federal and state governments, especially when tobacco taxes are taken into account. In general, smokers do not appear to currently impose net financial costs on the rest of society. The tobacco settlement will increase the transfer of resources from the smoking to the

nonsmoking public.

[radon]

Re: cap and trade versus a carbon tax

If the true goal were to clean up the earth and soak up excess man made generated carbon - taking the revenue generated by 'carbon taxes' and using them to install cleaner power plants, more efficient power distribution networks, and so forth in China is the best use of the cash. China would be happy to do it if they could afford it - but they cannot.

I guess we'll have to disagree here. China could afford this if its resources were not grossly misallocated. The general lawlessness and lack of accountability at all levels of government make any move in that direction unlikely no matter what the funding levels. There needs to be a fundamental cultural change before things like environmental issues take precedence over profit and patronage.

[santafe2]

Re: cap and trade versus a carbon tax

SF2,

I'm sorry, but your livelihood is interfering with your sense here.

:eek:...The only thing my livelihood keeps me from doing is having the time for rebuttal to your litany of complaints, some founded, others not so much and still others, not at all.

I often preface my comments when speaking with someone new to iTulip by warning them that my POV is shaped by the work that I do but it's also true that I do the work that I do because I'm concerned about conservation, AGW, pollution and security among other things.

And I will remind you of something you already know. When you begin defending your argument by attacking character or motives, (mild as it was), you weaken the rest of your argument.;)

[c1ue]

Re: cap and trade versus a carbon tax

When you begin defending your argument by attacking character or motives, (mild as it was), you weaken the rest of your argument.

Facts are facts. Choosing to view something which benefits you directly as altruistic is always easier than knowing your entire industry is a catspaw.

Note I'm not saying your industry is bad or is a waste or any such thing. But still no different than all those idiot kids rounded up for 'Rose Revolutions' or 'Yes We Can' or some such.

China could afford this if its resources were not grossly misallocated.

I suppose that China's per capita income being small fractions of the US somehow tells you they can afford 1st world modern equipment and luxuries like environmentalism?

http://www.asia.xorte.com/0,5,China-...2009,9509.html

According to the results of nationwide sampling survey on 68 thousand rural households in 31 provinces (autonomous regions, municipalities) of China, it was indicated that per capita cash income of rural households reached 1,622 yuan in the first quarter, a year-on-year increase of 8.6 percent, and a real growth of 8.6 percent after deducting price factors.

So how much of the 1622 yuan (about $200) should the average rural household have spent for cleaner air in the first quarter?

I don't necessarily agree with China's policies, but I do understand the challenges of trying to scale up a nation with 1/5th of the GDP but 4x the population.

Yes, certainly the nation with 1/20th the per person GDP should shoulder the burden. :confused:

[radon]

Re: cap and trade versus a carbon tax

I suppose that China's per capita income being small fractions of the US somehow tells you they can afford 1st world modern equipment and luxuries like environmentalism?

I don't necessarily agree with China's policies, but I do understand the challenges of trying to scale up a nation with 1/5th of the GDP but 4x the population.

Yes, certainly the nation with 1/20th the per person GDP should shoulder the burden.

Calling environmental concerns a luxury is part of the problem. Until that viewpoint changes all the money in the world won't make any difference. Larger profits will only serve to line to pockets of a few at the top and no matter what the per capita income is the average person will still be poor. Business will continue as usual and waste will be disposed of in the cheapest way possible.

Do you really believe that because people are poor the factory must dump waste in the river? A better reason is the some guy in shanghai needs a new boat. The poverty you speak of is a direct result of government policy. Like the poor people who have their homes seized so an industrialist could build something and give a kickback to some party clown. GDP ratios are a cop out. They are a symptom of the problem not its cause.

[jk]

Re: cap and trade versus a carbon tax

Calling environmental concerns a luxury is part of the problem. Until that viewpoint changes all the money in the world won't make any difference. Larger profits will only serve to line to pockets of a few at the top and no matter what the per capita income is the average person will still be poor. Business will continue as usual and waste will be disposed of in the cheapest way possible.

Do you really believe that because people are poor the factory must dump waste in the river? A better reason is the some guy in shanghai needs a new boat. The poverty you speak of is a direct result of government policy. Like the poor people who have their homes seized so an industrialist could build something and give a kickback to some party clown. GDP ratios are a cop out. They are a symptom of the problem not its cause.

i think we need to consider stage of development in our analyses. in these matters of governance, income distribution and the determination of what is a luxury, i think china is better compared to the post civil war, 19th century u.s.- i.e. when the u.s. was industrializing. a lot of the environment was trashed in the process. it is a later and wealthier stage of development in which public goods like clean air and water really get valued. why do we think china will care about carbon dioxide when they don't yet care about smog?

[santafe2]

Re: cap and trade versus a carbon tax

Facts are facts. Choosing to view something which benefits you directly as altruistic is always easier than knowing your entire industry is a catspaw.

Note I'm not saying your industry is bad or is a waste or any such thing. But still no different than all those idiot kids rounded up for 'Rose Revolutions' or 'Yes We Can' or some such.

OK, I'll just let this go as you keep coming back with every widening insults and no substance. I'd hoped for more.