Comments on: Environmental economics 101 http://blog.recycled-energy.com/2008/10/16/environmental-economics-101/ RED | the new green: thoughts on ways to reduce greenhouse gas emissions Mon, 19 Jul 2010 17:50:47 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Bill E http://blog.recycled-energy.com/2008/10/16/environmental-economics-101/comment-page-1/#comment-1402 Bill E Tue, 09 Dec 2008 00:14:53 +0000 http://blog.recycled-energy.com/?p=45#comment-1402 This seems like a debate over semantics. In a 100% auction, cap & trade system, emitters would bid for what they believe they will need permits for. They will purchase any deficit and sell any surplus credits, so the tradable permit model would be in effect. Qualified credits, or offsets, would be sold in the same manner, although experience tells us this approach needs to be quite restricted to prevent offsets from being sold that would have taken place anyway. As long as the cap is reduced annually to get us to our goal, and monitored for effectiveness, it works. It might seem like a tax to the payor/polluter, but who cares? People go to great lengths to reduce their income taxes, and would go to great lengths to reduce their GHG "taxes", or the cost of purchasing permits. The key is to be sure we set a floor, or exercise price, for use of the permits, to be sure we incentivize the behavior we want even if we set the cap too high. This seems like a debate over semantics. In a 100% auction, cap & trade system, emitters would bid for what they believe they will need permits for. They will purchase any deficit and sell any surplus credits, so the tradable permit model would be in effect. Qualified credits, or offsets, would be sold in the same manner, although experience tells us this approach needs to be quite restricted to prevent offsets from being sold that would have taken place anyway.
As long as the cap is reduced annually to get us to our goal, and monitored for effectiveness, it works. It might seem like a tax to the payor/polluter, but who cares?
People go to great lengths to reduce their income taxes, and would go to great lengths to reduce their GHG “taxes”, or the cost of purchasing permits.
The key is to be sure we set a floor, or exercise price, for use of the permits, to be sure we incentivize the behavior we want even if we set the cap too high.

]]> By: Suzanne Sayer http://blog.recycled-energy.com/2008/10/16/environmental-economics-101/comment-page-1/#comment-1190 Suzanne Sayer Thu, 20 Nov 2008 17:08:46 +0000 http://blog.recycled-energy.com/?p=45#comment-1190 Sean, I love your blogs. Can you put a print button on them so I can print them in an easy format? I know you read the NYTimes since I see your postings there. Thanks. Sean,

I love your blogs. Can you put a print button on them so I can print them in an easy format? I know you read the NYTimes since I see your postings there.

Thanks.

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