Agree on the economic approach and with a preference for cap and trade. Create a certain amount of emission billets and auction them off. Then restrict the amount each bullet allows over time. It has economics, planning and reductions all in one.
Even cap&trade is unnecessary complexity. Just tax it. Keep increasing the tax until the pollution levels drop. Use the tax revenue to offset the taxes on productive behavior.
Cap & Trade (as I understand it) would be the government playing referrer, and polluters/cleaners building a market place to exchange credits.
Taxing would involve playing referrer, collecting taxes for this specific issue, and then allocating that tax to either public or private parties to work on productive behavior.
Taxing sounds more problematic given how dysfunctional most governments are, especially when it comes to non-regulatory procedures. More failure points in the market generation.
A variable tax to disincentivize pollution combined with cap and trade would make the most sense to me.
It seems to me the complexity argument works in favor of cap-and-trade. While the global climate and global economy are both staggeringly complex systems, we can predict the former significantly more accurately than the latter. Thus it would be simpler to set the allowable emissions by policy and let the market work out the economic side.
Eg. "The tax per gram of PM2.5 is $1. Each year, if average PM2.5 levels across America are above 5 ug/m^3, the tax will increase 10%. Otherwise, it will decrease 10%."
Then lawmakers once need to put in place the tax and set the target, and they never need to intervene again.
WalterBright|3 years ago
meowkit|3 years ago
Taxing would involve playing referrer, collecting taxes for this specific issue, and then allocating that tax to either public or private parties to work on productive behavior.
Taxing sounds more problematic given how dysfunctional most governments are, especially when it comes to non-regulatory procedures. More failure points in the market generation.
A variable tax to disincentivize pollution combined with cap and trade would make the most sense to me.
magila|3 years ago
londons_explore|3 years ago
Eg. "The tax per gram of PM2.5 is $1. Each year, if average PM2.5 levels across America are above 5 ug/m^3, the tax will increase 10%. Otherwise, it will decrease 10%."
Then lawmakers once need to put in place the tax and set the target, and they never need to intervene again.