Economics

Cap and Trade is Dead

Long live cap and trade.

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The great newspaperman H.L. Mencken allegedly once said, "For every complex problem, there is an answer that is clear, simple—and wrong." But in the halls of Congress, complex carbon rationing schemes are multiplying, and they are good counterexamples to Mencken's observation. When it comes to Congress, you can generally bet that its complex solution to a complex problem is worse than the simple solution.

To date, the leading proposal for reducing carbon emissions in the United States has been the Waxman-Markey cap and trade scheme, which passed the House of Representatives last June. The heart of Waxman-Markey is the creation of an economy-wide cap on carbon dioxide emissions requiring that emitters must have a permit for each ton of carbon dioxide they release into the atmosphere. The artificial scarcity of emissions permits would put a price on carbon dioxide produced by burning fossil fuels like coal, natural gas, and oil. This congressionally-mandated carbon market would boost energy prices, forcing consumers and businesses to cut back on their energy use and subsidizing innovators to develop low and no-carbon energy sources like solar, wind, and nuclear. But in order to secure the acquiescence of major industries, the 1,200 page Waxman-Markey bill is filled with special interest deals that dramatically distort the proposed carbon market making energy even more expensive than it would be under a simple cap-and-trade arrangement.

Last fall, Sen. John Kerry (D-Mass.) introduced a similarly convoluted cap and trade bill in the Senate, and after being reported out of Senate committee the bill has stalled. In fact, The Washington Post last week reported that Sen. Lindsey Graham (R-S.C.) has declared, "Cap-and-trade is dead." So to address senatorial intransigence, Graham has joined with Sen. Kerry and Sen. Joe Lieberman (I-Conn.) to devise a new scheme to meet the goal of cutting U.S. carbon dioxide emissions by 17 percent by 2020. Instead of setting an overall national reduction target, the new scheme would apply different forms of carbon rationing to three major industrial sectors: electric utilities, transportation, and manufacturers.

Details of the new scheme are sketchy, but under the Kerry-Graham-Lieberman approach cap and trade is only partially dead. Cap and trade would still apply to electric utilities while a carbon tax would be imposed on gasoline, diesel, and jet fuel. Some sort of carbon rationing would later be phased in for manufacturers.

This divide and conquer strategy may be good politics, but it is bad economics. The virtue of creating an artificial market applying to all greenhouse gas emissions is that market participants can figure out the most efficient way to cut emissions among themselves. Isolating favored segments means that market participants will not be able to find the least expensive ways to cut carbon emissions, raising the overall price of energy more than it would otherwise be. So the Kerry-Graham-Lieberman bill does not initially appear to be much of an improvement on the Waxman-Markey horror.

December's Copenhagen conference collapsed largely because the U.S. and China could not agree on a global plan for reducing greenhouse gas emissions. At the conference, U.S. special envoy for climate change Todd Stern declared, "From our point of view, you can't even begin to have an environmentally sound agreement without the adequate, significant participation of China." China refused to offer any binding commitment, even carbon intensity goals, and further refused to allow for independent auditing of its voluntary pledges.

Yet less than three months later, in January, the Obama Administration sent a letter of intention to the United Nations Framework Agreement on Climate Change pledging to reduce U.S. greenhouse gas emissions by 17 percent from their 2005 levels by 2020. As Reuters reported, when asked if the U.S. would pull out of the Copenhagen Accord if China and India didn't sign on, Stern responded, "No…I don't think it's a question of the U.S. saying 'never mind.'" If that's the case, then the drama in Copenhagen was gratuitous since the U.S. has now given in to China anyway.

Assuming that carbon emissions pose a significant danger to the global climate, there is a much better proposal (cheaper) circulating on Capitol Hill: the Carbon Limits and Energy for America's Renewal (CLEAR) Act. The CLEAR act is a short, sweet bill introduced by Sen. Maria Cantwell (D-Wash.) and Sen. Susan Collins (R-Maine). The CLEAR Act sets a gradually declining cap on carbon dioxide emissions (20 percent below 2005 by 2020). It limits carbon dioxide emissions by requiring producers and importers of coal, natural gas, and oil to buy permits at a monthly auction for each ton of carbon in the fuels they sell in the U.S. The requirement would apply to 2,000 to 3,000 fossil fuel producers and importers.

Unlike Waxman-Markey or the new Kerry-Graham-Lieberman proposal, the CLEAR Act would largely avoid picking winners and losers among technologies, special interest groups, or industries. Seventy-five percent of the proceeds from the auction would be rebated on a per capita basis in equal monthly lump sum payments. Cantwell and Collins estimate that 80 percent of consumers would incur no net costs while the top 20 percent in income would see less than a 0.3 percent decrease in their incomes. The remaining 25 percent of the auction revenues would be used to fund energy research and development, adaptation to climate change, and help workers who lose their jobs because of higher energy prices.

Of course, failing to rebate these auction revenues somewhat undercuts the claim by Cantwell and Collins that they are not picking winners and losers. In addition, it would be more economically efficient (and cheaper) to rebate the entire amount rather than let Congress allocate money to favored projects. These missteps from Cantwell and Collins remind us that Mencken was right to be cynical about the workings of government. But if we must do something—and it seems that Congress and the president believe that we must—the CLEAR Act, clocking in at 39 pages, has more appeal than Waxman-Markey's 1,200. Sometimes simpler is better.

Ronald Bailey is Reason's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is available from Prometheus Books.

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  1. Ron,

    In order for people to use less carbon, you have to make it more expensive. If the less carbon intensive forms of energy were cheaper, we would already be using them. Even if you buy the line of carbon is bad line of bullshit that you have bought into, we are basically taking a free ride right now inflicting our externality on the rest of the world. When we can no longer do that, we will be poorer.

    You can claim there is a pony in all that shit all you want. But, that won’t mean there really is one.

    1. This is patently false. You can cap carbon, don’t create an “artificial scarcity” by declining the cap over time. Instead, why not let environmental groups buy up credits and ‘let them go fallow’. That would be a natural way to let carbon marginally go up. Of course, industry would compensate by making carbon less necessary, and the cost of carbon cheaper, and then, environmental groups can respond by buying more credits for the same cost.

      The best part of that is it would actually measure how much it’s worth it to us as a society to reduce carbon.

    2. “You can claim there is a pony in all that shit all you want. But, that won’t mean there really is one.

      Oh but there will be a golden pony for the faux free market crowd on Wall Street. Gillebrand and Schumer in uncharacteristic fits of honest bragged about how much money will flow through WS & NYC by managing the “trade” part of this monstrosity.

      The real point is to steal money from stupid parts of the country to enrich a few connected players in NY & DC.

      And also to make American business even less competetive internationaly.

  2. YOU’RE OUT OF CHARACTER, JOHN.

  3. Seriously, John, you sounded like Chony just then.

    “Externality”?

    1. I don’t agree with that. But if you take the AGW people at their word, carbon is an externality. Ok fine. Let’s say for the sake of argument it is. That means we are pumping out tons and tons of carbon and not bearing the full cost that it imposes on the rest of the world. It is great to be the producer of an externality. You are screwing the people around you. But when you stop the externality and bear the full costs of your actions, you get poorer. There is no way around that.

      Even by their own terms, the carbon tax cap and trade morons are arguing that we should be poorer in return for alleviating a generalized and unknown risk in the future. No bullshit about efficiency and green jobs will change that fact.

      1. All I wanna know, is who gets the money?

        1. If they could credibly claim that a straight carbon tax would be used to offset an equal cut in the income tax then the plan might not be completely terrible.

          Not good, but way beyond what it is now.

      2. John, your intuitions notwithstanding, there is no evidence that changing to clean energy will devastate the economy. Under worst-case assumptions the effect is not that bad, and under best-case assumptions, it could be a great boon to the economy.

        1. Depends on what you mean by ‘clean energy.’ More nuke power? By all means, let’s do it. Windmills and shit? I doubt the average wind turbine could charge my iPhone.

        2. Depends on what you mean by ‘clean energy.’ More nuke power? By all means, let’s do it. Windmills and shit? I doubt the average wind turbine could charge my iPhone.

          1. I think a strong case can be made that, factoring everything in, fossil fuel energy is by far the most expensive form of all.

            1. I’m sensing you mean “climate change” by “factoring everything in.” I personally don’t factor that in. I factor in the price per kilowatt hour, and that’s it.

              1. But that’s a woefully incomplete picture of the cost of fossil fuel energy. Do you live on your own planet?

                1. Someone who write that the planet will be destroyed has no credibility.

                2. Yes, it is the third one from the son. Mostly water on the surface. Atmospheric gas composition that supports life. Extremely prone to long-term, naturally occurring, and gradual changes in climate and has been for all geologic time. That’s the one I live on. How bout you?

                3. Go back to your planet, Tony!

              2. No, TripleB. Factoring everything in would include, at minimum, the tens of thousands of deaths and $100+ in health care costs that fossil fuels inflict upon the American people every year.

                1. LOL…oh, you were serious….wow…

                2. Factoring everything in would include, at minimum, the tens of thousands of deaths and $100+ in health care costs that fossil fuels inflict upon the American people every year.

                  And you think the lost jobs and income won’t affect their health?

                  This is the general problem, you never consider the costs of your ideas just the hypothetical result. Which never actually occur.

                  How’s your war on poverty working? How’s your war on drugs? How’s the war on terrorism? We’re close to winning them all surely? Or maybe it needs just a few more trillion? Where’s all the health care inflation reversal government intervention was supposed to provide? Where’s all the racial equality we were to expect from the permanent government crutch of lowered expectations of ‘minorities’? Where’s all the homeowners that were supposed to come from ‘affordable mortgage’ policies? How about the permanent boom from Keynesian economic policy?

                  You just need to take a few more guns, raise a few more taxes, restrict a few more freedoms, and surely all will be well any day now, right?

            2. Hard to say, Tony. Are you ‘factoring in’ the ability to do scientific research on sustainable energy that was enabled by fossil fuel enabling a complex economy to evolve. I mean, look at our incredible research-industrial complex? Surely, the NIH, NSF, and DOE would not have been possible without fossil fuels.

              1. Hard to say, Tony. Are you ‘factoring in’ the ability to do scientific research on sustainable energy that was enabled by fossil fuel enabling a complex economy to evolve. I mean, look at our incredible research-industrial complex? Surely, the NIH, NSF, and DOE would not have been possible without fossil fuels.

                I think fossil fuel energy has been richly rewarded for its contributions to society. Feel free to give it a gold star.

                What it’s not getting is charged for the costs it imposes on everyone.

                I’m not advocating to invent time travel to reverse the industrial revolution. I’m just advocating for a new one.

                1. What it’s not getting is charged for the costs it imposes on everyone.

                  Considering they myriad taxes that are levied at extraction, production, distribution and consumption of carbon energy, If anything, it subsidizes foolish government expenditures at all levels.

                  So just exactly what “externalities” are you talking about?

        3. Re: Tony,

          there is no evidence that changing to clean energy will devastate the economy.

          A forced change will devastate the economy.

          The Economy is the myriad of actions taken by freely-deciding people. Anything that is forced upon them will invariably create a distortion and a different set of actions that could be detrimental.

          There IS evidence that forcing people to be “cleaner” actually achieves the contrary result, as in the case of recycling laws: Many people end up dumping their trash on the trash bins of the apartment complex where I live, even though they are not tenants, so as not to pay the fees imposed by the local county for trash collection and the expensive trashcans the county requires. The same happens in Ireland and other places where recycling is mandated – the results are NOT what the planners expected. People literaly “dump” their cost on other people’s property BECAUSE of government, not despite of.

          Under worst-case assumptions the effect is not that bad, and under best-case assumptions, it could be a great boon to the economy.

          You are committing the “Broken Windows” fallacy.

          1. Old Mexican|3.2.10 @ 6:22PM|#

            A forced change will devastate the economy.

            Just like it “devastated” the economies of Japan and Germany (nearly double our enery prices) or Denmark (nearly triple!).

            1. Chad,

              Well, due to cost of living, people in Denmark and Germany live like the poor people in the US live, and the Japanese are “encouraged” not to heat their homes even during winter. If that is not “devastating”, I don’t know what is. I prefer to be able to heat up my home as I see fit, not as government wants me to do it.

              http://www.kt70.com/~jamesjpn/…..japan.html

            2. Perhaps using a country that has had 10 plus percent unemployment rates for over a decade and another one which has gone nowhere for the last 20 years via its “lost decade” arent the best examples for you to to use.

              1. EJ,

                Don’t tell that to Chad – he believes all people should live in penury . . . It’s the aesthetic ideal for Chad and other Statists.

              2. By the way, when I met some European exchange students at my university, some from France, others from Norway, I found much to my surprise that the Europeans thought I was a rich person because a) I had a car (a VW 78 Beetle) and b) I lived in a three-bedroom, two bathroom house. They were more astonished when I told them that Social Interest (i.e. government subsidized) dwellings usualy had 1 and 1/2 bathrooms. They did not believe me. I really thought they lived like peasants, and when I saw the Oprah special about Denmark, I found out that it was true: They LIVE like peasants – except that American peasants are far richer than these SOCIALIST FUCKS!

      3. Wow! You don’t get it John. Yes, you become *poorer* when you can no longer dump your garbage on other peoples’ property. But they become richer! Why did you fail to factor this into your idiotic calculation?

        1. At the same time, he liberalized the state’s marijuana law, decriminalized homosexuality, and strongly opposed the death penalty.

          What garbage?

          Whose property?

        2. When will the statists stop dumping their garbage on us? That’s the question. We’d be so much richer if they’d give up on their delusional plans to change the world and create harmony. The liberal dream is a return to an idyllic life that never existed. Unfortunately for us, we have to bear the costs in the form of confiscatory taxation. Talk about utopian!

      4. But when you stop the externality and bear the full costs of your actions, you get poorer.

        Who said there is a cost?

  4. I’d be happier with two amendements:

    1. Pay out 100% of the auction proceeds to people (less whatever reasonable operating costs are incurred in managing the auction).

    2. Don’t pay them out on a ‘per capita’ basis… reduce income taxes proportionally for everyone. There’s already more than enough progressivism built in the government’s taxes and benefits. Why do we need to keep adding more? Also, a per capita rebate requires the government to keep a file on every single person in the country and set up an infrastructure to send them monthly payments. The income tax approach can operate within the existing framework at no additional cost by simply reducing tax rates.

    1. Or even better, don’t institute any sort of taxing/revenue raising/whather the hell anybody wants to call it scheme in the first place.

      Seeing as how the whole AGW theory is total bullshit to begin with.

      1. I’m going with this idea….

      2. +1

    2. “There’s already more than enough progressivism built in the government’s taxes and benefits. Why do we need to keep adding more?”

      Because we keep fucking the poor with the regressivism of inflation.

  5. Oh… and enforcement.

    What happens if/when one of those 2,000 to 3,000 companies exceeds their permitted amounts?

    1. I have some great new devices to sell to the governemnt that helps measure CO2 output and send the tallies to teh government electronically. We need to do all we can to stop the deadly poison menace of CO2. My industrial scale devices will be used initially, but I am also working on household and personal CO2 output metering devices. These will be essential for helping to fix our planet. Once cap and trade is put in place I expect to have strong growth in my entrepreneurial business…Let the green job revolution begin!

  6. The only climatically relevant externality of carbon is the radiative forcing produced by burning it.

    How that forcing is managed does not exclusively depend on cap and trade or other CO2 policies.

    1. But what about economic relevance? Choosing policies that bash the economy less in order to abate whatever “climatically relevant externalities” one believes need abating is surely relevant.

      1. Ron, I think you focus too much on fantasy economics. For your scheme to truly work, you would have to interalize every externality with the correct price AND install a full-fledged member of Homo Economicus at every significant decision point. In reality, you are going to fall far short of this no matter what you try. Your method, in practice, will ignore many factors, and it is not clear at all whether it is better to price a few factors accurately and ignore the rest (as markets do), or factor in many things relatively inaccurately (as governments do).

        This is why projects funded with grants are likely to be good investments. They are always going to be targetted at picking up the best opportunities that markets miss due to incorrect pricing, which will always exist.

        1. chad has obviously never been a scientist.

          “projects funded with grants are likely to be good investments”.

          Get your PhD in a hard science and we’ll see if you still agree.

          1. LoL. That’s exactly what I have, silly goose.

            1. silly’s better than blind.

        2. Re: Chad,

          This is why projects funded with grants are likely to be good investments. They are always going to be targetted at picking up the best opportunities that markets miss due to incorrect pricing, which will always exist.

          A “price” is not inherent. Your comments imply that you think it is. The market arrives at a price which is the average exchange between two goods (money and something else) at which point the market clears – i.e. there are no more transactions. Thinking that one can arrive at a price outside the market is incorrect.

          In other words, your assumption is incorrect – NOBODY can “see” opportunities that the “market misses” because the market does NOT miss them: If millions of people interacting and trying to maximize their utility do not see something as an opportunity, with all probability it was not.

          1. well, no, we don’t live in a world with perfect information. So it’s possible for a price to be incorrect. But, it’s certainly fallacious to think that government is going to absolutely know what the correct price. And foolhardy think that the government will ever know what the correct price is.

            1. which is to say, the correct price is unknowable.

              1. But it can be approximated. Getting close to the correct price is better than not trying at all and letting a massively incorrect one persist.

                1. But it can be approximated. Getting close to the correct price is better than not trying at all and letting a massively incorrect one persist.

                  This presumes the government has access to information which market actors do not. It doesn’t. The government usually has less information, because information is distributed in the brains of millions of individuals.

                  Not just the local optimization calculation that each person does as far as his self-interest occur, but what that one engineer designing product X knows about the particular flaws and limitations of the science or engineering underlying it. That information can never be centralized, because human being aren’t psychic and don’t have a hive mind.

            2. It is not about “imperfect information”. Even if the market knew that the correct price of carbon was $32.02342429923 per ton, it wouldn’t mean squat, because it has no incentive to utilize this information.

              I am not saying the government is perfect. But because it approaches problems from an entirely different angle, it is likely to make up for the most egregious errors that markets make.

              1. “But because it approaches problems from an entirely different angle, it is likely to make up for the most egregious errors that markets make”

                Wow.

                So, If I create an axiomatic system where 1 = 2 I’m likely to solve the hailstone conjecture because I’m approaching it from “a different angle”. Yup. Yup.

                1. If the other system you were using as 3=2, your odds are just as good.

              2. Even if the market knew that the correct price of carbon was $32.02342429923 per ton, it wouldn’t mean squat, because it has no incentive to utilize this information.

                Gah. I don’t think my brain can handle the sheer retardedness of this statement.

                First of all, the “correct” price is undefinable. It is a constantly changing response to evolving economic conditions. Politicians as such cann’t calculate the “correct” price, they can only make arbitrary poltically-determined adjustments, with come with their own sets of perverse incentives. Unless you think that the government is some kind of omnipotent space alien with magical powers, there is no way the politicical process could ever magically strike upon the “correct” price. All it can do is trade favors.

                Assuming that all costs and benefits are properly owned under Coasian bargianing, the market price is the ONLY thing that can be considered to reasonably approximate a “correct” price. That is, the price which optimizes efficiency. YOU personally may not consider that “correct”, but it is the ONLY objective standard we have. The political process is not. Anyone who thinks so is (a) full of horseshit or (b) only interested in gaining an arbitrary economic advantage courtesy of the state.

                1. First of all, the “correct” price is undefinable. It is a constantly changing response to evolving economic conditions. Politicians as such cann’t calculate the “correct” price, they can only make arbitrary poltically-determined adjustments, with come with their own sets of perverse incentives. Unless you think that the government is some kind of omnipotent space alien with magical powers, there is no way the politicical process could ever magically strike upon the “correct” price. All it can do is trade favors.

                  Where did I say the price doesn’t change, Hazel?

                  All that matters is that it is highly probably that the government will come closer to hitting the $32.02 mark than the private sector would, because the private sector will assume $0.00, always and forever.

                  I am sorry that your theory massively fails on this matter. You may as well deal with it. Coase doesn’t help you, as it literally would take billions of billions of lawsuits to settle. Well, unless you were to accept a group settlement, but that would have to look an awful lot like C&T or a tax.

              3. Yes, the Soviet Union and the EU are great at this. This is why I have to pay outrageous prices over here for everything.

        3. Chad: My fantasy economics?! I actually don’t know quite what to say to such breathtakingly cavalier attitude toward pervasive evidence of government failure in energy markets and energy R&D. May I suggest you take a look at my June 2000 article detailing nearly 40 years of failed federal energy R&D?

    2. How about showing me a single model that indicates that radiative forcing is anything but a European statist’s wet dream.

    3. All methods of putting CO2 into the atmosphere have many externalities beyond the CO2 itself (SOx, NOx, particulates, ozone, etc).

      1. All methods of putting CO2 into the atmosphere have many externalities beyond the CO2 itself (SOx, NOx, particulates, ozone, etc).

        So you exhale sulfur oxides and ozone?

        1. If I was eating coal and natural gas, I probably would be.

          If I eat regular food, then my breath is just part of the carbon cycle and is not putting any additional CO2 in the atmosphere.

        2. actually, the body does technically produce both.

          1. The dose makes the poison, does it not?

    4. All methods of putting CO2 into the atmosphere have many externalities beyond the CO2 itself (SOx, NOx, particulates, ozone, etc).

  7. Dammit, I’m gonna go fire up the Ninja, the F150, the F250, the Mustang, the Harley…there. And now I’m breathing hard.

    Fuck Cap and Anything. Eat my CO2, bitches!

    PS I also sent the dogs out for a run, so they’re panting, too – so there.

  8. So to address senatorial intransigence, Graham has joined with Sen. Kerry and Sen. Joe Lieberman (I-Conn.) to devise a new scheme to meet the goal of cutting U.S. carbon dioxide emissions by 17 percent by 2020

    The only way Gov’t can make us cut emissions is to raise the price. I slept through econ, but I think those kind of taxes would gut the economy.

    Now, for more joy, I’ll go read Radley’s post.

  9. John: Did you read the column? Among other things, I was pointing out is that you can inefficiently price carbon (Waxman-Markey), making the cost for “clean” energy much more expensive than it needs to be to achieve whatever carbon abatement goals are being set.

    1. You know Ron, the point you haven’t addressed is “why?”. I have all the natural gas and electricity I need for about $150/month. No one is keeling over in the street and the air is cleaner than it used to be. What’s wrong with the status quo? Please show your work.

    2. Ron, where is your evidence that refunding that last 25% to taxpayers (who will spend it on junk from China and bigger cars and homes) is more “efficient” than, oh, anything the government could imagine spending it on? Don’t give me the libertarian line of “It must be so, because our theory assumes it”, either?

      Second, why aren’t you libertarians out there, day in and day out, calling for a fully-auctioned cap-and-trade or carbon tax? If you are going to claim that we shouldn’t do X because Y is better, you darned well should be actively pushing for Y.

      1. Good counterpoint. I mean really. I almost finished reading five words of it. LOL

        Jess
        http://www.total-anonymity.cz.tc

      2. “Ron, where is your evidence that refunding that last 25% to taxpayers (who will spend it on junk from China and bigger cars and homes) is more “efficient” than, oh, anything the government could imagine spending it on?”

        Yeah, just imagine all the diversity training the government could get done with that money. Talk about efficiency….

        1. If the government spend that much money on diversity training, it might match the ineptitude of spending it all on Chinese crap. Fortunately, we need not worry about that. The government has many more pressing priorities.

          1. Except that buying Chinese crap is a stupid CHOICE, diversity training’s just stupid…but that’s the sort of shit it would be spent on. But, hey, bureaucrats gotta have jobs too…

            1. Why do you hate the troops?

              1. I don’t, but I do hate excessive military spending. That said, what the fuck are you talking about, anyway?

          2. Chad is right, They could buy more of my drone aircraft to kill babies in Afghanistan or send a couple more prison contracts my way so we can fill up all the prisons I am building to put black pot smokers in jail. These would be far more productive than wasting the money on diversity training.

      3. actually some of us are for a no-trade auction carbon permiting scheme. After we amend the constitution.

    3. Carbon abatement? To what end? The “consensus” (if there ever was one) of AGW is falling apart under the weight of its own lies and deceptions. Why the need to take the statist route?

      1. Please, show me the peer-reviewed publications that demonstrate this “falling apart”.

        I quadruple dog dare you.

        1. Again. Peer-reviewed means shit for all. I could list down my arms the peer-reviewed fraud that came out of the instituted that granted me a PhD.

          1. Citation, please.

            1. http://en.wikipedia.org/wiki/G…..tractions)

              http://blog.everydayscientist.com/?p=1963
              (two retractions and counting)

              http://scienceblogs.com/drugmo….._numbe.php

              etc etc etc.

              And those are the ones that have been uncovered, I know of others, but I’d rather be threatened to be sued for libel, even if truth is an absolute defense for libel.

              1. rather *not be threatend with libel suit…

                  1. I would like to reiterate that I use the word ‘fraud’ as a matter of opinion, not fact.

                    1. Yonemoto, what percentage of papers are retracted? Retracted due to fraud?

                      The answer is few and almost zero, respectively.

          2. This is a dangerous symptom of Tragic Manichearean conspiracy nutterism. Next you will tell us that there is a “false left-right paradigm” that is “forced” upon the public as a sophisticated system of “thought control”.

            The peer review system = science. If you are speaking ill of the peer review system then you are against all the benefits of modern science.

  10. “Seventy-five percent of the proceeds from the auction would be rebated on a per capita basis in equal monthly lump sum payments.”

    Bullshit. I’m still waiting for my big TARP refund.

    1. Ah, Robin Hood to the rescue!

  11. Considering the way Obama and Co. are taking our current fiscal crisis and making it exponentially worse, I’m not sure we will need to worry about our “externality” costs too much longer.

    We won’t produce anywhere near as much CO2 when we’re living in boxes in shantytowns.

    But yeah, let’s go ahead and argue about what pissant penalty procedure is best for limiting our CO2 output as China and India laugh at us while taking over the world economy.

  12. I eat pieces of processed carbon like you for breakfast. LOL

    Jess
    http://www.total-anonymity.cz.tc

    1. …but Sinatra had chunks of carbon like you in his stool. LOL!

  13. We’re going to reduce CO2 by 17% like that 400lb guy at the gym on New Year’s Day is going to drop to 170 as soon as he puts down the cheese fries.

    I’m fine with transparently empty promises that make other countries like us. It’s cost effective PR.

  14. I’m confused. I thought Libertarians were fundamentally opposed to taxes, especially those designed to create bigger government, erode our economy and rely on junk science and the people’s self loathing.

    Where is the party of reason anyway?

    1. Don’t mistake Mr. Bailey’s opinions about the necessities of Cap and Trade as a libertarian position, despite the fact that he is the main science contributor for Reason.

      I think Mr. Bailey is trying to prepare and formulate the most effective and least damaging libertarian position for the inevitable attempts by the government to regulate CO2.

      I personally would prefer if he would not assume this as an inevitability, as I don’t want to give the government a new way to suck money out of my wallet, but I guess it makes sense to try and help be the least damaging if it’s going to happen one way or the other.

      1. So the great looming horror is government daring to interfere with the energy industries–not, you know, the environmental catastrophe.

        Libertarians and their priorities.

        1. No, stupid.

          The government has already screwed up the energy industries enough, thankyouverymuch. Between subsidies for every damn fuel that exists to over regulation that prevents the market from creating more efficient delivery mechanisms to complete blockage of new nuclear power plants, the government is half the reason we have these problems to begin with.

          Whether or not I believe this is an “environmental catastrophe” the fact remains that increased government interference is most likely not the solution but more likely already part of the problem.

        2. So the great looming horror is government daring to interfere with the energy industries–not, you know, the environmental catastrophe.

          Libertarians and their priorities.

          I would argue that the “environmental catastrophe” is debatable and that cap and trade is not intrinsically Libertarian. It’s simply an excuse for the government to tax big, bad corporations and get gullible people to go along with it because of the “what about the children” emotions.

      2. Tman: Insightful. In this column I am trying to advocate the least bad policy the government could do if it insists on rationing carbon. As for my views on what carbon rationing policy is likely to amount to, please see my column, Is Government Action Worse Than Global Warming?

        1. If the question is what is the least bad option, then I want a further investigation in to the question.

          And if part of the answer is “destroy our economy during a time of great instability by relying on centralized redistribution” then I’m going to have to say that you’ve left the reservation.

          I know you haven’t said exactly that yet, but that’s what it’s sounding like. Relying on the government to enforce free market principles is a contradiction with which to begin.

    2. Ron is arguing, in effect: We should vote against tax X because tax Y is superior. (But if Y ever came up for serious consideration, I wouldn’t support that either).

      1. Actually Chad, I think Mr. Bailey has done a good job of being honest about his position. He clearly believes that AGW is something that needs to be dealt with through some type of Carbon tax/trade scheme.

        His pieces that detail the specific costs of each fuel for electricity in terms of externalities, cost of production, and subsidies currently provided by the government clearly indicate which fuel is the least polluting, cheapesty and most efficient at this time (if I remember correctly I think it was the combined-cycle gas turbine power plant).

        https://reason.com/archives/2009/05/29/energy-futures/1

        I don’t think he’s against X or Y.

        1. Ron’s cap and auction idea basically convinced me that the government should do something about it (on small footprint grounds, even though I don’t believe that AGW is CO2-derived). Every good green libertarian (the, like 100 of us) knows that 1) the solution to the tragedy of the commons is propertization and 2) the government is the biggest polluter.

          1. …and some of us realize that credit expansion and keynesian economics is what really fucked the earth’s environment.

          2. The government is the biggest polluter? What do you mean by that? The military is pretty dirty but only a few percent of GDP. Most of the rest of the government is white collar (low emissions) or transfer payments (virtually no emissions).

            And a good libertarian would know that propertization only works in limited circumstances, because many things either cannot be confined or measured in the necessary manner (or at a reasonable cost), or would result in monopolies.

            1. white collar (low emissions) so when nancy pelosi flies back home her plane farts out rose water?

            2. …not to mention credit expansion. That’s a matter of government policy; it punishes savers and encourages spending, overinvestment, and consumption – is it a wonder that we have an overconsumptive society? Perhaps if we had a sustainable money supply, where price signals reflected speculation on the long-term future (including environmental effects), we would also have more environmentally conscious companies?

              I dunno. I probably won’t find out, either.

              1. Excellent point. Inflation increases discounting of the future in economic calculations and forces you to focus on the short term. It’s partly designed that way because Keynesians think consumers are irrationally risk-averse. But perhaps that risk-aversion isn’t as irrational as we think it is.

                I do find it irritating the way cooperating in the PD is considered “irrational” just because it isn’t short-term rational. Sometimes there’s a higher logic at work in people’s behavior, and all sorts of stuff gets classified as human irrationality that actually has a significant survival benefit to it.

      2. Chad: See my reply immediately above.

    3. Starting from the proposition that global warming is a real threat. Ron’s arguing that the correct mechanism for dealing with it is a flat carbon tax, given that no proper entity has ownership of the atmosphere and therefore can’t engage in coasing bargianing over pollution rights.

      The position is that a carbon tax is the closest approximation to what the market would do if someone *could* claim property rights over the atmosphere.

  15. At this point, the best thing to do is let skeptical science return to the table to help determine whether there is an actual problem to begin with.

    1. Rahmtard, skeptical science never left the table. Every major scientific organization on earth agrees.

      1. Citation needed.

  16. We have apparently lost the war on drugs and Ron Baily is the stellar evidence of it.

  17. The odds of anything that increases energy prices passing congress this year are even lower than the odds of the healthcare bill passing. Which are zero.

    1. The US government is incapable of dealing with its biggest economic, social, and environmental crises, yay!

      1. The US government is incapable of dealing with its biggest economic, social, and environmental crises, yay!

        FTFY.

  18. James Ard|3.2.10 @ 6:04PM|#
    How about showing me a single model that indicates that radiative forcing is anything but a European statist’s wet dream.

    Where were you when , take your pick, they successfully predicted the impact from the Pinatubo eruption and the contrail deficit the week after 9-11.

    Get real.

    1. I didn’t ask for anecdotal bullshit. I asked for a model. Preferable one that can make more than one correct prediction out of thousands. Why on earth are you hanging on to this fraud, is your pride that important that you refuse to admit you’ve been fooled?

  19. WTF? Have any of you morons who actually believe there’s AGW been following the news lately? Some free clues: ALL the major data sets used to justify the theory have been shown to have been seriously deficient in their scope and duration of measurement, or just dicked with, to make the numbers come out right. ALL OF THEM. The MSM here may be ignoring the story, but the UK press, as well as the UK government and scientific establishment, are driving coffin nails into the theory each and every day.

    It’s the biggest scandal in the history of science, and you’re all ignoring it????

    1. I pick the Loch Ness Monster as the biggest scandal in history

  20. Thirty-nine pages is too long.

  21. British Newspapers making up stuff about data sets they haven’t read ?

    The very idea!

    The Times seems to limit its study of the scientific literature to page three of The Sun

  22. My Gawd, who let this idiot (Chad) in?

  23. CO2 regulation is inevitable. Every single person emits CO2.

    The human tax is inevitable. Deniers, do not resist. Resistance is futile. Pay your masters. A clean planet is good for the economy anyway. Green jobs will be plentiful and we will give you rebates on your taxes. Trust us, this won’t cost you a thing.

  24. Inherent, irreducible problems with any kind of “market-based” cap and trade or auction scheme:

    (1) The commodity/right being capped is created wholly artificially by the State. Thus, the supply of that right is arbitrary and subject to manipulation. How can anyone build a functioning market on that?

    (2) Real commodity markets are barely transparent and functional now, and they have, at the end of the day, delivery requirements that ground the transactions in contracts. Carbon schemes have no delivery requirements; why should we expect them to function at all?

    (3) What a gigantic, irresistible arena for corruption, fraud, and all-around malfeasance this would all be.

    1. RC Dean,
      What you view as “problems” I view as opportunities. If only the Manichearan conspiracy-mongers would allow us to make some progress and create some green jobs for this country.

  25. I don’t care what system they use (none is my preference), but it should not take effect until all 195 countries in the world pass the same law. Why should our economy be penalized?

  26. We need to show leadership. It is gonna take a little sacrifice to get world government now lets all get on board people.

  27. Ron

    This bill from Reps Inglis, Flake and Lipinski is the only rational proposal I have seen on this stuff from Congress:

    http://flake.house.gov/News/Do…..tID=126315

    http://inglis.house.gov/issues…..t_homepage

    This bill would return 100% of any revenues from the tax to taxpayers by reducing payroll taxes the exact same amount. And by creating a long term predictable price system on the “externalities” of our current fuel system, businesses can plan a transition to other energy solutions.

    Its way more “progressive” than the existing payroll tax and it makes rational economic sense.

    Let’s stop taxing people for working and creating jobs and instead tax wasting oil and other fuels instead. And rather than allowing congress to pick winners and loser or create a massive derivative game for Wall Street, let’s let the government do the only thing they have ever been really good at collect a straight tax.

    Its better than the crazy kinds of taxes we have today and might actually help put people back to work.

    The libertarian folks in congress can come up with rational solutions that don’t involve more government revenue and regulation even for an issue like this. If only the rest of the congress critters had the brains to pay attention, we could address all sorts of issues with low cost or no cost solutions like this that would also help get the economy moving again.

  28. Burn baby Burn, burn that Oil, make earth a living HELL, BURN BABY BURN, ha, ha, ha

  29. truth,,,,obama people have no idea of the extent to which they have to be gulled in order to be led.”
    “The size of the lie is a definite factor in causing it to be believed, for the vast masses of the nation are in the depths of their hearts more easily deceived than they are consciously and intentionally bad. The primitive simplicity of their minds renders them a more easy prey to a big lie than a small one, for they themselves often tell little lies but would be ashamed to tell a big one.”
    “All propaganda must be so popular and on such an intellectual level, that even the most stupid of those towards whom it is directed will understand it. Therefore, the intellectual level of the propaganda must be lower the larger the number of people who are to be influenced by it.”
    “Through clever and constant application of propaganda, people can be made to see paradise as hell, and also the other way around, to consider the most wretched sort of life as paradise.”pelosi don’t see much future for the Americans … it’s a decayed country. And they have their racial problem, and the problem of social inequalities …obama feelings against Americanism are feelings of hatred and deep repugnance … everything about the behaviour of American society reveals that it’s half Judaised, and the other half negrified. How can one expect a State like that to hold TOGTHER.They include the angry left wing bloggers who spread vicious lies and half-truths about their political adversaries… Those lies are then repeated by the duplicitous left wing media outlets who “discuss” the nonsense on air as if it has merit? The media’s justification is apparently “because it’s out there”, truth be damned. STOP THIS COMMUNIST OBAMA ,GOD HELP US ALL .THE COMMANDER ((GOD OPEN YOUR EYES)) stop the communist obama & pelosi.((open you eyes)) ,the commander

  30. I like your point! It is of wisdom.

  31. Rationing is not the solution. We need to do two things. 1) Pour money into researching ways to store carbon and 2) In parallel, do research into alternative fuel sources that are closer to carbon neutral.

    chi flat irons

  32. How about showing me a single model that indicates that radiative forcing is anything but a European statist’s wet dream. http://www.w3schools.com

  33. Android TextMate Bundle has become released, for Android application developers who want an option to the Eclipse plug-in.

  34. If somebody left him to dry, they have to become worked with silently.

  35. Android TextMate Bundle has become released, for Android application developers who want an option to the Eclipse plug-in.

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