Skip to main content

View Diary: Carbon Cap / Tax ... and Dividend? (45 comments)

Comment Preferences

  •  A few thoughts (3+ / 0-)
    Recommended by:
    JayDean, A Siegel, MCinNH

    You quote Joe Romm:

    at its most basic level, a price for carbon most directly encourages fuel-switching (especially from coal), but does not particularly encourage efficiency. That's why most traditional economic models require a very high (read "unduly brutal" and "politically unacceptable") price for carbon to get deep reductions. [my emphasis--JR]

    I agree that a price for carbon without a cap on emissions will fail.

    But without a price for carbon we have no mechanism for enforcing our emissions cap. Can't we pick one of the two pricing options, or a combination of the two and then do other things as well? For example, why can't we have energy efficiency standards as well?

    The level of CO2 we will permit has to be determined by science.

    The argument between advocates of CAT and Tax and Dividend has to do with with how we determine the price point that causes people to curtail usage to the level of the cap. In either case, whether the market sets the price or it's set by policy makers establishing tax policy, the price is going to be brutal, because the cap on CO2 emissions has to be set very low if we are going to meet our goals.

    We might have eases into it, but now we don't have much time so, scientifically, we can't do much "easing".

    Both of the methods being considered use the market.  If we don't use the market we will have to have an enormous Soviet-style bureaucracy determining how much CO2e can be used in the production of all goods. I shudder at the thought.

    Assuming (big assumption) that we can set up either a CAT or Tax and Dividend that isn't riddled with loopholes and exemptions, the question is how do we get the public to buy it. With no dividend, all you've done is make life, at least initially, much more expensive for everyone.

    I know that Jim Hansen has said 100% dividend, but I don't see why the dividend has to be 100%. Some funds (maybe not these but money from somewhere) will need to be used to help people whose jobs disappear because of the transition away from coal and oil. Is this what you mean by regional differences?

    Rich people are unlikely to be very motivated by a dividend. It won't be big enough to be a big deal to them. So, why bother to pay it to them at all? Just let them eat the increased price of goods. There aren't enough of them to vote it down, particularly if we take their lobbying power from them, which reflects their money not their numbers.

    That money could be used to help poor people who are hit very hard by the transition or it could be invested in efficiency programs, R&D or government funded infrastructure like the smart grid, electrified rail and the restructuring of cities.

    There are lots of poor people (and we're making more of them every day) and the only way they're going to sign off on either of these proposals is if they have a way to make a profit on the situation.

    Obviously, if the rebate simply equals the increased costs that one incurs in purchasing life's necessities there will be no incentive to support it. But if government policy establishes programs and shows people how they can make a profit by being more energy efficient there should be a lot of support from lower income groups (the great bulk of us).

    What other reasonable options are there?

    "My True Religion Is Kindness" -- The Dalai Lama/---/Do you know why 350ppm is important?

    by JohnnyRook on Sun Feb 01, 2009 at 12:05:40 AM PST

    •  Differentiation ... (0+ / 0-)

      Issue is not CAP/CAT vis Cap & Dividend, but questioning what to do with revenues once there is some form of fee / cost to carbon.  

      The "dividend" approach distributes money out to people, quite directly, redistributing based on 'carbon footpritnt', enabling people to 'consume' even as giving (some) incentive to move to less polluting consumption.  

      •  Why would a dividend be distributed on the (0+ / 0-)

        basis of one's carbon footprint, which would reward the biggest polluters? I'm certain that I've misunderstood you here.

        "My True Religion Is Kindness" -- The Dalai Lama/---/Do you know why 350ppm is important?

        by JohnnyRook on Sun Feb 01, 2009 at 02:04:45 PM PST

        [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site