DiscussWorldIssues - Socio-Economic Religion and Political Uncensored Debate - View Single Post - What do you believe has been adequately demonstrated in climate change science?

**mGUuZRyA** · 12-09-2009, 10:13 AM

i) A carbon tax and a cap-and-trade system will both find the same equilibrium no matter how permits are initially distributed (Coase theorem) and both have the same initial deadweight costs

One will probably take longer then the other to reach a state of equilibrium so it is still worth while to study the options closely. Also one is applied to everything (theoretically) while the other is more open to political manipulation and thus is likely to be less effective (or take longer to reach equilibrium if you prefer that terminology). In my mind there are simply more factors politicians can **** with in cap & trade (the size of the cap, the value of off sets) so my inclination is to go with the simpler solution of taxing all carbon and letting god sort them out.

ii) The revenue from a carbon tax and a fully auctioned cap-and-trade system can be used to reduce other, more destructive taxes, and this is by far the most efficient way to reduce emissions (particularly compared to legislating/regulating/subsidizing technologies or industry-specific emissions levels) It won't. It never does. Politicians see money, politicians spend money. Theoretically all that TARP money banks are repaying to avoid the penalties should be used to pay off the debt incurred getting the money to finance the TARP to begin with but it won't. It will be spent. We all know this.

12-09-2009, 10:13 AM	#8
mGUuZRyA Join Date Oct 2005 Posts 492 Senior Member	i) A carbon tax and a cap-and-trade system will both find the same equilibrium no matter how permits are initially distributed (Coase theorem) and both have the same initial deadweight costs One will probably take longer then the other to reach a state of equilibrium so it is still worth while to study the options closely. Also one is applied to everything (theoretically) while the other is more open to political manipulation and thus is likely to be less effective (or take longer to reach equilibrium if you prefer that terminology). In my mind there are simply more factors politicians can **** with in cap & trade (the size of the cap, the value of off sets) so my inclination is to go with the simpler solution of taxing all carbon and letting god sort them out. ii) The revenue from a carbon tax and a fully auctioned cap-and-trade system can be used to reduce other, more destructive taxes, and this is by far the most efficient way to reduce emissions (particularly compared to legislating/regulating/subsidizing technologies or industry-specific emissions levels) It won't. It never does. Politicians see money, politicians spend money. Theoretically all that TARP money banks are repaying to avoid the penalties should be used to pay off the debt incurred getting the money to finance the TARP to begin with but it won't. It will be spent. We all know this.
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