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The Happy Warrior
Joined: 10 Feb 2010
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 Posted: Sun Apr 11, 2010 7:19 am Post subject: Cap & Trade Regime - The US already has one |
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As the US winds up debate on whether it should institute a Federal Cap & Trade regime, its worth reminding ourselves that there's already a regional regime that has auctioned off carbon credits. Its called the Regional Greenhouse Gas Initiative (RGGI).
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The ten states participating in RGGI -- Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont -- are implementing the first mandatory cap-and-trade program in the United States to reduce greenhouse gas emissions. |
The RGGI's goal is to reduce emissions from the power sector by 10% by 2018. The several auctions show that carbon credits are worth roughly over $3/ton of C02.
Federalism in action.
Originally, I was going to make a thread on Krugman's latest column backing cap & trade, but I find Krugman columns a bit too unnecessarily partisan for my tastes.
In addition to the Northeastern initiative, there's also the Midwestern Greenhouse Gas Reduction Accord, which has released GHG draft advisory recommendations.
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Reduction Targets:
2020 Target. The Advisory Group recommends a target of 20 percent below 2005 levels by 2020 (18 percent if allowances are released from the cost-containment allowance pool detailed in 3.5.1).
2050 Target. The Advisory Group recommends an 80 percent reduction below 2005 levels by 2050. |
The Midwestern Accord's goals, if adopted, would track the bill the US House of Representatives passed in June 2009 (HR 2454: American Clean Energy and Security Act of 2009), which calls for an 83% reduction of GHG below 2005 levels by 2050. |
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Senior
Joined: 31 Jan 2010
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| Posted: Sun Apr 11, 2010 7:32 am Post subject: |
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Krugman is a pariah. He used to be a serious economist, but now he is nothing more than a mouth piece for the Obama admin.
As for cap n' trade. Who cares? It's a "solution" (read tax) looking for a "problem" (read self serving excuse to implement afore mentioned tax). |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sun Apr 11, 2010 7:49 am Post subject: |
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| Cap and trade is more corporatism. It will enrich financial institutions and other market participants at the expense of the middle class. More of the same. |
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Pluto
Joined: 19 Dec 2006
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| Posted: Sun Apr 11, 2010 8:38 am Post subject: |
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Green may be the hue of environmentalism, but it's still the color of money to the Chicago futures exchanges vying for control of the nascent trading market in carbon emission credits.
CME Group Inc., the world's largest futures exchange, and the Chicago Climate Exchange, led by Richard Sandor, inventor of bond futures, are both angling to dominate a market that could generate $120 billion in carbon-credit trading annually if a so-called cap-and-trade system becomes the law of the land.
"We are talking about what will be the biggest commodity ever traded," says Mr. Sandor, executive chairman of London-based Climate Exchange PLC, which owns the Chicago exchange. At 6 billion metric tons, the U.S. carbon emissions market is expected to be about three times the size of the European market, where another of Mr. Sandor's exchanges dominates trading. "Every time a mandated market has come through, it's provided us enormous opportunities." |
http://www.chicagobusiness.com/cgi-bin/mag/article.pl?id=32191
A "mandated market" creating tremendous opportunities for who? Who are the winners? Who are the losers of such a cap and trade scheme? Who benefits? Who gets screwed?
Shouldn't we be asking questions about what the problem is? Is CO2 really a problem? How so? Even if it is, what are we to do about it? Should we just accept the political class's solution of cap and trade? Might there be a better solution? Might there even be a better political solution to such a problem than cap and trade? |
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jaykimf
Joined: 24 Apr 2004
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| Posted: Sun Apr 11, 2010 11:36 am Post subject: |
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| Senior wrote: |
Krugman is a pariah. He used to be a serious economist, but now he is nothing more than a mouth piece for the Obama admin.
As for cap n' trade. Who cares? It's a "solution" (read tax) looking for a "problem" (read self serving excuse to implement afore mentioned tax). |
You don't know what you're talking about.
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| Paul Krugman has emerged as Obama's toughest liberal critic. He's deeply skeptical of the bank bailout and pessimistic about the economy. Why the establishment worries he may be right. |
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| In his twice-a-week column and his blog, Conscience of a Liberal, he criticizes the Obamaites for trying to prop up a financial system that he regards as essentially a dead man walking. In conversation, he portrays Treasury Secretary Tim Geithner and other top officials as, in effect, tools of Wall Street (a ridiculous charge, say Geithner defenders). These men and women have "no venality," Krugman hastened to say in an interview with NEWSWEEK. But they are suffering from "osmosis," from simply spending too much time around investment bankers and the like. In his Times column the day Geithner announced the details of the administration's bank-rescue plan, Krugman described his "despair" that Obama "has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they're doing. It's as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street." |
http://www.newsweek.com/id/191393 |
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Senior
Joined: 31 Jan 2010
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| Posted: Sun Apr 11, 2010 5:12 pm Post subject: |
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| jaykimf wrote: |
| Senior wrote: |
Krugman is a pariah. He used to be a serious economist, but now he is nothing more than a mouth piece for the Obama admin.
As for cap n' trade. Who cares? It's a "solution" (read tax) looking for a "problem" (read self serving excuse to implement afore mentioned tax). |
You don't know what you're talking about.
| Quote: |
| Paul Krugman has emerged as Obama's toughest liberal critic. He's deeply skeptical of the bank bailout and pessimistic about the economy. Why the establishment worries he may be right. |
| Quote: |
| In his twice-a-week column and his blog, Conscience of a Liberal, he criticizes the Obamaites for trying to prop up a financial system that he regards as essentially a dead man walking. In conversation, he portrays Treasury Secretary Tim Geithner and other top officials as, in effect, tools of Wall Street (a ridiculous charge, say Geithner defenders). These men and women have "no venality," Krugman hastened to say in an interview with NEWSWEEK. But they are suffering from "osmosis," from simply spending too much time around investment bankers and the like. In his Times column the day Geithner announced the details of the administration's bank-rescue plan, Krugman described his "despair" that Obama "has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they're doing. It's as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street." |
http://www.newsweek.com/id/191393 |
Haha, Newsweek. If you wanted a mouth piece for Obama, you found it. Even the slightest unkind remark would be like a severe rebuke compared to the pandering of Newsweek.
Why don't you post some examples of Krugman criticizing Obama. He has criticized him because he felt the bail out wasn't big enough. More of a back handed complement, than a criticism. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Sun Apr 11, 2010 5:44 pm Post subject: |
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| Senior wrote: |
| jaykimf wrote: |
| Senior wrote: |
Krugman is a pariah. He used to be a serious economist, but now he is nothing more than a mouth piece for the Obama admin.
As for cap n' trade. Who cares? It's a "solution" (read tax) looking for a "problem" (read self serving excuse to implement afore mentioned tax). |
You don't know what you're talking about.
| Quote: |
| Paul Krugman has emerged as Obama's toughest liberal critic. He's deeply skeptical of the bank bailout and pessimistic about the economy. Why the establishment worries he may be right. |
| Quote: |
| In his twice-a-week column and his blog, Conscience of a Liberal, he criticizes the Obamaites for trying to prop up a financial system that he regards as essentially a dead man walking. In conversation, he portrays Treasury Secretary Tim Geithner and other top officials as, in effect, tools of Wall Street (a ridiculous charge, say Geithner defenders). These men and women have "no venality," Krugman hastened to say in an interview with NEWSWEEK. But they are suffering from "osmosis," from simply spending too much time around investment bankers and the like. In his Times column the day Geithner announced the details of the administration's bank-rescue plan, Krugman described his "despair" that Obama "has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they're doing. It's as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street." |
http://www.newsweek.com/id/191393 |
Haha, Newsweek. If you wanted a mouth piece for Obama, you found it. Even the slightest unkind remark would be like a severe rebuke compared to the pandering of Newsweek.
Why don't you post some examples of Krugman criticizing Obama. He has criticized him because he felt the bail out wasn't big enough. More of a back handed complement, than a criticism. |
Senior, you sound lazier and more partisan by the day. 'Tis a shame. |
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Senior
Joined: 31 Jan 2010
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| Posted: Sun Apr 11, 2010 6:05 pm Post subject: |
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| bucheon bum wrote: |
| Senior wrote: |
| jaykimf wrote: |
| Senior wrote: |
Krugman is a pariah. He used to be a serious economist, but now he is nothing more than a mouth piece for the Obama admin.
As for cap n' trade. Who cares? It's a "solution" (read tax) looking for a "problem" (read self serving excuse to implement afore mentioned tax). |
You don't know what you're talking about.
| Quote: |
| Paul Krugman has emerged as Obama's toughest liberal critic. He's deeply skeptical of the bank bailout and pessimistic about the economy. Why the establishment worries he may be right. |
| Quote: |
| In his twice-a-week column and his blog, Conscience of a Liberal, he criticizes the Obamaites for trying to prop up a financial system that he regards as essentially a dead man walking. In conversation, he portrays Treasury Secretary Tim Geithner and other top officials as, in effect, tools of Wall Street (a ridiculous charge, say Geithner defenders). These men and women have "no venality," Krugman hastened to say in an interview with NEWSWEEK. But they are suffering from "osmosis," from simply spending too much time around investment bankers and the like. In his Times column the day Geithner announced the details of the administration's bank-rescue plan, Krugman described his "despair" that Obama "has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they're doing. It's as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street." |
http://www.newsweek.com/id/191393 |
Haha, Newsweek. If you wanted a mouth piece for Obama, you found it. Even the slightest unkind remark would be like a severe rebuke compared to the pandering of Newsweek.
Why don't you post some examples of Krugman criticizing Obama. He has criticized him because he felt the bail out wasn't big enough. More of a back handed complement, than a criticism. |
Senior, you sound lazier and more partisan by the day. 'Tis a shame. |
Care to prove what I said wrong? Or is it easier just to call people names? Who's "lazy", now?
Have you ever heard me defend non-democrats? How can you be "partisan" if you don't identify with either party? |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Sun Apr 11, 2010 6:24 pm Post subject: |
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| Senior wrote: |
| bucheon bum wrote: |
| Senior wrote: |
| jaykimf wrote: |
| Senior wrote: |
Krugman is a pariah. He used to be a serious economist, but now he is nothing more than a mouth piece for the Obama admin.
As for cap n' trade. Who cares? It's a "solution" (read tax) looking for a "problem" (read self serving excuse to implement afore mentioned tax). |
You don't know what you're talking about.
| Quote: |
| Paul Krugman has emerged as Obama's toughest liberal critic. He's deeply skeptical of the bank bailout and pessimistic about the economy. Why the establishment worries he may be right. |
| Quote: |
| In his twice-a-week column and his blog, Conscience of a Liberal, he criticizes the Obamaites for trying to prop up a financial system that he regards as essentially a dead man walking. In conversation, he portrays Treasury Secretary Tim Geithner and other top officials as, in effect, tools of Wall Street (a ridiculous charge, say Geithner defenders). These men and women have "no venality," Krugman hastened to say in an interview with NEWSWEEK. But they are suffering from "osmosis," from simply spending too much time around investment bankers and the like. In his Times column the day Geithner announced the details of the administration's bank-rescue plan, Krugman described his "despair" that Obama "has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they're doing. It's as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street." |
http://www.newsweek.com/id/191393 |
Haha, Newsweek. If you wanted a mouth piece for Obama, you found it. Even the slightest unkind remark would be like a severe rebuke compared to the pandering of Newsweek.
Why don't you post some examples of Krugman criticizing Obama. He has criticized him because he felt the bail out wasn't big enough. More of a back handed complement, than a criticism. |
Senior, you sound lazier and more partisan by the day. 'Tis a shame. |
Care to prove what I said wrong? Or is it easier just to call people names? Who's "lazy", now?
Have you ever heard me defend non-democrats? How can you be "partisan" if you don't identify with either party? |
You identify with extreme libertarianism. You bash all politics and politicians.It is tiresome. While OTW is as extreme as you, at least he's an entertaining read, has some constructive ideas (although some wacky ones too), and has acknowledged some positives of some politicians (including Barrack once or twice). Your other other ideological mate Sergio, while sometimes sounding very naive, also has some positive ideas to give.
And in this case, I didn't say you were wrong, just commenting on your own comments. And what name did I call you? Lazy is an adjective, not a name. Partisan? Sure, and I stick by it for the reason I gave above. |
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The Happy Warrior
Joined: 10 Feb 2010
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| Posted: Sun Apr 11, 2010 7:16 pm Post subject: |
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| mises wrote: |
| Cap and trade is more corporatism. It will enrich financial institutions and other market participants at the expense of the middle class. More of the same. |
The EPA has determined that the cost of Federal cap & trade will burden the average American household 48 cents per day, and not even $1/day for those in the fourth quintile.
Of course, the EPA hasn't always correctly evaluated the costs of environmental legislation.
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The estimated cost of compliance with the acid rain control provisions in the Clean Air Act of 1990 were much lower than EPA predicted. The �annual cost of the program was expected to be $2.7 billion � 4.0 billion.� Yet an EPA analysis a decade later determined that the actual cost of cutting sulfur emissions by 40 percent was substantially lower��$1 to $2 billion per year, just one quarter of original EPA estimates.� |
As for those who are certain that climate change is not occurring, who believe that pumping millions of tons of black substances from the earth and emitting it into the atmosphere, or sometimes just straight-up burning fuel, over several hundred years has no effect on the climate;
Well, there's really no point in trying to convince you guys. |
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The Happy Warrior
Joined: 10 Feb 2010
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| Posted: Sun Apr 11, 2010 7:34 pm Post subject: |
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| Pluto wrote: |
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Green may be the hue of environmentalism, but it's still the color of money to the Chicago futures exchanges vying for control of the nascent trading market in carbon emission credits.
CME Group Inc., the world's largest futures exchange, and the Chicago Climate Exchange, led by Richard Sandor, inventor of bond futures, are both angling to dominate a market that could generate $120 billion in carbon-credit trading annually if a so-called cap-and-trade system becomes the law of the land.
"We are talking about what will be the biggest commodity ever traded," says Mr. Sandor, executive chairman of London-based Climate Exchange PLC, which owns the Chicago exchange. At 6 billion metric tons, the U.S. carbon emissions market is expected to be about three times the size of the European market, where another of Mr. Sandor's exchanges dominates trading. "Every time a mandated market has come through, it's provided us enormous opportunities." |
http://www.chicagobusiness.com/cgi-bin/mag/article.pl?id=32191
A "mandated market" creating tremendous opportunities for who? Who are the winners? Who are the losers of such a cap and trade scheme? Who benefits? Who gets screwed?
Shouldn't we be asking questions about what the problem is? Is CO2 really a problem? How so? Even if it is, what are we to do about it? Should we just accept the political class's solution of cap and trade? Might there be a better solution? Might there even be a better political solution to such a problem than cap and trade? |
C02 emissions exact a cost on society as a whole. They damage the environment. This cost is not currently reflected by the market. Hence, the creation of a mandated market.
One of the other solutions for this problem include shutting down all coal plants within 10-15 years. IOW, politically impracticable. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sun Apr 11, 2010 7:56 pm Post subject: |
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| The Happy Warrior wrote: |
| mises wrote: |
| Cap and trade is more corporatism. It will enrich financial institutions and other market participants at the expense of the middle class. More of the same. |
The EPA has determined that the cost of Federal cap & trade will burden the average American household 48 cents per day, and not even $1/day for those in the fourth quintile.
Of course, the EPA hasn't always correctly evaluated the costs of environmental legislation.
| Quote: |
The estimated cost of compliance with the acid rain control provisions in the Clean Air Act of 1990 were much lower than EPA predicted. The �annual cost of the program was expected to be $2.7 billion � 4.0 billion.� Yet an EPA analysis a decade later determined that the actual cost of cutting sulfur emissions by 40 percent was substantially lower��$1 to $2 billion per year, just one quarter of original EPA estimates.� |
As for those who are certain that climate change is not occurring, who believe that pumping millions of tons of black substances from the earth and emitting it into the atmosphere, or sometimes just straight-up burning fuel, over several hundred years has no effect on the climate;
Well, there's really no point in trying to convince you guys. |
I'll let you guess at my opinion of a government estimate of a government program. The historical record is on my side. And I'm solidly in the denier camp re: Agw. But even if one assumes that the government 1) must do something and 2) can do something that won't cause more problems, it does not follow that the most reasonable option is the policy that just so happens to enrich the oligopoly.
The government has created the car dependent suburbs. If the desired policy is to bring the inevitable shift to new fuels a slow and steadily/predictably increasing tax on fuel is sensible. The revenues will be blown on empire and entitlements so there is no point in speculating on what would be the best use of that tax revenue. Any shift must come slowly and carefully. We are in a depression. We see in Massachusetts what will happen to insurance premiums on medical services. The declining middle class can only handle so much.
As Andy Xie says:
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| The stability of a modern society depends on its middle class being in the majority and content with its situation. |
http://www.cibmagazine.com.cn/html/Print/Show.asp?id=1283&no_room_to_relax.html |
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Fox
Joined: 04 Mar 2009
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| Posted: Sun Apr 11, 2010 8:05 pm Post subject: |
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| The Happy Warrior wrote: |
| mises wrote: |
| Cap and trade is more corporatism. It will enrich financial institutions and other market participants at the expense of the middle class. More of the same. |
The EPA has determined that the cost of Federal cap & trade will burden the average American household 48 cents per day, and not even $1/day for those in the fourth quintile. |
48 cents a day ads up to 175 dollars a year. If every family in America is contributing on average 175 dollars to this scheme each year, that's going to add up pretty quickly, and at least a fair portion of that is going to be going to financial institutions that have all ready sucked enough out of our nation. And this is a best-case scenario.
Cap and Trade is a scam designed to enrich a small subset of people, I think that's fairly clear. If carbon emissions are a genuine problem, then stop subsidizing activity which emits it and start subsidizing clean alternatives. Business will follow the subsidies, no need for questionable schemes like Cap and Trade.
We could be a nation almost entirely powered by the Sun in a decade or two if the people in power seriously wanted us to be. Given they seem more interested in quirky schemes to divert wealth to the upper class, that's unlikely. |
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The Happy Warrior
Joined: 10 Feb 2010
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| Posted: Sun Apr 11, 2010 9:16 pm Post subject: |
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| Fox wrote: |
Cap and Trade is a scam designed to enrich a small subset of people, I think that's fairly clear. |
How is it clear?
Cap & Trade is simply the monetization of pollution. Pollution has a cost that would now be reflected at its creation.
A gasoline tax, while a good idea, wouldn't affect the pollution stemming from power generation. Meanwhile, rolling back the suburbs simply isn't going to happen: America cannot be rebuilt from scratch.
Lastly, additional taxes must be levied across the population, instead of merely allocated entirely to the wealthy. Federal Cap & Trade would cost the average American family $0.48/day, but it would save families making under $20,000/year (lowest quintile) $0.11/day and only cost those in the second-lowest quintile $0.11/day. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sun Apr 11, 2010 9:26 pm Post subject: |
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| The Happy Warrior wrote: |
| Fox wrote: |
Cap and Trade is a scam designed to enrich a small subset of people, I think that's fairly clear. |
How is it clear?
Cap & Trade is simply the monetization of pollution. Pollution has a cost that would now be reflected at its creation. |
I don't mean to be rude.. Do you know how trading works? Do you know how the fee/commission systems are structured? Consider oil. Every barrel of oil is traded 27 times before delivery. Each trade has rents attached. The rents are based upon both a transaction charge and a % commission so the incentive is to jack up the price with liquidity and trade as much as possible. And the derivatives market would be a typical 100x the physical market. Hence, 90$ oil (tomorrow). The actual extraction cost is between $10 (Saudi) and $40 (Alberta). This is how a single energy trader at Citi (or AIG, can't remember) had a $100,000,000 bonus in 2008.
The same would come from cap and trade. Take money from the middle class and give it to a Ferrari dealership via a middle man (trader). |
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