Post by kitkat on Nov 14, 2009 11:40:58 GMT -5
Problem is (one of many problems with this idea) is that "fairly" doesn't exist in a "free" market.
When you have a lot of buying power (wealthy or corp) you have the ability to consolidate purchases for a lower-than-market price. When you have little purchasing power, you pay top dollar. Thus the "flat" part of tax schemes like this--all of these market based schemes are regressive as hell, rewarding those who can pay most easily and punishing those who have the most hardship. For example, how many of the poor (and mostly stupid) will choose to sell part or all of their valuable rations to others for short term gain and then be left with having to pay twice the price for replacement credits later? Or people in the middle "E-trading" class who try to gamble in the carbon allowance market and lose--and end up having to SELL their motorcycle so they can buy enough artificially inflated credits to heat their house that winter. But this is just the beginning of the nightmare...
Enforcement-- here is a whole new class of crime and a whole new rationale for surveillance and "getting into your business". As in every other aspect of crime where all classes participate, it is the lower classes who end up bearing the brunt of prosecution--why? Because they are easier targets than the wealthy --who have good lawyers and the money to pay them. Then there is fraud--like Ty said, this would be just a shadow currency and therefore subject to all the crime that real money is subject to--counterfeiting, theft, etc. The cost of fighting fraud & crime in this new realm of "currency" would be enormous. Here's one route just off the top of my head---the credits would have to be assigned geographically---as costs are obviously higher in cold regions than in temporate climes. So what is to stop geographic fraud? IOW, "sunbirds" selling their extra winter credits, intended for heat up north, while living down south? "What" that is but orwellian levels of surveillance and enforcement.
I also dispute that "markets are efficient". What was "efficient" about the oil market of 2008? (Other than allowing the speculators to pocket obscene profits?) The way markets are manipulated these days it is simply insane to add firewood to such a conflagration. "Fair" markets don't exist (have they ever?) and every effort of those who create them (who will be the same who stand to profit from speculating upon them) will be towards stacking the deck in their favor. Wie immer.
The "free market" has no more business being involved in energy than it does in healthcare. All entities producing goods and services in sectors with the broad and essential-to-life social universality of these two sectors (as an example) should be under strict public regulation if not public ownership.
Markets like these are simply gimmicks designed for the profit of a few. We already have a currency and the means with which to regulate everything which is bought or sold--taxes and tax credits. You want to reduce carbon, tax it progressively *and* ensure that the corp margin pays for the impact not the retail price of the product affected. We already do that with energy "utility" companies (rate controls)-- time we started with the oil corps and *their* prices as well.
When you have a lot of buying power (wealthy or corp) you have the ability to consolidate purchases for a lower-than-market price. When you have little purchasing power, you pay top dollar. Thus the "flat" part of tax schemes like this--all of these market based schemes are regressive as hell, rewarding those who can pay most easily and punishing those who have the most hardship. For example, how many of the poor (and mostly stupid) will choose to sell part or all of their valuable rations to others for short term gain and then be left with having to pay twice the price for replacement credits later? Or people in the middle "E-trading" class who try to gamble in the carbon allowance market and lose--and end up having to SELL their motorcycle so they can buy enough artificially inflated credits to heat their house that winter. But this is just the beginning of the nightmare...
Enforcement-- here is a whole new class of crime and a whole new rationale for surveillance and "getting into your business". As in every other aspect of crime where all classes participate, it is the lower classes who end up bearing the brunt of prosecution--why? Because they are easier targets than the wealthy --who have good lawyers and the money to pay them. Then there is fraud--like Ty said, this would be just a shadow currency and therefore subject to all the crime that real money is subject to--counterfeiting, theft, etc. The cost of fighting fraud & crime in this new realm of "currency" would be enormous. Here's one route just off the top of my head---the credits would have to be assigned geographically---as costs are obviously higher in cold regions than in temporate climes. So what is to stop geographic fraud? IOW, "sunbirds" selling their extra winter credits, intended for heat up north, while living down south? "What" that is but orwellian levels of surveillance and enforcement.
I also dispute that "markets are efficient". What was "efficient" about the oil market of 2008? (Other than allowing the speculators to pocket obscene profits?) The way markets are manipulated these days it is simply insane to add firewood to such a conflagration. "Fair" markets don't exist (have they ever?) and every effort of those who create them (who will be the same who stand to profit from speculating upon them) will be towards stacking the deck in their favor. Wie immer.
The "free market" has no more business being involved in energy than it does in healthcare. All entities producing goods and services in sectors with the broad and essential-to-life social universality of these two sectors (as an example) should be under strict public regulation if not public ownership.
Markets like these are simply gimmicks designed for the profit of a few. We already have a currency and the means with which to regulate everything which is bought or sold--taxes and tax credits. You want to reduce carbon, tax it progressively *and* ensure that the corp margin pays for the impact not the retail price of the product affected. We already do that with energy "utility" companies (rate controls)-- time we started with the oil corps and *their* prices as well.