1. Alan Sandstrom reviews my book on the Mexican amate painters
2. Lynne Kiesling defends cap and trade for CO2 emissions; in favor of carbon taxes see here and here is a "not much difference" point of view.
3. Outsourcing your personal life
4. Our evil spawn: Kevin Grier, last week’s guestblogger, is now blogging (regularly?) over with Mike Munger.
Pretty good review. But it’s interesting that his criticism centers on (a) your failure to bring your expertise as an economist to bear on the material and (b) his disagreement with your economic premises re: NAFTA, etc.
I wonder how he would take you reviewing a book he might write on the cultural influences on the economics of some obscure tribe in la-laland, and you, an economist, disagreeing with his anthroplogical premises.
From Kiesling’s article:
Or, as John puts it, “Both emissions taxes and cap-and-trade can achieve optimal emissions at the least cost to society.” They are most similar if the initial permit allocation process is an auction.
Yes, BUT given the experience with the EU, what are the chances that cap-and-trade would actually be an auction? Why wouldn’t congressmen strongly favor a system which provided them a huge pile of carbon credits to bestow on local industries and campaign contributors?
First, Pigouvian taxes are indirect instruments because they are levied on an output or activity, not on the actual carbon emission. If you are going to tax my output based on an estimate of the amount of carbon its production process creates, why am I going to have any incentive to innovate my production process to make it less carbon-intensive?
Huh? Why wouldn’t a carbon tax be placed directly on carbon-based fuels (oil, natural gas, coal) in direct proportion to their carbon content? No need to tax the output of manufacture based on a guess of carbon inputs — just tax the inputs directly.
Sure, you still have the problem of imports not having their fossil fuel inputs taxed. But the problem is there with a cap-and-trade system too, because Kyoto proponents are quite prepared to exempt China and other exporting developing countries from restrictions under a cap-and-trade system also, so…
It strikes me that the biggest difference between a Pigovian tax and cap-and-trade is that under cap-and-trade, a great deal of the payments by carbon users are paid to concerns outside the U.S. whereas a tax goes directly to the treasury. I guess it’s arguable which is a bug and which is a feature.
Now I discover I could have saved myself the trouble of arguing with Kiesling’s article by posting this link:
Carbon Taxes Versus Carbon Markets
What’s the best way to limit emissions?
http://www.reason.com/news/show/120381.html
I come from asia, injoy 室內è¨è¨ˆ,work in a æ¬å®¶å…¬å¸
Comments on this entry are closed.