
Carbon credits, a projected trillion dollar market - bd
http://www.fastcompany.com/magazine/127/carbon-boom.html
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ckinnan
A straight tax on carbon emissions is far more transparent and less prone to
political abuse and self-dealing. The tax could be totally offset by a cut in
the payroll tax (as Gore proposes-- tax carbon, not work).

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Shamiq
There are a lot of economic reasonings behind supporting either carbon
credits, a tax (known as a Pigouvian Tax), and straight up Command and Control
(you will only pollute amount X).

The failure in selecting the "correct" one depends on issues with how the
marginal-damage-to-the-environment curve looks like. Ideally, we want the tax
equal to the amount of damage the individual is causing at a given level. But,
if the marginal damage curve is very flat, ie an additional unit of pollution
doesn't have a large magnitude in effect, then an incorrect tax amount can
lead to a lot of "dead weight loss" (ie we're not at optimal levels).

This explanation is easier with graphs. Therefore, let me know if this is not
very clear, and I'll whip up something appropriate.

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sh1mmer
<http://sandbag.org.uk/> was founded by someone at Greenpeace. It's a way to
help buy up all the slack in the emission market (by buying emissions permits)
in Europe which has a regulatory cap.

The theory is that by buying the permits off companies they loose the ability
to carelessly grow their emissions. At some point it's going to be more
economic for them to curb the emissions than try to buy more permits from
someone else in the market. Especially since Sandbag retires them and won't
resell them at any price.

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petercooper
Pollution is bad. Pumping tons of CO2 into the atmosphere is bad. But.. won't
there be incredibly crazy costs in _enforcing_ these limits? There seems to be
a lot of trust in companies "measuring" their CO2 outputs, but that's going to
need a lot of enforcement and regulation.

It's not like finance and taxation where the money has to go somewhere and can
usually be traced. Once you've thrown a ton of CO2 into the atmosphere, you
can't tell who put it there - so regulating the initial output would be
necessary, to great taxpayer cost.

I expect a lot of scams and corruption to occur around carbon credits. If it's
going to be a "trillion dollar market", you can bet some real nasty pieces of
work will want an unfair cut of it.. and when you can't track pollution with
any accuracy (yet) will the costs of enforcement be worth it?

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Retric
Your almost there. It would be cheaper to just tax the use of foil fuels so
this is all about setting up a scam. You give credit's to people who are
already polluting for free which has value and then let them sell those
credits to people who want to start or continue to pollute and are less
willing to lie.

PS: Methane (CH4) is a greenhouse gas, but it's far less stable so it's less
of a concern. <http://en.wikipedia.org/wiki/Anaerobic_oxidation_of_methane>,
but 2xO2 + CH4 > 2 x H20 + C02 also releases energy.

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petercooper
* It would be cheaper to just tax the use of foil fuels so this is all about setting up a scam.*

Agreed. Carbon credits or fuel taxes both reward efficiency.

