Comments on: McCain’s Big Idea On Environment Is Cap-And-Trade? http://donklephant.com/2008/05/13/mccains-big-idea-on-environment-is-cap-and-trade/ Big Teeth. Huge Ass. Surprisingly Reasonable. Mon, 23 Nov 2009 07:33:07 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Donklephant » Blog Archive » Obama’s Environmental Manufacturing Plan http://donklephant.com/2008/05/13/mccains-big-idea-on-environment-is-cap-and-trade/comment-page-1/#comment-407184 Donklephant » Blog Archive » Obama’s Environmental Manufacturing Plan Thu, 15 May 2008 01:25:15 +0000 http://donklephant.com/?p=5618#comment-407184 [...] I mentioned in yesterday’s post about McCain’s seemingly paper thin plan to help the environment, Obama’s plan would provide immediate funds to help create the technology that will help big [...] [...] I mentioned in yesterday’s post about McCain’s seemingly paper thin plan to help the environment, Obama’s plan would provide immediate funds to help create the technology that will help big [...]

]]> By: Dos http://donklephant.com/2008/05/13/mccains-big-idea-on-environment-is-cap-and-trade/comment-page-1/#comment-407007 Dos Tue, 13 May 2008 18:11:06 +0000 http://donklephant.com/?p=5618#comment-407007 Justin - Good post. The auction creates essentially a Pigovian tax on carbon emissions. There is a cautionary tale here, though, brought to us by Author Pigou himself in his book "Some Aspects of the Welfare State" (1954) that such a tax assumes certain "givens" -- in this case, the profitability or liquidity of a utility company to be able to afford the carbon credits without significant rate hikes to the end-consumers. For this reason, you might want initially a hybrid auction/give away until you can stablize the market. BTW, McCain said the following in a speech yesterday: <blockquote>Over time, an increasing fraction of permits for emissions could be supplied by auction, yielding federal revenues that can be put to good use. Under my plan, we will apply these and other federal funds to help build the infrastructure of a post-carbon economy. We will support projects to advance technologies that capture and store carbon emissions. We will assist in transmitting wind- and solar-generated power from states that have them to states that need them. We will add to current federal efforts to develop promising technologies, such as plug-ins, hybrids, flex-fuel vehicles, and hydrogen-powered cars and trucks. We will also establish clear standards in government-funded research, to make sure that funding is effective and focused on the right goals.</blockquote> Be carefull about what you wish for. http://en.wikipedia.org/wiki/Pigovian_tax Justin – Good post. The auction creates essentially a Pigovian tax on carbon emissions. There is a cautionary tale here, though, brought to us by Author Pigou himself in his book “Some Aspects of the Welfare State” (1954) that such a tax assumes certain “givens” — in this case, the profitability or liquidity of a utility company to be able to afford the carbon credits without significant rate hikes to the end-consumers. For this reason, you might want initially a hybrid auction/give away until you can stablize the market.

BTW, McCain said the following in a speech yesterday:

Over time, an increasing fraction of permits for emissions could be supplied by auction, yielding federal revenues that can be put to good use. Under my plan, we will apply these and other federal funds to help build the infrastructure of a post-carbon economy. We will support projects to advance technologies that capture and store carbon emissions. We will assist in transmitting wind- and solar-generated power from states that have them to states that need them. We will add to current federal efforts to develop promising technologies, such as plug-ins, hybrids, flex-fuel vehicles, and hydrogen-powered cars and trucks. We will also establish clear standards in government-funded research, to make sure that funding is effective and focused on the right goals.

Be carefull about what you wish for.

http://en.wikipedia.org/wiki/Pigovian_tax

]]> By: Sam. http://donklephant.com/2008/05/13/mccains-big-idea-on-environment-is-cap-and-trade/comment-page-1/#comment-406983 Sam. Tue, 13 May 2008 15:14:10 +0000 http://donklephant.com/?p=5618#comment-406983 Been following your blog for a couple of weeks now. Enjoy getting the updates on the US elections. It's fascinating to watch it all unfold from the other side of the pond. Been following your blog for a couple of weeks now. Enjoy getting the updates on the US elections. It’s fascinating to watch it all unfold from the other side of the pond.

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