Wednesday, December 15, 2010

The Air Resources Board is poised to make a bad decision... help them see the light!

© 2010 Joshua Stark

Contact the California Air Resources Board (CARB) and tell them to vote down the current cap & trade proposal before them tomorrow. 

I haven't written on cap & trade in quite a while, but here's a quick run-down of my views: 

1)  Carbon pricing must be collected by the government - giving away carbon 'credits' is tantamount to allowing companies to tax consumers for the companies' pollution;

2)  Carbon offsets are too costly to monitor and too easy to get around - if you don't trust that California can pay for adequate monitoring of its carbon offset projects, do you really believe Brazil or Chiapas can?;

3)  Cap & trade can work, but only if it is fairly expensive, and only if the revenues are given back mostly to the people via a direct rebate, and the rest only used to mitigate or adapt to climate change.

(If you are interested in my more extensive writings on the topic, click here, here, here, and/or here.)

Keeping in mind that there is no such thing as a "carbon market" - it isn't a good or service with any consumption value, and any scarcity of carbon will be contrived by the government - it is easy to remember that any attempt to put a price on carbon emissions will be a tax of some sort.  This is not bad!  Taxes are not always bad!  However, they are bad if they are allowed to be collected by private parties, and the latest proposal, by giving away carbon credits to the companies and industries that pollute the most, will do exactly that. 

In addition, the forest rules in the latest proposal will most likely provide incentives for timber companies to clear-cut, and they will definitely subsidize wood products in California, with the subsidies, again, being paid by consumers directly to the companies that pollute the most (those getting the free credits).  Look for California oil companies to start buying a lot more wooden chairs and tables than you'd think they'd need.  Also look out for giant chair bonfires at your local refinery...

This is a bad proposal, and its complexity makes it ripe for gaming.  It is also probably going to be so cheap that it will do very little to curb actual carbon emissions, with the result being a nominal tax on consumers given directly to polluting companies.  What an interesting way to save our planet!

For more information, start with this article at California Watch; to contact CARB about the cap & trade proposal, click here.

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