Why "Cap and Tax" is false...

We maybe talking two different topics. Renewable Energy Credits are generated when a utility produces energy by a renewable source. Some states require that a certain percentage of power produced is from renewables. These credits can then be traded between companies, these are traded in the market. Also, if a company doesn't have enough credits they can pay a fee to the state, which the price is already capped. So the credits will not go over a certain price.

Talking with my boss however, he thinks the best comparison is what the EPA did requiring companies to reduce sulfur emissions.

 

Global warming was occuring in the 1950's buddy. Even if we cut C02 levels back to 1950's levels, we'd still be causing climate change.

The only way to truly stop global warming is to stop burning fossil fuels all together. A cap isn't going to do it. You need to get rid of using oil as fuel, but use it as a lubricant.

The only energy policy that can impact global warming today is to push for development of fully electric cars and go 100% nuclear.

Crap n Tax is just a pile of doodoo. In fact, if you are truly an enviornomentalist, you'd be opposed to it because you'd see the danger in it - that it will make people thing they are doing something for the environment when they are not.

It's like taking Vitamins for colds. Placebo all the way.

 

The guy you quoted said cap and tax will not do anything. You said several states already have the program.

 

I'm not your buddy, friend!

And I don't remember arguing at all about the effect of CO2, I said take it how you want. This will cap CO2, if you think that is useless that is fine, I don't want to debate that. Seems kinda pointless.

 

The evidence that man-made CO2 emissions / greenhouse gases as causing the current increase in temperatures is very strong. The science is there. I use to think not but after a lot of looking into this, global warming as a result of mankind is real and pretty indisputable.

The problem is that the current proposals aren;t going to address the problem.

TJ, minuscule changes can upset an equilibrium. Whatever that was, is now gone, we are in uncharted waters. Even if we stopped all co2 production, we don't know the impact that will have.

One thing is for sure, we need to investigate how we can reverse the warming trend in case things start to get bad - but a cap and trade political policy is not that.

 

Actually it IS a tax. At 100% auctions it is a tax

 

you're right, i should have classified that what i meant is a program requiring renewable energy production.

however my boss was talking about the sulfur reduction legislation, what are you asking about an auction. according to him, companies are given credit at the beginning for a ton of sulfur they emit. you pay a tax/penalty when you exceed your credit. The credit limit is reduced over time. like the cap and trade you can buy the credits from other companies, choose to pay the penalty, invest in other technology, etc.

 

You are all over the place. If you want to change the system you have to start small. Just because it does not do everything you want does not make it logical to be completely opposed to it.

 

Yeah that is a pure cap and trade system. When you auction off the allowances and make tax revenue it is a "cap and tax/trade" system. The higher the % you auction instead of give away the more it behaves like a carbon tax.

 

If you sell 100% of the allowances the only difference is you allow people to sell their tax stamps.

 

Cap and trade was used to reduce sulphur admissions to combat acid rain and that program worked fairly well.

 

Under that reasoning you could claim almost any fee is a tax. FOr instance the title to my car is a tax on anyone who might buy my car since when I sell it I sell the title too.

 

Those types of fees do act like a tax. I am not sure what your point is though.

 

Why would I trade any permits when I had to buy them all? I would just buy enough to get the abatement cost in line with tax cost. No trading needed.

 

If you consider that anytime that government charges a fee and that fee gets passed on is a "tax" then under that reasoning yes Cap and Trade is a tax. I think that is a fairly unreasonable standard to say what taxes are as you would have to apply that to almost every item and everything that we do that costs money.

 

On the profit incentive: a cap & trade system has two effects on the NPV of projects. One, it makes investment in dirtier forms of energy less attractive by internalizing the costs of environmental damage. Two, it makes investment in clean forms of energy more attractive by adding an additional revenue stream (selling RECs to dirty energy producers).

By contrast, keeping the price of energy unnaturally low by socializing the cost of environmental damage for the sake of economic prosperity will do nothing to change the generation mix. Even in boom-times, cheap and dirty energy investments (which are, in effect, subsidized at the expense of the health and well-being of humanity) will have a better NPV than clean energy investments, and no change will ever occur. Whether we can afford the "luxury" (which is ridiculous in itself -- energy is a commodity) is irrelevant in considering where to invest the money to maximize returns.

If your goal is to effect a genuine shift in the American energy economy from dirty and/or foreign energy sources to clean and domestic ones, cap-and-trade is easily the way to go. Status quo will perpetuate the current arrangement. What's more, cap-and-trade is using the free market magic you love to make the change.

 

I said the title fee acts like a tax on the sale of your car. If it is technically a tax or not depends on other factors.

That has nothing to do with my reasoning on why 100% auction carbon permit program is a tax.