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I am curious what everybody thinks about the concept?

My thoughts follow:
It is a system where a government decides it will produce X amount of some quantity pollutant. It then auctions off permits for the X amount and allows people to buy and sell the permits as needed.

From what I have learned in economics class, its really the most economically feasible way to limit the amount of pollution produced, but it does not mean it has no effect on the economy. It just means the economy copes with the restriction as efficiently as possible.

The current push for this system is in US and its for production of carbon dioxide. This is effectively a tax on energy because the majority of the use of energy produces carbon dioxide. Its supposed to cost the US economy 1.2 trillion dollars over 7 years (170 billion dollars a year).

I think a nation based "Cap'n Trade" system is bad idea because it will just drive producers of carbon dioxide (and the jobs and growth they provide) to countries with no restrictions. Right now China has no restrictions and wants as much foreign investment as possible so factories and jobs will move from the US to there.

The basic issue here, is that this national system is supposed to stop a global problem (global warming). This will only work with a global Cap'n Trade system. Its like a city banning nuclear weapons to try and stop proliferation.

What about people who pollute anyways? How likely are they to get away with it? How will the fines work? What if the fines end up costing less than the permits (the government is terrible with this sort of thing)?

What will be the jurisdiction of state or local governments, and what if they try to give corporations that set up shop locally special deals (not necessarily in the clear; they can just wink-and-nod and turn the other cheek when the pollution starts. By the time it comes out the money will have been made, the damage done, and the politicians involved already out of office; in other words, it will have become Someone Else's Problem.)

And then, under the obfuscation of corporate and government beaurocracy, who will really know what's going on - or where the money is going - anyways?

Game_Ender wrote:This will only work with a global Cap'n Trade system.

And the odds of that happening are...?

I'm not saying "don't bother". But the Free Market - and democracy for that matter - is based on what people value... and if people don't value clean air and water, and a planet capable of sustaining human life, you are going to have difficulty making them contribute towards it. And value is relative. People may claim to value the environment, but they may place a higher value on SUVs, big-screen made-in-China TV's, and maintaining a relaxing bovine complacency.

(I usually don't waste time in the Lounge shooting my mouth off about political BS, so I'm blaming this post on my morning caffeine injection.)

I don't do much lounge talking either, but this issue is just bothering me. Why are my representatives in the US so convinced they need to shackle the American economy? When all there work will just shift carbon production to other countries, having no effect at all on carbon production.

I didn't even think about the enforcement issues Frenetic raised. Although this is federal system, so states can't offer breaks and such.

Were all shunting off our polution elsewhere anyway. Just look at china. Were responsible for their growth by moving a large portion of our manufacturing there. They just use up the fuel and create the waste for us, and with less regulation there is less cost cleaning up the mess they make.

US emissions standards for cars is actually higher than the EU's in many states now. Here in California Diesels aren't even legal because they don't meet minimum emissions requirements to be allowed on the road. There are a couple of new super clean diesels coming over here from Germany this year though.

I don't think many people realise that the Federal Government doesn't have control of nation environment policy. Each state is treated as the equivalent of a seperate EU country with Bush's government being the equivalent of the European Parliment.

California is the state with the largest population and most wealth, having the 6th largest economy in the world itself ( The UK being the 5th). This means CA has the wealth to experiment and pioneers most of the environmental programs in the USA, if successfull other states adopt them too. About 1/4 of US states have adopted the California emissions standard already and more adopt them each year.

Things are nowhere near as bleak as people make out. The biggest problem is the individual households that are used to squandering resources and don't think to cut back. For instance, I have rented 6 homes in the last 10 years, not a single one had a programable hot water heater or let you turn them off easily. Individuals need to be willing to make some small personal sacrifices. But most don't yet see the need.

I don't think it's always the governments responsibility, people need to be more responsible and shouldn't have to have a nanny state telling them what to do all the time.

BTW. A lot is changing today. The hummer plants are shutting down. SUV's have had a huge drop in sales. Ford focus here (not a great seller normaly) has had production uncreased 30%.

GM and Ford are finaly looking at their EU cars and bringing some over here. Saturn Astra is a vauxhall/Opel astra. The Ford fieste, and Mazda 2 are coming over in the next year. Things are definately changing.

Wonder if they will bring smaller capacity engines soon. Currently the VW polo equivalent base model has a 2.5L engine.

Ford focus starts at 2.0L and costs:
7105 GBP
8876 EURO

Sounds crazy that these cars have such large engines really.

Although this is federal system, so states can't offer breaks and such.

Yes, but the question is, who will enforcement be delegated to? Will the enforcers be impartial? Who will oversee them? Details, perhaps, but very key details.

Whenever something like this is proposed, politicians and beaurocrats and businesses start rubbing their slimy little hands together with glee, thinking of ways they can game the system to their monetary advantage. (Assuming this wasn't invented to be a scam in the first place.)

Evak raises some interesting points, too. It's nice that California can try things on its own, and other states can adopt them if they work. That was, of course, the whole fricking socioeconomic idea behind the "United States" in the first place, and indeed something being emulated (to some degree) by the EU and Canada. As we software people should know, there are a lot of cases where distributed structures are a good idea and centralization causes madness.

Evak wrote:Currently the VW polo equivalent base model has a 2.5L engine.

Game_Ender wrote:I think a nation based "Cap'n Trade" system is bad idea because it will just drive producers of carbon dioxide (and the jobs and growth they provide) to countries with no restrictions. Right now China has no restrictions and wants as much foreign investment as possible so factories and jobs will move from the US to there.

Luckily it isn't that simple. Environmental regulations and associated costs are just one among many factors that determine where a company will move.

I'd turn the argument into something positive: a "cap'n trade" system favors industries that are not heavy on carbon dioxide production. So a nation which implements such a system should see more growth in these areas. And more innovation in regards to reduce the carbon dioxide production.

Of course a global system would be preferable but until (if ever) that happens doing it nation-based does make some sense.