Robin Hahnel wrote:
> So you want to auction off the permits. Great. That's better than giving
> them away for free since it makes the polluters pay and gains the
> victims some form of compensation in the form of more tax reveunes. And
> I like the idea of a minimum price equal to the marginal social cost of
> the pollutant. But why don't you want to let the original buyers resell
> permits if they wish to? And why don't you want to let polluters who
> didn't buy as many as they now want at the original auction buy them
> from polluters who bought more than they now decide they want/need?
> Admittedly, if all polluters had their acts figured out perfectly at the
> time of the original auction none would want to participate in a re-sell
> market, but perfect knowledge is hard to come by, and where's the harm
> in allowing resales -- otherwise known as making the permits "tradable?"
Because there would be a temptation for a corp. to buy unnecessary permits, corner the
market and make a profit. Maybe they should be allowed refunds-- provided someone is
willing to buy the ration or permit for the same or more than the original purchaser
paid. . I'm really trying to make it a green tax -- but a green tax that includes a
ceiling on what pollution is allowed. I am trying to structure the thing to avoid the
type of corporate giveaways you criticize. All I'm really trying to figure out is how
to build a ceiling into green taxes.
<straw man snipped> <No -- singing, dancing, talking, scarecrow snipped>
> < If you mean: SINCE IN THIS WORLD NO MATTER HOW MUCH WE TRIED TO REDUCEPOLLUTION
> WE COULD NOT EVEN COME CLOSE TO REDUCING IT BY AN AMOUNT THAT WOULD BE OPTIMAL, OUR
> GOAL SHOULD BE SIMPLY TO STRIVE FOR THE GREATEST EDUCTIONS WE CAN POSSIBLY ACHIEVE,
> I completely agree with you.
Yup, that's what I mean.
> But Iagree because our power is so small and the polluters power is so great
> right now that we can't go wrong using this rule of action. No matter
> how much reduction we won, it wouldn't be as much as would be optimal.
exactly.
> But if you mean that it is always better to reduce pollution, no matter
> how much we have already reduced -- if you mean zero is the best level
> of pollution, I disagree and suggest you don't mean this.
You are right. I don't mean this
> >
> > No, it seems to me that you have to know how much pollution you want to allow
> > BEFORE you begin to figure out the social cost of unit of pollution.
>
> And just how do you figure out how much pollution you want to allow?
> This is the question too few greens ever ask themselves. The reason is
> because as long as we are pretty powerless we don't need to know the
> answer. We just need to scratch and claw for as much reduction as we can
> get. But likewise, we just need to scratch and claw for the highest
> pollution taxes we can get. If we ever get powerful enough to get close
> to the optimal level of pollution reduction, we're going to need an
> answer to the question how much pollution do we want. I submit that you
> can't answer that question without estimating the marginal social
> benefits of pollution reduction FIRST. Since only then will you know how
> much pollution you want to tolerate.
However, given that certain levels of certain pollutants have catastrophic effects, we
will know what we do not want before we know what we do want. That is, we do not know
what the right level of fossil fuel carbon is. (I can make a very good argument for
it being greater than zero.) But most greens can give you a level it has to be reduced
below to avoid greenhouse catastrophe. . If greens should happen to achieve a strong
position of influence without being dominant, I suspect that is the degree of
reduction they will be able to win. If greens gain so much influence they can reduce
pollution to or near optimal then you are right -- marginal social costs and benefits
of pollution become essential to deermine.
What about that long term ?
Even in a better society, I suspect that -- at least in the transition stages -- some
equivalent of ceilings will have to supplement true social pricing. I think that what
it comes down to is distrust. All right, in economic theory, you need the same
information to determine true social cost of pollution and optimum level of pollution.
In economic theory, if you price a pollutant at this true social cost, pollution will
be reduced to the optimum level. In economic theory the previous sentence was
redundant, saying the same thing twice; the definition of optimum level pollution is
the amount of pollution produced when priced at true social cost.
Given the basic human ability to screw up, I'd suspect that in real life major
problems in this regard are possible regardless of economic theory. I cannot believe
that it is impossible that a price determined to be optimum could not in some
exceptional case reduce pollution so little that it approached catastrophic level I
certainly cannot believe it impossible that in some cases such a prices would fail to
reduce pollution to widely acknowledged optimum levels. A ceiling added to any
attempt at true social pricing would guard against the worst consequences of such
errors. If such ceilings prove unnecessary they could be dropped, having done no major
harm.
