On 9/6/07, raghu <[EMAIL PROTECTED]> wrote: > On 9/6/07, Gar Lipow <[EMAIL PROTECTED]> wrote: > > of him that in his old age he would reject capitalism. But auctioned > > permits are not like offsets. Really they are more like a carbon tax. > > The problem with the auctions is it is almost guaranteed they will be > fixed. Especially if it is "upstream" where all refineries are > operated by a small number of oil majors. > > There is in fact a precedent for this sort of thing. The FCC regularly > auctions wireless spectrum and the big telephone companies have > learned to dominate the process completely and use it to keep unwanted > outsiders away. The ongoing drama over the 700 MHz band shows clearly > what to expect from such an auction process: > http://ap.google.com/article/ALeqM5iMi936evStc1ZaVhT25j_gMSBXxg > > In fact the companies have a fiduciary responsibility to their > shareholders to fix the auction. > It is not the details that are flawed, it is the very idea that > individual greed can somehow be harnessed to enhance the common good. > It simply cannot be done. > -raghu. >
I prefer a carbon tax myself. But permit auctioning at least shrinks the the total amount of fossil fuels that can be consumed. Progressive supporters of the Sky Trust do make an interesting political economy counter point. They point out that there is a significant difference between the type of political battle you have in a permit auctioning system vs. a carbon tax. With permit auctioning, the fight is over how few the number of permits you sell. With a carbon tax the fight is over how high the carbon tax should be. While they are economically equivalent, they are politically very different, and the argument is that the first type of battle is to be preferred to the second; it focuses attention where it belongs. My feeling is that fight over the price of carbon is not avoidable. Fossil fuel companies will simply publicize high estimates of what price they think permits will cost, and force that price to become part of the agenda. So IMO a carbon tax wins on that basis too.
