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The Fake Factory That Pumped Out Real Money

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Re: The Fake Factory That Pumped Out Real Money

#71

Post by icambron »

winstonewert wrote: post #60
fsargent wrote: post #18

Earlier quoted context omitted.

Cap and Trade and a Carbon Tax are equivalent in outcome. Cap and trade would impose fees on everyone regardless of how much it costs them to lower emissions also. The problem with Cap and Trade is that it targets the large scale emitters rather than the item desired to be limited. Imagine that you had five major producers putting out 30% of airborne carbon, and 50,000 minor producers putting out 70%. The cost of adm…

"The cost of administering a cap and trade system to the minor producers would be incredibly expensive - the legislation would instead focus on gouging the five major producers" Why is that different from the tax approach? Wouldn't taxing the 50,000 minor producers appropriate to their levels of pollution be equally as expensive?

The key part of that is administering part. Cap and trade requires the producer participate in a market for cap allowances. It's that overhead that makes it more expensive.

Re: The Fake Factory That Pumped Out Real Money

#72

Post by edkennedy »

Other hilarious and frightening "business ideas" with US government issued carbon credits:

Dumping giant piles of iron sulfate into the ocean in Northern Canada: http://www.timescolonist.com/news/local/haida-readying-for-s...

Driving a train full of biodiesel across the border and back again numerous times while never unloading it: http://www.cbc.ca/news/canada/biofuel-credits-behind-mystery...

Re: The Fake Factory That Pumped Out Real Money

#73

Post by jessaustin »

Dylan16807 wrote: post #59
jacquesm wrote: post #33

Earlier quoted context omitted.

And without sufficient auditing and enforcement you'll get scams and your goals will not be achieved. You're essentially betting the farm on the honesty of corporations controlled by people who now have a direct incentive to cheat. That's putting an awful lot of faith in humanity right where it has the biggest chance of failing (at the CEO level). Note how in the article the people working there were saying they were…

> And without sufficient auditing and enforcement you'll get scams and your goals will not be achieved. Auditing and enforcement are critical. Shipping around physical gallons does not get rid of that need. Physical gallons could just as easily be water if nobody checks. I don't see why you blame the abstraction.

The consumer can't put the water in her tank and drive her car away. Since she has skin in the game, everyone upstream from her does too. It is reasonable to blame an "abstraction" that removes consumer interest entirely, and doesn't substitute some other control of equivalent strength. The minute I heard of "cap'n-trade", which was decades ago, I expected exactly this sort of scam. Those who designed this scheme, unlike the useful fools who provide political cover for it, did so with exactly the same thought.

Re: The Fake Factory That Pumped Out Real Money

#74

Post by ThrustVectoring »

Alex3917 wrote: post #64
ThrustVectoring wrote: post #53

Earlier quoted context omitted.

Of course the goal isn't to punish polluters. It's to convince them to pollute less. This is why tax things and behaviors we don't want - to make it more expensive, so that there's less of it.

> It's to convince them to pollute less. That's not the goal. What matters is the total amount of pollution, not how much any individual pollutes.

I'm not sure what the distinction you're trying to make is. The total amount of pollution is the sum total of every individual's pollution. In order to reduce the total amount of pollution, individuals have to pollute less (on average). Conversely, if individuals pollute less (on average), then total pollution goes down.

Re: The Fake Factory That Pumped Out Real Money

#75

Post by slavik81 »

tomjen3 wrote: post #31
fsargent wrote: post #18

Earlier quoted context omitted.

Cap and Trade and a Carbon Tax are equivalent in outcome. Cap and trade would impose fees on everyone regardless of how much it costs them to lower emissions also. The problem with Cap and Trade is that it targets the large scale emitters rather than the item desired to be limited. Imagine that you had five major producers putting out 30% of airborne carbon, and 50,000 minor producers putting out 70%. The cost of adm…

If I can save 10 tons of co2 at a cost of 2 dollars and you can save it only at 4 dollars, then if we have to lower the amount by 10 tons with a tax that is evenly distributed the total cost is going to be 3 dollars - 50% more than under a cap and trade system, where I sell you 10 tons worth of co2 credits and implement all the changes. Since ultimately a carbon limitation is going to mean more expensive products, it…

The 50% in your analysis stems entirely from the fact that you're using ridiculously small integers. At any tax rate greater than $2, the first person would save money by making the change. You say $3, but it could be $2.01. At exactly $2 they would have no preference between enacting the change or not.

Of course, you omitted that the same must be true for cap and trade. The person who can save CO2 at a cost of $2 would have no preference between enacting the change or not if they were only to be paid $2. You'd need to pay them more. Like, $2.01 or $3 if we're only using integers. Exactly like the tax.

Re: The Fake Factory That Pumped Out Real Money

#76

Post by hackaflocka »

Interesting that there's no easily found mug shot of him considering he's in Fed Prison.

In India, about 25 years ago, the govt instituted export credits. Basically, in order to import anything, you needed to have export credits. So, export credits became a fungible currency. And people started exporting all kinds of crap under the guise of something legit, just to obtain export credits. People were exporting bricks, calling them shoes, and then selling the export credits. Of course, government officials were involved end-to-end in the scam (via relatives and friends, as is usually done there). Sad to see similar things are happening in the US now.

Re: The Fake Factory That Pumped Out Real Money

#77

Post by Dylan16807 »

jessaustin wrote: post #73
Dylan16807 wrote: post #59

Earlier quoted context omitted.

> And without sufficient auditing and enforcement you'll get scams and your goals will not be achieved. Auditing and enforcement are critical. Shipping around physical gallons does not get rid of that need. Physical gallons could just as easily be water if nobody checks. I don't see why you blame the abstraction.

The consumer can't put the water in her tank and drive her car away. Since she has skin in the game, everyone upstream from her does too. It is reasonable to blame an "abstraction" that removes consumer interest entirely, and doesn't substitute some other control of equivalent strength. The minute I heard of "cap'n-trade", which was decades ago, I expected exactly this sort of scam. Those who designed this scheme, un…

The consumer gets 100% gasoline in either case. Forcing the oil companies to buy biodiesel does not force them to give it to consumers. The RID abstraction is a completely separate issue from whether anyone actually wants biodiesel.

Re: The Fake Factory That Pumped Out Real Money

#78

Post by tim333 »

fsargent wrote: post #18
Alex3917 wrote: post #8

Earlier quoted context omitted.

A tax is actually vastly more complicated and easier to game. Remember, the goal is to cap emissions, not to raise money. When you start with a cap and work backwards towards the clearing price, you are guaranteed to be meet that cap. But when you start by setting a price, there is zero guarantee that you're going to meet your emissions target. Also, the point of cap and trade is that it lets societies meet their emi…

Cap and Trade and a Carbon Tax are equivalent in outcome. Cap and trade would impose fees on everyone regardless of how much it costs them to lower emissions also. The problem with Cap and Trade is that it targets the large scale emitters rather than the item desired to be limited. Imagine that you had five major producers putting out 30% of airborne carbon, and 50,000 minor producers putting out 70%. The cost of adm…

>Current estimates of the social cost of carbon is ~$220 per ton.

Wikipedia has "from less than $1/tC to over $1,500/tC." It's an inexact science.

Re: The Fake Factory That Pumped Out Real Money

#79

Post by AnthonyMouse »

rayiner wrote: post #52
Alex3917 wrote: post #49

Earlier quoted context omitted.

> Cap and trade doesn't work the way you say. It isn't an auction. See the article. The initial credits can be allocated either through an auction, by giving them away to existing polluters, or through some combination. But after the initial allocation, credits are traded on the market. That's the 'trade' part in cap and trade.

And Coase theorem says it doesn't matter who gets the credits--they'll eventually find their way to the most efficient allocation.

It doesn't matter who gets the credits as far as efficiency in reducing carbon emissions.

It matters quite a lot financially however, because the credits are worth money, so anybody who gets them for less than the market price is in for a windfall.

Re: The Fake Factory That Pumped Out Real Money

#80

Post by AnthonyMouse »

Alex3917 wrote: post #8
Pxtl wrote: post #3

Earlier quoted context omitted.

Yes, that's why most economists I've read seem to agree that carbon tax is better than co2 credit cap-and-trade systems - simpler and harder to game, flawed only because it includes the word "tax" which is unpalatable to the public.

A tax is actually vastly more complicated and easier to game. Remember, the goal is to cap emissions, not to raise money. When you start with a cap and work backwards towards the clearing price, you are guaranteed to be meet that cap. But when you start by setting a price, there is zero guarantee that you're going to meet your emissions target. Also, the point of cap and trade is that it lets societies meet their emi…

> When you start with a cap and work backwards towards the clearing price, you are guaranteed to be meet that cap. But when you start by setting a price, there is zero guarantee that you're going to meet your emissions target.

If you can't generate a good estimate of how much tax is needed to hit your target, hitting the target no matter what is actually a bit of a problem.

If the necessary tax would have been less than you expected then your emissions target is likely too conservative and you could reasonably have picked a more aggressive one.

And if the necessary tax is much higher than you expected then you could end up wrecking the economy, because the cost of credits will then be outrageously high and get passed on as high energy costs.

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