Saturday, July 31, 2010

Solving World Debt Through Radical Economic Transparency

A Way Out of the World Debt Spiral?

My own debt exit strategy to Save Capitalism with Radical Transparency is likely to be the simplest, easiest and most effective you'll find... and thus it is the very least likely to be tried, since it would sharply reduce the power of the most-mighty. 

No, it isn't particularly radical.  In fact, the concept might be called "conservative" in its fundamental ethos and judged by the writings of Adam Smith. The notion does not entail any particular campaign of confiscation, higher taxes, socialism or new regulation.  In fact, it would allow a whole lot of regulations to simply fade away as no longer needed. It would certainly force very little change in the actual structure of capitalism.

The proposal is radical economic transparency. Imagine a simple requirement, negotiated into a treaty that encompassed the world, that is so simple it can be encapsulated in a few sentences.

Anyone who owns anything larger than a small farm or shop must simply  declare and avow, openly, that they own it. People should state what it is that they own, and how they came to own it.  

Oh, there is one necessary corollary to spell out.

 Further -- no property may be possessed by any set of holding companies more than two layers deep, before getting to actual human people, who admit, assert and avow that ownership.

That's it; all there is. There ain't no more.  Isn't it enough?

                             Not so radical an idea.

Note that there is nothing whatsoever socialistic, confiscatory or “leveling” about this proposal. All I am asking for is the situation that already, in theory, prevails!  Look into it. Exactly this level of traceable ownership is the basis for most of our market systems, not so much for the benefit of the state, but so that all market players, from corporations to small consumers, can have the Hayekian knowledge they need, in order to make informed market and legal decisions. 

See also my article: Transparent Ownership Treaty.

In other words... if it ain’t true, right now already, then it oughta be.

No property owned by the rich or mighty or by corporations... or by anybody at all... should be any more or less protected by the law, just because nobody knows who (or what) owns it.  The law is the law and tax policy, and every other property-related concern, would be better thrashed out in the open, by adult citizens via the open political processes that are supposed to control such things.

In other words, those who use political means to fight for lower taxes on the rich may continue to do so; indeed, the propaganda machine agitating for continued low rates of taxation on the aristocracy is in full swing and very effective.  But that is an entirely different matter from concealing the ownership path itself.  There are no bases for justifying that, political, moral or philosophical.

Indeed, the open and honest rich ought to really want this, in order to prevent their more unscrupulous peers from gaining advantage over them!

One immediate benefit? An ability to attribute accountability, when it is badly needed.  Take the case of the oil tanker that ran aground in Brittany, a few years ago, befouling half of Northern France. When it came to assigning blame, no one could even find out who owned the damned ship! Nested holding companies and flags of convenience simply should not be allowed to perpetrate such travesties.

So, what would happen to the secret wealth that’s revealed, if this plan were implemented?  Well, much of it was, in fact, completely innocent, sheltered from general nosiness, but otherwise entirely legal. So? Should the rich really get to be the ones who determine this, on completely their say-so? Privacy is one thing but  paranoia is another. We have a right to have a look, sniff a moment, and verify the aroma is good.  Enjoy the wealth, but openly, please.

Much of the rest was derived from tax avoidance -- and for that huge reservoir, a generous partial amnesty should ease the transition and cleanse a lot of consciences. And the problem with making these people live by the same rules that apply to us is...?

As for the rest of the newly revealed wealth? I have seen estimates that a substantial fraction of the world's hidden ownership would be simply abandoned, rather than allow public connections to real people. Ill-gotten gains from criminal enterprise, drug-lord stashes, the holdings of local debt-lords who have no legitimate provenance for the estates they make peasants slave-upon. At-best, this might result in the return of maybe half of the wealth that was ripped out of developing nations by their own corrupt elites. (Africa, alone, would probably see a doubling of public assets, from the restoration of loot stolen by the likes of Mobutu Sese Seko.

radicaltransparencyIt is all very good for the right to blame the plight of deficit-ridden nations on excessive government and entitlements. And indeed, these are problems that need the corrective force of conservative criticism.  But that has nothing at all to do with the issue at hand, which is to fix the balance books as much as possible through the most-cleansing force of all.  Light.

And here's the crux: erasing much of the world’s official debt can take place without any confiscation or increased taxation of legally-gained assets. 

Ponder that last sentence again.  What at first seems a state power grab and tax rape is not anything of the sort.  Not inherently, at least. Not if put into effect honorably, by people who (with open eyes) genuinely want vibrant entrepreneurial markets to continue to work, ever-better.  That desire, if sincere and pervasive, should limit the “victims” of transparency to those who flee from some assets, abandoning them because they never did (or never should have) own them.

In fact, taxes on legal assets could probably go down, steeply, after such a move.  Think about that.  Especially if some of the abandoned property is then vested in the tenant farmers who actually till the soil, following the pro-market, pro-entrepreneurial methods of Hernando de Soto... methods that have vested property in the poor farmers of Peru, giving them a giant leg up toward middle-class, land-owning independence. This is a story that proves my point.  Lawful, open ownership is a goal that should inspire libertarians and honorable conservatives, easily as much as any liberal.
Wealth-of-Nations
(It would also broaden the tax base, turning more of the voting population into tax-skeptical owners... think about it. In any event, the general transparency treaty might be accomplished as part of a no-new-taxes deal.  Would that sweeten the pot, for conservatives?)

 Ask economists.  They will tell you that open information flows are the life-blood of markets, both in theory and in practice.  According to F. Hayek, the patron saint of sane libertarians, capitalism falls apart when shrouded fogs - either of secrecy or pragmatic obscurity, or else oligarchic collusion - thwart the ability of six billion market participants to make intelligent choices, based upon all pertinent data.  Note, also, that obscurity in order to mask cheating is precisely the kind of crony-aristocratic meddling that Adam Smith thoroughly denounced, in The Wealth of Nations, when he first shed light on the fundamental principles of market capitalism.

TransparentSocietyOf course you would expect such a proposal from the author of The Transparent Society: Will Technology Force Us to Choose Between Privacy and Freedom? But in fact, I am no goggle-eyed purist! I would allow considerable exceptions to Radical Transparency -- including professional confidentiality, basic intellectual property, tactical state security secrets, and temporary caching of business strategies and product development. This is not about purist radicalism, but pragmatically seeking equilibria that can help to keep our civilization healthy. 

And free.

Entirely at right angles to the hoary and stupid and discredited so-called "left-vs-right political axis,"  this is the reform most likely to rescue and re-invigorate capitalism.  It is also the one way that the debts can be paid off -- by criminals, tax cheats, and scoundrels.

And then there is science.

 Of course, even the prodigious debt-payoff that results from transparency-of-ownership won't prime the pump forever.  Sure, economic activity will also work better and more efficiently, with ownership information available to all.  Nevertheless,these are one-time jolts. Once we've incorporated the new efficiencies and the reservoirs of illicit wealth, what will drive the engine?

Look, over the long run, there is really only one way out of our current economic troubles.  Growth.  And what propels growth?  In developing nations it can be surges in previously under-utilized labor, as we've seen in China and India.  Marx said that capital formation can come from administrative theft, but we'll assume we're moving past that kind of thing.  So what is left?

It has been proved, time and again, that technology and science were responsible for 50% + of all growth in developed nations, since World War II. The figure in Western nations during the Internet boom of the 1990s was more than two-thirds, According to Mark Anderson of the Strategic News Service. Over sixty percent of growth, directly attributable to technological advancement.

Isn't the solution obvious?  Especially after the infamous War on Science reversed America's tech-driven growth spurt, during the first decade of this century?

More tech entrepreneurship.  More and better science education. Pull out the stops to encourage innovation.  And more science...

===   ====   ===

...and now... some Misc Political Items...

Said an alert fan: “FYI. Drudge just linked to a scare piece on an Alex Jones site about the coming dissolution of America in 2017, and they used a still from The Postman movie to illustrate the story. It was a hard LOL for me, and thought you'd all like to know.” 

Indeed, while Drudge & Jones are major apologists for oligarchy, Roberts is actually less predictable, sometimes interesting, and aims a zinger on-target, toward the end.: "America’s collapse occurred when government ceased to represent the people and became the instrument of a private oligarchy. Decisions were made in behalf of short-term profits for the few at the expense of unmanageable liabilities for the many."

Of course, the destruction of the American middle class should be the biggest political issue of our time. Hence, read this article!  Right now, the blame could very plausibly be heaped upon the Neoconservative Movement, whose misrule so horrifically harmed not only the United States, but the older mantle of responsible conservatism, which it hijacked.  President Obama could “get all populist on their asses” over this devastating example of retro-social-engineering.  But instead he has spent 18 months trying to reason with the unreasonable and to reach out to the rabid. 

He now has very little time left before he winds up owning the decline.  It is time to listen to Rahm Emmanuel. Or, at least, appoint a special prosecutor over the corruption at the Minerals Management Service... and let the SP’s trail take him where it will.

In the category of “who else do you know who has been saying all this, as long as I have been?”   “A U.S. audit has found that the Pentagon cannot account for over 95 percent of $9.1 billion in Iraq reconstruction money, spotlighting  that there is little to show for the massive funds pumped into their cash-strapped, war-ravaged nation.”

Continues the report: “The $8.7 billion in question was Iraqi money managed by the Pentagon, not part of the $53 billion that Congress has allocated for rebuilding. It's cash that Iraq, which relies on volatile oil revenues to fuel its spending, can ill afford to lose.... Complaints surfaced from the start of the war in 2003, when soldiers failed to secure banks, armories and other facilities against looters. Since then the allegations have only multiplied, including investigations of fraud, awarding of contracts without the required government bidding process and allowing contractors to charge exorbitant fees with little oversight, or oversight that came too late.”  Oh, BTW... 100% of the funds in question went missing during the Bushite Administration. And yes, I have said all this since 2004. 

Of course, you all could join the Coffee Party Movement. Yes, it is based on opposition to the rancorously partisan "Tea Party" movement.  But not so much over left-right issues as red-blue temperaments and basic approaches to life.  (There are conservatives and fiscal responsibility types etc in the Coffee Party movement; as I said, it is about personality.)  No, the thing being opposed is the rancor itself.  The culture war that is being foisted on America as a way to weaken us. "Our Vision: Reason, truth & civility in public affairs; A gov't of public servants accountable to the People; A People committed to civic virtue, compassion & the common good."

http://nakedcapitalism.com/  See an interesting extrapolation about hidden wealth in offshore tax havens... and the long-term implications for us all.

As someone who has experienced the most frigid extremes of the cold war between the US and Soviet Union, Admiral Bill Owens  has made it his life's mission to try to prevent a similar chill freezing the emerging relationship between Beijing and Washington.  (I have met Owens - a singularly impressive member of the officer corps.  And all I can say, again, is thank God for the Navy.)

According to the Wall Street Journal, consumer tracking “has grown both far more pervasive and far more intrusive than is realized by all but a handful of people in the vanguard of the industry.” Tracking technology “beacons” are placed on a computer when you visit a website, gathering information on your online activity, your profile and preferences…this info is bought and sold on stock market-like exchanges…

164 comments:

Tim H. said...

Nice idea, might cool down the class war. The sticking point is the people who can't see others as human, only a potential harvest. The sort who cause most of the pain the "Tea party" gets agitated about.

the.edwin.young said...

I'm unclear if the proposal includes fractional ownership: could someone still sell 10% of a business? Can stocks still be traded? Presumably a mutual fund would fail the '2 steps removed' test, though.

I don't object to the 'transparent' part, but the 2 steps bit seems a bit impractical given the complexity of the modern econonmy IMHO.

David Brin said...

I do not care if it is 2-steps removed, or four-steps. But when you get above that, you find clever nested-doll schemes to control vast empires based on tiny slivers of actual ownership

Now see this:

"Over-the-counter markets for derivatives have been a subject of blame for the global crisis. This column argues that the rising opacity and barriers to entry in these markets have been sorely overlooked leading to dark pools, flash trading, and front-running. These unfair practises can – at any time – cripple markets. They undermine the premise of free markets and should be stopped......
Dark pools are a private or alternative trading system that allows participants to transact without displaying quotes publicly. Orders are anonymously matched and not reported to any entity, even the regulators (Younglai and Spicer 2009). Thus, the mainstream exchange-traded market does not have any clue about the volume of transactions happening in this parallel market or the prices at which they are being executed. Obviously, price discovery on the mainstream market, without dark pools information, becomes inefficient. Moreover, transactions carried out in dark pools effectively become over-the-counter in nature as the prices are not reported and financial risks not effectively managed. More critically, these risks can spread like wild fire as we saw in collateralised debt obligations and credit default swaps markets."

http://www.voxeu.org/index.php?q=node%2F5056

Ian said...

The breathless tone of the articel about dark pools brings to mind the claims 6-12 months ago that a quadrillion dollar derivatives market collapse was just around the corner.

I guess like the Second coming it's been moved back a little but is definitely still on the way.

Tony Fisk said...

I thought those claims were more like two years old (ie before the GFC)

(It is later than you think! ;-)

ederhu: a swedish blanket

Ian said...

Two articles on China that are worth reading:

1. China and the other major developing countries are responding to the slowdown in the developed economies by stepping up trade and investment among themselves.

Brazilian plane manufacturer Embraer isn't selling many planes in Europe and North American markets but they're selling more than ever Asia and Africa.

http://www.bloomberg.com/news/2010-08-01/new-silk-road-built-by-china-binds-asia-to-latin-america-with-global-trade.html

2. Chinese corporations are aggressively investing in innovation and homegrown technology.

http://www.gizmag.com/haier-power-pad-recycle-energy-hot-water/15809/

tWB said...

@Ian -- No one's arguing that dark pools ("crossing networks," or, as I usually explain them, "hidden matchmakers") are going to trigger another economic collapse. Instead, dark pools and algo trades pose the problem of facilitating the hiding of information from the market, either through exposure tactics (algos) or through off-exchange matchmaking (dark pools). On the other hand, both methods are necessary to limit accidental volatility caused by large institutional block orders. The problem is that the volume of the dark pools is large enough to materially change NBBO spreads, which means SEC is concerned about price distortions.

As it is, SEC has an NPR that will require more robust consolidated tape and quote reporting for alternative trading systems (ATSs). In general, this should restore information to the system while protecting the anonymity of large block orders -- and will probably kill off the internalization (prop) pools and ping destinations.

I'm less impressed by the idea that dark pool trades, due to their effective OTC nature, are somehow riskier than on-exchange trades. There's a certain degree of parasitic arbitrage that exists on the dark pools, but that's a relatively small part of the overall trading volume.

Ilithi Dragon said...

tWB: While I think I grasped most of what you said, I'm feeling kind of like my parents must feel when I go off on a random tangent about physics and forget (sometimes intentionally... >.> ) that I'm talking to my parents and not a fellow physics enthusiast who understands the jargon I throw out.

Ilithi Dragon said...

Another for the McVeigh tally. This one's actually in my area; Camp Hill is only 30-45 minutes from where I live.

The guy claims he was stockpiling guns for an organization planning to overthrow the Federal government, that he refuses to name. If this is more than just him and his co-conspirator, or them and a handful of friends, this has me rather concerned. Not that they'll be effective at any coup attempt, but the damage and deaths that they could cause, and the possibility of an uprising attempt occurring in my area, if these whackos have friends who decide to go McVeigh on us. A dozen heavily-armed yahoos can't overthrow the government, but they can do a lot of damage before they're stopped...

Ilithi Dragon said...

Relating to that, people who think they can actually have a snowball's chance in hell of taking on the U.S. military with civilian firearms are something of a pet peeve of mine...

I mean, we're talking about a SERIOUS disconnection between perception and reality, and a SERIOUSLY flawed assessment of risk and probability here. If this were WWII, when military guns weren't all that much better than civilian guns in the first place (the standard-issue Soviet weapon of the war was the Mosin-Nagant, a 7.62mm bolt-action rifle with a 5-round internal magazine, one more than my Mossberg 100 ATR .30-06), when infantry wore nothing more protective than their metal helmets, and MAYBE a heavy, bulky flak jacket that provided only partial protection, the story would be a little different, but this is 2010. Our troops have body armor and helmets capable of stopping multiple high-caliber rounds, with large areas of protection (and near total protection of all vital areas), and they are equipped with a variety of high-powered, armor-piercing automatic weapons. And That's not even with the latest and greatest armor and weapons available to our troops. When you consider weapons like the AA-12, a fully-automatic, low-recoil 12-gauge assault shotgun that fires 00-buckshot, #4 bird shot, 12-gauge lead slugs, less-than-lethal rubber batons, or (my personal favorite) the Frag-12 19mm fin-stabilized HE, HEAP, or HEAB (High Explosive Air Burst) grenades, at 300 rounds per minute. It can put 32 19mm HE grenades into a window at, I think it was 10 or 50 yards iirc, in just under 6.5 seconds.

And then you have full-sized grenades, grenade launchers, advanced shoulder-fired missile launchers, the GAU-8 Avenger mounted on the A-10 Thunderbolt II, the most awesome gun in the world (fires a 30 x 173mm Armor Piercing Incendiary (Depleted Uranium) or High Explosive Incendiary round at 3500 ft/s, at 4200 rounds per minute - watch a video of it firing without cackling, I dare you), or the 'shot and cup' anti-infantry round for the M1 Abrams' main gun, turning it into a 120mm shotgun.

I mean, seriously, the best they could ever realistically hope for is give some SWAT teams a hard time, kill a few officers, and kill and/or hold hostage a bunch of civilians, in the span of a day or two maybe. If they actually get enough yahoos mustered together to call in the National Guard, the amount of firepower called down on their heads is just... Well, it would not be pretty at all, and it would be over VERY quickly.

But, then I suppose most people who would seriously consider that a valid course of action today are so disconnected from reality that they could probably seriously think it was also a viable course of action...

/end rant

LarryHart said...

Ilithi Dragon:

Relating to that, people who think they can actually have a snowball's chance in hell of taking on the U.S. military with civilian firearms are something of a pet peeve of mine...


Somewhat tangential to your point, I'm amazed at the total disconnect in the minds of right-wingers who insist that any incursion on individual liberty is justified in the cause of stopping "terrorism", but also consider Janet Reno and Bill Clinton to be the villains in the Waco Texas scenarios where "the government" uses force against avowed enemies of the government who are stockpiling weapons.

I can see the rationales for either position, but not for both at the same time.

Ilithi Dragon said...

Larry,

It's called mental compartmentalization. Have you read The Authoritarians by Dr. Robert Altemeyer? It's been linked on here a few times. He gives a very good description of the mental thought processes (and the walls of separation between them) behind that.

David Smelser said...

Doesn't a regulated market reduce risk by requiring capital requirements and limits to the amount you leverage? If so, then can someone explain how an unregulated market that doesn't have these control not end up with more risk than.

rewinn said...

@Ilithi Dragon / Larry,

"... mental compartmentalization. .."

Whenever I ask these guys (almost always male), they assure me in whispers that the police and the Army will be with them.

I think what we're seeing is not a "mental" process, in the sense of form of reasoning prior to decision, but rather an emotional process, with reasoning tacked on later to support the previously determined decision. Kind of like invading Iraq ...

Tim H. said...

Speaking of "mental" processes, tomorrow proposition C is up for a vote in Missouri, pretty much a protest against Obama care's mandatory health insurance requirement. The part that strikes me funny is a generation ago Missouri GOP was pushing mandatory car insurance. Responsibility, irresponsibility, any way the wind blows, I guess.

Ilithi Dragon said...

Rewinn:

Yeah, I tend to get the same response. They see the military as taking action and standing up for the oppressed masses rising up to reclaim their freedom and liberty and yadda yadda yadda. Forgeting the entire time that the military and the government giving the orders to the military, and 90% of the population watching the whole thing go down on TV is NOT going to view them as heroic rebels rising up against an oppressive dictatorship, but as crazy, heavily-armed, gun-toting survivalist/ultra-nationalist yahoos bent on shooting up a bunch of cops and civilians, especially if they're not white.

Sometimes I find myself wishing for an ultra-conservative Christian Rapture, the kind that all the people with the "Come Rapture, this car will be empty" bumper stickers and the like are really longing for. Not the whole end-of-the-world thing, just the part where all those guys just up and disappear into thin air. The whole world would be a helluva lot better off, if all those people just went away. The unemployment issue would certainly vanish along with them.

<----Is in an uncharacteristically pessimistic mood this evening.

tWB said...

@David Smelser -- OTC broker/dealers, banks and other institutions have capital adequacy requirements that they must adhere to. However, investors can happily over-leverage regardless of whether they are trading on- or off-exchange.

@Ilithi: I wasn't very clear, was I? Basically (and highly simplified), the key is that dark pools have a couple of uses. For example, large institutional block trades can be placed in a pool, which can limit information leakage -- basically, it's a way to sell or buy a lot of share without alerting the market and driving the cost against you. (From an efficiency standpoint, this is generally good, since a large institutional order is generally a short-term distortion.) They're also used to allow prop desks and brokers to match orders internally at the NBBO (National Best Bid and Offer -- basically, the current open market price): basically, it's a case of, "Hey, Bob, you're selling XYZ, and John here's buying XYZ, so let's just do the deal here, mmkay?"

The latter case arguably parasitizes liquidity from the market and may be preventing meaningful data from moving the NBBO of an instrument, especially since the volume of relatively small dark trades is astonishingly high (in part because of algo trades, but that's another issue). SEC is floating a proposed rule that will make this kind of pool less attractive to run, by forcing more trades onto the open markets and improving reporting back to the consolidated tape on exactly where trades were made.

Dark pools still risk creating two-tier access to liquidity, so this argument isn't over. But I do believe that they serve an important purpose, even if there are good reasons to limit such trades to very large block orders.

Sociotard said...

Transparency Watch

Pennsylvania Governor pitches cameras to catch uninsured drivers.
http://www.wnep.com/wnep-governor-pitches-insurance-cameras,0,6081495.story

But how much reciprocal transparency will big brother allow?

Ian said...

It isn't a panacra but if peopel really want to reduce government deficits, they could start by lobbying governments to stop subsidizing fossil fuels.

http://www.gizmag.com/government-subsidies-fossil-fuels-renewables-biofuels/15907/

It isn't a complete solution but we could also abolish agricultural subsidies.

Ilithi Dragon said...

Ian:

One of the main things the local Coffee Party group I'm in can all agree on is the need to cut 'corporate welfare', or government subsidies to big companies that don't really need it, and gain an unfair advantage over their competitors in that market, or over competing markets, and in conversations with people of all political walks, it tends to get approval by just about everyone, regardless of political affiliation.

Tacitus2 said...

Ilithi

I can't get too worked up about the latest militia nonsense. Remember the Hutarees? Rather convenient arrest of a bunch 'a mopes. I have not seen much about the case since then, but I understand they were all released on bond being considered an insignificant threat.

Of course, I want the appropriate authorities to keep a close eye on all flavors of kooks, but the timing of that particular nut harvest, right after the Health Care rancor, struck me as political. Makes me wonder if sagging polls prompt directives from White House to Justice...

And it is not just right wing idiots who expect a supportive uprising. Remember the SLA?

Its likely that I encounter more criminals than you do, and most of them are dull, unimaginative sorts. Talk to action ratio very high, and prone to saying stupid things.

Tacitus2

Stuart said...

I'd like to see a secure network of peer-to-peer communication devices that allow people to talk to each other without sending their messages through a provider backbone.

It may be commercially viable because it would allow low-bandwidth communication (like texting) between any two people who can be connected by hops on the network, where each mobile device is a network node. In other words, free local calling with no service plan.

And it's relevant to this thread because having citizens be connected to each other through decentralized lines of communication is at least as good as having them own rifles.

But I have a feeling there's going to be a good technical reason this doesn't already exist.

Patricia Mathews said...

And now on the transparency front:

http://reason.com/archives/2010/08/02/ignorance-of-the-law-is-no-exc

The gist of the 2-page article is: people are being arrested for photographing cops in the line of duty even when the law permits it; their only recourse is to sue; those suits usually end up going nowhere.

Robert said...

Going off on a tangent for a moment, there's an interesting article on the Green Sahara and on how a paleontologist found human remains and helped encourage an archaeological dig of one of the few unplundered sites in the Sahara. It's an in-depth article and a fascinating read in my opinion.

------

Slightly more political is this article on hot and cold weather records, which includes a map showing temperature anomalies (in Celsius) for January to June 2010, with red dots indicating warmer-than-average conditions, and blue dots indicating regions indicating colder than average conditions.

Rob H.

Tacitus2 said...

Rob
I find that map a bit surprising.
It shows Russia mostly cooler than average, and they are burnin' up this summer. And Alaska warmer than average. I am packing for a trip up there, and its been cold all summer (vs. 90 degrees where I am right now).
Tacitus2

rewinn said...

@Patricia Mathews
That's one of many examples, see
a motorcyclist with a helmet camera faces prison time.

Perhaps this is a matter in which the ACLU and the Libertarian Party could work together to send registered letters to every chief of police and DA reminding them of the 1st Amendment. As the article you linked to point out, the citizen's civil recourse is toothless.

Robert said...

@Tacticus: That's just average temperatures for the last six months. Russia may be hot right now, but it may have had a very cold winter and spring. And Alaska may have been hotter during the winter than usual.

One thing that is sadly true is that people equate climate with weather. Six months ago people didn't believe in global warming and claimed all the snow showed otherwise. I bet if you ask them now? They'll cry how global warming is going to kill everyone. (Except my folks. Bumper crop of tomatoes, and the grape vines are growing quite nicely. They'd like some more weather like this.)

Some people also refuse to acknowledge global warming, even when it smacks them in the face. My father is a firm disbeliever. I didn't call him on it last fall when he and I were up on the mountains of Colorado (elk hunting) and he was mentioning how unseasonably warm it was (still bloody cold to me!) and that the warm weather probably meant we'd not see many elk. (We didn't. The people we were hunting with did though, and shared some meat with us.)

Rob H.

Tony Fisk said...

Perhaps you should have.

Tim Flannery points out that the current epoch features an unusually high degree of habitat stratification (ie: different things living at different altitudes)

As things warm, the temperature creeps up the slopes, and creatures retreat until they have nowhere to go. Example being the Costa Rican cloud forests.

Tim H. said...

Uh Robert, didn't you just go to the same well the doubters were using last winter?

Lose Your Fat said...

just out of interest. how many months of the year is winter in Russia? ;)

Robert said...

@Tim: Not quite. I was commenting that some of the "weather doubters" would be crying "global warming" because of the heat wave going on. I've been a firm believer of manmade global warming for quite some time. I've seen the science and it makes considerable sense. I've also seen experiments replicating some aspects of this (such as showing how an increase in CO2 levels will increase heat retention of the lower atmosphere).

Mostly I see global warming as just one reason why we need to get off oil. Others include diminishing the power of oil-states such as the Saudis, Iran, Russia, and the like. If oil is no longer needed (or at least to the extent it currently is) we might also see operations pull out of Nigeria where oil money is increasing corruption and the industry is seriously polluting the region.

Really, there is only two reasons to stay with oil. First, we have the infrastructure built up around it. Second, we're giving the executives working for the oil companies (and for that matter the leaders of several nations) lots and lots of money, which is the proper capitalistic thing to do. ;)

After all, those oil barons need our hard-earned cash. It's not like we're doing anything important with it.

Rob H.

Tim H. said...

Robert, apologies. I could wish that more use was made of the "TWODA" argument, it could augment progress towards a reduced carbon future that this skeptic can see the advantages of. Free markets and trade are not alien to this subject, gainfully employed workers will replace inefficient cars, appliances & HVAC with more economical things. Merely replacing the pilot-ignition home furnaces would have a measurable effect on carbon emissions.

Tacitus2 said...

Robert
I was not showing "doubt". Just indicating that a particular graphic, dumbed down a bit for print, sometimes becomes less useful if it appears superficially to be full of crap.
I have only been tracking AK weather for a couple of months, and have only been hearing about Russia for about the same time. Things may well have changed after June 1st.
Time frame is important in the climate change debate.
And we are hard wired to respond to "today's" weather. Otherwise how would we have known to wear the wolf skin or the grass skirt when we left the cave?
Tacitus2

Robert said...

TWODA? oO I'm unfamiliar with the acronym. Sorry. ^^;;

Rob H.

Tim H. said...

TWODA, Things We Ought to be Doing Anyway. I first saw it here, used by our gracious host. It has the potential of moving the climate/energy debate away from extrapolation, sampling and modeling towards the process of getting from where we are to where we want to be. If the question is framed as energy independence, rather than catastrophe avoidance, climate doubters have less to talk about and conservatives are hearing music to their ears. Better yet, electrical power doesn't lend itself to export to the highest bidder, investment in clean electrical power uplifts the economy where it is.

Tim H. said...

Two interesting links:
http://pinoytutorial.com/bestandworst/dolphins-creating-amazing-bubble-rings-dolphin-rings
Bottle-nosed dolphins playing with bubble rings.

http://www.columbia.edu/~em36/wpdos/mac-intel.html

The second is how to run an old version of Wordperfect for mac on a virtual machine on a contemporary mac, mind you, I'd find it simpler to maintain an older mac than to set up a VM, but when you no longer have that option, you won't have to give up your favorite tool.

David Brin said...

hi all - from Paris. On the road.
db

Robert said...

A couple more news article links for you all. First, it appears that Senator Coburn and McCain's "Summertime Blues" list failed to fully do its homework and has several false or misleading claims in it. To give the two Republicans credit where credit is due, it appears that the Senators have been rectifying matters by editing the list to present more factual information when alerted to the discrepancies.

---------

And a little something that will tickle Dr. Brin's cockles, no doubt, 40 billionaires which include George Lucas among others are following a call made back June by Warren Buffett and Bill and Melinda Gates to pledge the majority of their wealth to charity. Several of the billionaires have been donating to charity quietly all along, but were encouraged by Gates and Buffett to go public with their donations in hopes that more billionaires will follow suit.

Rob H.

Robert said...

And a Federal Judge overturned California's Proposition 9 amending the State Constitution to ban gay marriage. While I applaud the judge's upholding of gay and lesbian rights, I must admit to being puzzled; if I'm seeing this correctly, a Federal Judge just negated part of a State Constitution despite the fact there is no Federal Constitutional mandate concerning gay marriage. Or in other words... Federal interpretation of the Fourteenth Amendment overrides State Constitutional mandates on more specific sections of State Constitutions.

This also means that any and all attempts to override "Obamacare" is destined to fail under the Fourteenth Amendment; I suspect this even covers the "insurance mandate" section that has a number of people in an uproar.

Rob H.

Darrell E said...

"And a Federal Judge overturned California's Proposition 9 amending the State Constitution to ban gay marriage."

There may be a few shreds of hope left for the USA after all. A step in the right direction anyway. Hope it sticks. Would be nice if all the money spent to push prop eight through were for naught.

slaxon: a lazy Saxon?

Stefan Jones said...

This is kind of sad, kind of funny:

Living in a Tea Party World

It is about how South Carolina representative Robert Inglis, a reliable conservative, lost his nomination to a tea party favorite:

"I sat down, and they said on the back of your Social Security card, there's a number. That number indicates the bank that bought you when you were born based on a projection of your life's earnings, and you are collateral. We are all collateral for the banks. I have this look like, "What the heck are you talking about?" I'm trying to hide that look and look clueless. I figured clueless was better than argumentative. So they said, "You don't know this?! You are a member of Congress, and you don't know this?!" And I said, "Please forgive me. I'm just ignorant of these things." And then of course, it turned into something about the Federal Reserve and the Bilderbergers and all that stuff. And now you have the feeling of anti-Semitism here coming in, mixing in. Wow."

Apparently the red code number on the back of Social Security cards is the latest proof of globalist liberal commie muslim conspiracy.

And not taking that shit seriously, and not calling Obama a socialist at every opportunity, means you are not fit for office.

For the record, the red number is the serial number of a particular blank Social Security card. The SSA keeps track of them to make it more difficult for social security workers to be tempted to issue bogus cards.

Tony Fisk said...

The zeroth commandment:

"Thou shalt think as I"

Of course not buying into my conspiracy theories means you're unfit for office!

(There was also the one about big Brother tracking your every move through the RFID tags embedded in US dollar bills. The way around that was to burn them out in the microwave: the scorchmark being the proof! (actually from the metal wire that's been included as a counterfeit deterrent since before computers were thought of)

Robert said...

An even better read is the article that quote came from. Some of his ideas (such as lowering income tax and replacing it with a carbon tax so it would be tax-neutral) sounded like superb ideas that should have been put forward by the Republican Party. Hell, I hope he puts forward his neutral-tax carbon scheme during the Lame Duck Session in Congress.

And I have to admit, I'm starting to think he's right. Democrats may be enjoying their time out of power this time around... as the Tea Party is going to butcher what's left of the Republican Party if they don't heel to the dictates of this wildly diverse party. It could tear them apart worse than the Neocons were doing.

Rob H.

Tony Fisk said...

Emissions trading schemes and carbon tax are being poo-pooed by our local conservative lad as another 'great, big, new tax' on the groaning populace.

I think he's 2/3 right (it is new, and it is great)

Aus govt should have gone for a carbon tax straight up rather than the half-baked ETS. At least we'd have probably had Turnbull leading the Libs rather than Abbott.

Tim H. said...

Not as I have much enthusiasm for taxes, but a carbon tax shouldn't need any more people than the government already has, which a conservative might like. Also, a straight tax is less likely to be used by speculators.

Ilithi Dragon said...

Ugh... Stefan, Rob, you're making my brain hurt...

Ian said...

Emissions trading is clearly superior to a carbon tax in terms of equity, economic efficiency and environmental protection.

That's not theory, that's not speculation that's pure hard fact based on the operation of existing emissions trading schemes.

But drop a few loaded terms like speculators and the left line up behind a carbon tax like so many sheep.

Tim H. said...

Ian, this might be worth your attention,
http://www.uni-saarland.de/fak1/fr12/csle/workshop/program/loeschel.pdf
It concerns gaming european emissions trading for profit.

Ian said...

Tim,

That article simply states that it is theoretically possible for firms to collude in emissions trading markets.

It's theoretically possible for firms to collude in virtually any market.

What you want is evidence that
a. collusion is actually happening; and
b. that the collusion is causing economic harm greater than the economic benefits from using an emissions trading scheme rather than a carbon tax.

Anonymous said...

They are riding a tiger by the tail. Rabid-frothing, 1861-level paranoid populism is the only chance the neocons have, of resuming the gravy train... or even staying out of jail.

But all it would take is a few charismatic voices to connect the dots (Fox=partly Saudi-owned, for example) to turn it into a gop train wreck.

What's in their favor? Mr. Reasonable Barrack simply won't go there. Period.

brin from overseas

rewinn said...

@Ian said... Emissions trading is clearly superior to a carbon tax in terms of equity, economic efficiency and environmental protection.

Not really.

As to environmental protection, by which I assume we mean "Actually reducing AGW dangers", emissions trading DISencourages cutting emissions below what-ever cap may be set. If you invented a way to cut carbon below the cap, you would simply sell your carbon rights to someone else ... netting no actual improvement in the carbon situation. And, in the real world, it is highly likely that the cap will be set in ways that support the marketplace, and not necessarily to solve the AGW problem. In contrast, a carbon tax MAXIMIZES the value to investors of minimizing carbon emissions. Thus if you invent a Magic Carbon Reducer, you would use it all the way, not merely to the limits of the cap.

As to "equity": it all depends on what you do with tax proceeds. Certainly it can be done inequitably, e.g. by driving up the price of goods & services for one part of the population. But it can also be done equitably, either by offsetting other taxes (revenue neutrality) or even better, by rebating tax proceeds per capita (comparable to Alaska's oil royalty checks sent to each resident). A tax-and-rebate scheme is extremely equitable.

As to "economic efficiency": This is a term of art so it's difficult to evaluate whether the claim is accurate or, more importantly, relevant to solving the AGW problem. If by "efficiency" we mean administrative overhead, a carbon tax and per capita rebate is no more inefficient than a carbon marketplace requires since both require objective measurement and reporting of carbon emissions. If "efficiency" refers to the effectiveness with which market information is shared voluntarily among willing actors, it's unlikely the market in goods & services that help you minimize your carbon tax would be less efficient than one in trading rights to pollute.

Cap-and-Trade scheme are basically command-and-control marketplaces that seem to work fine with a small number of actors, e.g. acid rain polluters. Once you get a truly large number of market actors, such as "car owners" you're better off going to a more free-market approach, such as taxing carbon use and letting the car owners decide how they'll modify their behavior.

Robert said...

And going back to science again, Dr. Brin will probably feel vindicated at a recent study suggesting the interior of the Moon is bone-dry. In fact, the articles point out that the Apollo astronauts were told to pick up "unusual rocks" which may be why the rocks they brought back had more water than what's really there.

The article does admit there is a bit of water (though still far less than in the driest part of Death Valley) on the surface of the Moon. It's deeper down and into the core itself where there is no water, as the existence of a variety of metallic salts (instead of the more normal hydrogen chloride so predominant on the Earth) shows.

Rob H.

rewinn said...

@Robert - The Prop 8 ruling is much more than merely an assertion of the Supremacy clause (although certainly it is that.)

I find it interesting as a reassuringly fact-based decision, hinging upon whether the State had enacted a private moral view without advancing a "legitimate government interest". The key issue became whether there was or was not a legitimate government interest, and it is very telling as to the methods each side used to "prove" that fact.

One side's experts introduced 17 witnesses, whose expertise the other side did not challenge (...perhaps realizing they would have lost the challange due to the experts' qualifications.) The judge nevertheless carefully documented the basis for each witness' expertise (starting around page 25 of the decision) and concluded each was credible and their testimony relevant.

The other side elected not to present most of its witnesses!!! It presented no witnesses at all on some of the issues, and only two witnesses total on any of the issues. On matters where one side presents some evidence and the other side presents nothing, judges have little choice but to make a factual determination in favor of the former.

But it gets more interesting. Both of the witnesses were challenged by the other side. The judge meticulously analyzed the qualifications for each witness and the testimony they gave. The grounds each of the two gave for their claims of expertise is almost comical, and the evidentiary support for their opinions was riddled with non sequiturs.

Regardless of one's attitude toward the disposition of the case (naturallly I think it was correctly decided) is it not noteworthy that one side brought a gun to a knife fight and the other side brought only the fact that they feel gays are icky?

Whether this matters to our current Supreme Court is a whole 'nother matter, but for the moment let us celebrate a victory not only for equality, but for reason itself.

Robert said...

I suspect that we may be seeing a significant shift in U.S. naval technology and naval doctrine in the next decade: China is close to perfecting a Carrier Killer missile that can travel 10x the speed of sound, evade defenses, and with two or three hits sink even a super-carrier. These missiles would be able to take out American carriers before the carriers were close enough to launch fighters and bombers to strike the launchers.

The solution is something out of science fiction and anime: submarine carriers armed with drone aircraft. The submarine carrier could surface, launch a dozen drones, and then submerge again before missiles could reach it. Drone aircraft could be controlled via satellite or via buoys transmitting signals from the sub itself. And the drones would very likely be harder to target and shoot down; while they would also carry less ordinance, they could still go after specific strategic targets for maximum effect.

As drone aircraft cost less than full-sized military aircraft with human pilots, they could even be sacrificed after their use if retrieval was inadvisable due to hostile forces in the area.

This could also result in a shift in submarine warfare doctrine: we could see new classes of submarines designed as escorts to a submarine carrier; submarine equivalents to escort destroyers, destroyers, and cruisers. A reworking of the Polaris launch system could even allow missile destroyer submarines to launch cruise missiles from under the surface of the ocean.

Yes, what I'm talking about is science fiction and the purvey of computer games. But if the U.S. surface naval fleet loses its effectiveness due to this new class of weapon... then might not science fiction become fact in the few face of naval warfare?

Rob H.

Tony Fisk said...

Russia has been developing a high velocity torpedo (Sqvall?) that uses cavitation effects to reduce water drag to near-zero.

Mach 10 doesn't compare to the laser point defence that is also 'on the point of being perfected'

(to tie in with Prop. 12, I'll end the escalation with a quote from Capt. Sulu: 'My... God! Shields! SHIELDS!!!')

Ian said...

"As to environmental protection, by which I assume we mean "Actually reducing AGW dangers", emissions trading DISencourages cutting emissions below what-ever cap may be set.'

You assume a once-only settign of an emissions level rather thsn progressive reductions in the number of permits issued.

Since every emissiosn trading proposal i'm aware of assumes the latter thisis a straw-man argument.

The EU has just setting the new, lower, emissions level for its second commitment period.

"As to "equity": it all depends on what you do with tax proceeds."

And on what you do with the revenue from auctioning permits.

And on what value you set on the higher economic growth you get eith emissiosn trading.

Consumption taxes are innately regressive, it is POSSIBLE to design an implementation package to minimise that impact, however in practise such mweasure are seldom fully effective.

"As to "economic efficiency": This is a term of art so it's difficult to evaluate whether the claim is accurate or, more importantly, relevant to solving the AGW problem. If by "efficiency" we mean administrative overhead, a carbon tax and per capita rebate is no more inefficient than a carbon marketplace requires since both require objective measurement and reporting of carbon emissions. If "efficiency" refers to the effectiveness with which market information is shared voluntarily among willing actors, it's unlikely the market in goods & services that help you minimize your carbon tax would be less efficient than one in trading rights to pollute."

The principle reason to beleive emissiosn trading is more efficient than a carbon tax is that a carbon tax relies upon the government rather than the market to set the price of carbon.

In reality, as opposed to fantasyland, a carbon tax will be far mroe subject to special interest groups, carve-out, lobbying and other economic distortions.

Can I say how humbling it is to realsie that I and others wasted a signifcant part of my life actually studying these issues when others can master the same matter merely by reading a few articles in the popular press.

Ian said...

"Cap-and-Trade scheme are basically command-and-control marketplaces that seem to work fine with a small number of actors, e.g. acid rain polluters. Once you get a truly large number of market actors, such as "car owners" you're better off going to a more free-market approach, such as taxing carbon use and letting the car owners decide how they'll modify their behavior."

Once again you appear to be engaging in a strawman argument.

No-one is proposing "car-owners" woudl be required to deal in carbon permits.

The permits would be held at the manufacturing level, i.e. by the petrol refinery or oil producer.

The belief that a government tax is a "more free market approach" than a market-based permit system is extraordinary.

Emissiosn trading weas developed precisely because it isn't a command and copntrol system.

Ian said...

More on the evils of free trade:

"DURING the Great Depression, America’s protectionist Smoot-Hawley Act of 1930 raised tariffs on more than 900 goods. A series of retaliatory actions by other countries followed. The effect on global commerce was devastating. In the three years to June 1932, the volume of world trade shrank by over a quarter. No wonder, then, that the spectre of the worst recession since the Depression led many to fear another descent into protectionism and a similar decline in trade.

At first, the recession did hit trade hard. Global GDP fell by 0.6% in 2009 while the volume of world exports dropped by 12.2%. But whereas the Depression saw trade decline for at least four years, this time the rebound has been quick, and sharp. By May this year, emerging-economy members of the G20 were importing and exporting around 10% more than their pre-crisis peaks (see chart). Rich-world trade has recovered from the trough too, though it has not yet made up all the ground lost since the credit crunch began.

...


There is even some evidence that activity has rebalanced from the lopsided trade pattern that existed just before the crisis. Then, the share of emerging-world imports that came from rich countries had been on a steadily declining path. But now demand from emerging economies is helping to prop up rich-world exports to a larger degree than is commonly realised. According to IMF figures, of nine emerging markets in the G20, seven got a higher share of their imports from rich countries in 2009 than they did a year earlier. Just 59% of China’s imports came from rich countries in 2008, but this rose sharply to 66% in 2009. India obtained 42% of its imports from rich countries in 2008, but last year this rose to 47%."

http://economist.com/node/16743780

In other words, growing demand for developed world goods in the developing world is helping economci growth in the develped world.

Ian said...

An article from the Economist on the aftermath of the Haitit earthwuake highlights antoher reason why property rights matter:

"Since very little Haitian land has clear title, much of the area around Port-au-Prince is now occupied by squatters who resist eviction. That makes it hard to find suitable sites for temporary portable shelters: less than a third of the 23,000 currently available have been erected. Even when they do go up, there is no system to allocate them."

http://economist.com/node/16703395

Ian said...

Also from The Ecoomist: the pitfalls of industrial policy (which includes protectionism).

"Even supposed masters of industrial policy made embarrassing mistakes. Japan’s MITI once opposed carmakers’ plans to export and tried to stop Honda expanding from motorbikes into cars because it didn’t want another company in the industry. “Probably I would have been even more successful had we not had MITI,” Soichiro Honda, the company’s founder, said of his battles with the ministry."

http://economist.com/node/16741043

Anonymous said...

Dig it, probably the greatest of all historian, Arnold Toynbee, studied the rise and fall of civilizations. Instead of zeroing in on comfy-idiotic- easily-disproved "cycles" of history, he focused on what enabled a civ to meet, innovate and overcome the challenges it faced - either predictable challenges or those that strike by surprise.

In his own way, he emphasized the same balance I have pushed, between the anticipatory skill of the Protector Castes and the RESILIENCE-based robustness of the engaged citizenry. But he made it more general than that.

He found that nearly always, a civilization has a "creative minority" that can perceive the challenge and propose dynamic solutions... often the right ones. Success or failure generally is determined by whether society believes in, trusts, connects with and empowers its creative minority, keeping it vibrant, innovative and capable.

Two things can prevent this. Decadence can ruin the creative caste, especially if they become compromised and ensnared in a corrupt or shortsighted oligarchy. Or else, populism can be the failure mode; the people are alienated from the creative minority.

Today we see both modes in full and rampant eruption: a resurgent oligarchy that is busy trying to cook and gorge on the goose that provided all its golden eggs... at the same time that same oligarchy is frenetically financing propaganda whose top, central and paramount aim is inarguably to alienate the populist masses against all forms of intelligencia. Especially science and its surrounding arts.

I do not claim all of the confidence-destroying propaganda comes ONLY from the right. Indeed, I am really cheesed-off at James Cameron and his fellow preachers-of-niceness on the left, NOT for their good intentions and environmentalism/tolerance messages (which I share), but for swallowing the imbecile doctrine that you can only wake up people through chiding! Never hope. Avatar's heart was in the right place, but can you name a single person it persuaded? Of anything?

Alas, the people who most believe in the old cult of creative problem solving -- ambitious and unashamedly technophilic -- are the sci fi folks around the world... (I was just on French TV today here in Paris, spreading the faith! ;-)

Alack, SF fandom is dying in America. The cons shrink and are filled with old guys in wheelchairs.

Stefan Jones said...

I wouldn't judge the health of SF fandom solely by convention attendance, or the health of the central memes of fandom solely by book sales.

The place where exciting ideas are laid out has moved beyond pulps, and the place where they are discussed is online.

The other day a guy on the Whitechapel blog asked "speaking of Deus Ex, who else has read Last and First Men?" It turns out that the phenomenally popular and influential "first person shooter" has a reference to the Stapledon novel!

Another game, Bioshock, is set in a sleek retro-futuristic city based on the creed of an industrialist straight out of an Ayn Rand. Objectivism didn't work out very well; the place is a depopulated nightmare.

In many respects, the geeks have won. Hands down, top to bottom. Creative and weird people have it much, much better today. They're pulling strings in the media and technology worlds.

What they haven't found is a way to outshout the oligarchs and hayseeds in the court of public opinion.

rewinn said...

The excellent @Ian writes...

”…You assume a once-only settign of an emissions level rather thsn progressive reductions in the number of permits issued. Since every emissiosn trading proposal i'm aware of assumes the latter thisis a straw-man argument.”

I make no such assumption, but merely realistically appraise as to the nature of political economy. The carbon industry is powerful and the serious increases in carbon pollution aren't coming from Europe.

”...it is POSSIBLE to design an implementation package to minimise that impact, however in practise such mweasure are seldom fully effective.”

Since you concede the major point, that a tax-and-rebate system can be designed equitably, I’ll grant the lesser point that they can be designed otherwise.

”The principle reason to beleive emissiosn trading is more efficient than a carbon tax is that a carbon tax relies upon the government rather than the market to set the price of carbon.”

Since you don’t define “efficiency”, you’re not actually saying anything here.

"In reality, as opposed to fantasyland, a carbon tax will be far mroe subject to special interest groups, carve-out, lobbying and other economic distortions.”

[ citation needed ]

Let us note that in "reality", currently proposed cap-and-trade schemes exclude one of our largest carbon emitters, the U.S. military.

”Can I say how humbling it is to realsie that I and others wasted a signifcant part of my life actually studying these issues when others can master the same matter merely by reading a few articles in the popular press.”

In other words, STFU.

But I do you a disservice by not stating for the record that I have had some graduate level study of economics (not enough to empower me to use STFU as an argument) but in fact most of my ideas have been taken from scientists and economists who contribute to the canonical "peer-reviewed journals" and who, not incidentally, tend to have the grace to argue as to issues not personalities.

”The belief that a government tax is a "more free market approach" than a market-based permit system is extraordinary. Emissiosn trading weas developed precisely because it isn't a command and copntrol system.”

Here I confess my guilty in an imprecision in language. In a cap-and-trade scheme, the government COMMANDS how much carbon shall be produced and when it does so, the market labors mightily to produce that amount and no less. In contrast, in a tax-and-rebate scheme, the government assesses a cost on carbon which (ideally) is proportionate to the amount of damage done by the carbon. It is up to market actors to decide whether to avoid the damage by not producing the carbon, or to do the damage and pay the tax. This helpfully lowers to point of decisionmaking to the individual actor. In fighting tobacco poisoning, for example, we use taxes, not cap-and-trade.

Tony Fisk said...

What they [geeks] haven't found is a way to outshout the oligarchs and hayseeds in the court of public opinion.

They're working on it

It seems a throwaway (and not very authorative) remark by me has got Ian on a roll. It was based on a wish that Turnbull hadn't got ousted by the Mad Monk (life would have been so much easier, but it was not meant to be... who said that?)

Interesting discussion, but sorry if I caused any collar warming.

decyanic: a reduced state of blueness.

ngm said...

Rewinn, Ian, interesting discussion.

I think I largely agree with Ian, indeed his rebuttals have covered much of what I was going to say.

The problem with tax-based systems is that one has to set the tax to the right level or you won't achieve the target reduction, or you'll overshoot and cause other problems. On the other hand, with a cap you know that you are going to reach your target (barring fraud and black market dealing, problems which effect the tax scheme too). It also seems to me that a tax-based system makes adding carbon capture technology less easy to manage (though doable I'm sure) than under a cap-based system.

That said, Rewinn makes an interesting point about the cap scheme not encouraging cutting emissions below the cap, versus a tax exerting a constant downward pressure on emissions. Enough so that I am considering whether adding a small tax to a cap-based system, creating a hybrid scheme, would yield something better than either alone.

(and Rewinn, having read your arguments, if we can't get cap-and-dividend (my favorite scheme) then tax-and-rebate might now be my second choice)

While we're on topic what do people here think about cap-and-dividend? Quick summary (though you can probably guess): carbon permits are auctioned to fuel suppliers and are required for first sale of fuels. The revenue generated is then distributed equally to all individuals (minus a small administrative overhead).

I like it because it's a cap, guaranteeing reduction, and revenue neutral, keeping government small. Also it has a very straight forward property-rights story.

bryan said...

Bribery, extortion, graft, and embezzlement. These are just some forms
of corruption which poses a great deal of effect on economy,
environment, humanitarian aid, health, public safety, education, trade
unions, etc. Corruption undermines challenges by generating considerable
distortions and inefficiencies. Not that I'm against politics since
they're there to govern a nation, but it's inevitable to think that the
main reason why the world is in great debt because of non-transparency.
However political tranparency can be close to impossibility, it always
good to start within ourselves being good citizens.

Tim H. said...

Scott Horton has an interesting piece on Project Vigilant atHarpers.org
http://harpers.org/archive/2010/08/hbc-90007473

Seems IT pros with ties to intelligence agencies are gathering intel on the side, so the agencies don't have to ask for court orders. Might have entertaining "Charlie Foxtrot" potential.

David Smelser said...

I understand the consequences of setting too low a rate with a tax and rebate program (not enough change from the status quo). But, what exactly are the problems with setting too high a tax rate when implementing a tax and rebate program?

Ilithi Dragon said...

I was wondering that myself.

On another note, I finally picked up The Postman (the local Coffee Party group I'm in meets in a used bookstore. Not. Good. For. My. Health.). I'm only on chapter 3, but I'm already pushing past the limits of my lunch break while reading... >.>

Tony Fisk said...

Why are used bookstores not good for your health? (Not being good for the bank balance, I can understand!)

(Unless you wondered a little too far into the L-space manifold and had a brush with a hungry thesaurus ;-)

Ilithi Dragon said...

When I have a set of good books, I have to be very careful of my tendency to not do anything else but read until I have finished them all. Regularly visiting a used bookstore, providing me with a plentiful, low-cost supply of such books, is thus a potential health risk.

Example: 30 minutes into an eye/leg-stretching break from The Postman, and I'm only just now noticing that my mouth is parched and I need water, and that I've been thirsty for the last 3 hours.

Ian said...

"While we're on topic what do people here think about cap-and-dividend? Quick summary (though you can probably guess): carbon permits are auctioned to fuel suppliers and are required for first sale of fuels. The revenue generated is then distributed equally to all individuals (minus a small administrative overhead).

I like it because it's a cap, guaranteeing reduction, and revenue neutral, keeping government small. Also it has a very straight forward property-rights story."

If you want the maximum reduction in carbon, you'd use the money to run a competitive tender for projects (including afforestation, changes to farming practices, energy efficiency; cash-for-clunekrs etc) to reduce emissions.

That's also the most efficient way to use revenue from a carbon tax if carbon emissiosn reductions is the overwheling priority.

Seeing as a carbon tax is regressive (i.e. it impacts the poor more becasue they use mroe of their incoem for consumption expenditure as oppsoed investments), if your principal priority is minimizing the economic impact ovf the carbon price you'd focus compensation on the poor rather than distributing it eqaully across the population.

In the US you could do this by, for example, increasing the earned income tax credit or exempting say, the first few thosuands dollars of income each year from social security contributions and payroll tax.

Increasing the social wage (payments from government to peopel in work) and reducign the tax wedge (the difference between the wage workers actually receive and the toal cost of employing them including taxes) is a far more effective way to increase employment than protectionism.

Ian said...

"I understand the consequences of setting too low a rate with a tax and rebate program (not enough change from the status quo). But, what exactly are the problems with setting too high a tax rate when implementing a tax and rebate program?"

Firstly, the whole point of both a carbon tax and a permit system is to incorporate the cost caused by carbon emissions into the cost of the goods that are produced and transported for a given quantity of emissions.

If a tonne of carbon dioxide causing $10 of damage, it should cost the emitter $10.

If you go above that, you're effectively penalzing carbon emitters.

The other problems are:

1. set the tax too high and industry may simply relocate (although there's next to no evidence for this happenign in reality);

2. set the tax too high and because of the4 regressive nature of a carbon tax, you'll be penalising the poor and producing a net trasnfer from the poor to the rich.

The other question though is, assuming you still have other taxes, why not just reduce them and keep the revenue from the carbon tax?

Getting rid of other taxes (like payroll tax)has widespread benefits just like a dividend and cuts the cost of compliance.

rewinn said...

"Some books are to be tasted, others to be swallowed, and some few to be chewed and digested ... but in an all cases, maintaining proper hydration is essential."

TwinBeam said...

A carbon cap is not a real commodity, and so it will likely react poorly and slowly to increases or declines in real demand. The supply of oil or gas can vary some with demand - the quantity of credits can vary only by edict.

Suppose you have a harsh winter - carbon credit prices will shoot up far out of proportion to any real economic costs, as heating fuel suppliers try to buy up the limited number of credits.

Speculators will jump in and drive carbon credit prices even higher, creating artificial demand for the credits at exactly the wrong time.

Wary of buying over-priced credits, some distributors would limit their credit/fuel purchases, resulting in shortages - and wind-fall profits would reward them for NOT meeting customer demand.

Those distributors who do buy up the over-priced credits to meet their customers' needs will likely see congress meet in emergency session to "ease" the cap. Credit and fuel prices collapse, leaving them with no way to recoup their expenses. They vow "never again" - and when a second harsh winter hits a few years later, the shortages are much worse.

With a carbon tax, prices would go up only enough to cause supply to track demand. That winter there'd be more CO2 produced - but marginal demand would be decreased elsewhere and over time, largely compensating.

Oh - and far fewer old people would freeze to death, avoiding creation of the political issue that would likely result in Cap & Trade being discarded after the next election cycle.

Tony Fisk said...

"Some books are to be tasted, others to be swallowed..."

If you've read or seen 'The Name of the Rose', you will begin to see that other health hazards arise from that statement!

(It would have made a good entry for Hitchikers' though: an evolved and advanced civilisation that crashed because everyone starved when they got engrossed reading the universal release of the massed works of J. B. Frubilex... come to think of it, I do recall reading a short story with that very premise...)

tritan: a string of solariums based on Neptune.

Ian said...

"A carbon cap is not a real commodity, and so it will likely react poorly and slowly to increases or declines in real demand."

No but an emissions permit is as much a real commodity as any other intangible right.

Your assertions are in any case disproven by the history of actual emissions trading schemes in the real world.

Ian said...

"Suppose you have a harsh winter - carbon credit prices will shoot up far out of proportion to any real economic costs, as heating fuel suppliers try to buy up the limited number of credits.

Speculators will jump in and drive carbon credit prices even higher, creating artificial demand for the credits at exactly the wrong time."

Once again you demonstrate total ignorance both of how emissiosn trading schemes are strcutured and of their history in the real world.

Firstly, emissions trading schemes are typcially set up with a reserve of credits held by the market operator specifically to prevent any abrupt increase in price.

You also appear nto to understand the operation of options and futures marekts which, contrary to recent hysteria, operate precisely to reduce marekt volatility. (Exception in exceptional circumstance, you can invoke the GFc I can cite dozens of studies in the relative volatility of different market before and after the introduction of futures and options trading.0

"Oh - and far fewer old people would freeze to death, avoiding creation of the political issue that would likely result in Cap & Trade being discarded after the next election cycle."

I have attempted to remain polite durign this discussion.

If you insist on invoking "freezing old people" I will fidn it difficult to continue to do so.

Your preference for a carbon tax implies scrappign the Kyoto carbon trading system which took ther better part of twenty years to implement.

A global carbon tax replecment for it would likely take as long or longer to make operational.

(You may not beleive this but I tend to suspect that you were not privy to the negotiations leading up to Kyoto as I was as an economist working on carbon modelling for the Queensalnd EPA. I also have a pretty fair idea fo what is involved in even a comparitively modest tax reform like the introduction of the GST in Australia having, once again, been directly involved in such an exercise.)

Should you get your wish, the likely result ias a fuerther massive icnrease in carbon emissions and hundreds of millions of avoidable deaths.

I will also point out that carbon trading schemes in the EU and elsewhere, including several US states, have survived multiple electoral cycles.

Please feel free to provide a factual counterexample of an established operating carbon trading scheme abandoned as a result of an election.

Ilithi Dragon said...

Ian,

Do you have examples of carbon tax programs that failed or underperformed compared to cap-and-trade programs? Not questioning your knowledge and expertise, I'm just curious and would like to see the comparisons.

Robert said...

In what was a delightful little dig at Republicans, and something that will come to mind of anyone with a car when they start driving, Obama was heard to said the following: "In a car, when you want to go forward, you put it in D," Obama said at an Austin fundraiser where he raised more than $1 million for Democratic candidates in the midterm elections in November. "When you want to go backward, you put it in R. That's no coincidence."

Rob H.

David Smelser said...

All of your arguments (penalizing carbon emitters more than the actual cost of the emmissions, businesses might move, cost increase are regressive) are equally true in a cap 'n trade if the cap is set too low, because both methods (tax and cap 'n trade) increase the costs of emissions. Economists have shown that for every cap limit there is an equivalent tax rate that produces the same result. So if people can calculate the correct cap, they can equally calculate the correct tax rate.

So, a good question to ask is how do you address the problem of the regressive nature of tax OR cap 'n trade? How do you reduce a "a net trasnfer from the poor to the rich"?

It seems to me that rebate or dividend is the best method of doing this. This results in a net transfer of wealth from those with a large carbon foot print to those with a smaller carbon foot print.

Jumper said...

Cerberus Capital Management sticks in my craw.

Neil Miller said...

@ David S.: Economists have shown that for every cap limit there is an equivalent tax rate that produces the same result. So if people can calculate the correct cap, they can equally calculate the correct tax rate.

It is true that for every cap there is an equivalent tax rate that will have the same result, but the calculation of the cap and the calculation of the tax rate aren't equivalent things. One is climate modeling, the other economic. Additionally calculating the tax is going to be based on the desired reduction, or cap, calculated from the climate model. So you can take the results of the climate model as a cap* and auction permits or you can perform an additional complicated calculation to determine the tax rate, a rate that could prove incorrect if demand changes in an unpredicted manner. Not to mention that from what I've read, if we were to ask economists what the equivalent tax rate is we'd probably get a range of answers with nearly an order of magnitude difference between the high and low.

* In practice you'd set the cap to the current emissions or a little below and each year reduce it so you reached the target emissions in the desired timeframe.

Neil Miller said...

@Ian: Seeing as a carbon tax is regressive (i.e. it impacts the poor more becasue they use mroe of their incoem for consumption expenditure as oppsoed investments), if your principal priority is minimizing the economic impact of the carbon price you'd focus compensation on the poor rather than distributing it eqaully across the population.

I don't see the need for focusing the compensation on the poor. Distributing it equally across the population ought be a net win for for the poor as they have a lower carbon footprint to begin with.

@Ian: If you want the maximum reduction in carbon, you'd use the money to run a competitive tender for projects (including afforestation, changes to farming practices, energy efficiency; cash-for-clunekrs etc) to reduce emissions.

I'm curious why you think this is better than each individual figuring out how best to cut their costs as prices change due to the cost of carbon. (I'm assuming here that carbon capture projects such as afforestation can earn money by adding the emissions permits to the pool in proportion to what they've captured)

ps. ngm = Neil Miller

Ian said...

"Do you have examples of carbon tax programs that failed or underperformed compared to cap-and-trade programs? Not questioning your knowledge and expertise, I'm just curious and would like to see the comparisons."

Not really because virtually no country has opted for a carbon tax.

India has introduced legislation for one which was supposed to commence from July, 2010.

New Zealand proposed one then after an election the minority government scrapped it in favor of an emissions trading scheme.

Ian said...

Neil:

"I'm curious why you think this is better than each individual figuring out how best to cut their costs as prices change due to the cost of carbon. (I'm assuming here that carbon capture projects such as afforestation can earn money by adding the emissions permits to the pool in proportion to what they've captured)"

Because different people, and businesses, have different carbon reduction costs.

The whole basis for preferring cap and trade is that it identifies the businesses with the lowest marginal cost of reduction, delivering the most reductions for a given level of cost.

Using carbon tax revenue to fund reductions and using a market-based mechanism to allocate that revenue between projects is a second-best approach which captures some of the advantages of tradeable permits.

As for why the poor should be treated differently in an redistribution of revenue from a carbon tax, I've already pointed out that a carbon tax is regressive.

Someone earning under US$20,000 a year probably spends 80% or more of their income on immediate consumption of food, clothing etc which will be affected by the carbon tax.

Someone earning above, say, $100,000 on average, spends a significantly lower amount of their income on consumption (and more in capital investments and in personal services).

So a flat percentage tax on consumption has a disproportionately high impact on the poor.

(Fun fact: once you factor in state and local taxes and consumption taxes, the effective tax rate paid by most Americans is flat across an extremely wide income range. In some states, such as Texas people on incomes around US$20-25,000 pay a higher effective tax rate than those earning higher incomes.)

CulturalEngineer said...

Transparency in 'wealth' distribution is essential... and also likely inevitable at least to a considerably greater degree than seen now.

And it will also likely be very messy.

"Money" (whether in currencies, gold, land titles or some related form) serves as an allocator of 'social energy'. It is a central driver of individual and group action.

Hence... money is political in its very foundations! (Which is why the separation of politics and economics is asinine on its face... as is the idea of a neutral Fed or any other economic body).

Finance is an essential technology for co-ordinating and driving decision in any civilization larger than a hunter-gatherer band.

However it is NOT the only driver... nor are economic metrics always the best measure of 'social metabolism'.

Our globalized system of finance is broken and corrupt... and often very far away from the market fundamentals which are supposed to be its master.

For an interesting example see this:

The Food Bubble: How Wall Street Starved Millions and Got Away With It: http://bit.ly/9ShbKa

It relies on faulty systems of credit and currency creation which have seriously biased and distorted decisions.

This is not some pale dream that we should all sing Kumbiyah and give up such an essential technology...

but rather that improved metrics of social metabolism are urgently needed... as are new mechanisms for the allocation and storage of the social energy which is the true underlying key to the metabolism of a civilization.

We are lacking the tools needed to abet the utilization of vast amounts of wasted, unused and discouraged human capability.

This is what the Individually-controlled/Commons-dedicated Account is really about... establishing a voluntary, self-supporting, self-organizing governance tool.

(The neutral, networked citizen lobbying facilitation is a vital element but not really the most important potential. Its designed for use in both charity and politics for concrete reasons.

These serve as a proxies for the Commons in general... and ultimately this network becomes a tool for its protection by empowering on a more equitable basis those within it...

If the Enlightenment is to survive it must now be strengthened from the ground up.

Lack of faith in our ability to make rational collective decisions is, all by itself, a threat to our survival... especially with exponentially expanding levels of global communication, ever-more glaring examples of wealth division... and an increasingly vulnerable infrastructure fostered by current economic paradigms of critical-interdependence and financial manipulation.

CulturalEngineer said...

P.S.

Some news this morning:

"Lack Of Stock Dispersion Hits All Time Record As Most Stocks Now Trade As One... today 1 Year Implied Correlation hit a new all time record, at 79.84 (out of 100 maximum possible), meaning the inverse of the metric, stock dispersion, or the measurement of the variation in individual stock prices, or broadly speaking alpha, is now completely irrelevant."

A great indicator of how disconnected our financial markets are from the purposes envisioned by their creators.

This is a fatal condition given time. Money and the current financial technologies and designs upon which it depends have become cancerous. It's perverse in its incentives and its distribution.

No organism can long survive such poor management of its own metabolism... its own energies.

Though the tumor will thrive for some period of time.

Ian said...

On a wholly unrelated note: an amusing thought struck me, if the secessionist extremists got their wish and the United states were partitioned along lines roughly reflecting the 2008 Presidential vote, the seceding states since they include most of the south and much of the south west would probably end up with a much higher percentage of African Americans and Hispanic Americans in their population than does the current US.

Gilmoure said...

Cultural Engineer said...

"Lack Of Stock Dispersion Hits All Time Record As Most Stocks Now Trade As One... today 1 Year Implied Correlation hit a new all time record, at 79.84 (out of 100 maximum possible), meaning the inverse of the metric, stock dispersion, or the measurement of the variation in individual stock prices, or broadly speaking alpha, is now completely irrelevant."


What does this mean. I foundthe original posting on Zero Hedge but is still Greek to me (and not the biblical Greek I studied in college for one semester).

CulturalEngineer said...

Essentially it means that the market is NOT evaluating companies or much of anything on any kind of granular basis related to true relative value of one against the other.

This suggests it's not functioning as a true marketplace... i.e. evaluating the risk vs. benefit of a particular vehicle for capital allocation (be it bond, stock, commodity, etc.) and making thoughtful judgments about how capital should be allocated...

but rather is responding indiscriminately en masse to macro events.

Occasionally this is expected and understandable... (e.g. as a result of natural disaster or any sudden cataclysmic event)...

But an extended correlation suggests that market participants are less concerned with the value of particular investments...

and more focussed on general systemic issues and the responses by governments and/or Central banks.

It's also a result of low volume, the abandonment of the market by retail investors... and the increasing pathological dominance of computerized flash trading by large, concentrated pools of capital simply seeking arbitrage opportunities in a zero-sum short-term game of speculation.

Frankly, I believe the global monetary system is unraveling. It's happened before. Though its impossible to predict how long it'll take or how bumpy the ride will be.

When both your political and economic group decision mechanisms are not only broken... but to a considerable extent INTENTIONALLY broken for the benefit of those closest to the trough...

It's way... WAY past time to start attending to these mechanisms of collective decision in a cogent and thoughtful way.

Tragically, these aren't mechanisms that the current marketplace has much interest in attending to.

Oddly enough, our current Party system attempts to encompass nearly every constituency... but has little interest in abetting a better, more capable citizenry.

Good citizenship has little representation... and none with any real strength...

However, I do believe I have a clue on how to build that representation.

Tony Fisk said...

Rewinn: based on those last comments, you may find this of interest:

Collaborative Democracy: Beth Noveck on Reengineering Civic Life

Neil Miller said...

@Ian: As for why the poor should be treated differently in an redistribution of revenue from a carbon tax, I've already pointed out that a carbon tax is regressive.

Someone earning under US$20,000 a year probably spends 80% or more of their income on immediate consumption of food, clothing etc which will be affected by the carbon tax.

Someone earning above, say, $100,000 on average, spends a significantly lower amount of their income on consumption (and more in capital investments and in personal services).


As a percentage yes, but the percentage doesn't matter, the absolute amount does. Even if the person earning $100,000 spends just 30% of their income on immediate consumption that yields $30,000, as compared to $16,000 for the poor family. We can assume that the carbon intensity per dollar is roughly the same, in which case the wealthier individual is paying nearly twice as much in carbon fees as the poor one. Taking a carbon intensity of 0.5 tons per $1000 and a fee of $40 per ton, we get $20/$1000, or $320 for the poorer individual and $600 for the wealthy one, assuming there are 20 poor people for every wealthy person, then an equal share of the fees comes to $333.33 per person. And thus the poor person comes out $13 dollars ahead without any need to be treated differently.

(I actually prefer a cap, but cap or tax: it's equally regressive)

Ian said...

"As a percentage yes, but the percentage doesn't matter, the absolute amount does."

I assume you're also opposed to progressive income tax.

Ian said...

The US North East together with several Canadian provinces already has cap and trade.

Miraculously civilization has apparently survived there.

http://en.wikipedia.org/wiki/Regional_Greenhouse_Gas_Initiative#Implementation

http://www.rggi.org/about

Gilmoure said...

@ CulturalEngineer

Cool run down; now makes sense. So, all this reading up on companies I do, checking on p/l, holdings, etc. has no relation to how the stock price is doing. Figures. Might as well be picking the jockey wearing blue.

sg said...

Science News:

The use of excess computing power in home computers has brought the discovery of a neutron star -- and the computer owners get credit for the discovery and confirmation!

http://news.yahoo.com/s/ap/20100812/ap_on_sc/ us_sci_star_discovery

Robert said...

There was a fascinating article in the journal "Policy Review" (the June/July 2010 issue) called "The Tea Party vs. the Intellectuals" which commented on the difficulties that conservative intellectuals are facing with the Tea Party and on how the base of people who make up the Tea Party are apathetic to the intellectual pressures that comes with the Progressive movement, which helps explain a bit of their anti-intellectualism. I don't think it's available online (I wrote up an abstract for it as part of my job, though that won't be up for several days at least), but if any of you get a chance, I think it's well worth reading.

Rob H.

David Smelser said...

I know where the money goes in tax & rebate and capt & dividend program. But I don't believe the proposed cap and trade proposals have a dividend.

So, where does the money used to purchase carbon credits go? I.e., who makes a profit?

TwinBeam said...

RGGI - goal of 10% reduction in GHG by their power companies by 2018 (~10 years).

Impressive! Daring!

Yes, that is clearly strong evidence that C&T can't hurt one's economy...

...so long as one doesn't get serious about having any significant impact any time soon.

Tony Fisk said...

That's not daring.

*This* is daring!

When rolled up, a 170 page report makes for a hefty clue-bat!

Now what we need to do is persuade more politicians to find out what is possible *before* practising the art of it.

oftbr: of windfarms. Used when referring to a frequently chilly place

Ian said...

Yes, the imaginary carbon market in yout head is obviously a far better basis for determining the likely behaviour of carbon markets than the NGGI; or the CDM; or the EU trading system or the Japanese carbon market.

TwinBeam said...

OK - let's see.

RGGI - barely started, but despite the credits being bankable against future need, the price collapsed from $3 to under $1.90, likely indicating a surfeit of credits and no real impact so far.

European system: 25% higher electricity prices along with windfall profits to the power suppliers - THAT instills confidence that C&T systems won't be gamed. Reasonably green European businesses losing business to dirty coal-powered businesses in China - and then having their "carbon reductions" reported as progress for the C&T system. Not to mention that a large fraction of reported GHG reductions there have been due to the economic crisis (according to the EEA).

HFC-23 credits purchased under CDM for 20x the actual cost of eliminating the HFC-23; and projects approved for CER credits that were already underway - creating no added reductions to balance the real GHG emmisions allowed by the credits.

Yup, I'm convinced - imaginary carbon trading systems ARE better than real ones...

C&T is a reaction to the failure of command economies to achieve dreamed results. "Let's get all the benefits of markets for the goals we like, by creating markets that WE control!" I think they're somehow missing a few key points about how markets work and succeed...

Ian said...

So which of these markets sdupport your claim of speculators producing massive increases in the carbon credit price causing the poor to freeze to death in their thousands?

Ian said...

"C&T is a reaction to the failure of command economies to achieve dreamed results. "Let's get all the benefits of markets for the goals we like, by creating markets that WE control!" I think they're somehow missing a few key points about how markets work and succeed..."

Yes, your knowledge of markets is obviously superior to that of Ronald Coase and those morons from the Nobel Foundation.

Ian said...

"European system: 25% higher electricity prices along with windfall profits to the power suppliers - "

Higher than what?

And do you think maybe you could provide sources for your claims?

Tim H. said...

Ian, if a system can be gamed, it will.
BTW, the name of the game we need to be playing is "How do we cut carbon-based energy, and end up with more energy", any other is liable to get ugly.
"eptive",tied to the roof?

Ian said...

"Ian, if a system can be gamed, it will."

Right except for a carbon tax, of course.

Tim H. said...

Simplify.

rewinn said...

"...except for a carbon tax, of course."

The basic problem with cap-and-trade as a solution to carbon poisoning is that it (A) creates a right to pollute and then (B) depends upon a force external to economics to decrease that amount to the level that solves the problem.

Carbon licenses (government-approved rights to pollute) may indeed be traded in an "economically efficient manner" (...whatever that may mean ... a topic worth considering... .) However this has nothing to do with the reduction in the amount of property in that carbon pollution market. It is entirely conceivable for the carbon pollution market to be maintained at a level that actually increases the amount of carbon pollution.

It remains to be seem if we can rely on forces external to that market to squeeze the amount of permitted carbon pollution. History suggests that the carbon pollution industry is not shy about using its economic and political power to kee carbon pollution licenses both cheap and easy.

Carbon taxes OTOH set up a power countervailing to the carbon pollution market: the need for revenue (whether appropriately rebated to consumers to maintain equity, or poured into the general fund for any purpose good or bad.) This force is external to the carbon pollution marketplace and thus not easily analyzed by economic methods.

Robert said...

We've had massive floods in China and Pakistan, devastating fires in Russia, and several significant oil spills in America which not only threatened the livelihood of thousands of Americans who rely on the Gulf Coast to make a living (fishing, tourism, and so on) but also revealed that the House of Petroleum is built on eggshells. I must wonder if there might be some actual effort to restrict greenhouse gases... or if we're going to see some superbug rise up in India or China that wipes out a significant number of people to force a reduction in longer-term greenhouse gas emissions. (After all, if a quarter of the world population is dead, after the bodies rot they won't be burning fossil fuels and the like.)

Rob H. who is still trying to think of the longer-term economic aspects of having 25% of the U.S. population (as of 1996) die off in a couple of weeks from plague and out-of-control fires devastating a number of larger cities

Tim H. said...

Plague?, try this:
"http://www.guardian.co.uk/society/2010/aug/12/the-end-of-antibiotics-health-infections"

CulturalEngineer said...

A general thought on economics as a science sparked by this piece on the Naked Capitalism blog...

What Kind of Science Should Economics Be When It Grows Up?

My thoughts on this:

An economist's assertion that he's a scientist is akin to the similar claims once made by alchemists and astrologers...

They use lots of charts and formulas and made great successes out of themselves by understanding that their most important task was pleasing their patrons.

This doesn't mean that there aren't things in economics to be studied... nor that there aren't fundamentals upon which to base opinions and proposals... [like the ignored effects of altruism's boundaries in scaled human decision networks and the misplaced faith that exchange tokens (currencies and their proxies) can sufficiently represent social energy*]

*Social energy is the net sum of individual and collective decisions within a social body. A decision is an idea + an action.

Credit Creation and the Building of Sustainable Economic Ecologies
http://culturalengineer.blogspot.com/2010/02/credit-creation-and-building-of.html

Decision Technologies: Currencies and the Social Contract
http://culturalengineer.blogspot.com/2010/07/decision-technologies-currencies-and.html

Ayn Rand & Alan Greenspan: The Altruism Fly in the Objectivist Ointment
http://culturalengineer.blogspot.com/2009/10/ayn-rand-alan-greenspan-altruism-fly-in.html

Building a sustainable global social metabolism ... for a species now with a biomass hundreds of times larger than any previous land animal...

Requires DIFFERENT models and assumptions than those which demand continuously increasing consumption and intense resource and energy utilization.

Moreover the global specialization through free trade promoted by Central banks inhibits the sort of resiliency offered by multiple metablolisms each with autonomous survivability.

Hence, in evolutionary terms... the model for the global organism should more closely resemble the early move from unicellular life to multi-cellular organisms.

There is an intermediate stage of 'partially' inter-dependent cellular collections similar to a sponge. (where each cell can, if necessary function independently).

This suggest the need for additional mechanisms for 'currency creation' and banking in general which is the underlying 'scheme' behind the Individually-controlled/Commons-dedicated Account concept, btw.

I could be wrong. I'm no scientist. But some fresh thinking, one would hope, could have some value. It's time to try some things...

Complaining is cheap and requires little sacrifice. Building solutions requires much more. I speak from my own experience.

What is perhaps most frightening is how ideologies in both politics and economics (which are essentially claims to certitude) are giving rational analysis a bad name.

What's left is then superstition and appeals to mysticism. This often leads to demagoguery.

Rational skepticism about prescriptions for complex/chaotic systems suggests seeking solutions with an understanding that none is certain... and none may even be possible... but we keep trying nonetheless.

Robert said...

Oh, remember that article I mentioned earlier? I found a website that is carrying it. I definitely recommend reading it, though you might want some tea and a snack to eat while reading it. ^^

Or coffee for that matter.

Rob H.

CulturalEngineer said...

@Robert

The article makes a good point recognizing "Don't tread on Me!" as the bottom-line check on a run amok oligarchy...

and the Tea Party as an expression of that "Attitude"... as opposed to a specific ideology.

From the article:

"What sparked the Tea Party revolt is mounting dissatisfaction at living in a society in which a small group has increasingly solidified its monopoly over the manufacture and distribution of opinion, deciding which ideas and policies should be looked upon favorably and which political candidates will be sympathetically reported. Even more, the Tea Party rebels bitterly resent the rigid censorship exercised by this elite over the limits of acceptable public discourse. Those who have the power to rule an opinion “out of order” do not need to take the trouble to refute it, or even examine it. They can simply make it go away."

What's interesting is how much a guy like Ralph Nader would agree with much of that.

Nader on C-Span Book TV:

http://www.booktv.org/Featured/11751/In+Depth+Ralph+Nader.aspx

Civic society must be rebuilt from the ground up.

In truth... it's the fault of an inattentive and/or passive population that's brought about the current 'troubles' and its been decades in the works.

TwinBeam said...

Here's a few sources on C&T failures for others here - but I'll bet Ian isn't really interested in these as possible sources of facts. He just wants targets to shoot down. None of these will count with him, since they don't jive with his "C&T has been a marvelous success" theme.

Europe's Problems Color U.S. Plans to Curb Carbon Gases

Expensive failure of Europe's Emissions Trading

Cap and Trade Doesn't Work

Over-Allocation or Abatement?

TwinBeam said...

CulturalEngineer - nice article on Rand/Greenspan/Objectivism. Covers the basic issues - that rationality and dogmatism conflict (though Objectivists would probably say they all just rationally came to the exact same conclusions as Ayn - sigh), that there does appear to be a limited degree of altruism in human nature (I'm guessing Ayn didn't share in that, and projected that lack onto "human nature").

However, I don't quite get the connection of limited altruism to what Greenspan was missing in the failure of presumably self-interested financial companies to run their companies well.

Sometimes it is "rational" to be stupid. If others have always taken good care of you no matter how inattentive to your own self interest you've been, you come to rely on it.

If actively monitoring your investments for signs of trouble is difficult, and everything seems to just keep humming along regardless of your occasional concerns, you may learn to "don't worry be happy".

If you've been able to trust your money manager to give you nice returns year on year, you just leave them to it.

If you've got smart guys in the derivatives devision returning big profits year after year, you learn to passively let them do their incomprehensibly complex thing.

And even if you suspect that something could go wrong with just trusting that everyone else is smarter and more energetic than you, the government will bail out your business - so why worry that others in your company may be just as stupid and lazy and uninformed as you are?

The thing Greenspan missed wasn't limited altruism - it was finite rationality up against the vast flood of economic information to be evaluated, combined with greed, mental laziness and wishful thinking that went too long un-punished.

Ian said...

"Here's a few sources on C&T failures for others here - but I'll bet Ian isn't really interested in these as possible sources of facts."

And with that our conversation is finished.

Ian said...

"Here's a few sources on C&T failures for others here - but I'll bet Ian isn't really interested in these as possible sources of facts."

And with that our conversation is finished.

CulturalEngineer said...

@Twinbeam...

Thanks for reading and your kind words re my Ayn Rand/Greenspan post...

The issue with altruism may be made clearer with these posts:

The Foundations of Authoritarianism

Compensation and the Social Network

It's critical to not confuse altruism with kindness or generosity though it may encompass those...

That's because altruism also encompasses the most ruthless brutality and even genocide!

And can drive pretty much every kind of emotion and decision in between those extremes.

Altruism has a sometimes fuzzy but always existent line of demarcation grossly interpreted as the boundary between who's in and who's out

In the Greenspan/Financial Sector case, the issue extends far beyond things like pay scales which I discuss in one of the posts here referenced... but extends to policies that resulted in what Elizabeth Warren referenced as "carving up the American middle-class like Thanksgiving Turkeys"...

No, I don't think Alan Greenspan wanted to commit genocide on the middle-class... but rather that a natural focus on his own tribe supported a sort of cognitive dissonance, a now well-developed but stagnant groupthink that allowed policies, practices and ideologies to metastasize... and in which he honestly believed... that led to that result... and with the full support and to the great benefit of... his tribe.

Altruism is a very, very subtle player in scaled decision networks... but extremely powerful.

P.S. Its also why Lloyd Blankfein IS one of the most well-liked CEO's in the world as ranked by his employees... and yet perhaps the most reviled CEO by everyone else.

He really is very likely a highly altruistic man... as is Alan Greenspan... and believe it or not... as much as she'd deny it herself... so was Ayn Rand.

I'm neither trying to eliminate nor expand altruism. It's an issue of developing political and economic mechanisms that recognize and deal with its true nature.

CulturalEngineer said...

Dr. Brin (et al)

This doesn't seem to be good news:

Obama closes curtain on transparency

I'd be interested to hear your thoughts on this.

Anonymous said...

Brin here at an internet cafe in rome.

unable to follow the whole thread but home very soon.

I have an article in a new volume - PATHOLOGICAL ALTRUISM. I kid you not! A serious academic volume about a common psychological disorder group, wherein people impose 'altruism' on others in pathological ways...

hot here. Glad to be going home. weary.

TwinBeam said...

"And with that our conversation is finished."

Snort. It never started. A conversation is a two way street, not a sermon by someone who believes He has come to deliver the One True Answer.

You might try it sometime - you'll find that *sometimes* others will end up agreeing with you. And (horrors) sometimes you'll end up agreeing with them. But mostly not, so really you have less to fear from it than you apparently believe.

Ian said...

"Snort. It never started. A conversation is a two way street, not a sermon by someone who believes He has come to deliver the One True Answer."

spare me I repeatedly attempted ot explain my opinion to you and cited evidence to support that opinion.

You were the one with the One True answer.

Which is why when you finally made an attempt to support your assertion with something approaching evidence you're "but of course Ian will ignore it" is grossly offensive and hypocritical.

rewinn said...

Well, if we're all done (Not) Talking To Each Other, can we simply accept that *I* have the One True Answer, and move on?

@Tony - thanks for the link to Collaborative Democracy - it's truly ponderworthy!

@CulturalEngineer - that's very bad news about transparency; not really surprising to those of us who never believed Obama was the liberal/progressive/hippie he was painted to be ... but, setting that aside, extremely worrying. It points to another area that "left" and "right" could and should work together, but probably won't.

Tim H. said...

P. Z. Myers posted an amusing link on Burn the rebel flag day, September 12th.
http://sites.google.com/site/burnrebelflagday/
Sounds awesomely fun, wonder what might come out of the woodwork when they saw their flag burning?
"sidogfn", Ford Prefect might say this in a moment of stress.

Neil Miller said...

@TwinBeam

Interesting articles on cap-and-trade. I feel like the terminology is lacking around cap-and-trade, as it isn't really one idea. There's the European-style cap-and-allocate, which, I would agree with rewinn, is a command system much more than a market system. There is also cap-and-auction in which a set amount of permits are auctioned periodically, definitely a market system. And there are probably some others I don't know about. Also, there is another aspect, what is done with the revenue, if any, raised: the default is that it enters government coffers, then there is the rebate, or dividend, where the money is returned to individuals.

All those articles are about cap-and-allocate, of which I'm not that fond. That said let's look at the articles.

I found the first one very good; lot's to learn there. In summary: 1) raising the local cost of carbon, just shifts it's production and energy intensive business to places where is it is cheap, 2a) it raises the price of energy, which hurts consumers 2b) and utilities keep the money, 3) allocating permits is a mess.
In it's coverage of points 2b and 3 I think it shows pretty clearly why cap-and-allocate isn't that great. However, the other points aren't really about cap-and-allocate at all, but any system in which the price of carbon is raised in attempt to reduce it's production (are there systems that try to do it without that?). They are useful points none the less: shifting production of something locally toxic, works ok, but something of global effect like C02 emissions it's less then useless, harming local business while providing no benefit, so any system we consider must set a price on "imported" emissions unless from a country with a recognized scheme.

The TPA paper also raises good points regarding windfall profits and the cost to the poor and elderly. On the latter point there is no difference, between cap-and-allocate, cap-and-auction, or a tax, the resulting increase in cost will be similar if each system is to be effective. Under the tax or auction schemes this pain can be alleviated either through a dividend/rebate or through tax-shifting, while the allocate scheme is stuck with raising taxes elsewhere to help the poor and elderly, not so good. As for windfall profits, cap-and-auction doesn't suffer this problem.
The issues it raises with volatility don't wash for me. Look at the oil price over the same period, it's just as volatile.

I had to stop reading the third article as it was so full or misinformation, that I felt it was a waste of time to keep reading it. If there were some good points in it, feel free to post them.

On the last, one more reason why the cap-and-allocate scheme is poor.

In summary, I don't seem much in the articles that favors a tax over cap-and-auction, nor why a truly market-based system would have trouble.

What system do you prefer?

Neil Miller said...

@Ian: I assume you're also opposed to progressive income tax.

You assume wrong (and it makes me wonder if you even read past that first sentence). Do the math: using a rebate or dividend system turns the regressive nature of a carbon tax, or cap, into a progressive one. Using my, admittedly, made up numbers (if you have better, we could use those, I don't think it'll make a difference) net "taxation" was $-13.33 for the low-income individual, and $266.67 for the high-income individual. Certainly looks progressive to me.

Neil Miller said...

@rewinn The basic problem with cap-and-trade as a solution to carbon poisoning is that it (A) creates a right to pollute and then (B) depends upon a force external to economics to decrease that amount to the level that solves the problem.

A) Cap-and-trade doesn't create a right to pollute, it creates a limit on an existing right. B) How is a tax not a force external to economics?

History suggests that the carbon pollution industry is not shy about using its economic and political power to keep carbon pollution licenses both cheap and easy.

What's to say they won't use that same power to keep a tax low?

rewinn said...

@Neil Miller

"A) Cap-and-trade doesn't create a right to pollute, it creates a limit on an existing right."

In my brevity, I elided two forms of property: (1) the right to use something, and (2) the right to exclude others from using something. (I'm sure real economists have actual technical terms for these, please jump in!)

Without a carbon pollution limitation scheme, everyone has property type #1. As you note, cap-and-trade does not create your type 1 property, but just limits it. It limits it by converting it to property type #2: the right to keep others from using your right to pollute.

I can't speak for other countries, but in the USA type #2 rights in physical objects tend to be far more protected by government action than type #1 rights. Your general right to toss garbage on the sidewalk is easily curtailed, but it's difficult to keep you from putting garbage in your dumpster out back. Converting type #1 property to type #2 creates an actual interest that the government can't take from you without a "taking" which is limited by our Constitution (maybe not limited enough, but that's another question.)

"B) How is a tax not a force external to economics?"
Every political act has some dimension outside of economics - that's why economics and politics are different fields. If I get the drift of your question, you seem to be querying whether the setting of a tax rate may also be influenced by political considerations - in particular, the carbon pollution industry may oppose setting carbon taxes at a rate sufficient to solve the problem. I couldn't argue against that since, in fact, this does seem to be happening.

I do think that our experience with tobacco suggests that, if you're not going to ban a poison outright per CFC, taxing the poison can gradually squeeze it out more effectively than licensing because, although in both a license scheme and a tax scheme there are underlying "goods" with economic value to be defended by powerful interests, only licensing creates an additional value to defend in the form of the license.

Also: I don't oppose license-and-trade schemes per se; I just don't think they'll be enough to solve the carbon problem. For deeper analysis I refer to Dr. Hansen's latest book "Storms of my Grandchildren".

TwinBeam said...

I was always skeptical of the "zero carbon Australia" plan, but now someone has done a decent critique in detail:

http://bravenewclimate.com/2010/08/12/zca2020-critique/

Well worth a look, though I think they were still far too kind in some of the ZCA plan assumptions they accepted.

Among other results - 3-10x investment required, and resulting in electricity that costs 10x to 20x more than now.

The site appears to be pro-nuclear, but not AGW skeptics or deniers. So I'm not vouching for their results - could be inflated to favor their favored solution.

But it does jive with my gut reaction to the ZCA plan - "too good by far, to be true".

Joel said...

It might also create a surge of creativity, if the legal requirement were extended from real property to intellectual property. If all the un-claimed (or opaquely-owned) intellectual property were to pass into the public domain, the sphere of human knowledge would be able to grow much more quickly.

Tony Fisk said...

I'm slowly going through the ZCA critique at the moment. (CITOKATE on CITOKATE, like all good immune systems)

It's a decent try, and makes a few good points. However, it also suffers from a few 'misinterpretations', and the authors are pushing a pro-nuclear barrow (as a quick visit to the comments will show).

While it isn't my preferred option, I've no fundamental objection to nuclear being considered part of the mix. Unfortunately, the proponents are very partisan in their stance, and need to get the notion that he who slings mud loses ground.

BNC site host Prof. Brian Barry (not an author) is trying to maintain an air of civility (having administered a swift kick under the table to Lang for his ad hominem and downright defamatory commentary). ZCA are holding fire for the moment.

I consider BNC to be the opposition rather than the enemy. I look forward to further comment from them.

The gut feeling 'too good to be true' plays to zero sum thinking and obedience to the status quo. I attended the Melbourne launch of ZCA. It was an interesting set of speakers. They were supporting academics, well versed in the field. All had a few criticisms of their own to make, but all were unanimous in what they thought the main point of the plan was: that it *was* feasible, and that it laid the feasability out in detail. That alone should have an effect on political will.

On that topic, I find it an interesting coincidence that Saturday's election falls on World Overshoot Day

rewinn said...

If you're in the mood to anticipate next week's Conspiracy Theory Based On Something Harmless, take a gander at Dowling Duncan's Entry in the Dollar Rede$ign Project.

If this doesn't fuel wild speculation about black helicopters shipping Amero-wielding New Black Panther Party Mosque-Builders across our national borders, someone is slowing up!

Tony Fisk said...

Ooh yes! Lots to fulminate about!

"We wanted a concept behind the imagery so that the image directly relates to the value of each note."

On that assessment*, putting Obama on only the $1 could raise hackles in one quarter, but then, free market wrecker Roosevelt on $100 could raise hackles in another. (and this quarter might object to Obama being present at all!)

*By 'value', the authors actually mean symbolic association with the number rather than monetary worth, and they do explain it. But I bet that gets missed!

reffe: adjudicator of a rastafarian football match.

BCRion said...

As far as the "Zero Carbon Australia" (ZCP) plan, I am very skeptical. I have indeed studied a bit about energy and I know a bit of its history. There is no shortage of such studies that make such claims over the last 30+ years. Thus far, we are nowhere close to the predictions made.

So whenever I see something like this, I have to ask, "What is different this time?" Considering such claims have been made time and again for a long time now, and all to the same negative result, anyone making such a claim bares a steep burden of proof.

Many of these studies base their results off of extrapolations on existing sites and take a "leave it to the engineers" attitude when it comes to working out all the messy little details. Unfortunately, these details are important. Energy analysts tackle these problems everyday and when all is said and done, we see a net growth in fossil fuels. Certainly renewable sites get built, but these are at a far slower rate than natural gas plants.

These studies tell us what is theoretically possible but these almost universally fall very far short of what is actually practical. "Why is this any different?" is a natural question to ask.

Tony Fisk said...

The difference this time is the detail of the plan. The difference is that it addresses the standard arguments used against renewable resources.

Gripping hand difference is that they invite people to challenge its conclusions.

Certainly, it makes audacious claims and you have every right to be skeptical, on several levels. However, don't fall into the trap of thinking because you are skeptical, it is therefore unworkable.

The BNC critique takes a fairly solid approach and is worth taking seriously: it lists the assumptions made by the BZE plan and seeks to show they are unrealistic. My main issues with it (so far) are that a) they are more or less comparing apples with oranges and b) they have an agenda which could be affecting some of their interpretations (while the tone of the critique itself is quite civil, there are a couple of giveaway phrases, and some of the forum comments have been anything but civil). BZE are aware of the critique but have chosen not to respond at this time.

Me? I would suggest that the BZE Plan's success may be over reliant on a number of interlocking initiatives being acted on. I would ask how resilient is it to having certain factors knocked out: eg could it cope with a continuation of coal exports? What about a low consumer take-up of electric vehicles or electric heating?

snessess: serpentine charisma

Neil Miller said...

@rewinn

Thanks for the book recommendation, I'll have to check it out. It certainly gets lots of good reviews.

I would argue that cap schemes start with the idea that there is no right to net carbon pollution, but so as to ease the transition a slowly diminishing cap is put in place. That is: any right created under the scheme is inherently temporary. CFC's weren't banned outright, immediately, but rather phased out with some uses only ending in the last couple years. The cap system is just a mechanism to perform a phase out, and I'm sure we have good enough lawyers to craft legislation to that effect. :)

I'm also curious about the tobacco example. I wasn't aware a license scheme was ever tried, do you have links to information about such a plan?

And finally, we are just haggling over the details, I'll cheer the passage of tax-and-rebate or cap-and-dividend. Either would be a big step in the right direction.

Neil Miller said...

And getting back on topic...

@David Brin - I do not care if it is 2-steps removed, or four-steps. But when you get above that, you find clever nested-doll schemes to control vast empires based on tiny slivers of actual ownership

I'm not sure any limit is necessary, provided that the data for the chains of ownership are stored in some open, readily-available, computer-readable format. Provided that data, a modern computer could chew through the data for any given property in a matter of minutes even if it was thousands of layers deep. Given that data there are many interesting things that could be done with data analysis and visualization. I'm liking it…

Such a repository would make it very easy to say "go look for yourself" when making a point about the ownership of certain news organizations. :)

Duncan Cairncross said...

Hi Neil

"I'm not sure any limit is necessary"

I would think that either a limit or a requirement that if the simple search does not reach a human then the asset in question "Must be owned by Humanity (the state)"

That would stop any games of hide and seek!

BCRion

I have seen many failed ventures but I took away a different conclusion

Most failures were due to failure of political will
Not failures of science or engineering

BNC appears to be parroting some well known disinformation about wind power - I actually think their favorite - Nuclear could be very useful but I don't like talking up your option by dissing the opposition!

Robert said...

Well, it appears that Fox News's parent company is no longer politically impartial: News Corp., owner of the Fox network, Fox News and newspapers including the New York Post and The Wall Street Journal, gave $1 million in late June to the Republican Governors Association, making it one of the largest corporate donors to the GOP group this election season.

While it is doubtful that Democrats will stay in power, it would be most amusing if the recent brouhaha over the Ground Zero idiocy dragged out otherwise-burned-out voters to vote for Democrats in a bid to keep what appears to be an increasingly-prejudiced Republican Party from taking a majority of power. (That's not to say the Republican Party has become the Party of Bigotry; but with the idiocy over immigration and Ground Zero and other such immigration-and-religion-related matters, they're painting themselves an ugly color while pandering to their more reactionary base.)

-------

Speaking of reactionary... it seems Dr. Laura is going off the air after saying "the n-word" on the air. Several advertisers pulled their support and she's not renewing her contract; however, she insists she's not retiring, just moving to a venue (online) that doesn't violate her First Amendment rights.

After reading what she said... I have to say it's much ado about nothing. She didn't call anyone the word in question. She was making a point on how people such as her cannot say something that some minorities use all the time. I swear, America is becoming hypersensitive on both sides of the aisle.

Rob H.

Neil Miller said...

Good article on the "Ground Zero Mosque" article

Particularly the point about opposition being inverse to distance.

BCRion said...

Tony Fisk -- There are plenty of very detailed studies that come out periodically. Thus far, none have even modestly been even close to reality. Amory Lovins is a good example. His work is pretty detailed, but very few of his predictions in 30 years have come to pass.

I don't demand perfect agreement, and I fully accept that what they have just might be workable, but such claims have a poor track record, so I do not find it unreasonable to ask for empirical evidence to support their conclusions.

The way to gain credibility is to establish some milestones with less lofty, but non-trivial goals. If you are able to meet the first few, I will be far more persuaded.

As for BNC's rebuttal, I'm sure they have an agenda. Everyone does. The ZPC study contains a few "giveaway phrases" about their agenda too. I don't fundamentally see a difference here.

Duncan -- Certainly there is a political dimension to this and I cannot deny that some political underhandedness is involved in derailing such plans. However, one thing that cannot be ignored are the laws of economics which is a function of the science and engineering available. It is often this that drives decisions about energy choices.

Why I'm skeptical is that no one, anywhere in the world, has even come close to 100% renewable energy on a macroscale even when pro-renewable policies are in place. Universally, even in areas with such policies, we have yet to see such bold claims come to fruition.

Tony Fisk said...

@BCrion: as I said, I have no problem with skepticism on this one. Of course you want proof that any investment in such large scale schemes like this isn't going to evaporate. So do I! It's called risk analysis.

I would assess the BZE plan as a feasability study, and one that still needs a full checking out.

The BNC critique is just the first attempt. I don't think it succeeds in its rebuttal because all it basically does is reject some of the listed assumptions, substitutes a different set of figures from more conservative sources, and points to the massive cost blowout that results.

Surprise!

I would take the critique more seriously if it could demonstrate why its sourcing is more relevant than BZE's, and if it could discover a few implicit assumptions for itself rather than rely on the ones listed (which suggests that the Report has already addressed them. Actually, some later sections have pointed out that credible power requirements require a full LOLP assessment, whatever that is, and that additional rail infrastructure hasn't been included. Need to check those, though.)

Sorry to carry on. I think I'm rehashing old arguments now, and you guys have got more important things to worry about, like how to harness mosque generated energy. If it's proportional to distance, then it sounds like strong nuclear forces might be involved...

However, I can't let your last paragraph go without quickly pointing to Portugal, which has apparently on track to source 45% of its electricity by year's end. I simply point it out without knowing whether or not the assertion fails within 5 seconds or not.

hingshi: ancient oriental discipline that ensures that someone else pays for your mistakes.

Tony Fisk said...

Back on topic, I've linked the original post to John Elkington's piece on the Global Shadow Economy

rewinn said...

@Robert - Dr. Laura did a lot more than use the N word over and over. Read The Transcript.

The caller asked her advice about a problem in her biracial relationship in which her husbands family & friends made racist comments to her face. Laura discounted her complaint, stated the comments were not racist, questioned why the lady was upset about the n-word when entertainers used it, discounted the caller's objection to being called the n-word and said "we've got a black man as president and we've got more complaining about racism than ever".

When the caller objected, Laura told her not to "NAACP" her (the 1st time I've heard that as a verb). Laura finished up by suggesting the caller was "hypersensitive" and should not have married "out of your race"

There was more ... sure, the n-word made the headlines cuz it's a short description, but the entire response was deeply, deeply racist and offensive.

Now, this has been a summer when radio wackos are trying to out-do themselves with hate talk ("Terrorist Babies OMG!") but Laura's show is at least facially directed to relationship advice, which does not include advising people not to marry outside their race. Her sponsors exercised sound business judgment by dropping off and she made a business decision based upon the diminished free market value of her now-tainted produce.

@Neil
I offered tobacco as an example of where a taxation scheme to reduce poisoning is effective and a cap-and-trade scheme would never work due to the resistance of tobacco growers to setting the cap at the level needed to ameliorate the risk.

BCRion said...

Tony -- I think we're largely in agreement here. Indeed, I'm hopeful that it is all correct and we can have a greater percentage of these sources while still being economical. This will, at very least, take the burden off of areas where such sources are not practical because of climate.

What bothers me most are people who take this study and blindly assert that if it can be done for Australia, then everyone can do it. Unfortunately, such energy sources are highly dependent upon geography and climate. What I can tell you with absolute certainty is that with existing technology it is impossible for every region to obtain it's electricity "locally" (which may be a several hundred mile radius) from renewable resources alone while still being affordable.

As for the mosques, the whole controversy is simply disgusting and hypocritical. You have many (although not all) of the same people who, in one breath claim "Obama is trampling on the Constitution" and in the very next demanding the government stop a group of people from freely practicing their religion just because it makes them feel uneasy.

These so-called "conservatives" and "defenders of the Constitution" should actually read up on the document they claim to protect. Of course, it's not really about the Constitution for them; that's merely the rationalization. Really, it's about the feeling of comfort they get when their side is in power.

Duncan.Cairncross said...

Hi BCRion

"Certainly there is a political dimension to this and I cannot deny that some political underhandedness is involved in derailing such plans. However, one thing that cannot be ignored are the laws of economics which is a function of the science and engineering available. It is often this that drives decisions about energy choices."

I don't think political " Underhandedness" is anywhere near as big a problem as timidity,
The decision comes down to
I know it will work - look at that one
or
I think it will work and be a lot better!

The politicians go for the sure thing - then it is in place for fifty years

This timidity overwhelms the economic argument

Tony Fisk said...

BZE is a plan for Australian conditions. It *might* be adaptable elsewhere, but locality is definitely an issue.

For example, a quick glance at the world solar irradiation map (Fig 2.18) shows that CST technology isn't very suitable for China (I'd like to know why it's so gloomy over there, though. Is it mountain mist, or Asian smog? Panda farts?)

Ironically, both China and India are positioning themselves to be exporters of renewable technology in 10-20 years time.

Also ironically (on economics), one of the guest speakers at the launch pointed out that a rapid ramp-up could lead to a supply imbalance, and push the costings up.

repasto: last night's spaghetti for breakfast (my daughter thrives on it!)

BCRion said...

Duncan -- I would disagree and claim that underhandedness does indeed play a big enough factor. Energy companies have a significant amount of wealth and motivation to protect their market share. Typically, much of what they do is perfectly legal and involves influencing policy itself (rent seeking).

That, however, is an aside. In US at least, energy markets don't work the way of political fiat although politicians are the easiest scapegoat for any problem. It is not the government who builds and manages the production of electricity. Now they do regulate and incentivize it, but, ultimately energy construction is largely left to the private sector. Such a system will only build the facilities that are most economically advantageous to them. The government simply cannot license facilities that do not exist.

Now, we can argue that the government should take a larger role in the construction of plants or be more heavy-handed in what they are willing to approve. However, these get into murky philosophical arguments about the proper role of government. There are many who see this as too much. While some may call this "timidity", many would simply call this a reasonable philosophical disagreement.

As for energy choices, I am indeed in favor of some incentivization for newer technologies as well as some public assistance such as direct loans or loan guarantees (company puts up front some percentage of the cost as collateral and the government consigns on the loan) in financing large capital projects. What makes me more nervous are electricity production tax credits that stretch in perpetuity.

rewinn said...

To its credit, the CATO Institute (...six words I do not often string together...) has at least one member who thinks the mosque issue is a red herring.

I would like to believe that the majority of Americans will figure this out too, given a little time to think about it. Of course, there will then be another fake scandal ... and so it goes.

Duncan Cairncross said...

Hi BCRion

I'm sorry - my experience of political manipulation is in the UK and NZ

Any corruption is much less overt than the US - or people go to jail!

Here the problem is timidity - in private industry as well as public!

In the US - you guys just have to get the money out!

agenzia hostess Verona said...

Superb and awesome post on solving world debt through tracsprency, Thanks.

Ilithi Dragon said...

157 posts before getting hit with delicious spam? I think we've hit a new record...

On the issue of the Islamic prayer room in a community center two New York City blocks from the World Trade Center site (aka "the Ground Zero Mosque"), a friend of mine had this to say, with which I agree 120%:
"If you're not willing to allow someone to exercise their religious
freedom then the terrorists have won because they have changed the
nature of what you are."

Robert said...

Off on a science bent for a moment, there's an interesting article on the need for NASA and other space programs to alter their exercise programs for astronauts in low-gravity environments (ie, freefall). It seems that astronauts who are in orbit for six months return with the musculature of an 80-year-old (and not one who's remained active).

I must admit some curiosity as to whether long-term experiments on the musculoskeletal system has been done with small mammals; it would be interesting to see how animals born in zero-g environments and spend their entire lives there are different than us gravitationally-bound critters.

Rob H.

Darrell E said...

I have always been puzzled by the exercise regimens of astronauts. Muscle and bone loss are the two major issues with longer term missions, yet astronaut exercise programs have always been heavy on cardio and light (often none at all) on strength training.

It has been clearly established that weight training stimulates muscle and bone growth. Obviously traditional weight lifting equipment would not work. But Bowflex, or a similar company, could probably help design strength training equipment that would work well.

A strength training program for astronauts should be biased more towards a powerlifting program rather than a fitness maintenance program. I really think this type of program should be tried, and I am surprised that something like it has yet to be tried.

Tony Fisk said...

'Great Mambo Chicken' describes an experiment that showed chooks raised in *high* gravity environments had improved musculature and cardio-vascular systems.

Still, I suppose you could take the space station from 2001 and rev it up a little.

demblesh: the paraphernalia left over from mad scientist experiments (see here)

Neil Miller said...

The heart and vascular system also deteriorate as the heart no longer has to work against gravity. Weak bones and muscles you can deal with when you get home, a weak heart not so much.

and riffing of Tony...

manopyl: what happens when lazy astronauts return from space.

rewinn said...

I'd like to see the resistance device (whether for cardio or strength training) hooked up to a generator powering an ion engine. That way, with enough patience, we could row to Mars!

Ilithi Dragon said...

rewinn said...

I'd like to see the resistance device (whether for cardio or strength training) hooked up to a generator powering an ion engine. That way, with enough patience, we could row to Mars!


LMFAO!!! That, sir, is both the greatest idea that I have heard, and the most awesome image that I have been given, in a month. I second this motion, and am making it a status update on facebook.

Tony Fisk said...

Hehehe!

...or bicycles?

Pedal,
Oh pedal faster,
Oh pedal faster, up the hill!


Would Messrs Schleck or Contador care to volunteer?

Duncan.Cairncross said...

Hi Rewinn

The late great Charles Sheffield had a short story about that
I think it was - Tour de System

With pedaled ion engines doing Tour de France stages

Tony Fisk said...

... and no cheating with concealed solar sails, either! It would bring the sport into disrepute!

rewinn said...

@Duncan - thanks for the reminder! I'd enjoyed the story (especially the clever way the protagonist doesn't cheat, just exploits the rules) but forgot the author. Putting that together with the last panel from The Heterodyne Boys and the Dragons from Mars and the row-to-mars concept is complete.