Comments on: Are voluntary actions meaningful where an emissions cap is introduced?

By: Voluntary Actions and the Rudd Government’s changes to its proposed Carbon Pollution Reduction System « BraveNewClimate.com

Fri, 15 May 2009 11:05:12 +0000

[...] pointed out[3] by myself since September 2008, by Richard Dennis in his discussions from the Australia [...]

By: Barry Brook

Barry Brook — Mon, 15 Sep 2008 14:25:11 +0000

Bernard J – as MattB implies, others with far deeper knowledge of economics than me are blogging about this e.g. John Quiggin: http://johnquiggin.com

But I certainly do have a strong view on this – and definitely favour a carbon tax over an ETS (CPRS, whatever you want to call it), for various reasons beyond the simple “lowest cost abatement” justification – some of which are described so comprehensively by Tim Kelly above. I do indeed plan to blog on this point more in the near future!

By: MattB

MattB — Mon, 15 Sep 2008 13:49:25 +0000

The economic theory is pretty clear cut… a trading permit system is the lowest cost abatement program, with significantly greater efficiency (lower cost to economy) than a carbon tax. To me the best thing about an ETS is that, when done properly, it liberates us form all these spot-fire treatments… yep they pretty much become redundant under an ETS. No offence, but for the lowest cost abatement strategy I have to admit I’ll be heading to braveneweconomy.com ;)

By: Bernard J.

Bernard J. — Mon, 15 Sep 2008 13:11:51 +0000

Barry,

I am very interested to hear your thoughts, and those of others ,on the relative merits of CAT vs carbon tax, or other options.

I remember a commentary piece in New Scientist about 18 months ago that promoted (unpopularly it seems) carbon tax alternatives over cap and trade schemes. I am certainly no economist but I felt that some of the arguements had merit, although many economists who I have respect for have since supported CAT. I would love to see this teased out further here, and I hope that some of the economists who frequent sites such as Deltoid and RC might add to the conversation.

By: Barry Brook

Barry Brook — Mon, 15 Sep 2008 04:14:17 +0000

Tim Kelly says:
“A carbon tax should not be ruled out for many reasons, not least that a tax does not constrain or prevent voluntary actions, it encourages them.”

I think this is a key conclusion – one that the government is not seriously discussing. More on this in later posts.