I'm doing my best to keep my new year's resolution to steal more posts (especially on the weekends). Here's one from over at Green Econ (aka, Environmental and Urban Economics) where Matt Kahn simulaneously highlights a Boston Globe editorial from Gilbert "Gib" Metcalfe on the economics of climate change policy and slams the writing style of "many academics." Below the fold are some excerpts from the BeeGee (my clever, 80s-ish, nickname for the Boston Globe) article (you can get the whole thing at Green Econ).
These are the factors we should consider in evaluating ... [climate change] plans to combat climate change.
Administrative complexity. Is the plan in question easy to administer, or will it require heroic oversight efforts? At the national level, the first place to look is to see if the plan is an upstream or a downstream plan. An upstream plan would focus on producers of carbon; coal mines, refineries, natural gas wells, and the firms that import fuel into our ports would have to submit permits for their carbon. A downstream plan would focus on the companies that use fossil fuels.
At the national level, an upstream plan is better. Production of carbon-based energy is concentrated, and relatively few producers would have to be part of the system -- especially if we exempt small producers. ...
Coverage. Does the plan cover a large fraction of carbon emissions? If not, it unfairly burdens covered sectors while reducing the program's effectiveness. ...
Give aways. [Massachusetts] Governor Patrick has broken the mold by deciding to auction RGGI carbon permits. In contrast, the European Union's carbon trading program gave them away. Not only did electric utilities in Europe receive permits worth millions of euros, but they also raised electric rates, arguing that it was now more costly to produce electricity since doing so required them to use their carbon permits!
Watch the debate over carbon cap-and-trade systems carefully. The number of carbon permits that are issued could well be based on the existing emissions levels. This could help explain why Texas utility TXU plans to build 11 coal-fired plants adding 78 million tons of carbon dioxide to the atmosphere annually. Better to build the plants before a carbon cap is put in place, the thinking goes, so you can argue for grandfathering them under the new rules.
Revenue use. If governments impose a carbon tax or auction off permits under a cap-and-trade system, what will they do with the money? ... Should carbon revenues go for new efficiency programs or, say, to provide property tax relief?
