DarkStealth

The Carbon Emissions Tax Effect

On May 18 11:28 PM philais wrote:
> Say what? All this is fine if the private market can seek a profit,
> and all this is not government coercion... but of course it is. Follow
> the government money! '

Yes this is government coercion, and it's necessary to fix a market failure. And private companies can profit from it.

The market (outside of some specific growing portions of sectors) has been woefully unmotivated by any of these issues. Climate change is the largest market failure ever - the cost of living unsustainably is an external cost, not included on anyone's balance sheets, though over time governments at all levels will be forced to pick up the tab for adapting to a new climate. That's the motivation for this government coercion - the market's rules need to be changed to motivate companies to act in their enlightened self-interest (without putting themselves at a competitive disadvantage). Of course we must use the market & let companies do what they do best (which is just gradient searches in some multi-dimension cost curve), but they need to be optimizing within a broader framework (ie, a curve with one more dimension) than they currently do. The only common unit of measurement the market seems to respect is money, hence the idea of placing a price on greenhouse gasses.

Government intervention to correct market failures is the most complete solution, and much better than the "voluntary" (ie, ineffective & unbalanced) efforts championed by industry. Just as many may agree that regulation is required to keep banks & insurance companies from destroying themselves, some cost for carbon pollution is necessary to keep industry from destroying the planet (or our society through using all our liquid fuels before we have replacements). Or if you don't believe in AGW, China's government is pushing ahead with electric cars simply to avoid the worst of Peak Oil.

If the AGW and Peak Oil arguments don't motivate you, companies of any size can save money by buying more efficient equipment that uses less energy, anywhere from a better jet engine or hybrid locomotive, to improved building HVAC systems, to those compact flourescent lightbulbs. Once again, a cap & trade system will help encourage this.

BTW, private companies that really "get" this should make a lot of money off this. Witness the wind & solar industries, as well as corporate pushes in large companies like General Electric. The truth is we'll need to shift somewhere around $2 trillion of investment in the US economy over the next 40 years to rebuild our energy infrastructure & transportation grid. If any company or investor isn't aware of this or paying attention, they need more vision.