[Nuclear1]

carbon credits

The pope did this back in the middle ages, except he called it "Indulgences".

Thanks Mr Beck.  Have something substantive to say about it?

EDIT: Dammit Inquisitor, I'm not letting you steal my Glenn Beck reference

[Scotty]

Ok, so you are actually a moron. guess we're done. Cheers.

Keep ad hominems out of this.  If you have an issue with his arguments, address it.  Do NOT waste time and space with a personal attack.  I know I'm not a mod, but mods say that often enough.

Explain them.

Carbon credits are are an amount of "credits" doled out to businesses limiting the amount of emissions they can produce without being heavily fined by the government.  If we want to go the cap-and-trade route, those credits can be traded by businesses that don't necessarily produce many emissions to emissions heavy businesses for a monetary sum or other agreed on payment. 

Carbon credits are not a free market tool.  Carbon credits are only brought into existence by government mandate, and the only value they have is through artificial government-created scarcity.

This is correct in all necessary aspects.  Credits are indeed only brought about by governance, as no business would voluntarily handicap itself (unless it doesn't care about profit, which is really a poor business to begin with, but that's an argument for another thread) in that way.  If there is anything wrong with this, it's the last sentence, and then only partially.  Any value they have would be subjective, rather than objective, and the government has no real control over subjective value.

The way I see those working is low emissions companies giving them away, high emissions companies buying them, and nothing changing at all except the emission producers would have to pay more money.

[mxlm]

Carbon credits are only brought into existence by government mandate, and the only value they have is through artificial government-created scarcity.

So you're saying that carbon credits are currency?

[SpardaSon21]

Do you really want to know how cap-and-trade is not a free-market system?  Fine.

The cap for starters.  The government comes in an says that production of CO₂ can't exceed a certain amount.  That's a mandate.  Mandates are not a free-market tool.

Carbon credits are also an artificial product.  They wouldn't exist except for said cap on CO₂ emissions.  Also, certain business that produce CO₂ as part of their normal operations can't reduce CO₂ emissions below a certain amount.  This wouldn't be a problem except for the cap on emissions.  So in order to avoid a fine (again, not a free-market tool) they buy carbon credits.  They only buy said credits to avoid the fine, which means there is an artificial demand for carbon credits created directly by government intervention in the marketplace, which is the cap on CO₂ emissions.  Said carbon credits also have an artificial value, since there is an artificial demand for them since they would not arise as part of normal free-market operation, CO₂ emissions being a valueless product.

Saying cap-and-trade is free-market is like saying ethanol mandates are free-market.  Both have government intervention in the marketplace and both create artificial demand and hence artificial value for valueless or low-value products.

TL;DR:  Trade is by all means a free-market tool as it arises naturally as a result of supply and demand.  The cap, and everything that derives from it, are not because they are the result of government intervention creating artificial supply and demand in the free-market.

Scotty, I'm saying that the value of carbon credits is somewhat artificial, since they do not arise as part of natural free-market processes, and the demand for them is created by government intervention.  The artificial demand leads to an artificial increase in value, much like what has happened to ethanol thanks to the government mandate that it be included in all gasoline sold in the United States.

mxlm, that's dead wrong.  Money has value because it is used to secure goods and services.  There is a free-market demand for money for use as a transaction medium.  Money would arise without the government printing it.  Money is merely a reflection of the value of the goods and services being produced.  All government does is provide said medium.  Inflation occurs because there is more money than the value of the goods and services, and so currency is devalued in order to more accurately reflect its buying power.  Deflation occurs because there is less money than the value of goods and services, and so its value increases to reflect its buying power.

[Rian]

The way I see those working is low emissions companies giving them away, high emissions companies buying them, and nothing changing at all except the emission producers would have to pay more money.

Companies that emit less don't give the credits away, they sell them. That's the point. It's altering the incentive structure to tie financial benefits to socially positive outcomes. Companies can go on as they have, but it's going to get more and more costly. Meanwhile, companies with ecologically sound policies can use the competitive advantage created by the credit to expand their market share.

Carbon credits promote socially optimal behavior by creating a direct financial incentive. It's as simple as that.

[Scotty]

Ah, social engineering (not that kind) by economic penalty.  I can see how that wouldn't backfire at all.

This, by its nature, penalizes production businesses.  Penalizing production businesses reduces the amount of goods on the market.  This drives prices up.  This creates inflation (or demand for higher salries and strikes, which then creates inflation anyway).  Inflation reduces confidence in the economy (and reduced confidence from investors overseas).  Reduced confidence (of a rather sudden variety) is what caused the Great Depression in America.

Also, socially positive outcomes != environmentally friendly outcomes.  I firmly disagree with the idea that the government should be able to mold the economy on a societal level.

[General Battuta]

Wow, that kind of simplistic view of economics could have only come from high school. Nobody knows how the market works with that degree of confidence; we cannot forecast economics and have not been able to for a century.

[Rian]

Ah, social engineering (not that kind) by economic penalty.  I can see how that wouldn't backfire at all.

This, by its nature, penalizes production businesses.  Penalizing production businesses reduces the amount of goods on the market.  This drives prices up.  This creates inflation (or demand for higher salries and strikes, which then creates inflation anyway).  Inflation reduces confidence in the economy (and reduced confidence from investors overseas).  Reduced confidence (of a rather sudden variety) is what caused the Great Depression in America.

Also, socially positive outcomes != environmentally friendly outcomes.  I firmly disagree with the idea that the government should be able to mold the economy on a societal level.

Ah, I apologize for my loose terminology there. By "socially optimal" I meant "good for society," that is, "not likely to render large swathes of the planet uninhabitable." Note that I used the term interchangeably with "ecologically sound," which was sloppy of me but does not alter my main argument.

More to the point, you're overlooking an entire half of the equation here. Yes, the system increases the costs associated with unsustainable practices. This will cause the companies employing these practices to raise their prices, and consumers will turn to the more cost-effective alternatives: namely, the companies that are practicing responsible, sustainable production.

By imposing penalties on companies with unfavorable characteristics, you create opportunities for other companies. The point is to raise the costs associated with unsustainable practices, while reducing costs for responsible ones. The companies that are squandering resources and destroying the atmospheric balance become competitively unfit, and they die out because they deserve to. Meanwhile, newer companies with more effective practices make bank, and there's very little change on the consumer end of things.

Oh, and unregulated markets don’t ****ing work. Or did you not notice that whole global financial crisis thing?

[Liberator]

The global financial crisis was spurred by a bunch of self serving politicians trying to buy votes by removing the regulation that would have prevented it from happening in the first place.  BTW, those same politicians are trying to "fix" it now.

@Bat
Economics is simple.

One person has a good or service that they want to offer up for sale.  Another person wishes to buy said good or service.  The only really useful place government has in that equation is to provide a standard of value that all partied agree upon and to act in the best interests of they're citizens by handling the sales people who behave immorally and unethically.  Beyond that, GTFO.


It's only made difficult by pointy headed "intellectuals" who only seem to want to make it hard for the sake of making it hard.

[General Battuta]

Nope, economics is not simple, nor is that model of economics accurate. If you had any knowledge of economics or psychology you would be aware of this. Honestly, it's a bit odd to see you arguing in favor of increased government regulation; I come from the Chicago neoclassical school which I imagine you'd idolize.

Your two paragraphs do not even appear to have been written by the same person, since the first advocates extensive regulation and the second decries it.

I'm kind of tired of your ad hominems. We take the time to address your arguments, I even take the time to defend you personally, and then you just attack people instead of arguments in response. I think maybe you need some time off.

Please stop ignoring multiple posts directed at you. You look like a troll. In fact, by skipping from topic to topic spouting flamebait and ignoring discussion, you act like a troll.

[Scotty]

Minor clarification:  government inability to force economic changes on a societal level != unregulated market.

The problem big problem I see with this is that this idea arbitrarily alters the balance of competitive markets.  It becomes less the "most effective company survives" but more "the company that I agree with survives," which is a dangerous slope to start down.

The issue to agree or disagree with here is irrelevant.  The arbitrary and artificial alteration (alliteration, heh ) of cost-effectiveness I fundamentally disagree with.  By imposing penalties on companies that have proven their ability to compete on the market that operate simply on a method you disagree with, other, actually otherwise less effective companies come to the forefront, reducing overall quality or effectiveness as a whole.

(and simplistic or not, I don't really have the ability to take a class in economics right now.  The closest my school has that I know of is Business Math )

EDIT BEFORE THE POST FOR LIBERATOR'S BENEFIT:  The financial crisis was caused by banks trading future interest and payments on loans as actual currency.  For example, say I lend you one hundred dollars and ask for one hundred ten dollars back whenever you can.  Say then, that I trade away the promise of that loan being repaid for one hundred twenty dollars.  Say that the person I trade the combined package to then trades THAT to another person for 150 dollars.  If you default on that loan, then I can't pay the guy I traded it to back, HE can't trade back, etc.  EVERYONE comes up short money.  Basically, banks trading money they didn't have caused this.  (This example feels off somehow, like I mixed up one of the links.  Gist is still there though)

Granted, regulation during the Clinton administration even allowed this to happen, but that is well before the fact, and only relevant in passing here.

Personally, I prefer the Austrian School of Economics.

[Herra Tohtori]

One person has a good or service that they want to offer up for sale.  Another person wishes to buy said good or service.  The only really useful place government has in that equation is to provide a standard of value that all partied agree upon and to act in the best interests of they're citizens by handling the sales people who behave immorally and unethically.  Beyond that, GTFO.

Could you show me some US money issued by the government then?

[Rian]

Minor clarification:  government inability to force economic changes on a societal level != unregulated market.

The problem big problem I see with this is that this idea arbitrarily alters the balance of competitive markets.  It becomes less the "most effective company survives" but more "the company that I agree with survives," which is a dangerous slope to start down.

The issue to agree or disagree with here is irrelevant.  The arbitrary and artificial alteration (alliteration, heh ) of cost-effectiveness I fundamentally disagree with.  By imposing penalties on companies that have proven their ability to compete on the market that operate simply on a method you disagree with, other, actually otherwise less effective companies come to the forefront, reducing overall quality or effectiveness as a whole.

So you don't think companies should be discouraged from running the planet into the ground? Say my chemical company is dumping heavy metal waste into your backyard. Would you or would you not like the government to drive my company out of business? This is the same thing, but on a global scale. Certain practices must be discouraged because they will lead to global economic and environmental collapse if allowed to continue unconstrained. That's not arbitrary or opinion-based, it's a decision that can be made solely on rational, empirical data. There is no slippery slope there.

EDIT BEFORE THE POST FOR LIBERATOR'S BENEFIT:  The financial crisis was caused by banks trading future interest and payments on loans as actual currency.  For example, say I lend you one hundred dollars and ask for one hundred ten dollars back whenever you can.  Say then, that I trade away the promise of that loan being repaid for one hundred twenty dollars.  Say that the person I trade the combined package to then trades THAT to another person for 150 dollars.  If you default on that loan, then I can't pay the guy I traded it to back, HE can't trade back, etc.  EVERYONE comes up short money.  Basically, banks trading money they didn't have caused this.  (This example feels off somehow, like I mixed up one of the links.  Gist is still there though)

What you're missing is that (in theory, anyway) the money is invested in industry and creates more wealth between the steps. All banks make money by loaning out money that belongs to other people. My background is in political science and technology policy, not pure economics, so I can't tell you the details of how the system broke down, but it's nowhere near as simple as you describe.

[Nuclear1]

The global financial crisis was spurred by a bunch of self serving politicians trying to buy votes by removing the regulation that would have prevented it from happening in the first place.  BTW, those same politicians are trying to "fix" it now.

@Bat
Economics is simple.

One person has a good or service that they want to offer up for sale.  Another person wishes to buy said good or service.  The only really useful place government has in that equation is to provide a standard of value that all partied agree upon and to act in the best interests of they're citizens by handling the sales people who behave immorally and unethically.  Beyond that, GTFO.


It's only made difficult by pointy headed "intellectuals" who only seem to want to make it hard for the sake of making it hard.

Everything Battuta said, plus more.

First you blame Democrats for deregulating the market and causing the economic downturn, because you can blame the "pointy-headed intellectuals" for doing it.  Besides the fact it's completely out-of-character with what we know about your ultra-free market positions, I'll accept it.

But then you turn right around and get pissy when people implement regulations on the market to keep the economic crisis from happening again, and since they happen to be the same people who deregulated the market in the first place, you get all high and mighty and imply them as hypocrites.

Top that with the ad hominem horse**** "pointy-headed intellectuals", and it's absolutely 100% clear you're just trolling.  I really hope you enjoy your inevitable two week vacation.

[esarai]

Wait... did Liberator seriously call economics simple?

Christ dude, read an economics book.  There's a crap load more to it than just the idea of "supply and demand." 

[Dilmah G]

I don't look at gendisc for more than 30 seconds at a time to avoid eyestrain. But seriously. What the ****.

Liberator. Do you own a High School diploma?

[karajorma]

I'm not going to ban Liberator from this discussion purely on the grounds that I'm interested in seeing if this hole he is digging for himself will go all the way through the Earth's core.


Seriously Lib, you really need to stop parrotting talk radio and actually think once in a while. You first complained about government regulation, then deregulation and then finally regulation again. You can't have it both ways. If you are not in favour of a completely unregulated market (and you would be a fool if you were) then you are in favour of regulation. Your disagreement simply lies on what should be regulated.

[Bobboau]

did he just say deregulation caused the economy to collapse?
yes I think he did, lib your conservative card and complementary tee shirt are to be returned at once, you are no longer allowed to display them.

[karajorma]

That's just the basic hypocrisy you get from certain conservatives though. They bang on about wanting a small government except when it's doing something they like. Then the government can be as intrusive as you like.

So government stepping in and making federal laws to prevent flag burning, nudity on tv, porn, gay marriage, abortion, anything Obama likes is fine. Just small government for other stuff. The stuff they like.

[Nuclear1]

As long as it's Big Government stepping in to trample the rights of the people God hates, it's all fine.  But as soon as someone steps in to undo the injustices done by big business, the religious right, and the ultranationalists.

Big government makes America great.  No one likes taxes and the bureaucracy, but I'll gladly suffer through it as long as the federal government is protecting Yellowstone, ensuring fair economic competition and guaranteeing all Americans the right to see a doctor.  Too bad none of the teabaggers or blind Fox followers want it.