If you want to set hard limits, do exactly that - give everyone a tradeable carbon ration and aggressively go after anyone who 'spends' beyond it.
The basic situation that the FT detected is that in a cap and trade market with a slack cap, the "low hanging fruit" under the cap and trade regulation includes a lot of things that are not really gains.
Tighten the cap and tighten the regulations, and you substantially increase the amount of actual carbon emissions reduction achieved, as well as making for a much thicker market, therefore substantially reducing price instabilities.
My preferred social dividend in the US context is half distributed per resident citizen, half distributed in proportion to payroll taxes paid. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
If we rely on a carbon tax as a single silver-bullet, then we need to adjust the carbon tax annually in case it fails to meet targets. A quintennial adjustment would be too large and attract too much political opposition. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
My preferred social dividend in the US context is half distributed per resident citizen, half distributed in proportion to payroll taxes paid.
I could go along with that after the health affect costs of pollution have been deducted from the fund. Until these various externalities are quantified and monetarized the MBAs running the world won't give a damn.
You think those flowers from Nigeria are cheap? They are - but wait until you see how much they cost in emissions.
Manufacturers would have to create carbon accounting systems. But if you tax emissions, you have to create a carbon accounting system of some sort anyway.
You wouldn't necessarily have to account for every last mg. Cars are already aligned in emission bands. It wouldn't be impossibly hard to group other items in similar bands.
