The second point is that I'm not too worried about delays of one or two years on measures that go in the right direction. Once we're on that path, there is no ging back. In the long run, we're all dead. John Maynard Keynes
The question is not whether the consumer pays in the end. The question is who the consumer pays. If rights are auctioned, the companies will pass on the costs, of course. But the government receives the revenue. The government can use that money to invest, or to reduce taxes or social security contributions, or whatever.
If rights are not auctioned but grandfathered, the companies still pass along the 'costs' (which are factored in as opportunity costs of not selling the certificates - the price of emission rights determines the costs passed along in both instances), but the revenue goes to their shareholders and executives. So, this is then another transfer of wealth upwards.
And don't get confused by the fact that energy costs tend to be regressive ... that is measured as a percentage of the consumer's income. That is, consumption rises on average with income, just not as fast as income rises. So a social dividend of auction proceeds is a net progressive policy. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
Once we're on that path, there is no going back.
aah, a cool breeze of reasonable optimism just turned my turbine... ~Government budget deficits are not nearly as dangerous as the deficits we have created in vital and complex natural systems.~ Naomi Klein.
