The goal is not to reduce carbon emissions, it's to achieve an optimal level of carbon emissions. Zero net CO2 emission is too little. Five times current emissions is too much. We need emissions somewhere in between, but we don't know where.
The problem with cap-and-trade is that you have to work out what the optimal level is on the basis of central planning, which is impossible. I think it's an easier impossible problem to work out the marginal cost of CO2 emissions, and let the market derive the optimal level of emissions based on that cost.
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Date: 2008-12-11 11:34 am (UTC)The problem with cap-and-trade is that you have to work out what the optimal level is on the basis of central planning, which is impossible. I think it's an easier impossible problem to work out the marginal cost of CO2 emissions, and let the market derive the optimal level of emissions based on that cost.