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The Carbon Auction: Brilliant or Deranged?

From, of all the unlikely places, Taegan Goddard's offshoot called Political Insider. From anybody else I would just say this is nuts...but wasn't Robert B. Reich, Secretary of Labor during the first Clinton administration, given a great deal of the credit for fixing the US budget after the last time the Republicans looted the place?

He's got an idea. Not a "carbon tax," which would workd but would not get passed until about the time the sun expanded to the orbit of Venus...but a carbon auction:

The best idea I've heard so far to deal with global warming is not a carbon tax. I can't imagine any politician calling for higher taxes affecting the middle class, or for that matter the middle class -- already squeezed by high energy prices and stagnant wages -- putting up with it.

The winning idea isn't a cap-and-trade system, either. That system would allow companies to continue polluting, just require them to buy the right to pollute more from companies that keep their dirtying to a minimum. Today's biggest polluters -- those who've done least to reduce their emissions -- would be the biggest winners because they'd get the highest caps.

The best idea I've heard is described as a carbon auction. Companies would have to bid for the right to pollute. And, most ingeniously, the money raised in the auction would be shared equally by all citizens in the form of yearly dividend checks -- just like the residents of Alaska now get yearly dividends for their share of the state's oil revenues.

I mean, it's our atmosphere, right? Think of a national park or a national forest. No company is simply allowed to take what they want from it, free of charge. Why should the atmosphere be any different?

In a carbon auction, companies would have to bid against other companies for a portion of the atmosphere they intend to use -- within overall limits that reduce pollution levels.

Get it? It's a win-win. The auction market itself determines who can pollute and by how much. And since companies will inevitably want to reduce their bidding costs, they'll search for new technologies that cut their emissions.

That's at if not over the line on fair use, so hit the link to read the few other lines omitted. Like I said, from anybody else I would give an eye-roll and say "yeah, right, like this would work or could get passed." But Robert Reich? I'm not gonna scoff at any rate.

And it's one of those things that, once one country did it, would spread like wildfire around the globe (okay, maybe not the best metaphor when the subject is global climate change, but work with me here). This eliminates the primary objection I can see, which is that the multinational greedheads would just pull all their carbon-generating activities to countries that did not use the auction system.

But you know, I can see even China going for this.

Ideas, thoughts, expansions, objections? Comments await your input. no auction fees required.

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Ruth's picture
Submitted by Ruth on

It's got potential. That fair competition would result is probably the most tenuous part of the plan. Collusion among the competing parties seems to me as likely as the same thing as gasoline producers fairly competing for the market. China has gone to number one among polluters (see http://cabdrollery.blogspot.com/2007/06/... ) and it is not about to throw itself on the world's graces to determine its polluting activities.

While Reich is definitely due great thanks for his overcoming the Reagan and Bush I wastrel govts' leavings, he's still an idealist when it comes to actual business practices, IMHO.

Ruth

julia's picture
Submitted by julia on

I find it a little troublesome that Alaska would be getting a hit of the money from polluting in my back yard along with 100% of the money from drilling in their back yard.

If the money went to, say, Amtrak and public transportation I would be a lot more enthusiastic.