To which people is this often confusing?

The other piece of Cap and Trade, of course, is that it solves the missing market problem in pollution and creates a structure in which reducing pollution is incentivised rather than merely mandated. To optimize the system, it seems to me that the cost of the right to pollute needs to have some sort of relationship to the cost of equipment like chimney scrubbers, but I'm not sure what that relationship should be. The more expensive the licenses are the more often it will be cheaper for a company to invest in scrubbers rather than buying licenses. At the same time, though, there needs to be enough of a market for trading that most companies really participate--if the licenses are so expensive that it's never practical to buy more of them you could end up with a situation where there's no trading and everybody just cheats, and if everybody cheats it's impossible to enforce the law.

Does that make sense? If so, how do you figure out where to set the price of the licenses?

So how is this going to work when politicians go into conniptions when gas goes up a couple bucks? Cap and trade would cause gigantic increases in the cost of electricity, heating oil, natural gas and good old unleaded.

When Bernie Sanders, Chuck Schumer and his good greenie buddies call on Saudi Arabia to increase oil production, what makes anyone think people will be okie dookie when gas doubles in price again and electricity rates increase by 50% accross the board?

So, the solution is simply to tax needed energy so much that you change behavior? Why didn't I think of that?
Why, you could also solve the food and housing problem the same way. Just tax the crap out of housing and food and then no one can buy much of it. Problem solved!!

This whole global warming mess could all be avoided by privatizing air space. That is each country is given ownership of the air over their land. When CO2 emissions in a particular country are greater than the amount of CO2 absorbed through trees and algae this country has committed a tort against other nations property rights.

Privatizing air space would in effect create an international cap and trade system where countries with high emissions can buy other countries emission allowances.

Also, a cap and trade systems can be used domestically but without an international framework in place they are rather useless at limiting CO2 emissions globally.

It should be noted that excess CO2 emissions are not a market or capitalist failure. A necessary capitalist assumption is property rights are well defined. If the ownership of air is collectively owned then this is merely an example of a tragedy of the commons.

Gekko brings up a point.

Do government operations get involved with buying their emission rights? If not it won't work.

Or, is it that oil companies have to buy capntrade for me?

I really do not want to do the research, as I am sure the idea stinks and Tort liability is the best approach to pollution.

Silly, naive me: I still don't quite understand why cap-and-trade, with virtually no transparency and massive opportunities for fraud and various forms of rent-seeking, has any advantage over a simple tax on coal, crude oil, and natural gas. Oh, wait! Could it be because the electorate can actually account for a tax and resist it, while the indirect costs of cap-and-trade are so obscure that politicians can deny all responsibility?

I really don't have too much trouble with a moderate straight carbon tax, especially offset with some carefully targeted tax credits for green energy R&D and production. However, it annoys the hell out of me when a bunch of zealots decide that they need to treat us all like children to impose things they decide will be good for us.

However, it annoys the hell out of me when a bunch of zealots decide that they need to treat us all like children to impose things they decide will be good for us.

Welcome to the wide world of modern liberalism where the few decide and then cram it down our throats via the full force of government.

Actually, to me Cap'n Trade sounds like a breakfast cereal made with plenty of greenhouse gas consuming high fructose corn syrup.

It isn't really a tax unless permits are auctioned off. The precedent is for emission rights to be grandfathered in.

Calling it a "tax" misleads the public into thinking the agenda ia government rent-seeking.

The issue is putting a price on carbon emission and carbon sequestration. We pay a cost-premium on supply-chain risks in Nigeria, and I think we should pay for the risk of baking ourselves off the planet, too.

The reason they all like capn trade. Because nothing will change. Sure there will be a market created, lots of money flowing back and forth. Then will come the various scandles when its found the system doesnt work how everyone assumed, and that most of the big players are ignoring it.

They will trade 'carbon stocks' around to subsidiaries or offshore units or bring them in from outside. In short they will ahve a giant smokescreen that they can color green for advertising purposes while doing nothing to avert any pollution.

A carbon tax wont work politically because there would be a simple a directly accountable flow of money that can be directly asociated with a volume of goods. In other words it would work, which would force change, and noone in government really wants to risk that.

..and if Im wrong? Ill be happier then anyone else.

Actually, there are good reasons to prefer cap and trade: a carbon tax sets the level of tax and lets the market work out how much carbon will be produced. This means that policymakers can't, with a carbon tax, ensure that carbon production goes down fast enough. With a cap and trade, you set the total amount of carbon and let the market figure out how much it should cost. This is a much more direct way of restricting carbon production (which is, after all, the goal here).

Oh certainly there is no debating the fact that people think cap and trade is the best thing ever. That once we have that system we will have a green utopia not seen since before the industrial revolution.

..as communism was a very egalitarian, and fair system when operated according to the rules. As corporations all pay taxes to support our infrastructure. (except when they move to the cayman islands)

It seems that by creating a commercial market, a necessarily complex entity. You multiply the possibility for abuse, obfuscation, avoidance, and cheating. Especially when when non environmentally freindly forces inhabit the chambers of power. Since they already use the complexities of the executive to bind and restrict agencies like the EPA and keep them from doing their explicit duties.

A simple tax levied on carbon is easy to understand, easy to implement, and only requires a small contingent to enforce.

..and they certainly can restrict the amount, form, and dispostion of carbon used as finely as they like. We could have a firewood tax at x%, petro at y%, ethanol subsidized, any any further combination we like.

Most of the states already have mechanisms for this type of thing. Look at washington sales tax.. there can be 0 sales tax on baked items, and groceries, but most other goods receive the tax. Theres no reason that fuel wholesalers couldnt work under the same system.

I know its not the new sexy approach.. it doesnt create the next big stylish thing that the hollywood stars can get behind and brag about the carbon they bought off some costa rican so they can drive their hummer still. But it will work just as effetively and cost less to setup.

"..and they certainly can restrict the amount, form, and dispostion of carbon used as finely as they like. We could have a firewood tax at x%, petro at y%, ethanol subsidized, any any further combination we like."

This is wrong: if you tax a product at x%, you know exactly how much you raise the cost of the product -- you can't calculate a priori what the effect of that on total production will be. If I tax gasoline at 5% more than current levels, it's very unpredictable how much gasoline will end up being consumed. If I cap gasoline production, then I know exactly how much will be consumed. Since, again, the goal here is to keep production of carbon below a certain level, the latter scheme allows policymakers a much more exact tool to do the right thing. (For a right-wing government to do the wrong thing it doesn't matter which of the two we use.)

You've never been to a store that cheated on its sales tax? I utterly fail to see how enforcing a carbon tax is any easier than enforcing cap and trade: in either case, you need to figure out how much carbon is being produced and then compare it to either the amount of permit or the amout of taxes paid. Similarly, a tax is at least (if not more) as susceptible to trashing by a right-wing government as a cap-and-trade scheme. Rather than just asserting it, do you have any actual evidence that a cap-and-trade is worse? (You can spare me the idiotic sarcasm of your first two graphs.)

This weekend I had a BBQ.

If I lived in socialist Belgium, I would have to get a license in advance and pay about $35 for the privilege of cookin outdoors all enforced by the full force of the government.
Thank GOD for a free country!!

Spare you sarcasm? why on earth would I want to do that?

all the actors in hollywood are for cap and trade so obviously we should overlook all the other current trade controls that we have and invent a new one.

It would not be easier, nor would it be harder to enforce. It would be more expensive to introduce then using infrastructure that we currently have at all levels of trade from wholesale to retail. There is infrastructure in existance in most states for the payment, enforcement, investigation, documentation, records, etc.

We dont need a quantitative a priori knowledge of anything to achieve the needed goals. Why? Because the necessity is to stop the growth, and eventually reduce the overall output of our greenhouse emissions.

The levels settled upon are practically arbitrary at the current time. So any magic number level that is set is just as likely to be wrong as more science comes in. Its the general trend that needs to be dealt with not a static quantity.