--- Patrick Bond <pbond at mail.ngo.za> wrote:
> Doug Henwood wrote:
> > I said I think cap & trade is bogus. I think a
> carbon tax is a good
> > idea. What do you think?
>
> Doug, did we go over this before, 12 days ago? I
> suggested you please
> *not* think of carbon taxes as market mechanisms
> but, ideally, as
> anti-market mechanisms: if done *properly* (with an
> intense focus on
> disincentivizing luxury consumption and, in the
> process, on
> cross-subsidisation of energy for basic needs), they
> would 'distort the
> markets' (get the 'prices wrong'), because they
> would work against the
> inexorable capitalist logic of declining short-run
> marginal cost curves.
> So, since Chris Doss doesn't get this either, let's
> sum it up like this:
> market mechanisms commodify life; our job is
> decommodification. Ok?
[WS:] I think you got all backwards, Patrick. You argue that market mechanisms lead to wasteful energy consumption and you propose non-marchet mechanisms to remedy it, but it is the other way around. It is non-market mechanisms that create wasteful uses of energy. Specifically, it is the energy producer's to pass ome of the costs of energy production (namely externalities) on the public, and it's the small consumer political pressure to keep the prices down through regulation and consumption subsidies.
In other words, non-market i.e. political mechanisms - passing parts of the energy production cost on the public and regulating the user price - keep the enregy cost artificially down and thus encourage wasteful consumption.
Under the market condition, the producer would lack the ability to externalize the costs through non-market (political) means, and the user would have to pay that cost in full. The cost of externalities (or public bads) would be added to the cost of energy in the form of tax, determined by the actual cost of dealing with that externality (cleanup, health hazard, compensation for property damage due fallout, etc.). That cost is calculable.
Of course, the small consumer would scream bloody murder if he had to pay the full cost of energy, but that is a good thing, because it woul dforce him to change his behavior. For example, they coul dform cooperatives (housing, farms, et.c) the take advantage of the economies of scale and utlize energy more effciently.
Subsidies on consumption that you advocate are usually a bad thing, because they promote wastefulness. This is especially true of energy, as the case of the Soviet economy illustrates. Populism seems to cloud the clarity of your vision here, just as the pollutions from subsidized energy uses clouds our environment.
A far batter way would be subsidies on investment e.g. to develop and disseminate more energy-effcient technologies. Such investment can be better targeted and actually lead to a change in behavior. Subsidies on consumption will not. Your medicine is poison that will actually make the patient even worse.
Wojtek
__________________________________________________ Do You Yahoo!? Tired of spam? Yahoo! Mail has the best spam protection around http://mail.yahoo.com