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Author: NailThatJello Big gold star, 5000 posts Top Recommended Fools Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 444952  
Subject: California: the anti-Texas fights climate change Date: 10/14/2012 5:29 AM
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If elected, Romney will no doubt do everything in his power to bring the world's ninth largest economy and most forward-looking state to its knees. Like Raygun did as guv (destroying huge areas of redwoods) and LittleBush tried to do (blocking CA's raising of car emission controls).

A Grand Experiment to Rein In Climate Change

On Jan. 1California embarks on its grand experiment in reining in climate change. It will become the first state in the nation to charge industries across the economy for the greenhouse gases they emit. Under the system, known as “cap and trade,” the state will set an overall ceiling on those emissions and assign allowable emission amounts for individual polluters. A portion of these so-called allowances will be allocated to utilities, manufacturers and others; the remainder will be auctioned off.

The outsize goals of California’s new law, known as A.B. 32, are to lower California’s emissions to what they were in 1990 by 2020 — a reduction of roughly 30 percent — and, more broadly, to show that the system works and can be replicated. California air regulators are proud of their record in leading the nation to new auto emissions standards in the 1960s and efficiency standards for appliances in the 1970s.


Hey Reds: if this upsets you, here's an idea. You can lie and cheat to undermine the law and make it fail! And you can count on oil money to cover your expenses and then some! You're already skilled at that; after all, you've had four years of practice at making Obama fail rather than the country succeed (your own declared goal). And you've already succeeded in failure to serve the country at the national level:

Just three years ago, President Obama’s first budget proposal included a cap-and-trade program to cut national greenhouse gas emissions 14 percent by 2020; but in 2010, political forces backed by the biggest emitters, oil and coal companies, blocked the plan in the Senate. In that year’s midterm elections, conservative Republicans disavowed their party’s role in creating similar programs; they continue to deride it as “cap and tax.”
http://www.nytimes.com/2012/10/14/science/earth/in-californi...

If Romntastrophe happens maybe CA ought to beat Texas to Texas' (empty blowhard) threat of secession.
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Author: DrBob2 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 410935 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/14/2012 8:28 AM
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The outsize goals of California’s new law, known as A.B. 32, are to lower California’s emissions to what they were in 1990 by 2020 — a reduction of roughly 30 percent — and, more broadly, to show that the system works and can be replicated.

Interesting to note that the EIA reported earlier this year that US energy-related CO2 emissions in early 2012 were the lowest since 1992 without AB32 policies.
http://www.eia.gov/todayinenergy/detail.cfm?id=7350

The more important issue is one of leakage, both within the US and internationally. As California's costs of energy go up businesses, manufacturing and even agriculture drift out of state, where emissions intensities are higher. California will increase imports — cement from Arizona, food from South America, high tech devices from Asia – with a net increase in global emissions.

DB2

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Author: saunafool Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 410961 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/15/2012 3:27 AM
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The more important issue is one of leakage,

Is it? Or, is this just an argument which muddies the waters and justifies the status quo?

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Author: DrBob2 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 410962 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/15/2012 9:06 AM
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The more important issue is one of leakage,
---
Is it? Or, is this just an argument which muddies the waters and justifies the status quo?


It's very real, both at the state and international level. Think of it as a subset of the tragedy of the commons where you put restrictions on yourself but others don't. Here though the restrictions can actually increase carbon dioxide emissions.

As AB32 increases the costs to California agriculture, for example, grocery stores in Illinois buy less California produce and more from, say, Latin America. Practices there may be more carbon intensive (tractors, fertilizers, etc.) plus the products have to be transported further which also contributes more carbon dioxide.

Manufacturing is generally energy intensive, and China is much less energy efficient than California or the rest of the US. The more things we have made in China (and buy in Wal-Mart and Home Depot) the greater the global emissions, although our total is smaller. Steel is carbon intensive; California is rebuilding the Golden Gate bridge with steel made in Shanghai -- better for AB32, but not for CO2 levels.

Cement production makes a lot of carbon dioxide. If AB32 makes cement prices high enough in California then cement made in Arizona would be trucked in. In general, as things get more expensive in California more will be moved elsewhere.

Here is a discussion at Resources for the Future of policy options:

Competitiveness, Emissions Leakage, and Climate Policy
www.rff.org/Publications/WPC/Pages/09_02_27_Competitiveness_...

Here are some presentations on leakage made earlier this year at a CARB public hearing:

Cap-and-Trade Program: Emission Leakage Research & Monitoring
www.arb.ca.gov/cc/capandtrade/meetings/073012/emissionsleaka...

DB2

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Author: AngelMay Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 410964 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/15/2012 9:39 AM
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As AB32 increases the costs to California agriculture, for example, grocery stores in Illinois buy less California produce and more from, say, Latin America.



I would think that could be fixed with a WHOPPING import tax.

AM

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Author: DrBob2 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 410966 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/15/2012 10:17 AM
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As AB32 increases the costs to California agriculture, for example, grocery stores in Illinois buy less California produce and more from, say, Latin America.
---
I would think that could be fixed with a WHOPPING import tax.


Obviously that is something California can not do. In addition, it wouldn't work within the US (interstate commerce) and may be illegal internationally under WTO rules.

A Dissucssion on the Legitimacy of Carbon Tariffs under the WTO
www.ipedr.com/vol10/41-S00042.pdf
It concludes that, in general, carbon tariffs probably will be found being inconsistent with WTO rules, despite WTO has shown increasing efforts on granting flexibilities on trade-related climate measures.

There are also those, such as Germany's Secretary for the Environment who consider it 'eco-imperialism' with the developed nations forcing their will on less developed countries who are trying to grow out of poverty.

DB2

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Author: NailThatJello Big gold star, 5000 posts Top Recommended Fools Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 410967 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/15/2012 10:31 AM
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Cement production makes a lot of carbon dioxide. If AB32 makes cement prices high enough in California then cement made in Arizona would be trucked in.

Lets work through this carefully; its a complex issue with lots of unforeseen ramifications and hyper-externalities to weigh.

On the one hand, climate change could cause record droughts, heat, floods, Katrina-scale natural disasters, and possibly make the planet uninhabitable right after it fries our grandchildren like pork bacon.

On the other hand, doing anything about that could harm the cement industry.

You're right - the answer's obvious. Let's protect the cement industry.

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Author: DrBob2 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 410971 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/15/2012 11:53 AM
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Lets work through this carefully; its a complex issue with lots of unforeseen ramifications and hyper-externalities to weigh. On the one hand, climate change could cause record droughts, heat, floods, Katrina-scale natural disasters, and possibly make the planet uninhabitable right after it fries our grandchildren like pork bacon. On the other hand, doing anything about that could harm the cement industry. You're right - the answer's obvious. Let's protect the cement industry.

Well, I guess we need to start with a definition of leakage. From the previous CARB (California Air Resources Board) link:

Leakage is a reduction in emissions of greenhouse gases within the State that is offset by an increase in emissions of greenhouse gases outside the State

Who is at Risk for Leakage?
- Industries in which production is highly emissions intensive, leading to high compliance costs
- Industries in which competition is strong from out of state producers

The issue is serious enough so that California is basically giving away carbon credits for 2013 and 2014 and for industries at high risk of leakage the credit extension goes to 2020, i.e., no carbon dioxide emission reduction.

There is also the substitution issue. For example, here in the United States low-cost natural gas has displaced coal for power generation, reducing carbon dioxide emissions. However, this lower domestic demand for coal has dropped the price considerably. This lower price leads to expanded coal use in China and Europe.

www.coalguru.com/other_region/coal_to_displace_gas_in_europe...
Coal has been displacing gas generation in Europe since 2009 and the International Energy Agency expects this trend to continue, Ms Anne Sophie Corbeau, senior gas analyst for the International Energy Agency said that "We will have a Golden Age of Coal in Europe, at least over the next 5 years."

DB2

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Author: 1poorguy Big funky green star, 20000 posts Top Recommended Fools Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 410979 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/15/2012 1:42 PM
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You have to factor in transport costs. It may still be cheaper to get CA produce than from Latin America, even without tariffs. And tariffs to compensate for other countries' lack of pollution controls, worker safety, etc, would eliminate the problem you are talking about. Not to mention helping workers here get jobs again.

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Author: DrBob2 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 410982 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/15/2012 2:44 PM
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You have to factor in transport costs. It may still be cheaper to get CA produce than from Latin America, even without tariffs.

Transportation costs are included in the present prices. When California adds a carbon surcharge the price of California products will increase. At that point certain items will be cheaper to buy elsewhere. For those items longer transport, lack of pollution controls, less efficient equipment, etc. means that global carbon dioxide emissions will have increased even though California's emissions will have gone down.

DB2

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Author: 1poorguy Big funky green star, 20000 posts Top Recommended Fools Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 410983 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/15/2012 3:03 PM
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Quibble...At that point certain items may be cheaper to buy elsewhere.

You don't know that they will be. With transport costs from Costa Rica (for example) it could end up being a wash, or still favorable to CA.

I understand the concept, but you're drawing a conclusion ("will be") that is not supported by the data presented. I would agree "may be". Which is easily fixed with tariffs (that we should be applying anyway, and should have been applying for the last decade or more).

1poorguy

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Author: DrBob2 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 410987 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/15/2012 3:20 PM
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Let's look at watermelons. The top five states in U.S. watermelon production, accounting for more than 75 percent of the total production, were Florida, California, Texas, Georgia and Indiana.
www.agmrc.org/commodities__products/vegetables/watermelon/
Assume the production methods are the same in California and Texas (might as well use Texas, given the title of the thread).

Let's say you're a produce buyer in Grand Junction, Colorado about equidistant from California and Texas and the melons from both states are priced essentially the same. Now add in California's carbon tax and the Texas watermelons are cheaper. Purchases switch to Texas and no carbon dioxide emissions are saved.

Further west in Utah watermelons from California had been cheaper and had a larger market share; now they are the same price. Purchases are now divided equally between the two states. Here CO2 emissions have gone up because of the longer transportation from Texas.

DB2

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Author: DrBob2 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 410988 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/15/2012 3:30 PM
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From the FWIW department:

Obama Opposes Trade Sanctions In Climate Bill
www.huffingtonpost.com/2009/06/29/obama-opposes-trade-sanct_...
President Obama on Sunday praised the energy bill passed by the House late last week as an "extraordinary first step," but he spoke out against a provision that would impose trade penalties on countries that do not accept limits on global warming pollution.

DB2

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Author: 1poorguy Big funky green star, 20000 posts Top Recommended Fools Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 410994 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/15/2012 3:51 PM
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President Obama on Sunday praised the energy bill passed by the House late last week as an "extraordinary first step," but he spoke out against a provision that would impose trade penalties on countries that do not accept limits on global warming pollution.

Of course. He's a corporate lackey, and corporations don't want that sort of thing because it could reduce the benefits of off-shoring.

He also still hasn't gone after "big finance" (or "Wall Street"). And he likely never will.

I suspect a lot of these folks helped him gain prominence 4 years ago when no one outside of Illinois had ever heard of him.

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Author: NailThatJello Big gold star, 5000 posts Top Recommended Fools Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 411025 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/16/2012 3:55 AM
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Well, I guess we need to start with leakage. There is also the substitution issue...

Yeah we all realize that the Greed is Good wing can come up with an unlimited stream of excuses why we shouldn't do anything about climate change. Just like its paid service to the tobacco industry, the auto industry on safety issues, the medical and insurance and credit card and gun industries etc. delayed action on all those issues. Killing Americans but making money in the process, which is what matters. To the Romney wing.

We can't lead on climate change because the other guys aren't leading on climate change. And they aren't leading because we aren't leading. Right wingers who on the one hand urge American Leadership in starting wars on the other hand back off when Greed could be impinged upon.

You guys have fat wallets but are morally bankrupt.

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Author: albaby1 Big gold star, 5000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 411029 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/16/2012 7:44 AM
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We can't lead on climate change because the other guys aren't leading on climate change. And they aren't leading because we aren't leading. Right wingers who on the one hand urge American Leadership in starting wars on the other hand back off when Greed could be impinged upon.

But that's not really the argument being raised. Concerns about leakage don't go to whether fighting climate change is important, or a worthwhile endeavor. They go to whether a particular climate change response will actually work. Sometimes well-intentioned policies promoting a worthy goal are simply not going to be effective, and indeed might even be counterproductive - and it's not much of a response to simply push aside those criticisms about whether the means actually work by pointing to the moral importance of the goal.

Efforts to limit greenhouse gas emissions raise enormous collective action problems. Many pollutants are local in nature, so a jurisdiction is guaranteed to reap environmental benefits from limiting emissions in their geographic area even if other folks respond by increasing emissions elsewhere. Not so with greenhouse gases. If emitting activity were simply shifted to another area, then Californians would suffer the economic costs of their new regulatory framework, but neither they nor anyone else would see any environmental benefits.

It's unlikely, of course, to be all or nothing one way or the other. However, the collective action issues in greenhouse gas emission regulations are very real, and should be taken seriously in any regulatory effort to fight those emissions.

Albaby

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Author: DrBob2 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 411030 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/16/2012 7:58 AM
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Well, I guess we need to start with leakage. There is also the substitution issue...
---
Yeah we all realize that the Greed is Good wing can come up with an unlimited stream of excuses why we shouldn't do anything about climate change.


Jello, if you're going to do the right thing you need to do it right. You want to put in place policies that maximize the benefits while minimizing the down side. CARB recognizes the problems of leakage; that is why they are doing research on it and why carbon credits are being given away free to everybody for the next two years. And why the most energy intensive industries, those that emit the most carbon dioxide, are to be given free carbon credits for the next eight years.

As the NYT article in the OP said: "The risks for California are enormous. Opponents and supporters alike worry that the program could hurt the state’s fragile economy by driving out refineries, cement makers, glass factories and other businesses. Some are concerned that companies will find a way to outmaneuver the system, causing the state to fall short of its emission reduction targets."

Personally, I think California would get more bang for its buck by concentrating on areas where leakage is not an issue such as construction and transportation. What if, for example, the state put a 'fee and credit' system in place on auto sales? Each year there would be a neutral MPG target, say 25mpg. An vehicle sold that had a milage rating of 24mpg would have a $1000 fee added, 23mpg would cost you $2K and so forth up to an addition $5,000. Similarly, an EPA rating of 26mpg would get you a rebate of $1000 and 30mpg a $5000 credit. The system could be designed to be revenue neutral or to generate funds for public transportation by sliding the scale.

DB2

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Author: NailThatJello Big gold star, 5000 posts Top Recommended Fools Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 411031 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/16/2012 8:38 AM
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that's not really the argument being raised. Concerns about leakage don't go to whether fighting climate change is important, or a worthwhile endeavor. They go to whether a particular climate change response will actually work.

Yup. Sure.

Just like the same bunch used to argue that climate change wasn't happening. Why spend money on nothing?

When that got too ridiculous to defend, they switched to "OK it's happening but people aren't causing it." Again, nothing we can do. It's not our fault, the devil's doin' it.

Now that they're finally losing the attention of the suckers who fell for that one, they trot out the present load of baloney.

They did the same thing with tobacco, the Iraq war and every other issue that dents their greed-is-good ethos. They'd love to tangle you up debating those nonsense myths.

If you want to find a reason you can't do something, there are always plenty to pick from. And if you're a Red, you can just make them up.

If you want to lead, you have to solve problems, not trot them out to make excuses in order to earn your lobby payola.

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Author: DrBob2 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 411036 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/16/2012 10:05 AM
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If you want to lead, you have to solve problems...

True. Now the question becomes how to solve the problem. To illustrate the problem of leakage and California lets simplify things for you.

Assume the city council of Mason City, Iowa decides to do its bit and put on a carbon tax or some sort of cap and trade for the city. Now, assume there is a cement production plant in Mason City. Cement production is energy intensive and also produces a lot of carbon dioxide.

So, what happens? The cement plant relocates ten miles to the west in Clear Lake. The net reduction of CO2: zero (or maybe an increase, if the plant's customers are now at a greater distance).

Capiche?

DB2

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 411037 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/16/2012 10:10 AM
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If you want to find a reason you can't do something, there are always plenty to pick from. And if you're a Red, you can just make them up.

If you want to lead, you have to solve problems, not trot them out to make excuses in order to earn your lobby payola.


Both DrBob2 and Albaby gave a good description on concerns about leakage. If you want to continue to be an ostrich and keep your head buried in the sand, go ahead and do it. That doesn't stop leakage from being an issue.

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Author: albaby1 Big gold star, 5000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 411038 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/16/2012 10:35 AM
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Just like the same bunch used to argue that climate change wasn't happening. Why spend money on nothing?

When that got too ridiculous to defend, they switched to "OK it's happening but people aren't causing it." Again, nothing we can do. It's not our fault, the devil's doin' it.

Now that they're finally losing the attention of the suckers who fell for that one, they trot out the present load of baloney.

They did the same thing with tobacco, the Iraq war and every other issue that dents their greed-is-good ethos. They'd love to tangle you up debating those nonsense myths.


Again, I think you're overlooking the difference between the examples you cite above and the nature of this particular argument. It is true that there have been plenty of contexts in which folks have argued that a particular problem is not really a problem; or that the particular problem is not one that we should worry about solving.

But that's not this argument. Even if you stipulate that climate change is a major problem and that it should be a very high priority, you still have to address questions about whether a given policy proposal will actually work to make things better. It's not a question of whether, say, cement company profits are more important than climate - rather, it's a question of whether the expected reaction of cement companies to the regulation ends up damaging the climate as much (or more) than the status quo. Both fossil fuels themselves and many of the products manufactured from them are fungible and portable. So whether a regulation reduces emissions or just pushes them across state lines (and thus possibly even increasing them) is a legitimate question.

It is not necessarily a "myth" that some problems cannot be solved by the unilateral actions of a subset of the relevant population. Collective action problems exist, and there are very good reasons to conclude that greenhouse gas emissions are one of them.

Albaby

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Author: NailThatJello Big gold star, 5000 posts Top Recommended Fools Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 411042 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/16/2012 11:52 AM
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It is not necessarily a "myth" that some problems cannot be solved by the unilateral actions of a subset of the relevant population. Collective action problems exist, and there are very good reasons to conclude that greenhouse gas emissions are one of them.

It's a diversion. A.k.a. a red herring. A well known rhetorical tactic by those who don't want to address the real issue.

Do you really think there are no conceivable solutions to collective action problems? That, therefore we must all fry together, that's just bad luck, sorry folks?

The question isn't about which diversion tactic we should trot out. It's about leadership. California is showing it.

The US is not. The rest of the world knows this, if we don't.

During the 2007 United Nations Climate Change Conference, Kevin Conrad representing Papua New Guinea declared:

"We all came with high expectations. The world is watching us. We left a seat for every country. We asked for leadership. I would ask the United States: we ask for your leadership. We seek your leadership, but if for some reason you're not willing to lead, leave it to the rest of us; please, get out of the way."


Do you think California is naiive, stupid, silly, masochistic, or all of the above?

Or, if you are Red, are you just scared that they might succeed, like they did with smog regulations? My goodness, what will happen to our cement makers? Our oil lobbies? Our coal mountaintop blowers-up? Oh, the humanity!!

Even scarier - California is not alone. Many other countries are way ahead of the US on reducing carbon footprint.

Some of their dirty industries have probably fled to the US, if the logic of the Grand Unsolvable Leakage Collective Action Theory is followed to its conclusion. Still, astonishingly, their qualities of life are as high or higher than ours. Their worlds did not come to an end.

Yes, it is not impossible. We can put on safety belts, discourage tobacco, avoid wars of choice, reform health care and do many astonishing things that the Greed is Good crowd tells us Cannot. Be. Done.

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Author: albaby1 Big gold star, 5000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 411044 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/16/2012 12:12 PM
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It's a diversion. A.k.a. a red herring. A well known rhetorical tactic by those who don't want to address the real issue.

Do you really think there are no conceivable solutions to collective action problems? That, therefore we must all fry together, that's just bad luck, sorry folks?


There are conceivable solutions to collective action problems. However, there are not unilateral solutions to collective action problems. That's why they are collective action problems. You cannot, for example, prevent the overfishing of a marine fishery by personally limiting just your own amount of catch - or even by limiting the catch of a small subset of the folks using that commons. You need to bring everyone (or very nearly everyone) into the program for it to work.

This is not a red herring or a rhetorical tactic - it's a very real problem in emission control programs that only apply to a limited segment of the economy. Commons problems can't be solved unless you regulate a large enough proportion of the folks exploiting the commons.

Do you think California is naiive, stupid, silly, masochistic, or all of the above?

I don't know. The issue being raised is a very real one, and California is counting on leakage being relatively small. In other words, that their regulation will truly lower emissions, rather than shifting them across state lines. Whether that is the case or not is a difficult empirical question. California is obviously counting on their size and other transaction costs to minimize that shifting. We will see.

Unintended consequences can occur with these types of regulations, no matter how laudatory the goal:

http://boards.fool.com/an-interesting-unintended-consequence...

....so the key is to rationally assess the potential deficiencies in a program (not just the prospective benefits), not just dismiss them because they are unpleasant.

Many other countries are way ahead of the US on reducing carbon footprint.

Some of their dirty industries have probably fled to the US, if the logic of the Grand Unsolvable Leakage Collective Action Theory is followed to its conclusion. Still, astonishingly, their qualities of life are as high or higher than ours. Their worlds did not come to an end.


The question is not whether their worlds came to an end. The question is whether or not their policies worked. Were emissions actually reduced, or simply shifted to other countries (such as China)? Or somewhere in between? The U.S. has actually reduced its carbon footprint substantially recently, but the BASIC countries have vastly increased their carbon emissions.

Albaby

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Author: DrBob2 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 411063 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/16/2012 3:27 PM
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Do you think California is naiive, stupid, silly, masochistic, or all of the above?
---
I don't know. The issue being raised is a very real one, and California is counting on leakage being relatively small.


From the New York Times:
"The risks for California are enormous."

To repeat:
"The risks for California are enormous."

DB2

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Author: DrBob2 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 411071 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/16/2012 6:43 PM
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Do you think California is naiive, stupid, silly, masochistic, or all of the above?

Good question. My gut reaction is to go with 'stupid' but that's not polite and I know there are some very smart people in California. I'll go with 'naive'.

They are rolling the dice with a high risk strategy ('The risks for California are enormous.') that has a low probability of succeeding (trying to solve a collective action problem with unilateral action). Perhaps since they know their goal is right they think that all actions trying to reach that goal are right.

DB2

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Author: sano Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 411219 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 10/19/2012 12:27 PM
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Bodycount Bob: Well, I guess we need to start with a definition of leakage. From the previous CARB (California Air Resources Board)


Needs to be simplified to:


Well, I guess we need to start ...

See, we start... then we modify as we go.

The option is to not start.

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Author: DrBob2 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 412743 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 11/10/2012 8:27 AM
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California's cap-and-trade program is not getting off to a smooth start.

California Carbon ‘Crippled’ by Buyer Hesitation
www.bloomberg.com/news/2012-11-09/california-carbon-crippled...
California carbon is trading at a record low as legal threats, political opposition and rule changes plague the days leading up to the first auction of permits under the state’s greenhouse-gas program....

Futures contracts based on California carbon permits for 2013, the first year of compliance under the program, dropped 40 cents to a record $12.25 a metric ton yesterday, data compiled by CME Group Inc. (CME)’s Green Exchange in New York show. Prices are set to fall for a ninth straight week and are down $3.50 a ton, or 22 percent, for the year....Liquidity has been “crippled by buyers’ hesitation to sign forward contracts,” Thomas Marcello, a Bloomberg New Energy Finance analyst in New York, said yesterday....

Beginning next year, California plans to “cap” carbon emissions from power generators, oil refineries and other industrial plants and cut that limit gradually to achieve a 15 percent reduction by 2020....The California air board is giving away about 90 percent of the permits at the onset of the program and selling the rest at auction. The free allocations are set to shrink over time....

State regulators agreed to spend 18 months reviewing and not enforcing the ban, which prohibits companies from bringing low-emission electricity into California while sending more carbon-intensive power to other states. The air board issued some clarification to the rule on Nov. 6.

A spate of refinery upsets that drove retail gasoline prices in California to a record $4.671 a gallon on Oct. 9 also intensified opposition to the program, with Sacramento-based nonprofit CalWatchdog warning the same day that prices at the pump were “a pimple of what is to come” when the state starts capping emissions.

DB2

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Author: DrBob2 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414571 of 444952
Subject: Re: California: the anti-Texas fights climate ch Date: 12/11/2012 4:25 PM
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An 86% shortfall on the cap'n trade auction -- not good for California's deficit.

First cap-and-trade auction a bust for California budget
www.sacbee.com/2012/11/22/5003856/first-cap-and-trade-auctio...
A low price for credits and minimal demand for future offsets suggest California will see a mere fraction of the $1 billion that Gov. Jerry Brown and lawmakers estimated the state would receive this fiscal year. If demand remains similar in two forthcoming auctions, the state would generate only about $140 million, the nonpartisan Legislative Analyst's Office estimated Wednesday....

As California sells credits, it stands to benefit financially. Brown and lawmakers assumed California would take in $1 billion total this year, spending $500 million on state budget relief and $500 million on curbing greenhouse gas emissions. The California Air Resources Board sold $289 million in credits this month, but most of the money is dedicated for utilities and their ratepayers. That leaves $55.8 million for the state....

Lawmakers used their predicted environmental windfall to help plug the budget. They also passed two bills this year describing how additional money should be spent. They outlined seven goals, ranging from job creation to public health, and required that at least 25 percent of funds benefit "disadvantaged" communities. At one point, Brown suggested the money be tapped for high-speed rail construction, but lawmakers tabled that idea for two years....But now it's unclear how much money will be available this year for any of these purposes.

DB2

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