One method does not work for all. Flexibility is better, as some will not respond to incentives.

And Coasian bargaining works well for self-regarding individuals, and rather less well for other-regarding individuals.

The issue here in real-world application is the inability to properly calculate Pareto optima. As we can see here in the various comment threads, there is asymmetric information processed along preferential and self-referential lines.

Best,

D

“You know, drunk drivers shouldn’t be fined when caught, they should be paid when they drive sober!”

It is an accepted academic result.

If your sole interest in dealing with an externality is to modify the outcome, it doesn’t matter whether you whether it is a charge continue the act, or a payment to desist from it.

Google Ronald Coase – Coase Theorem.

Your comment on a carbon tax brings up a point. I fully believe we should tax bads, not goods (forgive me for quoting Rachel).

The question remains: Is carbon, the base of our food chain, bad?

Unfortunately that is the least popular option. However, That doesn’t mean we shouldn’t call for it. Tax away, (assuming it is offset elsewhere, of course.)

First, are they a sound basis for policy? Of course not. Unfortunately, they do limit what is possible. Just about any economist will tell you that carbon/gasoline/pollution taxes (or virtually identical cap-and-trade systems) are the way to go. Guess what was the least popular item in the Gallup poll…

Additionally, you can be sure of three things in politics. First, the majority want more spending on just about everything. Second, they want to cut taxes on themselves, and will oppose almost all increases on taxes unless specifically targeted on someone else. Third, everyone wants to reduce the deficit. From this, you can pretty much conclude that the average voter is a greedy moron, but it is the system we have to work within. Note how most of the things with strong support in the Gallup poll consisted of “someone else” being forced to solve them problem.

When I saw the large numbers of people who opposed a gasoline tax increase, I was wondering how this really differs from a tax increase in general. Yes, only 15% of Republicans would consider a gas tax increase, but on the other hand, I am surprised 15% of Republicans support ANY tax increase. I wonder how much support for a gasoline/carbon tax one could find if it were coupled with a proportionate income tax rebate. This would separate opposition to tax increases in general from opposition to gasoline taxes specifically. I have been able to convince a number of my libertarian/conservative friends that a carbon/gas tax is superior to an income tax, which is actually a pretty easy argument to make. It is fairly obvious that it is in general better to tax bad behavior than productive behavior. Offer these people a 1:1 trade from a bad tax to a good tax, and many will bite.

http://www.desmogblog.com/denying-climate-change-urging-inaction.

Anyway, I continue to appreciate how you must mischaracterize stuff to make your argument. Your 95-0 phrase a case in point, and your ‘Gallup’ highlight are just two of the easily-spottable mendacicizations. I note that Roger’s recent post on polls had not a one comment from you in there, perhaps because the public polling differs from your touts…

http://sciencepolicy.colorado.edu/prometheus/archives/climate_change/000785congressional_opinio.html#comments

Best,

D

__________

[Unnecessary ad homs deleted. In the future Dano I'll just delete the whole post. Take that stuff elsewhere, please. Thx. RP]

What’s wrong with tax breaks on climate-related policies and energy efficiency? They exist in almost every country in the world: http://www.energy.gov/taxbreaks.htm

Here is a good European example that might actually work if the economic incentives are right:
http://news.bbc.co.uk/1/hi/business/4717578.stm

“Instead of fining firms for carbon emissions, they should be offered tax breaks to clean up their act.”

You know, drunk drivers shouldn’t be fined when caught, they should be paid when they drive sober!

Best,

D

That was not my intention.

There may be any number of reasons why some people dismiss the Lovin’s ideas (and why some embrace them, as some clearly have — including at least one US Presidient (Carter) and some at DOD over the years).

Each of these criticism MAY or MAY NOT BE valid and must be judged on an individual basis on its merits.

It is RARELY (if ever) warranted, at any rate, to dismiss ideas without first going to the source.

To get back on track, I would simply say that I suggest that people FIRST actually read FOR THEMSELVES the Lovins’ publications. They have produced voluminous writing on resource use and energy efficiency over the 20+ years that they have been researching such issues and “Natural Capitalism” (for which the anonymous amazon review was provided above) is just ONE of those works.

Only by reading the Lovins’ work cane one be in a position to make an informed judgement about whether criticism of one of their particular ideas is valid. (I am ALWAYS dubious of sweeping criticisms — like “They are not economists” — at any rate)