2005-11-03

Chicago Climate Exchange

The worlds first greenhouse gas exchange - trading the major six gases:

Chicago Climate Exchange (CCX): "Our mission is to provide our members from the private and public sectors with cost-effective methods for reducing their greenhouse gas emissions by building and operating a market-based emission reduction and trading program that is flexible, has low transaction costs, is environmentally rigorous and rewards environmental innovation."

They have also been very proactive in setting up a european counterpart and it runs as
some kind of sister project to CCX.

The Heartland Institute - Auctioning Pollution Rights - by Ted Gayer

The Heartland Institute - Auctioning Pollution Rights - by Ted Gayer:

A brief explanation of applications of market mechanisms to pollution rights:

"In the past 15 years, cap-and trade programs have become the preferred means of regulating air pollutants. A cap-and-trade program establishes the annual number of allowable emission permits (the 'cap'), which is set below the existing emissions level. Each regulated entity must cash in one permit for each unit of air pollution it emits. The cost savings come from allowing firms to trade permits, so that a firm that finds it costly to reduce its marginal unit of pollution can instead purchase a permit from another firm that can reduce a unit of pollution for less cost. Because the overall cap is binding, the result is a reduction of pollution to the target level at costs much lower than the more rigid command-andcontrol regulations"

In practice there has been a full spectrum of implementations on national levels and I think many countries are still a far cry from achieving cost efficiency in the usage and bonafide effects concerning the goals of lowering pollution numbers. But it is anyhow the first econopolitical instrument that has potential to be useful in the long run.

There might be better incentives in other economical instruments, like traditional "stock or in natura" exhanges.

Atlas of the Biosphere

Atlas of the Biosphere: the basic idea is to "gather as much information about the environment as possible, and deliver it to as many people as possible. We are dedicated to bringing environmental information to the widest possible audience."

It seems to give a broad survey of different important cycles like carbon, oxygen, and maps of land-use, human impact and more. I do not know right now if it still is maintained.

Taxing bads instead of goods?

This is mentioned in Stieglitz book on the "Roaring Nineties" and is attributed to president Clinton who proposed "a brilliant new idea: Why not start taxing 'bads' - pollution - rather than 'goods' - hard work and savings".

This was indeed turned down by the US energy and automobile companies at the time, and converted into a tiny US gasoline tax increase of a couple of cents.

Concerns and ideas

I have been reading several very good books on the "state of the planet and I think that sofar the best survey comes from Vaclav Smil and his MIT Press book "The Earth's BioSphere". He is very good at maintaing a holistic perspective without loosing details.

I think a popular and pedagogical version should be made mandatory during basic education. I willl maintain this blog for things related to problems concerning the biosphere and feasible solutions like self-government of (open) commons to achieve sustainable solutions (analyzed and researched by Elinor Ostrom).