Cap vs Tax

Obviously free allotment based on production, or even worse, “grandfathering” based on historical pollution, is a cruel joke and the EU severely messed up that day. 🤦🏻‍♀️

It’s free money for the richest. Do not want.

That might’ve been humanity’s greatest mistake. In the name of fighting climate change we gave the fossil industry a handout. What a mess. Fossil lobby and bribed politicians are gonna be the richest creeps on the cinder.

Economists wanted a cap that was auctioned out, instead. Much better.

At first glance, that’s similar to a tax. You wanna blast a lot of fossils, you pay a lot. You don’t wanna blast so much? You don’t pay as much. But that similarity is superficial.

I’m always going on about artificial scarcity. Well, a cap enforces real scarcity. It lets us set hard limits and decrease those limits quickly. A tax doesn’t have that property. The tax would need to be literally infinity.

Y’all know how the problem with capitalism is that externalities aren’t accounted for, right? But a tax doesn’t solve that problem fully, since the market economy—and that includes a market economy with taxes—can not accurately determine costs or values, only prices. No matter what amount we set the tax to, if they really wanna blast, they can just pay that price. But if we instead set a hard limit and auction out allotments, there’s gonna be a limit to emissions (which is what we want), a limit no matter what they pay.

With a cap, they can’t buy their way out of what they owe our planet.

People on the left who were hungry for the “and dividend” part of the tax, don’t be fooled. A tax is a cheat code for the industry. They can always create money. Money is just a number to them, not a real resource. The atmosphere doesn’t have that luxury. It has to live in reality.

There’s also nothing stopping us from applying the dividend principle to the auctioned cap. Cap, auction, and dividend. Everyone happy.

Regardless of whether the money from those auctions benefit individuals directly, through a UBI-style dividend, or if it’s to be used for societal programs and “according to needs”-style welfare, auctioning shares a drawback with an emissions tax. While intended to disincentivize individual institutions and corporations from blasting & guzzling, it creates an incentive for society as a whole to keep the limits non-zero. Politicians won’t wanna lower limits to zero since that’ll cut off the money flow from the auctions. We need to move to a full ban within a few decades and then this money is gonna dry up immediately.

So if we can find out a solution to that…? Then heck yeah.♥︎