jamesz

Artificial environmental goodness

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Arnold Kling at EconLog isn’t impressed by Planktos who claim to

…restore damaged habitats in the ocean and on land. Through iron-stimulated plankton blooms in the oceans and afforestation projects in Europe, we are able to generate carbon credits. We then sell these offsets to individuals and businesses that are looking to reduce their carbon footprint and lower their impact on climate change.

He claims that this ‘nonsense’ is the product of artificial markets created by the government and should really be the preserve of charitable organisations. I can’t see how leaving the externality damage of markets to be cleaned up by charities is a particularly efficient solution. Surely, the creation of these ‘artificial’ carbon markets internalises the pollution externalities and results in increased market efficiency. It’s a textbook government intervention to correct a market failure. Planktos’ idea seems to be the exact sort of thing that everybody hopes such markets will generate, and excellent evidence that they work to stimulate innovation in environmental protection. The sooner NZ gains a few of these artificial markets, the better, I say.

jamesz

Carbon taxes for all

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Well, I don’t always agree with Gary Becker but he has a nice post on carbon taxes and why they could be George W Bush’s friend. He says

A tax on carbon emissions from business and household production would not only help reduce global warming–by how much is still controversial–but it would also lower the world prices of these fuels through reducing the demand for fossil fuels. Lower prices would cut the revenues received by Middle Eastern states from the sale of oil and natural gas. This is why a carbon tax receives support from many environmentalists and national security advocates.

National security isn’t such a big deal for NZ when it comes to energy supply, but it’s nice to know that even conservative economic commentators in the US are starting to favour emissions taxation. Hopefully the NZ government doesn’t need quite as much prodding as Dubya before it implements a decent scheme to meet our Kyoto obligations.