Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
As far as TEQs go, I doubt that most people will frivolously sell their allowance. After all ordinary people manage their pensions and state benefits perfectly well. The occasional fool who does so will soon learn the error of his ways.
Quote:
It may encourage a bit of conservation, as energy becomes a direct cost and/or a source of income, but it is a very regressive form of income transfer from poor who cannot buy extra units to rich who can. Versus fuel surcharges with tax rebates to the poorest,
Yes, if this happens, it is going to make things worse. I don't like regressive taxation. I must ask David about this.
As far as TEQs go, I doubt that most people will frivolously sell their allowance. After all ordinary people manage their pensions and state benefits perfectly well. The occasional fool who does so will soon learn the error of his ways.
Quote:
It may encourage a bit of conservation, as energy becomes a direct cost and/or a source of income, but it is a very regressive form of income transfer from poor who cannot buy extra units to rich who can. Versus fuel surcharges with tax rebates to the poorest,
Yes, if this happens, it is going to make things worse. I don't like regressive taxation. I must ask David about this.
They may not frivolously sell them except in need, but they may not know their true value either. That is options pricing. You gotta know you delta, gamma & theta along with all the other Greeks and the math is one step short of nuclear physics
However, I bet if I open a bingo hall and players can only use their credits to play for large cash prizes that in a very short period of time I will own all the heating credits for entire neighborhoods?
Quote:
After all ordinary people manage their pensions and state benefits perfectly well. The occasional fool who does so will soon learn the error of his ways.
You will notice that such 'benefits' are paid on a monthly basis and not generally in one lump sum. I don't think that is by accident?
Also, good point you make, those pensions and benefits are mostly on a pay as you go basis and wholely underfunded with generous future payouts which will become increasingly unaffordable. And the best minds who are tackling the problem do not yet know how to square that particular circle? Will they be any better at devising a politically acceptable solution to energy trading or will it be open to cyclical electioneering abuse and short sightedness like all other government programs and insurance schemes currently in deep arears but with no handy solutions and devoid of serious debate? _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Joined: Oct 12, 2005 Posts: 281 Location: Washington State, USA
Posted: Thu Dec 01, 2005 9:58 am Post subject: Re: Personal Carbon Allowance Rationing
julianj and MrBill,
Thanks for picking up on the complications of how these DTQs (or whatever they get called) interact with the money economy. It is complicated.
Somewhere in one of the links I read, that to address just the global warming aspects of this issue, the use of carbon fuels needed to be reduced 1.x% per year or so. Also in the beginning stages of addressing the oil availability issue the objective is to slow this monster economy's GROWTH of the use of oil just back to zero growth. That alone will take some massive readjustments in attitudes and the economy.
My point being if the initial stages of oil decline are 2% for example, that could be accomplished with fairly high distributions of the rations. A large supply would mean they would have a very small money value each. Thus for all the small uses like a taxi ride, the taxi driver would quickly decide to include the cost of buying the DTQ in the price. It would be the same in a restaurant, The gas used in the kitchen would not be worth the trouble of swiping every customers carbon card. Thus the initial application would probably only apply to the larger direct uses of fuel and a few larger fuel use purchases like airline tickets.
As the oil shortage really starts to bite like the North Sea depletion is in the UK now, each ration unit becomes more and more valuable and the system expands deeper and deeper into the economy, but by then everyone knows how to use it.
In the later stages of oil shortage in the next century this could easily evolve into a new gold standard. The fixed amount of DTQs created each year are directly related to a commodity like gold was once. "Black Gold" takes on a whole new reality!
The gold prospectors, conquistadors, and miners got rich back in the days of the gold standard and their activities increased the money supply. In the case of this carbon allowance ration, anyone drilling for a small pocket of oil gets rich which is OK because society needs that oil. It could easily be good public policy to subsidize enhanced oil recovery with free carbon allowances, and direct payment in new carbon allowances to the oil company.
The oil business will live well into the future because it will be extremely profitable.
There is a current post over at The oil drum showing one barrel of oil is worth one manyear of very hard manual labor. As that truth soaks in even $1000/bbl oil may seem cheap. I learned that decades ago when I bought my first gas chain saw!
http://www.theoildrum.com/story/2005/11/30/233433/82 _________________ An expert is someone who has made every mistake possible in their field and learned how to prevent them.
At the start of the scheme, a full year's supply is placed on the market. Then, every week, the number of units in the market is topped up with a week's supply.
So after the initial tranche, the system does work in an incremental basis; and quite frankly, I've never been sure why there was the need to have a whole year in advance, given that wages, and many other things like pensions and benefits come on a weekly, fortnightly or monthly basis. I tend to agree with you there that individuals with poor forward planning might squander a year's credits, where they would be less inclined if they had a week or a month's supply.
Perhaps you have a more pessimistic view of humanity than me: I think most people will be able to manage their allowances. Though I do take your point about the Bingo Hall - a fool and his carbon credits being easily parted.
But in a way, I think our speculation is fruitless - the only way to find out the problems of this system is to have a pilot project - choose a town and institute the system and see what happens. I don't doubt that there will be unanticipated things going on, but then the method could be tweaked until it worked, or was discarded as unworkable.
Donshan,thanks for your kind words, but could you please call them TEQs from now on? Changing the name has caused enough confusion and I hope we can stick to the better name in future.
Joined: Oct 12, 2005 Posts: 281 Location: Washington State, USA
Posted: Thu Dec 01, 2005 12:59 pm Post subject: Re: Personal Carbon Allowance Rationing
julianj wrote:
Donshan,thanks for your kind words, but could you please call them TEQs from now on? Changing the name has caused enough confusion and I hope we can stick to the better name in future.
Thanks, TEQs it is! However googling TEQ is not as informative as "carbon allowance". Googling TEQ brings up a lot of wrong stuff. However using the full words Tradable energy quotas does work. _________________ An expert is someone who has made every mistake possible in their field and learned how to prevent them.
Joined: Sep 30, 2004 Posts: 975 Location: On one of the blades of the fan
Posted: Fri Dec 02, 2005 11:46 am Post subject: Re: Personal Carbon Allowance Rationing(TEQs)
I asked David about ID cards and this is his reply:
Quote:
By the way, re ID cards, I think the need for those a condition for TEQs is exaggerated. All rationing systems have to have some way of identifying people, and I have no doubt that some contingency planning already exists for petrol rationing - probably a paper system. Censuses get at people's names, as do voting registers, National Insurance numbers and National Health numbers. None of these are ideal but they are a workable basis for a TEQs system, allowing it to be set up, and allowing the anomalies to be sorted out afterwards. ID cards would make it easy, but I don't think they are essential. Tyndall have given much more emphasis to ID cards than I have.
Joined: Jun 02, 2004 Posts: 1078 Location: Bristol, UK
Posted: Sat Aug 05, 2006 9:37 am Post subject: Re: Personal Carbon Allowance Rationing(TEQs)
Looking forward it is clear that the business-as-usual energy policy is “not fit for purpose”. The current system is proving itself inadequate when faced with twin challenges of fossil fuel depletion and climate change. The energy markets are likely to respond to future shortages with profiteering, grossly inequitable allocation and globally destabilising financial flows.
A rationing system is required which can both facilitate equitable allocation of the diminishing resource whilst simultaneously reducing the carbon dioxide released.
Formulated by Dr David Fleming and first published in 1996 as Domestic Tradable Quotas (DTQs), Tradable Energy Quotas known as TEQs (pronounced “tex”) are just such a system. TEQs are an electronic rationing system that includes everyone, bringing citizens, industry and Government together in a single scheme with a common purpose. The structure of this scheme is detailed in Fleming’s excellent short book (available at www.teqs.net).
Posted: Mon Aug 07, 2006 3:02 am Post subject: Re: Personal Carbon Allowance Rationing(TEQs)
clv101 wrote:
Looking forward it is clear that the business-as-usual energy policy is “not fit for purpose”. The current system is proving itself inadequate when faced with twin challenges of fossil fuel depletion and climate change. The energy markets are likely to respond to future shortages with profiteering, grossly inequitable allocation and globally destabilising financial flows.
A rationing system is required which can both facilitate equitable allocation of the diminishing resource whilst simultaneously reducing the carbon dioxide released.
Formulated by Dr David Fleming and first published in 1996 as Domestic Tradable Quotas (DTQs), Tradable Energy Quotas known as TEQs (pronounced “tex”) are just such a system. TEQs are an electronic rationing system that includes everyone, bringing citizens, industry and Government together in a single scheme with a common purpose. The structure of this scheme is detailed in Fleming’s excellent short book (available at www.teqs.net).
So in other words, in a completely fair world, the developing world teeming with its billions would get 5/6th of the world's energy credits for free, which they then could sell to the 1/6th of developed world, in proportion to their overall populations, regardless of where energy is found or who pays to extract and refine it? And the more children they have the higher their yearly quota relative to others, although strictly speaking we are talking about finite fossil fuels? Sounds like child inflation to me? _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Joined: Dec 08, 2004 Posts: 921 Location: 145'2"E 37'46"S
Posted: Sun Aug 13, 2006 6:04 am Post subject: Re: Personal Carbon Allowance Rationing(TEQs)
MrBill wrote:
So in other words, in a completely fair world, the developing world teeming with its billions would get 5/6th of the world's energy credits for free
No, they'd still have to pay cash money for the energy too (but cash prices should be lower than they would be in speculator-dominated markets).
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which they then could sell to the 1/6th of developed world,
International trading is neither required nor demanded by what is proposed. If practiced, it seems you are presuming that a) mega-nations of the majority world don't continue their spectacular and carbon-heavy growth, & b) that individual citizens in the minority/'developed' world are incapable of pursuing their own self interest by reducing their energy consumption. I think you're wrong on both.
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in proportion to their overall populations, regardless of where energy is found
Neoliberalism insists we sell all assets and resources into global markets, regardless of where they are found or their strategic importance, what is different?
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or who pays to extract and refine it?
Whoever pays to extract and refine does so to make a profit, why should they have further special rights? (apart from externalising most of the ecological, social, and political costs of their resource extraction).
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And the more children they have the higher their yearly quota relative to others, although strictly speaking we are talking about finite fossil fuels? Sounds like child inflation to me?
Mr Fleming suggests that children and infants receive much less than adults, so you'd have to be sharp to make a profit there. By the time they hit driving age, if you can get their finally full quota off them, you deserve it!
You coulda spared yourself these needless fears by reading it first.
Posted: Sun Aug 13, 2006 10:18 am Post subject: Re: Personal Carbon Allowance Rationing(TEQs)
Liamj wrote:
MrBill wrote:
So in other words, in a completely fair world, the developing world teeming with its billions would get 5/6th of the world's energy credits for free
No, they'd still have to pay cash money for the energy too (but cash prices should be lower than they would be in speculator-dominated markets).
Quote:
which they then could sell to the 1/6th of developed world,
International trading is neither required nor demanded by what is proposed. If practiced, it seems you are presuming that a) mega-nations of the majority world don't continue their spectacular and carbon-heavy growth, & b) that individual citizens in the minority/'developed' world are incapable of pursuing their own self interest by reducing their energy consumption. I think you're wrong on both.
Quote:
in proportion to their overall populations, regardless of where energy is found
Neoliberalism insists we sell all assets and resources into global markets, regardless of where they are found or their strategic importance, what is different?
Quote:
or who pays to extract and refine it?
Whoever pays to extract and refine does so to make a profit, why should they have further special rights? (apart from externalising most of the ecological, social, and political costs of their resource extraction).
Quote:
And the more children they have the higher their yearly quota relative to others, although strictly speaking we are talking about finite fossil fuels? Sounds like child inflation to me?
Mr Fleming suggests that children and infants receive much less than adults, so you'd have to be sharp to make a profit there. By the time they hit driving age, if you can get their finally full quota off them, you deserve it!
You coulda spared yourself these needless fears by reading it first.
I certainly did read it, and carefully, and your points do not make sense. any carbon trading system as suggested means that 'energy is allocated per person' and then either individuals can choose to use the energy by buying it or sell the permits to someone else. You may not understand this, but I do. Mine are never needless fears. It took me less than the time to read the article to see the underlying problems with this scheme. Maybe you should read my previous points where I went into all the other problems with this scheme? Then you could spare yourself needless posts until you have done your homework! Thanks. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Joined: Dec 08, 2004 Posts: 921 Location: 145'2"E 37'46"S
Posted: Sun Aug 13, 2006 6:36 pm Post subject: Re: Personal Carbon Allowance Rationing(TEQs)
MrBill wrote:
I certainly did read it, and carefully, and your points do not make sense. any carbon trading system as suggested means that 'energy is allocated per person' and then either individuals can choose to use the energy by buying it or sell the permits to someone else. You may not understand this, but I do.
An energy quota, not energy itself, is allocated per person. Is having a permit to fish the same as having fish? No. If have no cash you could sell half (w.a.g) your quota and have cash to buy energy with the rest of your quota, how will that a problem?
Quote:
Mine are never needless fears. It took me less than the time to read the article to see the underlying problems with this scheme. Maybe you should read my previous points where I went into all the other problems with this scheme? Then you could spare yourself needless posts until you have done your homework! Thanks.
Your 'other points' (what was the first one?) all seem to be variations on your fear of 'teeming millions', which is a straw man as international trade is not required. Maybe i'm simple, could you lay out the problems you saw before finishing reading the article? Feel free to respond to my points too.
ps. the booklet contains information not in the article, thats why i linked it.
Posted: Mon Aug 14, 2006 1:27 am Post subject: Re: Personal Carbon Allowance Rationing(TEQs)
Quote:
An energy quota, not energy itself, is allocated per person. Is having a permit to fish the same as having fish? No. If have no cash you could sell half (w.a.g) your quota and have cash to buy energy with the rest of your quota, how will that a problem?
Sorry, I only read the article, not the booklet.
A quota as you mentioned is a right or a permission to fish or to sell energy. Anytime a quota is issued it has an intrinsic value, like a dairy quota or a taxi quota to a busy airport. The price of the quota represents the economic rent it brings to the seller by those who are willing to buy it. Those willing to buy these certificates think they can get more economic value out of the quota than those willing to sell.
If it is allocated for free to those that do nothing then it is simply a gift. Like diary or taxi quotas the intrinsic value of the quota quickly get capitalized. For example, the quota value of one dairy cow may be worth $25.000 the quota value of one taxi might also be worth $25.000. My energy quota allocation might be like getting a cheque for $1000 each year. It is simply unearned income.
If it is not a universal scheme then it is not worth doing. Most of the world's remaining petroleum in any case belong to governments, not private companies. Whether the government decides to extract that petroleum themselves through a national oil company or decides to sell the rights to explore, drill and extract in exchange for royalties, basically all the oil & gas that we use going forward comes from the public domaine. TEQ's therefore will not make energy cheaper. The cost of petroleum reflects its scarcity, the cost to find it and to extract it and then distribute it. And governments find it an attractive target for extra taxes as its demand is very inelastic. So the argument that TEQs will make energy cheaper simply does not hold water.
As it is a gift it brings unearned economic benefit to those who have not produced anything of value to trade for that petroleum. So like the share trading privatization scandal in the Czech Republic the government/UN or whomever distributes energy quotas which individuals would have the right to exchange for energy or sell.
Except the energy is already owned by nations who want to sell it. Therefore, due to infrastructure problems in sub-sahara Africa they may not have anything to trade to buy the imported energy in any case, and as the countries are so corrupt and many uneducated people live in poverty, I will explain to you exactly what will happen.
Criminal gangs will go up and down the countryside buying certificates at a steep discount from those who do not know their true value, cannot read, or are too poor and need pennies on the dollar to buy food instead of petroluem. Then these gangs will aggregate these certificates and sell them on the black market at a profit to those who need energy and can afford to buy it.
As I said, it is not dissimilar to the Czech privatization scheme where every ciitzen was given shares in public companies, but then smart operators bought those shares up cheaply, and then used them to buy these newly privatized companies. One privatization share is not worth much, however, one million are enough to exercise management control over a company. In Africa, and other parts of the developing world, it will be worse, as at least the Czech's had a fairly developed country, laws, courts, and were relatively well educated at the time.
But in underdeveloped countries, where the poor are uneducated and the infrastructure poor, criminal gangs will get pocession of these certs and sell them at a profit. I fail to see how this is going to help anyone?
The certs are given away free, but they have value. Therefore, the biggest countries will get more energy allocation whether they need it or not, whether they deserve it or not, whether they can pay for it or not. So high birthrates definately play a role even if as you say the authors envision paying less for children. Well, children grow up, so there is still an incentive to produce them.
The petroleum already belongs to the public via national governments. They sell that oil via the competitive market or by allocation. Yes, OPEC decides to whom they sell at what price. They sometimes sell to Asia, Europe and N.AM at different prices at the sametime while allocating more supply where they see fit.
The certs that are allocated bring an unearned benefit to the recipient. That is a nice form of charity, but ultimately that cost has to be borne by the end user. Therefore, it cannot result in lower priced petroleum as you suggested. As the costs of extraction, refining, etc. already reflect their costs in terms of capital, manpower, infrastructure, risk, etc.
As petroleum is overwhelmingly found in a few inexcessible places, the import and export of energy is a fact that cannot be discounted away. Therefore any energy trading scheme has to be international as well.
Really, taking away ownership rights from national governments and handing them out to many individuals for free is just a sort of global communism.
Why oil? Why not water, food, land and the other means of production? A global government to make asset allocations. An all seeing, all knowing world government that can allocate resources more effectively than the market. An omnipotent government that can ensure that no one cheats, that energy certs go to everyone fairly. And that a blackmarket does not spring up for their trading. Much like cheap, subsidized energy gets smuggled out of a country and sold at a gain creating profits for the smugglers and shortages in the home market.
We already have a very simple, workable system for allocating energy based on price using freely traded currencies who's value goes up and down against other freely tradeable currencies based on supply & demand, interest rates, trade balances, etc. This does a remarkable effective job of allocating scarce resources to those who produce something else of value in order to trade for them. But instead of this simple, but effective system, you want to impose an unworkable system, full of imperfections, that can easily be manipulated. Added layers of complexity and bureaucrats instead of market mechanisms. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Mon Aug 14, 2006 1:53 am Post subject: Re: Personal Carbon Allowance Rationing(TEQs)
Quote:
Neoliberalism insists we sell all assets and resources into global markets, regardless of where they are found or their strategic importance, what is different?
If I look at this definition of neoliberalism....
Quote:
Neoliberalism is a pejorative label[citation needed] for the economic liberalism which has became increasingly important in international economic policy discussions from the 1970s onwards.
In its dominant international use, neoliberalism refers to a political-economic philosophy that de-emphasizes or rejects government intervention in the domestic economy. It focuses on free-market methods, fewer restrictions on business operations, and property rights. In foreign policy, neoliberalism favors the opening of foreign markets by political means, using economic pressure, diplomacy, and/or military intervention. Opening of markets refers to free trade and an international division of labor. Neoliberalism generally favors multilateral political pressure through international organizations or treaty devices such as the WTO, World Bank and ADB. It promotes reducing the role of national governments to a minimum. Neoliberalism favors privatization over direct government intervention and production (such as Keynesianism), and measures success in overall economic gain. To improve corporate efficiency, it strives to reject or mitigate labor policies such as minimum wage, and collective bargaining rights. It opposes socialism, protectionism, environmentalism, fair trade, and critics say it impedes democratic rule. Likewise, these critics argue that labor rights and social justice should have a priority in international relations and economics.[citation needed]
What is Neoliberalism?
I fail to see how you can say allocating resources based on population size is no different than through market mechanisms?
If one takes the view that God decides where we are born and therefore it is just luck or fate that determines where one is born then I suppose it would be only fair to allocate resources by population.
However, that is not how it works. Each one of us is the product of a whole series of decisions, conscious and subconscious, made by ourselves and our forefathers. Where we are born is no accident in this sense of the word.
But in any case, I have no problem with neo-liberalism, democracy, market forces, free trade because I see the alternatives as worse. I have to disgree with wikopedia that this excludes environmentalism and fair trade as well. I am very pro- fair trade and sustainable development. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Joined: Dec 08, 2004 Posts: 921 Location: 145'2"E 37'46"S
Posted: Tue Aug 15, 2006 8:02 pm Post subject: Re: Personal Carbon Allowance Rationing(TEQs)
MrBill wrote:
..If it is allocated for free to those that do nothing then it is simply a gift. ... It is simply unearned income.
Only if you never buy energy. If you sell your TEQ as soon as it arrives, yes it will be instant unearned income then, but every time you buy energy you’ll need to purchase TEQs on the open market, will probably pay more than you got for selling all yours ASAP, and thus only those who use less every year will have any benefit.
MrBill wrote:
If it is not a universal scheme then it is not worth doing.
Absolute nonsense. Health insurance, honesty, and hunting limits are not universally taken up, does that mean they're not worth doing?
Quote:
Most of the world's remaining petroleum in any case belong to governments, not private companies. Whether the government decides to extract that petroleum themselves through a national oil company or decides to sell the rights to explore, drill and extract in exchange for royalties, basically all the oil & gas that we use going forward comes from the public domaine.
This is the oil-is-fungible argument, which the Coalition of the Willing has bet a few wars is not set in stone.
Quote:
TEQ's therefore will not make energy cheaper. The cost of petroleum reflects its scarcity, the cost to find it and to extract it and then distribute it.
AND the speculators premium, which some soothing voices on MSM have put at $20 a barrel. I’m not saying energy will be cheaper in absolute terms, but it will have to be cheaper than in a market smothered in gamblers.
Your next x hundred words seem a mash of projected fears and simple misunderstanding of the proposal. Resource ownership rights will not be taken away from governments. An international scheme is not required.
Your incredible claim
Quote:
We already have a very simple, workable system for allocating energy based on price ..
tells me only that the status quo is working fine for you. I'm sure you've heard it before but its so appropriate: It is difficult to get a man to understand something when his salary depends upon his not understanding it (Upton Sinclair).
Joined: Dec 08, 2004 Posts: 921 Location: 145'2"E 37'46"S
Posted: Tue Aug 15, 2006 8:07 pm Post subject: Re: Personal Carbon Allowance Rationing(TEQs)
MrBill wrote:
...But in any case, I have no problem with neo-liberalism, democracy, market forces, free trade because I see the alternatives as worse. I have to disgree with wikopedia that this excludes environmentalism and fair trade as well. I am very pro- fair trade and sustainable development.
Neoliberalism and the 'free market' (at gunpoint) are diametrically opposed to fair trade and anything resembling sustainability. That you can believe you support both is .. surreal.
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