Wednesday, July 11, 2007

Confusion about the Cap-n-Trade Post

I have noticed some bewilderment amidst the Rank and File. The crux lies in my use of the Concept of a Carbon Dollar. I used the nominative term, but Many mixed the two Dollar types. The Carbon Dollars, denominated like Currency though hopefully differentiated by size and color, would actually be Carbon Permits universally transferable. They would be required to fill your Gas tank, buy your Groceries, pay for Heating fuel or Natural Gas, even to purchase electrical power. They would not negate the necessary use of U.S. Dollars to make your Purchases; but must also be provisioned to make any purchase.

I suggested a Carbon tax by Sale of these Carbon Permits at a rate which I thought would be equitable: $.12 per Carbon dollar Permit. I did not explain my Thought that this should be the Price up to a Household Head limit, after which I would propose further Carbon Permit Sales but at a Price of $.34 per Carbon dollar Permit. These Permits will not equate with the U.S. Dollar Cost of the Purchase, but only with the estimated per-item Carbon emission Cost of the Product. Carbon Emission Costs suddenly run through the entire Production change when Business is forbidden to purchase these Carbon Permits. Every Producer, Wholesaler, Transporter, and Retail will add the significant Carbon tax per-item necessary for their continuance in business, as they cannot continue to function without ability to pay for their own Carbon emissions.

Answerable Questions:
1) Retailers will assign a Carbon Cost to each item at the Check-Out lane, and will insist on payment of the subTotal in Carbon dollar Permits. There will not be great Math involved, and Business will be ordered to Round Down to the lowest Dollar; and they will thereby be generous in assignment of per-item Carbon emission Costs.
2) The rationale behind the Carbon dollar-denominated Permits consists of use of Consumer Preference to determine in real terms how they truly favor Carbon distribution by introducing Market scarcity through expensive Carbon Permits. They will buy exactly those Products and Services which maximizes their own Carbon budget.
3) The current structural Debate on Cap-n-Trade favors Business selling unused Carbon emission Credits for Profit, which does not restrict their own Production schedules in any way, fails to provide directed Incentive to reduce Carbon emissions--only to find a Supplier of cheap Emission permits, and delivers a Tax to the Consumer which is hidden; it will be higher than my formula as Business passes on the Cost of the Carbon emission permits. The Consumer will be paying the tax on Carbon emissions anyway, and will not possess any Say on what directions that Production should take. Be sure to transmit further Psychic waves if there are still unanswered Questions. lgl

A further Answer:
4) The enabling Act should undoubtedly require Banks, Credit Cards, and all Other Expense Expenditure Accounts to hold and list Carbon Dollar-denominated Permits. The easiest way to achieve This may be to entail these forums to be Permit-Selling agents, granting them 2 Cents commission on every Carbon Dollar Permit sold. lgl

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