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Global Warming

RoarEmotion

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Aug 20, 2005
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Arbitrary CO2 prices do not price externalities. All they do is cause malinvestment because they have no reference to the action of parties involved. Only through preference demonstrated in action can we gauge what actors really value, and to try to deduce values from mathematical formulas (I’m assuming that’s how CO2 prices are determined) without the evidence of action, is a hopeless cause.

If you assume actors are rational and have perfect knowledge and fully bear the consequences of their actions over an infinite period of time.

None of these things are true.

I’d agree pricing co2e is educated guesswork at best. There is no perfect number.
 

AngryAnt

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Nov 25, 2004
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If you assume actors are rational and have perfect knowledge and fully bear the consequences of their actions over an infinite period of time.

None of these things are true.

I’d agree pricing co2e is educated guesswork at best. There is no perfect number.

yeah, but there is a feedback mechanism - reduction in actual emissions, reinvestment in renewables and so on. This stuff is very measurable. So we have fulfilled G's "preference demonstrated in action" criterion.

For the first time we will also have a price related to the previously vague externality of CO2 emissions and ultimately climate change.

As emissions reduce towards zero the price can be amended or removed.
 

spook

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Jun 18, 2007
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It's La Niña. Going to be a wet summer across northern and eastern Australia, and colder than usual in the south.
 
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DavidSSS

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If you assume actors are rational and have perfect knowledge and fully bear the consequences of their actions over an infinite period of time.

Define "rational".

This is not an empty question because rational has many different definitions. The neo-liberal definition of rational means that you only take into account economic considerations when judging whether actions are rational. They seek to make everything an economic calculation.

Life is not just economics.

DS
 

RoarEmotion

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Aug 20, 2005
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Define "rational".

This is not an empty question because rational has many different definitions. The neo-liberal definition of rational means that you only take into account economic considerations when judging whether actions are rational. They seek to make everything an economic calculation.

Life is not just economics.

DS

Fair point. Any answer has to be subjective as everyone assigns different values to economics, health, happiness, education, connectivity, animal welfare, environment, football team success etc etc.

I was plonking for a utilitarian view of rational but realise everyone’s is different…. QED none of these things are true.
 
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Giardiasis

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Apr 20, 2009
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If you assume actors are rational and have perfect knowledge and fully bear the consequences of their actions over an infinite period of time.

None of these things are true.

I’d agree pricing co2e is educated guesswork at best. There is no perfect number.
None of those things have any relevance to what I said except to say everyone acts to reduce their level of uneasiness and in this way all action is rational. Whether the methods they choose to met the ends sought after are logical is another question.

Prices allow for economic calculation to be performed because they reflect the action of market participants, which contains information linked to the demonstrated preferences of market participants. Market participants act on imperfect knowledge and take risks in search for profit (profits are obtained when you have successfully satisfied the demand of other market participants) or if they can afford it, for other goals not linked to profit such as providing charity, supporting family members, etc. The point I’m making is that some bureaucrat can’t just magic up a number and think that reflects the price of anything. It is pure fiction and it will act to distort price discovery and hence lead to malinvestment.

What is happening in European gas markets is a sign of the future whereby interventions to reduce fossil fuel investment will inevitably lead to general impoverishment. A reduction in the supply of fossil fuels will not be met by a reduction in the demand for them and the result is significantly reduced affordability of energy, necessitating the burning of coal again because when the choice is no heating or heating, you choose heating.
 
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DavidSSS

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Global warming is an environmental issue, which is why economic calculations are not enough and why it is a market failure.

DS
 
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Giardiasis

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Global warming is an environmental issue, which is why economic calculations are not enough and why it is a market failure.

DS
The pricing of environmental damage is very much apart of economic calculation under a market economy, what it requires is clearly defined and protected property rights. If Company A wants to dump their toxic waste into Joe farmer’s dam, they are not permitted to do so without Joe’s permission. Joe might require compensation to allow it to happen, he could ask for the waste to be treated first to bring the toxicity down he could ask for a monitoring plan to be established to ensure the waste isn’t toxic, etc. all of which company A needs to price into their cost structure to ensure they remain profitable.
 

RoarEmotion

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Aug 20, 2005
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The pricing of environmental damage is very much apart of economic calculation under a market economy, what it requires is clearly defined and protected property rights. If Company A wants to dump their toxic waste into Joe farmer’s dam, they are not permitted to do so without Joe’s permission. Joe might require compensation to allow it to happen, he could ask for the waste to be treated first to bring the toxicity down he could ask for a monitoring plan to be established to ensure the waste isn’t toxic, etc. all of which company A needs to price into their cost structure to ensure they remain profitable.

So who’s property rights are the upper atmosphere? How do pollutants get priced in?What about long term effects or run off into a neighbouring property?

Do we need the NZ approach? https://www.theguardian.com/world/2...iver-granted-same-legal-rights-as-human-being

Then joe can gagf because the land owns itself.

Joes rights’ in your example are an artificial construct anyway we created for our own purposes. They are very useful and clearly have many pros but weren’t set up to protect the environment or social goods. We’ve seen the market fail to deliver in this space multiple times because the market by its nature finds any way to exploit a free or low cost resource.
 
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DavidSSS

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Yep, setting up an artificial ownership regime for bits of the atmosphere is cloud cuckoo land, but that is the neo-liberal solution.

Some find it very hard to admit that the market fails, even though it fails quite often.

Not to mention that not everything in life is about economic relations, there are other more important things, like, you know, having a planet which is in good shape.

DS
 
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Giardiasis

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So who’s property rights are the upper atmosphere? How do pollutants get priced in?What about long term effects or run off into a neighbouring property?

Do we need the NZ approach? https://www.theguardian.com/world/2...iver-granted-same-legal-rights-as-human-being

Then joe can gagf because the land owns itself.

Joes rights’ in your example are an artificial construct anyway we created for our own purposes. They are very useful and clearly have many pros but weren’t set up to protect the environment or social goods. We’ve seen the market fail to deliver in this space multiple times because the market by its nature finds any way to exploit a free or low cost resource.
I believe this answers your question, it is a short read: https://mises.org/wire/rothbard-explains-proper-response-climate-change

Long term effects or run off could constitute a property right violation and the transgressed party has cause for damages.

Sort of, but it follows a logical chain of reasoning that allows the problem "how do we deal with the problem of scarcity" to be addressed. It's certainly up for discussion on the finer points, but in the main, it is property rights that allow for disputes concerning these issues to be resolved. It doesn't matter what resources are in question, they are covered by property rights be they environmental or social. People that claim market failures are often people that don't like the choices other people make and so they seek government coercion to direct things towards an outcome they prefer. Market outcomes to the extent they are unimpeded by governments should by and large reflect the preferences of the majority of people.
 

RoarEmotion

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Aug 20, 2005
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I believe this answers your question, it is a short read: https://mises.org/wire/rothbard-explains-proper-response-climate-change

Long term effects or run off could constitute a property right violation and the transgressed party has cause for damages.

Sort of, but it follows a logical chain of reasoning that allows the problem "how do we deal with the problem of scarcity" to be addressed. It's certainly up for discussion on the finer points, but in the main, it is property rights that allow for disputes concerning these issues to be resolved. It doesn't matter what resources are in question, they are covered by property rights be they environmental or social. People that claim market failures are often people that don't like the choices other people make and so they seek government coercion to direct things towards an outcome they prefer. Market outcomes to the extent they are unimpeded by governments should by and large reflect the preferences of the majority of people.
Thanks for sharing. I think I understand the logic.

Completely impractical and therefore useless IMO. The idea that I can use the legal system to sue everyone else in the world who has contributed to the impacts that climate change has had on the world to me is laughable. There aren’t enough lawyers, knowledge and dollars in the world for everyone to use the legal system on everyone else where their property rights have been infringed.

I’m a chemical engineer by education and there is such a thing as a runaway reaction. This is the stage where it doesn’t matter what you do for example to cool down the system… it is going to heat up And explode

The logic that you have to wait until the evidence is beyond a reasonable doubt means our reactor may well have exploded by the time this is the case - so I think its Impossible to assert this system can work when a consequence may be irreversible even though it is yet to trigger and you could also rightly assert that we will never know if it was irreversible or not. In terms of being preventative it has to be a complete failure as it can only ever be reactive the way that article lays it out.

That has its own ethical problems that get well laid out by the trolley problem. Do no harm as an absolute means taking a minor harmful action to prevent massive harm is morally bankrupt. I think we will agree to disagree on that one so probably never going to change each other’s minds as that seems a fundamental tenet of your (and not of my) Logic.
 
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Giardiasis

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Thanks for sharing. I think I understand the logic.

Completely impractical and therefore useless IMO. The idea that I can use the legal system to sue everyone else in the world who has contributed to the impacts that climate change has had on the world to me is laughable. There aren’t enough lawyers, knowledge and dollars in the world for everyone to use the legal system on everyone else where their property rights have been infringed.

I’m a chemical engineer by education and there is such a thing as a runaway reaction. This is the stage where it doesn’t matter what you do for example to cool down the system… it is going to heat up And explode

The logic that you have to wait until the evidence is beyond a reasonable doubt means our reactor may well have exploded by the time this is the case - so I think its Impossible to assert this system can work when a consequence may be irreversible even though it is yet to trigger and you could also rightly assert that we will never know if it was irreversible or not. In terms of being preventative it has to be a complete failure as it can only ever be reactive the way that article lays it out.

That has its own ethical problems that get well laid out by the trolley problem. Do no harm as an absolute means taking a minor harmful action to prevent massive harm is morally bankrupt. I think we will agree to disagree on that one so probably never going to change each other’s minds as that seems a fundamental tenet of your (and not of my) Logic.
It wouldn't need to involve suing everyone, just one large player suing another large player and the precedent is set. This would then allow for some reasonable costing to be discovered that should by and large reflect the damage incurred, which would then allow prices to adjust accordingly and allow for further damage claims to proceed.

I'm also a chemical engineer by education; you can't just argue there is a runaway reaction and therefore argue justice can be overridden. If you want to claim damages, you need to successfully demonstrate you have suffered damages or will suffer damages. Your characterisation of the changes demanded by climate change alarmists as a minor harmful action needs a serious re-evaluation. You have no way to gauge whether it is minor in comparison to the alternative as there is no meaningful basis of comparison without linking costs to the action of market participants. Your method is to throw darts blindfolded and justice be damned.
 
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DavidSSS

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Dec 11, 2017
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Yep, let's wait until everything is truly f*cked and then we can all sue.

Now, I wonder about this one large player suing another large player - I thought your free markets had lots of players, not domination by large players. Are you suggesting that markets tend towards oligopolies with domination by leading firms? Surely your scenario above is proof positive of market power (the plebs can't sue, they have to wait for a precedent established by large market players, and then they can try and work the precedent . . . if they can afford the legal services and justice system, if not, they're f*cked) and we all know that oligopolies are inefficient as compared to free markets in free market theory (those of us who have done some economics know this anyway).

Wow, never thought I'd see Gia admit that markets tend towards oligopolies, Mises and Hayek would be very disappointed.

DS
 
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RoarEmotion

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Aug 20, 2005
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It wouldn't need to involve suing everyone, just one large player suing another large player and the precedent is set. This would then allow for some reasonable costing to be discovered that should by and large reflect the damage incurred, which would then allow prices to adjust accordingly and allow for further damage claims to proceed.

I'm also a chemical engineer by education; you can't just argue there is a runaway reaction and therefore argue justice can be overridden. If you want to claim damages, you need to successfully demonstrate you have suffered damages or will suffer damages. Your characterisation of the changes demanded by climate change alarmists as a minor harmful action needs a serious re-evaluation. You have no way to gauge whether it is minor in comparison to the alternative as there is no meaningful basis of comparison without linking costs to the action of market participants. Your method is to throw darts blindfolded and justice be damned.

Yep we will have to agree to disagree. Your method is to just march off a cliff and hope the market intervenes in time to stop us doing it.

I’m sure any PID controllers you designed responded to deviations away from set point relatively promptly and tuning them if they didn’t work perfectly on day 1 was ok too.

A price on co2 equivalents could do the same.