CO2 cap-and-trade bill (Awaiting Presdential Signature/Veto)

[HappyWarrior]

CO2 cap-and-trade bill:

Section 1: In an effort to combat the catastrophic effects of climate change, Atlasia will attempt to reduce overall emmissions of carbon dioxide by regulating the total amount that may be produced through a "cap-and-trade" system.

Section 2: The Atlasian government will provide regions with "climate credits" proportional to their share of employed Atlasians, which will be distributed as regions see fit within their boundaries.

Section 3: These credits may be bought, sold and otherwise transferred among the companies that receive them as they see fit at market based prices.

Section 4: The total level of CO2 credits issued to the regions by the Atlasian government will equal 98.5% of the total amount of CO2 produced in the previous year, with the goal of meaningful, long term reduction.

Section 5: This carbon regulating scheme will last for a maximum of 10 years, after which it will be evaluated again and renewed according to new demands and goals.

Sponser: Franzl

[Associate Justice PiT]

     We should include a repeal of the Carbon Tax Act with this.

[DownWithTheLeft]

I will be voting in favor of this only if we repeal the carbon tax

[Associate Justice PiT]

I will be voting in favor of this only if we repeal the carbon tax

     I think Franzl said he would be fine with including a repeal of the carbon tax with the bill.

[Lief 🗽]

Friendly amendment:

Section 6. Upon passage of this act, FL 20-1 ("The Carbon Tax Act") is repealed.

[Sam Spade]

Why are we engineering the backdoor funding of entities like Goldman Sachs?

[Franzl]

I support repeal of the Carbon Tax if this is passed. Only seems fair.

Any other concerns with this? I'm not exactly sure how the regions would distribute the carbon credits, so I wonder if anybody has more specific language that we could use?

Otherwise, I would urge the other senators to support this legislation, as it strikes me as a simpler, more effective and more just system of reducing CO2.

[Lief 🗽]

Is there a reason why you prefer the cap and trade system to a carbon tax? The carbon tax seems like a simpler system and to me and it results in tax revenue which can then be put towards investment in clean energy research. Also it seems that a cap and trade system would put our industries at a disadvantage versus those in countries without carbon caps.

[Franzl]

Is there a reason why you prefer the cap and trade system to a carbon tax? The carbon tax seems like a simpler system and to me and it results in tax revenue which can then be put towards investment in clean energy research. Also it seems that a cap and trade system would put our industries at a disadvantage versus those in countries without carbon caps.

I like the cap and trade system especially because it sets a clear limit as to the total amount of carbon dioxide that may be put out into the atmosphere, which will be continually reduced each year. I also think that many companies will have greater incentives to reduce CO2 emmissions because this system is based on the rules of the market. At a certain point, I believe that the price of these carbon credits will possibly exceed the carbon tax rates.

You're right, the state will miss out on the money it would have made through the carbon tax....but it doesn't seem fair to me that the state make lots of money off of CO2 (not to mention that we don't even know if the state will invest that money into research.

Overall, it just seems more just to me...and provides a better guarantee that carbon emmissions will steadily go down.

[Franzl]

What you said about putting Atlasian companies at a disadvantage is true, BTW. Do you have a proposal what could be done to make the playing field more fair under that kind of a system, or do you believe that the carbon tax system is the only way to go?

I suppose we could set an environmental tax on imports from countries that have no such system...perhaps directly tied to the average price of carbon credits in Atlasia....thereby keeping it market based?

[Purple State]

Don't we still have the Carbon Import Tax? So that should take care of foreign competition.

[Bacon King]

Not really sure if I support this bill anyway, but question regarding section two: would it not be more fair to proportion the credits among the regions based directly upon their total carbon emissions rather than employed population? Some region might, say, have a higher concentration of high polluting industries and would be forced to reduce at greater rates than other regions.

[Smid]

If it's tradeable, it would be like a licence and could probably be traded through the commodities exchange - perhaps each licence entitles the owner to release XXX tonnes of CO2. If the licences are traded on the market, and each has an expiry of one year, then there would be no reason the government could not list the licence on the exchange. This means that it would create an income stream for the government, similar to a carbon tax, it would remove the complexity of determining which companies in which regions receive the licence and would ensure that there is a market to trade the licences.

While I'm personally not a fan of the legislation, that may be one way to do it.

[Franzl]

Not really sure if I support this bill anyway, but question regarding section two: would it not be more fair to proportion the credits among the regions based directly upon their total carbon emissions rather than employed population? Some region might, say, have a higher concentration of high polluting industries and would be forced to reduce at greater rates than other regions.

That's certainly true...I'd be willing to change that accordingly.

[Franzl]

Friendly amendment:

Section 6. Upon passage of this act, FL 20-1 ("The Carbon Tax Act") is repealed.

I accept this amendment as friendly.

[Franzl]

Don't we still have the Carbon Import Tax? So that should take care of foreign competition.

No, that'd still be a problem because the Carbon Import Taxes are directly tied to the rates in Atlasia under the current Carbon tax, and this would abolish the normal Carbon tax.

I suppose we could keep the import rates at those rates artifically...but I dunno, the problem then being that that unnecessarily puts foreign competition at a disadvantage.


Maybe we should just leave the whole thing alone and scrap this bill.

[Associate Justice PiT]

     What if we put a limit on what foreign firms can sell in Atlasia, which they could null by electing to buy into the cap-and-trade system?

[Franzl]

I like that idea, although we might need to issue more credits originally to make sure that Atlasian companies aren't unreasonably forced down to impossible carbon levels immediately.

[Associate Justice PiT]

I like that idea, although we might need to issue more credits originally to make sure that Atlasian companies aren't unreasonably forced down to impossible carbon levels immediately.

     Yeah, we would have to increase the scope of the program. Maybe it would need to be adjustable based on how many foreign companies participate.

[Franzl]

I'm going to amend the bill later today and see what you think.

If we intend on doing this....I would like to get it done relatively quickly.

[Fine...I Made This More Civil]

Even though I am not a Senator, I would like to make a comment. I suggest that the CO2 permits be sold to the Carbon Emitters, as opposed to  just giving it to them. I see no reason why one should have any qualms about making money from this. This will result in the same amount of carbon pollution as outlined in the bill. The only difference is the fact that the permits will go to the highest bidder.

[Smid]

Even though I am not a Senator, I would like to make a comment. I suggest that the CO2 permits be sold to the Carbon Emitters, as opposed to  just giving it to them. I see no reason why one should have any qualms about making money from this. This will result in the same amount of carbon pollution as outlined in the bill. The only difference is the fact that the permits will go to the highest bidder.

I suggested listed on the commodities market to be traded, but I echo the sentiment.

[Associate Justice PiT]

     Sounds good, as long as the cost is not prohibitive.

[Smid]

     Sounds good, as long as the cost is not prohibitive.

With the repeal of the Carbon Tax incorporated in this Bill, the licences become a defacto carbon tax, where the total carbon output is limited, but where the market sets the effective rate of taxation by setting the price of the licences.

[Franzl]

I like the idea of putting them on the commodities market, that's something I think I will put in my new version.