April 25, 2008

Back to the barter system?

Do people driving into a big city notice the pollution, the smog, the dark brown cloud that hovers over the city top? Is it a concern to the people that live in the city, that are breathing that smog in for air? In the recent years there have been movements to clean up the air, but has it been done? The major problem I see is that companies are making a profit off of selling their certificate, to be able to pollute to other companies. This profit is probably just a segment of their business and not really in business for that segment, but at the end of the year they get to report a profit on their income statement from this type of business. So how is air traded or sold when air mixes and mingles; clean air with dirty air; and no one owns it? There is a financial market growing around the trading of polluted air, where brokers match those who need pollution allowances with those who have extra. Pollution traders just measure the pollution coming out of the smokestacks, so how does this work? Each polluter is allotted a certain number of pollution certificates, when all the certificates are used up the polluter must buy more certificates. Currently the goal of any emission market is to clean the air at the lowest possible cost to society. But is this going to work in the future or are we moving into finding a technology that polluters must use to control and be able to administer and enforce.

1 comment:

Alan C. Earing said...

CMP, perhaps privatization of the air-cleansing mechanisms is the answer! That way costs can be internalized...

Why do we need government to regulate this stuff? Maybe the role for government is to subsidize those private firms that 'clean air,' and the way to cover those subsidies is to fine ANY and ALL emissions until they've bought into some sort of private firm that cleans their dirty air... perhaps a non-monopolistic emergence of this phenomena would solve the situation.

Now... how to create incentives for such a system...