(Still overwhelmed with Copenhagen, still sorry for the short shrift)
I’m not sure the case has been made that most of the problems with carbon trading are not equally applicable to a carbon tax. In fact, some are more so – e.g., if there are monitoring issues with a select cohort (say, energy producers), why won’t there be that many more problems trying to impose an across-the-board tax?
I’m also not clear as to why it’s more efficient to block trade – why two companies with differing costs to reduce can’t be allowed to trade reduction amounts in order for both companies to lower their reduction costs (or in some cases, for one company to profit). If the end goal is to reduce emissions, isn’t it more likely to achieve the goal if the costs are at their absolute minimum?
Oh, someone upthread needs to look up the basic definition of an externality. Of course no one *wants *to pay a carbon tax or for emissions permits. Nor does anyone really want to pay for hazardous waste disposal nor any other cost for an unwanted output.