How is carbon supposed to be priced?

[Chronos]

Anyways, Drexler’s versions would be at least 10 times more efficient if they worked.

This is like the story of the gas station owner who lowers his price to a dollar a gallon whenever he runs out of gas. If they worked, it’d be because they were like the nanomachines we already have, and would thus be just as inefficient. It’s only when they don’t exist that they have the luxury of higher efficiency.

And on sequestration in forests, just because there’s an equilibrium doesn’t mean that we can’t shift where the equilibrium is. If we make a big push to planting trees and increase the land area covered by forests, and then keep that expanded land area covered by forests, then we’ve sequestered that carbon just as truly as if we’d buried it. Sure, at some later point, those new forests might get cut down again, but by the same token, buried carbon might get dug up at some later point, too.

[septimus]

@bump

Here’s the problem with a tax: … they may find other efficiencies in their processes that mitigate the cost of that tax, if they choose not to redesign their process or raise prices.

And where are you at that point? You’ve both collected your tax, and NOT reduced the amount of carbon emitted, so you essentially made things more troublesome for someone, and not actually solved the problem…

Reading this, it’s hard to believe you understand, let alone are a proponent of, free market solutions.

If the company can revise its process so that carbon use at $X is profitable, while other companies cannot, then a market proponent would applaud and agree that it is efficacious that that company get the carbon. Yet you treat those efficiencies, which would be good for the company’s shareholders and/or consumers in any event, as “troublesome.”

If a company uses platinum in its processes, and the price of platinum rises due to some cost (e.g. scarcity or an embargo) then companies will revise their process and/or raise prices. This is easy to understand. It’s called “free market economics.” If the price of coal rises due to scarcity or mitigation of environmental damage, then again companies will revise their process and/or raise prices. That’s the free market in action. I think you understand this.

Why in heaven’s name is it difficult to apply this to “external costs”? If I understand your reasoning, then if Freeport needs to spend $1 billion repairing damage at a copper mine, you’d accept increased prices as capitalism working properly. If Freeport refuses to do the repair and the government steps in to spend the money and recovers it via a tax, then your reasoning on the matter changes 180°. Is there something I’m missing? Or is it just another application of “Corporations are teh good; gummint is teh eevul”?

@Dr.Strangelove

I don’t understand the dispute. Why not just set the tax at a million dollars a pound, if we start on the basis that any amount of carbon is too much? …
The external cost of CO2 emissions is certainly anything but linear–it’s zero (or even negative) up to some threshold, and as you cross the threshold the cost increases rapidly, and asymptotically. The cost of 10 times current emissions isn’t 10x the current amount; it’s infinity…

Why not put a million-dollar tax on cigarettes? Or a million dollar fine for seatbelt violation? Can we please not go down that silly road?

Answering your substantive point — I thought you were a mathematician! Regardless of the overall shape of the full cost curve, incentives and taxes are directed at marginal behavior. When comparing the costs of 6 gigatons, 6.0000001 gigatons, 6.0000002 gigatons and 6.0000003 gigatons I hope you will agree that the curve is non-pathological enough to treat as linear.

If, in response to a tax hike, Joe stops driving his car altogether while Mary drives hers just as much before, the invisible hand of the market is demonstrated, not the gummint out to get Joe.

[watchwolf49]

@iamthewalrus_3

Ok, so you are actually saying the thing that I’m arguing is wrong.

And you are actually very wrong.

If you slap a 10% tax on some raw material that’s used in widgets, it doesn’t matter if you force the end user to pay the tax or the producer to pay the tax. The ultimate change in price is going to be approximately the same.

The simplest reason is that profit margins are not static. There’s no magical reason that a producer would always get 10% margin, regardless of how their costs change.

I mean, look at how silly your example is. You have a producer making more profits per unit when their production is taxed. That is not how it works. The cost of a tax is always shared between the producer and the consumer based on supply/demand curves.

I don’t think what you’re saying is universally true, it depends on market and competition … I’ve run business operations where this is true; tight market, abundant competition; and I had to absorb a good portion of the increased expenses … however I treated this as a problem to be solved, not as the normal method of business … so I found and exploited a niche market where I can just simply double the expense increase and add it to the fees I charge … it’s a clear business goal of mine to be “making more profits per unit when [my] production is taxed” …

True story … a municipal tax was imposed for which I doubled and raised my rates accordingly … but I’m outside city limits and don’t have to pay that tax … [wolfish grin] … the majority of my competition do run inside the city and pay, driving up their fees … to me it’s all profit and that’s kinda the whole point of running a business …

If we apply this to the petroleum industry, I think we’ll find what is “right” will be somewhere in between our positions … ExxonMobile (symbol XOM) won’t be risking their $83.70 per share price … don’t expect them to absorb any carbon tax that’s imposed …

I’m not saying splitting the added tax burden is “wrong” … just that’s it’s something to avoid … better to pass it on to the customer (with a bit a margin) …

[SamuelA]

@watchwolf49

If we apply this to the petroleum industry, I think we’ll find what is “right” will be somewhere in between our positions … ExxonMobile (symbol XOM) won’t be risking their $83.70 per share price … don’t expect them to absorb any carbon tax that’s imposed …

I’m not saying splitting the added tax burden is “wrong” … just that’s it’s something to avoid … better to pass it on to the customer (with a bit a margin) …

This reduces demand for oil at the price+tax, however. Less demand means less oil purchased by the industry overall, which is possibly bad for Exxon. This is why I am unsure why they are publicly calling for a carbon tax, not even cap and trade. Allegedly they have a lot of natural gas holdings - but those aren’t free of carbon emissions, either.

[adaher]

@Dr.Strangelove

Of course not. I’m not sure where you got that idea–the point of a cap and trade system is that there’s a cap.

That’s the argument for cap and trade vs. a carbon tax, but there’s two problems with that logic:

1. You’re only capping what is covered by the system, and generally only the big guys are going to be in the system trading permits with each other. Which means you need carbon taxes anyway to reach the small farmer and the guy who commutes 50 miles to work on the freeway in his SUV. I assume people who own private jets also won’t be trading permits. And if you’re going to use a carbon tax, you might as well just use the carbon tax rather than have two systems in place.

2. Capping emissions is a lot like capping say, Medicare provider payment rates. The beauty of a carbon tax is that while you can’t know in advance just how much you’ll reduce carbon use, you can be reasonably sure that the market won’t just break. With a cap, if it can’t be met and plants have to shut down, causing blackouts or layoffs of employees or inventory shortages of carbon heavy goods, the political pressure to lift the cap will be tremendous, and like Medicare payment rates, will just be put off year after year.

[septimus]

@adaher

That’s the argument for cap and trade vs. a carbon tax, but there’s two problems with that logic:

1. You’re only capping what is covered by the system, … And if you’re going to use a carbon tax, you might as well just use the carbon tax rather than have two systems in place.

2. … The beauty of a carbon tax is that while you can’t know in advance just how much you’ll reduce carbon use, you can be reasonably sure that the market won’t just break. …

Thank you for pointing out the universality and flexibility of carbon tax compared with “cap and trade.” Both of your points are encompassed by the general rule: Affording costs is the way free markets solve economic problems.
Cap and trade was a political device to allow certain rent-seekers to continue to collect rents despite the cost to society. Let us not confuse political necessity for economic theory.

[LSLGuy]

Under either approach you need an intellectually honest feedback loop to adjust the government-imposed costs to match the actual externalities.

Both sets of proponents seem to say that their approach will (or at least is more likely to) be intellectually honest and free from political interference, both democratic and corrupt.

It’s not obvious to this observer which is more true. It’s clearly the case that whichever method is used (or even both), it needs to begin with very obviously identifiable economic pain. Until/unless consumers (people, megacorps, and every level in between) can connect the dots between their behavior and their pain, they won’t be incentivized to alter behavior.

Then the system must slowly increase that pain (ref SamualA’s couple of good posts) over a span of decades to centuries.

IMO this level of sustained political will on a planetary scale has no precedent in human political history.

ISTM the innovation we need is here, in the political arena. That’ll be much harder to accomplish than the relatively trivial engineering magic of Drexler’s idea or similar.

IMO we *will *collectively shit this nest until/unless we can think of we, not me, on both a planetary scale and across a timespan of centuries.

[bump]

@septimus

Reading this, it’s hard to believe you understand, let alone are a proponent of, free market solutions.

If the company can revise its process so that carbon use at $X is profitable, while other companies cannot, then a market proponent would applaud and agree that it is efficacious that that company get the carbon. Yet you treat those efficiencies, which would be good for the company’s shareholders and/or consumers in any event, as “troublesome.”

If a company uses platinum in its processes, and the price of platinum rises due to some cost (e.g. scarcity or an embargo) then companies will revise their process and/or raise prices. This is easy to understand. It’s called “free market economics.” If the price of coal rises due to scarcity or mitigation of environmental damage, then again companies will revise their process and/or raise prices. That’s the free market in action. I think you understand this.

What I was getting at is that you could theoretically come up with a situation with the tax where the majority of companies find other, non-carbon-lowering efficiencies in order to offset the tax and not raise prices. In that situation, the tax hasn’t accomplished squat in terms of reducing carbon emissions.

That’s where the cap-and-trade scheme shines; even if some subset of companies/economic sectors choose to emit like they always have, some other companies/economic sectors will be compelled to emit less, and as a system, the total will go down over time. Taxes don’t guarantee that, even if they’re likely to force that anyway.

And both of them are essentially governmental interference in the economy- one is basically setting a cap on carbon at a high level, and the other is levying a tax at a much lower level. Both are distortions of the normal demand/supply pricing mechanisms, so it’s not at all clear to me how one is more or less meddlesome on the part of the government.

Ultimately, I have a sneaking suspicion that geoengineering of some sort, combined with other technological advancements like Drexler’s nanobots are what’s going to change things for the better though. I just think a cap-and-trade system would be a good way to try and push the ongoing need for some technological solution downward.

[SamuelA]

@LSLGuy

ISTM the innovation we need is here, in the political arena. That’ll be much harder to accomplish than the relatively trivial engineering magic of Drexler’s idea or similar.

IMO we *will *collectively shit this nest until/unless we can think of we, not me, on both a planetary scale and across a timespan of centuries.

Heh. Drexler’s idea would make humans basically gods of matter at a molecular scale. I mean there’d not really be any limits. You could make a small machine, maybe the size of a refrigerator or a bit bigger, and send it to the Moon on just 1 rocket. It would deploy solar panels. It would send out a tiny rover, scoop lunar rocks, bring it back, and begin to forge the parts for another rover/solar panel/copy of itself. Rinse and repeat, wait a couple decades, and that’s no moon, that’s a self replicating swarm of robots. Starships would be possible. You could terraform a planet in a decade or 2 because you get to cover every square meter of the planet with machinery to do it. Or not bother with terraforming, that’s a n00b move, just convert the whole planet into solar orbiting space habitats that have spin gravity.

But yes, solving all the immense problems with that are tasks that are straightforward. You write the problems down on a whiteboard. You conduct experiments. You have a clear pass/fail set of conditions, and you slowly ratchet your way there. It might be centuries - this is really finicky stuff and it would be very expensive to prototype anything - but it’s a task you can do slowly.

With politics, you get to lie about whether you succeed or not at something. The voters lack an accurate picture of what you even did. You can make promises you can’t deliver on, and will be reelected even if you broke most campaign promises you made. And so on and so forth. I get the impression from History that politics was a never ending loop of backstabbing and pointless wars and injustices, for thousands of years, and only advancing technology briefly created conditions where nice places to live for some of the inhabitants of the planet were even possible.

[SamuelA]

@bump

What I was getting at is that you could theoretically come up with a situation with the tax where the majority of companies find other, non-carbon-lowering efficiencies in order to offset the tax and not raise prices. In that situation, the tax hasn’t accomplished squat in terms of reducing carbon emissions.

Flip it the other way. Solar panels/windmills are getting better, and batteries are getting cheaper. So with a carbon tax, it makes the untaxed alternatives - solar/wind/hydro/nuclear, using batteries - more attractive. That battery electric car actually pays for itself if gasoline is $5 or $10 a gallon with the tax added in*. Companies decide to cover their building rooftops with solar panels because they actually pay for themselves promptly. And so on. Market electric rates are higher, since coal and natural gas burning plants pay a big tax, so power companies find it worthwhile to build new nuclear plants.

What you are talking about is only possible if there is not a free market. If company A can find non-carbon lowering efficiencies but keep emitting carbon, and company B can copy the same efficiencies and also switches to alternatives that are net cheaper, company B has lower costs. Company B then makes more profit at the market price for it’s products, and can expand or price compete or do numerous things to take advantage of it’s position over company A.

*Which, as LSLguy points out, is the kiss of death politically. You’d probably lose more voters if you did this than if you put an ISIS flag on your seat in Congress and wore a turban to work.

[LSLGuy]

@SamuelA

Heh. Drexler’s idea would make humans basically gods of matter at a molecular scale.
…
It might be centuries - this is really finicky stuff and it would be very expensive to prototype anything - but it’s a task you can do slowly.

With politics, you get to lie about whether you succeed or not at something. The voters lack an accurate picture of what you even did. You can make promises you can’t deliver on, and will be reelected even if you broke most campaign promises you made. And so on and so forth. I get the impression from History that politics was a never ending loop of backstabbing and pointless wars and injustices, for thousands of years, and only advancing technology briefly created conditions where nice places to live for some of the inhabitants of the planet were even possible.

Overall I mostly agree. But …

It’s essential to recognize that much of “politics” happens inside businesses and between businesses. It’s not a case of pure economic meritocracy on one side and pure social gamesmanship on the other. That’s the mindless orthodoxy of certain political orientations, not a sober assessment of the real world.

We v2.0 chimps suck totally at both business *and *politics.

Remember that in general as long as the competition is other humans you don’t have to be good/fast in any absolute sense. You just have to be gooder / faster than the other humans.

In this case (AGW) our competition is Mother Nature. We need to be better/faster than she or she’ll beat us like a red-headed stepchild. So far we’ve not shown much evidence of being up to the task.

[SamuelA]

@LSLGuy

In this case (AGW) our competition is Mother Nature. We need to be better/faster than she or she’ll beat us like a red-headed stepchild. So far we’ve not shown much evidence of being up to the task.

So, what I see happening is essentially a partial, well, apocalypse. The warming has to get so bad that you can see the evidence outside your window before the deniers and oil company shills finally stop being listened to and the major polluting nations finally agree to do something meaningful.

By then it will already be sort of too late in that when that happens, the warming would continue for another century from phase lag. And large parts of the planet would change, the equator would be uninhabitable, hundreds of millions or billions of people in third would nations would die, and life would be rougher in the first world nations. They’d be able to adapt, though, you can can grow food in artificial environments and get water from the sea - using present day tech, at a large scale. Canada and Siberia would be valuable real estate, enriching the holders of those lands.

Do you concur? Nobody is going to do anything but talk until the warming is so extreme that it’s more than just some numbers on a graph and some photographs of shrinking arctic ice.

[LSLGuy]

Sadly, I do agree. With a couple other gotchas along the way.

There’s one effect that hits closest to home for me as a Florida waterfront landowner. It’s my belief that long before society decides to change enough to stop feeding AGW, much less mitigate existing AGW there will come a time when they recognize they’re trapped into riding the consequences of past AGW forward for a long time. And for a large impact over that long time.

Global and national public opinion and hence global and national politics moves at a tectonic pace compared to global financial markets which can turn in milliseconds.

There *will *come a day when the smart money wakes up and realizes that all coastal Florida real estate will become not only unlivable, but more importantly to them, unsaleable. At which point its current value collapses directly to zero. So one fine day suddenly the markets will turn and such property will be unsaleable, unmortgageable, and uninsurable. Followed a week or so later by everybody owning or living there deciding to stop paying their mortgages and maybe even their property taxes.

That will be the financial equivalent of HG Wells’ continuously exploding bombs as this idea spreads around every coastal area on the planet.

Once we collectively wake up to the reality of abandoning 1/3rd of the capital stock of humanity to a rising sea during what was (until yesterday) thought to be the useful economic lifespan of that stock, massive economic chaos and dislocation will immediately follow.

It’ll be a little bit like the various reproductive plague scenarios we’ve discussed wherein nobody alive today is harmed, but nobody is able to reproduce and the very last human baby was born yesterday. All the motivations for ongoing business as usual suddenly shift or disappear. The difference being in this case is the change is financial, not biological, and it directly affects only about 2/3rd of humanity, not everybody. But rest assured the impacts will be felt on/by absolutely everybody.

The shooting starts later when people start actually getting wet in their homes.

Speaking just for selfish little old me I have no heirs and I’d be surprised if this scenario matures during my remaining 30-40 years. So I’m comfortably whistling past this particular graveyard.

OTOH, markets are volatile and brittle. The conventional wisdom can persist in an overhang for a very long time until suddenly it doesn’t. The old saw “The market can remain irrational longer than you can remain solvent” cuts both ways. Which is another way of saying “any unsustainable trend will continue until it doesn’t.”

[SamuelA]

@LSLGuy

Once we collectively wake up to the reality of abandoning 1/3rd of the capital stock of humanity to a rising sea during what was (until yesterday) thought to be the useful economic lifespan of that stock, massive economic chaos and dislocation will immediately follow.

Perhaps. The fundamentals would be the same. Most real estate value is in the land, which is a more or less made up number - the actual buildings are worth a lot less, and can be rebuilt elsewhere. All our society’s technology would be the same, and while you’d have to demolish the buildings ahead of the rising water and reclaim the valuable materials (the copper and steel and so forth), you can just use the same technology to rebuild. As a side note, even near term partial factory self-replication makes this problem trivial from a physical perspective. What I mean by that mouthful is we have big factories, using this new machine learning tech, that need almost no human labor to make the most complex of products, including advanced factory robots. It’s an “almost” - some labor is required, and some of the factories in the supply chain would not be this automated.

Anyways, with such factories, the problem of rebuilding becomes easy. Design modular structures, made of parts these factories can make. Modular skyscrapes, modular single family homes, and everything in between. Each module is just small enough to fit on an 18 wheeler with the “wide load” flag. Since the factories need minimal labor, essentially their task is to take the reclaimed materials from the buildings that were demolished, ahead of rising water, and spew out new modules that replace the same structures. And since they don’t require much labor, and the software licenses are hopefully inexpensive and commonly available, and the robots themselves are cheap because they didn’t require much labor to make, this is cheap.

In such a world with easy, cheap manufacturing, other problems become tractable. Need enough solar panels and batteries on short notice to go to near 0 carbon emissions within 5 years? Just click the mouse a few times basically, and first build enough factories that can make solar panels/batteries to finish the whole job in 2-3 years, during an exponential growth phase, then run them for 2-3 years to get there. Then scrap the now unneeded factory equipment back to scrap metal and rebuild it as equipment making whatever is now in demand. Humans are still needed, just about 1/100 as many.

Ditto food production and freshwater production, assuming the new world map is unfavorable for this.

Anyways, that’s from a tech perspective. From a political perspective - well, I can see politicians failing to fund the development of this tech until it’s too late. I can see financial markets just failing completely, like you said, even though the ability to recover exists, the actual financial system can just fail and people will not be correctly motivated by economics to take the actions needed to recover. Post 1929 stock market crash, America’s fundamentals were all still there. There was plenty of land, plenty of natural resources, plenty of workers, plenty of technology (relative to the time). All it would have taken were the right set of instructions issued to the right people, and America could have been the world’s sole superpower by 1934 instead of needing a world war to push everyone in the right direction. (and bomb out America’s competitors)

[SamuelA]

Oh yeah, one more kind of massive fault. In such a world with this kind of tech, the way the financial system currently works, only the owners of these factories and of the earth’s finite land and resources have anything. They have all the wealth, and no reason to share any of it. They can bribe politicians so they don’t have to share any either. So in such a world, most people don’t have a job, because robots can do all but the most skilled tasks. And those people - always near starving, lacking food and medicine and shelter - could be supplied with what they need with minimal human labor, but this would involve “taking” the use of robots and land from the “0.01%” who own it all. And this is considered wrong by the majority political view at the present time.

The flaw here is that today, people argue against wealth re-distribution because it is seen as taking the productive labor of one person and giving it to another person who, for whatever reason, is unproductive. Even though we’re already more than halfway to the point where most earned income is from simply inheriting capital - which is in real terms, mostly land and machinery - provides most actual income. So if you “take” half the income from a billionaire’s assets, you’re not actually seeing him sweat in his business suit to earn that income and then taking it at the end of each quarter. He’s actually probably not doing much, if anything, and the checks keep coming from his ownership of existing capital.

[LSLGuy]

The idea of self-replicating (“SR”) machines are the SF equivalent of perpetual motion or free vacuum zero point energy. They represent a separate state of economic matter, a phase change if you will, from all that went before.

The Industrial Revolution (“IR”) flipped the relative value of land vs financial and man-made physical capital utterly on its head. SR would make the IR seem like a minor tweak since, as you say, it will drive the value of 99.44% of labor almost directly to near zero. As well as the value of all pre-SR physical capital and hence all the financial capital behind it. It’s the economic equivalent of the frictionless antigravity drive.
As such I don’t put much credence in SR. Will humans eventually invent SR? Maybe, if we don’t destroy our societies over the baby steps taken along the way. But “eventually” is in the far future.

So talking about it now as if SR was a solution to any problem we actually face in the 21 Century is the same as lambasting NASA for wasting money on Orion, SpaceX, etc., when they should be investing it all in the frictionless antigravity drive.

Makes for fun messageboard postings and such. But just like you can never successfully bring a knife to a gun fight, never bring SF to a real-science fight. Nor Utopian politics to a real political fight. That’s the equivalent of showing up naked and unarmed.

[SamuelA]

@LSLGuy

The idea of self-replicating (“SR”) machines are the SF equivalent of perpetual motion or free vacuum zero point energy. They represent a separate state of economic matter, a phase change if you will, from all that went before.

As such I don’t put much credence in SR. Will humans eventually invent SR? Maybe, if we don’t destroy our societies over the baby steps taken along the way. But “eventually” is in the far future.

Don’t take my word for it, then. Price waterhouse Cooper, CNN, New York Times, The Guardian, and many other sources are all stating that mass automation is essentially here. They are talking about 40% of all jobs - which means more like 90% or more of manufacturing and transport jobs. Literally a blizzard of news articles on this the last few years, what rock have you been living under?

Factories are already self replicating, right now. Think about it for a little bit. Sure, you can’t draw a single square around a self replicating subunit on google maps. A modern factory making something can only make a little bit of the stuff used in itself, you need to draw a whole bunch of boxes around a set of buildings stretched across thousands of miles. Nevertheless, if the right orders come in, all those buildings can be doubled. The problem is, at the present, the workers who run them cannot be doubled. You have to train new ones or wait for new ones to breed, depending, and this slows your doubling rate to a crawl. Automation solves that problem. 10x automation - where you need 1/10 the workers - means you can expand industry by 10 times with the same workers you have.

And as the automation gets deployed and companies make money, the firms offering robotics solutions get more contracts and harder problems, and so on in a positive feedback loop. And I never said we would get to full self replication. Like you said, that would be “frictionless”. But getting close increases enormously your global manufacturing capabilities, letting us get out of this climate change jam.

[LSLGuy]

Mass automation with some AI and true SR are miles apart.

And yes, mass automation with some AI is a nascent tech that’s about to burst on the scene with significant dislocations right behind.

[SamuelA]

@LSLGuy

Mass automation with some AI and true SR are miles apart.

And yes, mass automation with some AI is a nascent tech that’s about to burst on the scene with significant dislocations right behind.

? No, they aren’t. I guess we’re miles apart. If you go from needing 500 million factory workers worldwide to 100 million, for the same total production, that’s enormous. If you go from needing 100 million to zero - that actually is barely relevant, because the majority of your costs are now things like mining rights and environmental compliance reviews and land costs and so on. It stops mattering. 80 or 95 percent automation is, to the bottom line of a manufacturer, basically as good as full self replication.

Full self replication is only really interesting if you can use it on the Moon, because there are none of those costs there. But there’s a huge startup barrier - you need billions or trillions to get landers with a seed factory there, and you need to redesign all your equipment to function in the environment, and so on.

[Dr.Strangelove]

@septimus

Answering your substantive point — I thought you were a mathematician! Regardless of the overall shape of the full cost curve, incentives and taxes are directed at marginal behavior. When comparing the costs of 6 gigatons, 6.0000001 gigatons, 6.0000002 gigatons and 6.0000003 gigatons I hope you will agree that the curve is non-pathological enough to treat as linear.

A mathematician? Moi? What a sad, innumerate society we live in that someone that remembers perhaps 30% of undergrad math could be confused with a mathematician…

Obviously, I agree that it’s locally linear. You seem to acknowledge, implicitly, that the tax needs to be adjusted based on total demand, because the marginal external cost at 10 Gt is different from that at 6 Gt. I don’t understand how that’s supposed to work; who decides this, and on what criteria, etc.

With an overall cap, it’s reasonably easy: you ask the scientists how much can be emitted before you hit the knee of the CO2 curve. After that, industry figures out the price. And if that’s too much of a jump, you work out a reduction schedule and hope you don’t overshoot too much.