Technical thread. Structural similarity between tradeable quotas and fee÷nd. I call them twin siblings. There are 3 questions: (a) what is the Q, (b) what is the P, and (c) what is the fairness (the income transfer element)?
There exists a demand function that links Q-P pairs. You may say "we don't know that demand function," but it exists. Suppose current Q is 16t per cap and current price is $0/t (free). Pick any new quantity (say 4t C02 per cap) and suppose the paired price is very high ($300/t).
The tradeable quota option gives 4t quota to each person. The trading price becomes $300/t and rich people buy a big fraction from poor people at this price. The poor don't get much high-carbon goods, but they do get money. The rich keep flying and they pay for it in money.
Now suppose a fee of $300/t. At this high price, the total Q averages 4t per cap, but distributed unequally (with the rich buying more). The tax money mostly from rich is distributed mostly to the poor. Twin siblings: the same P, same Q, and same fairness.
You may say, what if demand is inelastic and the real price corresponding to 4t per cap is SuperHigh ($700/t). My response is this new assumption affects both twins. The fee&div would need this high price to achieve 4t per cap. And the quota 4t/cap would trade at price of $700/t.
Y'all (my dear friends) have been telling me too many times now that your quota proposals are more realistic. But the source of political objections is the lifestyle change. If both proposals give the same lifestyle change, then they face much the same political challenge.
Some have objected to our initiative, thinking we focus on personal piety rather than systems change. But I swear we are working on systems change, with a strategy guided by a sensible diagnosis of the source of political opposition. Help or don't help. But this is our logic.
