Carbon, dated

    Tim Yeo, the British Member of Parliament, has been ridiculed this past week for his suggestion that every British subject be given a "carbon rationing card" delimiting the amount of a carbon footprint they may have.  To Britons the idea conjures up memories of post-WWII food rationing and so was promptly hooted off the political landscape without any consideration of its economic merits.
    In addition to being a public relations disaster such a scheme would be impossible to establish and regulate.  It would require an intrusion into each person's personal life in ways that would even make social conservatives or communists shudder.
    Yet, if the idea gets shifted from the nonsensical microeconomic sphere to the macroeconomic sphere, there may be something to the notion.  My friend, Thomas Barnet-Lamb, has thought of such a scheme for allocating carbon usage among countries.  While almost all analysts recommend the change-over from carbon to non carbon based societies, the devil has been, as it almost always is, in the profound disruption which will occur during the transitional period.  This is especially the case in the developing world.
    The use of macro-economic carbon credits could provide a solution to ease the transition.  By making it allocated on a strict per capita basis, it would provide developing countries the needed economic capital to raise their standards of living without requiring the use of additional carbon in the world's atmosphere as the Kyoto Accords accept as inevitable, thus making the Accords in reality more an income transfer rather than a "global warming" treaty.
    How so?  By creating incentives for developed countries to either buy carbon credits from countries without much carbon-based infrastructure these societies will have the money necessary to promote growth.  The developed world, not wishing to purchase continually such credits would have the incentive to create alternative fuels/efficient technologies.  Once such technologies are developed, the cost of the credits would fall proportionately. 
    What about the continued use of carbon by the third world as they grow?  As the industrialized nations switch away from a carbon based economy the costs of these credits would become close to zero.  Thereby allowing these non-developed nations to have the ability to "purchase" as large a supply of carbon credits as they would require for their economies prosper.  As the non-carbon based technology becomes widely spread, the cost of that technology would  fall to a level that would permit the less-developed nations to purchase and use it.  At such a point the transition period would be over.
    Alas, Barnet-Lamb's idea is so compelling that it will never be taken seriously.

Comments

[emsl]

This is a bad idea that can only get worse if put in practice. There will be claims of neo-colonialism, assertions that the developed nations are taking advantages of the less developed nations, bloc politics, and the like. Why not just make it a total joke and let the UN administer this program?