Windfalls
One of the thorniest problems in cap and trade programs is deciding how to distribute the carbon permits. Should the public sell pollution privileges or give them away for free?
Some folks worry that if we make polluters pay for carbon permits, they'll just raise prices for consumers. That's a perfectly legitimate concern. But unfortunately, it turns out to be true whether or not we sell the permits or give them away for free. Prices rise by the same amount in either scenario. (The only difference is whether polluters reap windfall profits or whether the public earns revenue from selling the permits.) It may be counterintuitive, but it's true.
It's also very hard to explain why this is the case without resorting to a lecture on economics. So in an attempt to clear things up, we've put together this easy-on-the-eyes summary. It comes in four parts:
- A simple explanation
- A bit more detailed explanation
- A look at Europe's carbon trading market
- A review of the (basically unanimous) economic literature
Take a look and let us know what you think.
The Dirty Little Secret About Health Disparities
The New York Times has some moderately disturbing -- if unsurprising -- news about the widening health gap between rich and poor in the US.
New government research has found “large and growing” disparities in life expectancy for richer and poorer Americans, paralleling the growth of income inequality in the last two decades...
In 1980-82 ... people in the most affluent group could expect to live 2.8 years longer than people in the most deprived group (75.8 versus 73 years). By 1998-2000, the difference in life expectancy had increased to 4.5 years (79.2 versus 74.7 years), and it continues to grow, he said.
Unfortunately, the news that rich Americans are healthier than poor Americans is a bit of a dog-bites-man story at this point -- it's surprising to, well, just about nobody. Same goes for the trends; few will be shocked to learn that health disparities and wealth disparities are widening more or less in tandem. Is it disappointing? Sure. But unexpected? Not so much.
What I do find surprising, though, is the article's blinkered, incomplete view of how income inequality and health disparities are linked.
