Arnold Kling  

Free Market or Artificial Market?

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Evidently, there is a company offering a solution to CO2. It is called Planktos.


Our primary focus is to restore damaged habitats in the ocean and on land. Through iron-stimulated plankton blooms in the oceans and afforestation projects in Europe, we are able to generate carbon credits. We then sell these offsets to individuals and businesses that are looking to reduce their carbon footprint and lower their impact on climate change.

Pointer from Dennis Mangan, who comments, "Brilliant: leave it to the free market to come up with this."

But it's not a free market. It's an artificial market, created by the "carbon offset" nonsense.

If dropping iron dust into the ocean is a great idea, then let's just get on with it. Create a charitable organization to fund it, or try to talk legislatures into funding it with tax dollars. If there were a futures market in global temperature, then people who are betting on low temperatures could fund it. (On the other hand, does that mean that people who are betting on high temperatures would fund massive CO2 pollution-creation enterprises?)

But selling it as a way to lower your personal or corporate carbon footprint gives me the creeps. When it comes to climate change, I don't necessarily want to be called either a believer or a skeptic. But you can definitely call me a Lutheran.


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COMMENTS (10 to date)
Dan writes:

I don't think the "trafficking in guilt" argument really holds up for libertarians. What's the difference between your opinion on this and on other "repugnant" markets such as organ donation or prostitution? Do you think your revulsion outweighs the positive good done by the existence of such a market (if, as these people argue, CO2 causes climate change)?

This is a charitable enterprise, but it's marketed at those who are causing the problem that this is supposed to solve. I think it's much better for polluters to fund offsetting than for innocent taxpayers to do it. Although in the end consumers will pay the price, the results will be less distortionary than funding it with taxes.

Dan Weber writes:

I've heard from some climate scientists that this isn't at straightforward as it looks.

IIRC, the ocean depths are super-saturated with CO2, and if we screw with that, we could cause a bunch of CO2 to bubble out into the atmosphere.

Matt writes:

I remember reading in one of Toffler's books that there could be future cities on the oceans, and they could seed the sea with iron dust. I've always wondered why fishermen don't do this. I assumed environmental regulation, the tragedy of the commons, or it's simply not cost effective. But these people seem to think dumping iron in the ocean and leaving has value, so this could be funded by selling fishing licenses to fish in the cultivated waters.

Selfreferencing writes:

What's the 'Lutheran' comment mean? I don't understand it.

Joe Horton writes:

I assume the Lutheran comment means he is opposed to selling indulgences.

Brad Hutchings writes:

Greg Benford (UC Irvine Cosmetology Professor, just kidding, it's physics) proposed the same plankton solution a decade ago.

I agree with you about the economics of carbon offsets. It's not like we could ever do accurate accounting of such a thing anyway. But what if entrepreneurs come up with these indulgences. Science can weigh in on which are bogus or effective, instead of weighing in on how we all need to stop enjoying life and give control of our lives to the central planners. To me, that would be an improvement.

Larry writes:

It's good that Planktos is trying this out, but their approach is completely unproven as a climate change prophylactic.

I agree on the indulgences point. Paying someone else to live green so that you can live brown is deeply unethical.

The bigger picture about the ocean is that we're beginning to change from treating it as in effect a hunting ground where we just kill what we find into a place where we try to grow what we want on a long-term basis, i.e., a "farm". As with real farms, we're starting off just trying to figure out how to do it, and over time we will figure out how to do it more sustainably.

Stan writes:

Why is "paying somebody to live green so you can live brown" unethical?

Ethics can be thought of rules that enable a certain end. If the end is less pollution, then paying someone else to pollute less is a step toward achieving that end.

David Thomson writes:

I consider main stream global warming rhetoric to be hysterical and anti-rational. It is not based on science---but a luddite contempt for progress. Those advocating this nonsense have much in common with the Inquisition of the Middle Ages.

caveat bettor writes:

The circle is now complete. Back in April, I posted this at Agoraphilia, inspired by Arnold's quote of Solow:

I just read some Arnold Kling, who quotes some Robert Solow, and I found that Solow may have some relevance on this thread. He says:

"In the nature of the case it will often happen that two quite different models can fit the facts just about equally as well. No doubt the right way to proceed is to think of circumstances in which the two models give widely different predictions and to look around for real-life situations that offer the opportunity to discriminate between them. But that may not be possible...So naturally the temptation becomes irresistible to compete by adding variables, making slight changes in formulation, looking around for especially favorable data, and otherwise using the tricks of the trade. It can become very difficult ever to displace an entrenched model by a better one. Clever and motivated - including ideologically motivated - people can fight a rearguard battle that would make Robert E. Lee look like an amateur."

and

"there is a lot to be said in favor of staring at the piece of reality you are studying and asking, just what is going on here? Economists who are enamored of the physics style seem to bypass that stage, to their disadvantage."

These things always end up back in the epistemological.

http://agoraphilia.blogspot.com/2007/04/is-god-decider-or-knower.html

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