When added to the other joke called "carbon credits" I am amazed that somewhat intelligent people fall for this crap. It's OK if I pee in your pool, I filtered the toilet tank! Pure BS!

If your metric is the net amount of urine in both the toilet and the pool, peeing in the pool is OK as long as you don't pee in the toilet. What variable are you optimizing for?

The market has valued them at zero, which is why they don't exist in free markets.

That would be because in free markets as you define them, pollution costs zero dollars. Anything that reduces pollution or "allows" you to pollute is therefore worth zero dollars. This is not necessarily a good outcome.

Actually, it is not. The low quality mortgages pushed up the prices of all houses, because, suddenly, there were 10-15% fewer houses on the market â" that's a huge figure, actually, and caused a great distortion. Our Capitalist system is very efficient, and it proceeded to address the imbalance between the supply and demand. It just was not prepared for the demand to be artificially exaggerated by the government's meddling...

If what you're describing were the complete story, it would have ended with, "...and housing prices across the board went up permanently." It simply cannot explain a bubble in which prices skyrocket well beyond sustainable levels and then crashes. In order for that to happen, somebody somewhere along the lines needs to be incorrectly evaluating the value of something.

You don't have a way to force every last human on earth to comply.

That's certainly true.

And you can't ask people to starve for clean air and expect them to comply (which is exactly what you're doing btw).

Starvation? Seriously?

That's the whole problem in the "tragedy of the commons". It DOES NOT matter if "most" people behave. It does not matter if "nearly everyone" behaves. it does no good if "everyone except that one guy" behaves. All those things accomplish exactly nothing.

That assumes that one player (or a small number of players) are capable of doing just as much damage to the commons as the entire population is. This is simply not the case. I agree that it will be important to cut emissions in other nations. It does not follow that having some of the players reduce their emissions is of zero benefit.

If any of Ahmadinejad, Kim Jong Il, or the Chinese refuse to sign, you're just destroying the American economy without ANY advantage for the athmosphere.

Rephrasing what you just said, "If the US cuts its carbon emissions, Iran, North Korea, and or China will increase their carbon emissions by an equal amount in order to make it a net gain of zero." The only reason why this might actually happen is if we stupidly allow the offshoring of carbon-intensive production to non-capped countries. Otherwise, any country that doesn't participate is simply going to continue to produce whatever they perceive to be the optimal amount of CO2 emissions.

There have already been cases in other cap and trade systems where companies actually ramped up CO2 output prior to adoption of the system just to set a high level mark for cap purposes. Then after the system is implemented they just return to normal and sell of their excess credits.

This is why the correct way to do it is for the government to set a cap of N carbon units and then auction the rights to those N units off. Of course, we're too stupid to do that, probably because it would allocate the rights to emissions efficiently rather than allowing an initial cash bonanza for people who figure out how to game the system. Bah.

Yeah, there's room for improvement here in the States, but dammit, what good is it to muzzle 100 coal-fired plants here in the States if 1000 more coal-fired plants in China start up?

Aside from a 9% reduction in the total number of coal-fired plants? None.

The common areas? You mean, public property? I'm opposed to the entire non-concept of "public property". The sooner we privatize all property, the sooner we will have a healthier environment for people to live in and prosper.

Let's say one person throws a cigarette butt on your property. Do you sue them? For how much? Will you win?

OK, now let's assume that every person in the city throws one cigarette butt on your property? Do you spend the resources suing all of them? Sue just a few of them and hope that it scares the rest of them away?

What is your solution to a case in which the problem is caused by huge numbers of very small and individually innocuous actions? Does each one of them need to be actionable?

And the USA needs 25% of the world's economy, because...

GDP is a measure of "domestic product." That means, "stuff we make and sell." If people in other countries would like to see that number shrink, they're free to produce and sell more stuff themselves.

Oklahoma Sen. Jim Inhofe now counts more than 700 scientists who disagree with the U.N...

"Scientists"? Really? Wow! Is that like the list of scientists (like dentists and computer programmers) who reject evolution? Seriously amazing!

Any public resource WILL be destroyed, therefore it is best to sell everything into private hands.

OK, let's assume that this part is 100% true for the sake of argument.

Given that AGW is correct (which is a big assumption), you could economically model the athmosphere and co2 in the athmosphere as commons.

And let's do just that. Properly implemented, a cap and trade system is the process of selling that commons off into private hands so that it can be managed more efficiently. All government does is define the commons and sell it off.

By "properly implemented" I mean that the carbon credits should be auctioned off to the highest bidder, which is something the administration has backed off of. That only means that the first transfer will be inefficient, though. Once the credits are out there, they will be allocated to their most valuable use, just as your theory proposes.

The only thing that has staved off inflation so far is the poor economy. Hooray for this "new" administration!

This is bizarre cause and effect confusion. A better way of putting it is, "The poor economy was likely to enter into massive deflation, and the only thing that staved it off was Federal Reserve action."

My point exactly. I've seen a photograph once of a forklift palette of papers which was the entirety of one drug company's submissions to the FDA to get a drug approved.

I'm really not sure how you get that from my response or from the document you linked. Do you know what is meant by "cost of capital"? Let me clarify: If I spend $100 on something that should cost $100, but I then claim that it "cost me" $200 because I could have spent that money on another $100 item that would have yielded me a $100 return, is the question of how I "spent" $200 on a $100 item a sensible one? What if I said that I spent $400 on it because I got scammed a few times when I tried to buy the $100 item, so I rolled those failures into the total cost as well?

Think of it this way: Can any rational efficient firm actually manage to spend (as in, pay money out of pocket) $800M filling out a palette of paperwork? Unless you define actually doing the research as part of "paperwork" the value is way overblown.

Want to explain how you spend $800 million [healthcare-economist.com] on clinical tests?

I would, but the link you posted pretty much already has. You do several phases of clinical trials for efficacy and short and long term side effects over the course of 7.5 years. You then perform your estimate of the cost by rolling the cost failed drugs into that $800M total (not sure what percentage of them fail, but if it's a lot, that skews the number pretty heavily) and then you assume a 9% cost of capital, which results in a final number about twice what the actual dollar outlay is.

So the short answer is, you don't actually spend $800M on clinical tests. You spend less than half that (probably significantly less, given the number of drugs that fail partway through).

My question to you is, how do you think they'd piss away $800M doing anything but expensive clinical tests? Paperwork? I find it much easier to explain an $800M hole in a budget if I can point to doctors, hospitals, insurance, and lab facilities than if the only thing I can appeal to is, "I have *so much* paperwork to do. It's crazy!"

It doesn't cost anything like that to go through the approval process in France, Germany, Japan, etc.

Really? How much does it cost? Do those estimates also include the cost of failed drugs and assume a 9% cost of capital?

Further, don't those countries also have rigorous drug approval standards? How does that support your contention that we're better off without any government body approving drugs? If true, it sounds more like an argument to figure out what we're doing wrong with our regulatory system than an argument to scrap it.

It's a lot more expensive than it needs to be, and you can thank the costs of FDA red tape for that.

What some people call "red tape" other people call "testing the product." What percentage of the FDA costs are going to filling out paperwork and what percentage are going to mandated clinical trials?

You make it sound like removing FDA certification will reduce costs because you're saving on a bunch of bureaucratic nonsense. The reality is that most of the "savings" would come from not having to pay to do large scale testing with expensive labs, scientists, and medical personnel. That's where the real money goes, and that's probably the last place we want our drug savings to come from.

Courts are for exceptional circumstances. People who actually seek to harm others, or who do so through depraved indifference are exceptional; that's why they're big news stories when they happen.

And of course, anything but that is unexceptional and doesn't get policed. So we end up with a huge pool of cures that are ineffective at best with (perhaps) a few legitimate remedies scattered among them--just like we see in the herbal/homeopathic area.

Once that starts happening, the next problem is that legitimate players who used to spend a lot of money putting out well-tested and effective medicine have to decide whether it's worth it. Putting out real medicine is expensive, and when you're competing with people who put eel farts in a jar, call it a cure for cancer, and sell it for $9.99, there isn't a lot of incentive to keep it up. So basically, we all end up free to choose blindly among a whole lot of quackery to see if we can find something that works.

I suppose the whole thing would be a boon to pharmacists as we'd have to go and consult them for everything to figure out which medicines are likely to work and which ones are downright dangerous, but that doesn't seem like a major win. As flawed as the system we currently have is, at least the signal to noise ratio on the pharmacy shelves is high. Getting new cures to market fast doesn't help a lot if consumers can't figure out which ones actually work.