Re: [OPE] carbon tax

From: ehrbar <>
Date: Thu May 07 2009 - 00:09:59 EDT

I'd like to support Paul, I think tradable carbon allowances are the
way to go. Recent literature about tradable carbon allowances asks:
will the complication of a two-dimensional medium of transactions be
acceptable to the public? Although this is an important issue, I
think the more basic issue is: is the structure of the production
system such that a two-dimensional means of transactions is

I think here we Marxists can make a contribution to the climate
debate. The labor theory of value is justified as follows: since the
interactions on the surface of the economy are one-dimensional
(everything is measured in money), the production system must have a
one-dimensional character as well -- otherwise the surface
interactions and the underlying production system would not fit
together. Such a one-dimensional factor of production is easily
found, it is labor. Labor is the only production cost to society as a
whole (at least before we ran into global resource costraints).

With the greenhouse effect this one-dimensional character of the
production system has been lost. As I see it, the persistent failure
to achieve GHG reductions comes from the fact that a one-dimensional
means of transactions is unable to steer an economy which has to pay
attention to two factors between which no tradeoffs are possible: (a)
labor input (or call it economic efficiency) and (b) the carbon
constraint. The translation of the carbon constraint into monetary
terms gives unintended effects which have nothing to do with the
carbon constraint as such, and therefore lead the economy astray:
polluters are rewarded and those with the lowest climate impact are
punished most.

Carbon rationing is a qualitatively different approach than carbon
taxes or cap and trade. Making the rations tradable between
individuals is a breach of the two-dimensionality justified by our
skewed income distribution: this trade redistributes income and
therefore makes it easier for low income earners to pay the higher
cost of a carbon free economy. But carbon rations should not be
tradable between firms. One should be careful to keep the medium of
transactions two-dimensional and not to collapse the two dimensions
into one. The institutional framework should be such that profits can
only be made on money (because labor only creates surplus-value, it
does not create surplus carbon rations). The carbon rations are a
constraint on all economic agents, but they are not a profit center.


Hans G. Ehrbar
Economics Department, University of Utah (801) 581 7797 (my office)
1645 Campus Center Dr., Rm 308 (801) 581 7481 (econ office)
Salt Lake City UT 84112-9300 (801) 585 5649 (FAX)
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Received on Thu May 7 00:13:08 2009

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