tag:blogger.com,1999:blog-28078378.post365223332455326108..comments2023-10-30T11:00:05.243+00:00Comments on Bacon Butty: Energy white paper - nuclear muddle continuesUnknownnoreply@blogger.comBlogger1125tag:blogger.com,1999:blog-28078378.post-1883101402782288582007-06-05T23:13:00.000+01:002007-06-05T23:13:00.000+01:00It is odd to get into a tax v trading debate when...It is odd to get into a tax v trading debate when they both have benefits and can be combined in a hybrid system.<BR/><BR/>A tax alone is not enough. It wont drive automatic transfers to developing countries. And government may set a tax rate that is too low to achieve the quantity of carbon reductions required by EU/UK targets. As a result, the tax will be discredited as a revenue raising instrument.<BR/><BR/>Emissions trading alone - particularly in the short term is not enough. As it develops over the next 5 to 10 years, there is inevitable uncertainty that will result as the EUETS is extended accross different sectors and gases and is linked to other schemes, and as long as we persist with a decentralised cap setting process and allocation methodology. <BR/><BR/>If we combine the two in a hyrbid instrument, we can fix the quantity through trading, while fixing the price floor through a tax. Doesnt this get the best of both worlds? What is the drawback?Anonymousnoreply@blogger.com