South Korea Turns Off the Lights

One Wednesday a Month, offices in South Korea will shut off their lights early in the evening. No, they're not trying to look like North Korea when viewed from space. Instead, they want all their office workers to go home.

Why? Well, I've written how some countries have high birth rates that lead to food and resource shortages. South Korea has the opposite problem, with the world's lowest birth rate. At only 1.2 kids per couple, their population is actually in decline. This means that a comparatively large portion of the population are elderly, and there will be greater pressure on people of working age. And of course with less workers, the country has less manufacturing capacity. Therefore, the Ministry of Health hopes that by getting people out of the office, they might go into the home and make babies.

In order to make this truly successful, I think that the government also needs to shut down all TV broadcasts on those same evenings, at least based on the Indian government's assumption that getting people to watch television at night will stop them from making babies.

Impôt de Carbone

While England is considering a personal cap-and-trade system, France just passed a national carbon tax. It is set at 17 euro per metric tonne, or $22.60 per normally spelled ton, which is fairly similar to the $20/t that's bandied about a lot in the US. "The tax will be introduced next year and will cover the use of oil, gas and coal," but not electricity, because 80% of Frances power comes from nuclear power plants.

There's always talk that the tax is more efficient than trading permits, but this one still gets complicated: it will apply to households as well as enterprises, but not to the heavy industries and power firms included in the EU's emissions trading scheme. (Okay, I guess that's because there's already a trading system in place that it has to operate with in parallel.)

"Critics say it is just a ploy to boost ailing state finances," but French President Sarkozy claims that all money gathered will be re-issued in the form of income tax refunds and other reductions, so that a "typical" household will see no change in finances.

Personal Carbon Trading

Yesterday I saw Yael Parag from Oxford University present on a plan the UK is looking at for "personal carbon trading" (Oxford description here). The UK, like lots of cities and countries, has all these grand plans for 30% reduction in Greenhouse gases by 2030 and 80% by 2050, but no real plans to accomplish this, and minimal progress. This cap-and-trade type of idea might be able to accomplish the goals. Here is how I understand the plan from the talk:

The UK is generating some amount CO2 each year. Of this, 40% is directly used by individuals in the form of non-business transportation, home heating, and home electricity. The rest is used by commerce, industry, and agriculture for similar purposes, plus manufacturing.

The presenter mentioned, though I can't find any reference of this on the website, that the 60% would be auctioned out to all non-individual users.

More interestingly, the 40% would be distributed evenly among all people. Each person would then have some monthly (or yearly) balance of Carbon. Whenever people buy things that actually produce CO2 when used, they enter their Carbon card number, and their account is debited. An important point is that there wouldn't be that many of these transaction, since the only things counted would be

• Gasoline/diesel
• Monthly heating bill (gas/oil)
• Monthly electric bill
• Air travel

The carbon credits could of course be bought and sold, and I bet eBay would just be the beginning. I can see entire companies emerging to manage, loan, invest, and speculate on credits.

Although Fat Knowledge prefers taxes to permits (and in general I do too), there are a few points that speak in favor of CO2 credits.

• Energy is a fairly inelastic commodity: that is, the demand is not especially affected by price. In summer 2008, gas prices rose something like 75% from the previous year, but vehicle miles traveled dropped just 5-10%.
  
• People respond to social norms. Just like the California electricity users who cut back consumption to be closer to that of their neighbors, Britons may alter their behavior to use closer to what the average citizen uses, for social norm reasons as well as economic.
• Caps are good for controlling things that should be, well, capped. Taxes are good for things that the government wants to discourage, but doesn't care if a specific amount are used. For instance, the high cigarette tax (in theory) reduces demand, but it doesn't limit the number sold. But if scientists say that the amount of CO2 generation shouldn't increase, it is difficult to estimate what tax level will accomplish this, whereas the cap dictates the amount and lets the demand set the price. And the amount of credits could slowly be ratcheted down to meet that level that the government/scientists believe is sustainable.
  

The system has the potential to work well. One concern I had was that people would chalk up all the driving they could as "business travel". But if the firms have to bid on carbon pounds, they might not want their employees using them up. And since many of the poor do not drive cars and live in smaller houses/apartments with smaller utility bills, they could earn extra income selling credits, making this a Progressive measure.

Nevertheless, I do have a few things I wonder about.

• If firms bid on credits, why is air travel counted for personal consumption? Wouldn't that count twice? Or maybe the system is set up so that the airline industry can pass on the credit use to consumers, rather than the cost of auctioned credits.
  
• Mass transit is not included (initially) to encourage use rather than cars, and because there is in general far more of these transactions a month, so it would be a pain to have to debit the carbon card every time. Would intercity buses and rail also be exempt, or would they pass on credit consumption like airlines?
• For electricity, would we use the average CO2/kwh of the entire country, or the local company's portfolio? Would (in the US) hydro-happy Washington's electricity not debit much, but a lot of points would come out for a kWh in King Coal states like Kentucky and West Virginia? And if, as you can do, you pay a premium to guarantee that your electric company buys at least your amount of kWh from Wind or whatever, would that make your electricity free of credits?
  
• Should credit allowance be based on the household? Or is the individual better? How should children be counted? Should you be able to merge accounts, so one family member isn't stuck somewhere unable to buy gas while the other has a surplus? And how much would this complicate divorces? (No, those carbon credits should go to me!)

The government still gets some revenue from the non-residential credits permit sales. But this would certainly be much more complicated than a tax. And would people trust the big bad government to have so much control of people? Would it be better if the system was administered by a big bad corporation? Any thoughts?

Net Neutrality and Pirates

CNN reports that the FCC voted last week to begin studying new rules to protect an open internet. These "net neutrality" rules would limit the way internet service provides could limit access to the world's series of tubes. Specifically,

the proposal itself uses the FCC's open Internet principles as a foundation and would forbid network operators from restricting access to lawful Internet content, applications, and services. It would also require network providers to allow customers to attach non-harmful devices to the network.

Two additional principles were added, which would prevent network providers from discriminating against particular Internet content or applications, while at the same time allowing for reasonable network management. Internet access providers would also have to be transparent about the network management practices they implement.

What exactly is the problem the FCC is trying to address? Well, say for instance you got your internet from Time Warner Cable. Back in the day when people actually used AOL to search the internet, TWC might want you to use that service rather than Google or Yahoo. So they might make it hard for you to access google.com. From what I can understand, the original 2 principles the FCC considered prohibited the ISP from outright blocking the content, and the additional principle makes it so they can't slow down access to select sites either.

Seems like a good idea, no? Well John McCain, who is the nation's biggest beneficiary of Telco/ISP money (by far), has introduced the ironically named Internet Freedom Act of 2009 (because it keeps the internet "free from government interference"). Nevertheless, I think net neutrality has a good chance of passing (eventually). In fact, Verizon and Google have become unlikely bedfellows and issued a statement of support for net neutrality.

In the US, this issue is just taking off, and even so is taking a back seat in the public eye to health care reform. In Europe, however, it is a major issue. It is one of the main agendas of the Pirate Party, founded recently in Sweden, and now the country's 3rd largest political party. In fact, the party received enough votes in the 2009 European Parliament elections to get 1, maybe 2, seats in Parliament.