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Comment by xahrepap | Hacker News Reader

Slightly off topic... Interesting thing about solar in Utah (maybe everywhere? Not sure about the specifics): Utah gives every land owner pollution credits. They're allowed to pollute X units worth per year or something like that. Depending on certain criteria you're allotted a certain amount of credits. The problem is, these credits are transferable. So if I, for example, don't pollute, I can sell my credits off to someone who wants to pollute more than average.

Something (I think is shady) some companies are doing is selling solar for really cheap in dollars, but they subsidize the cost by selling it for credits. Average Joe is going to think he's polluting less, however since he sold off his pollution credits, his solar purchase has authorized someone else to pollute for him. Netting us nothing in the end.

(not an expert, so I may have misunderstandings and be oversimplifying things, but the point should be easy to understand)

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I'm not familiar with Utah's program, but it sounds like an emissions trading / "cap and trade" program. https://en.wikipedia.org/wiki/Emissions_trading

There are two ways that this is netting something:

1. Utah gets to set the total allowable emissions/year. If this is set lower than what emissions would be, absent the program, then emissions will be reduced.

2. Companies have to pay for those credits. If the credit price ends up being high enough, then companies will invest in ways to reduce emissions, e.g. by purchasing carbon scrubbers.

It's not net zero impact to pollution, because polluters are forced to buy credits, which increases the costs of their pollution and incentivizes them to reduce it, while non-polluting technologies are subsidized by the income they can get from selling unused credits.

The key is how many total credits you allocate to begin with - they should be sufficiently scarce that large emitters need to buy credits - and continually ratcheting down the number of credits allocated annually.

> which increases the costs of their pollution and incentivizes them to reduce it

Or, they pass the cost to the very consumers that sold them the credits.

But that's fine, it'll increase the cost of whatever good is being produced and put pressure on the producers to reduce that price based on competitors polluting less making the same thing.

> since he sold off his pollution credits, his solar purchase has authorized someone else to pollute for him. Netting us nothing in the end.

You're forgetting the 'cap' part of cap-and-trade. The point is minimize the cost of reducing the total amount of greenhouse gas (or whatever) pollution across society. The reason for allowing people to sell their credits is that it reduces the economic cost of reducing pollution. It doesn't matter whether any given individual is polluting more or less, what matters is that total pollution is continually decreasing until we reach safe levels.

Thanks for the explanation. You're right. I wasn't aware of the full system. The parts I did know seemed like a shady loophole for bigger polluters to take advantage of.

Thanks!

Chances are the solar companies themselves are selling for cheap and taking credits as an "alternative currency", which makes sense for Average Joe as they no longer need them (in theory) as (I assume) excess credits have no value.

From there, the solar company probably covers their own pollution level and then sells the remainder of the credits at auction and capitalizes on the spread.

Company pollution rates will likely not be affected until it eats into their profits; rather, they will likely just buy credits up to the point where there's a breakeven between the cost of a credit and the savings for a credit. Whatever money is saved won't be used to increase pollution but rather just be reinvested into other parts of the company or released to shareholders.

In this case, the pollutant is paying money to pay less in taxation, the solar company is providing access to renewable energy, and Average Joe is going to be polluting less at home. I could get behind that.

EDIT: Also, this means that Utah could theoretically wean the state's pollution credits lower and lower each year until the cost of polluting is so high that pollutants either convert or leave.

I'd suspect that if the actual net is anywhere close to even, then that scheme having the side-effect of further building up the solar industry, is a massive long-term win for renewable energy and the environment.

That's a good point. I didn't really think of that. It still feels a bit off, but that does help return some of the feel-goods back into buying solar :)

The status quo in most places is : pretty much people pollute however they want at zero marginal cost to themselves, without needing any credits, and passing on the costs to the environment as a whole.

The credits are an improvement, because polluters at least have to pay for pollution credits, which means they have an incentive to pollute less.

Seems a bit unfair to single out land owners. One would think even non-landowers should have claim to the air.

I've never heard of this. What is the name of Utah's "pollution credit" program and where can I find out more? Google isn't helping me.

Perhaps its this?

https://deq.utah.gov/air-quality/emission-credits-offset-reg...

That does look like the right info. I think Utah has a typical emission credit program. Maybe xahrepap was overstating the case when (s)he suggested that every Utah land owner has emission credits they can sell. Emission credits seem to be limited to certain large businesses.

Not sure on all the details. Maybe it's only certain power companies. I know this did apply to a relative who was a home-owner in a city that generated it's own power, so maybe they have their own program different than normal. He was telling me about it when he looked into some of the fine print from solar salesman.

I understand your perspective now. Thanks. I'll study this more.

It netted us more solar power installed so that the next person will have it at a lower price through volume, encouraging cheaper s.p. for everyone else.

It sounds like a fantastic loophole that allows companies to break regulations. I love capitalism.

Then you haven't done enough research on cap and trade, which the vast majority of environmental studies show is an extremely effective way to manage the problem.

Effectively the same as moving manufacturing to 3rd world countries. Out of sight out of mind

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