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> perverse incentives like allowing you to “sell” or hold hostage something you were going to do anyway

This is true, but it's a weird way to frame it. Yes, absolutely: carbon-sensitive regulation changes the market pricing such that less polluting activities and means of production are "worth more". So if you have some, you win. If you were planning on having some in the future ("were going to do anyway"), you likewise get a windfall.

And thats... good? It's not perfect. But it produces the result we want.

IMHO the much bigger problem with offset regulation is that it's likely to be nearly impossible to actually measure[1] and we'll be dealing with cheating and fraud for decades. But the incentives seem fine to me.

[1] Vs. a carbon tax which is pure simplicity: $xxx per ton of carbon (for extra credit: a floating price based on a dynamic bid-based sequestration market) pulled out of nonrenewable sources, paid by the extractor at the time of initial sale, and let the market sort out how to allocate the overhead.

Who gets to decide what the carbon footprint of every activity is? How is the surveillance of every activity performed? What is the performance metric to evaluate the success or failure of the system?

A tax on carbon is much simpler than a tax on carbon footprint.

Corporations buy carbon, to a good first approximation, as coal, gas, or crude.

That's what you tax. Plus a tarrif on countries which don't do likewise.

Imagine being a politician and proposing taxes on energy and fuels which will directly and indirectly increase the price of literally everything. Imagine all the hate currently being directed at Russia being redirected towards you personally.

You can just make the tax revenue neutral, and give each person an equal dividend. That way the average person would actually get money back from this tax scheme. It’s what Canada does. The goal isn’t to raise money, it’s to incentivize consuming lower carbon goods.

That is why the tax revenue should be redistributed per head and why we need a carbon dividend.

That hasn't been a blocker in the past (see: all the other taxes that exist), why would it need to be going forward.

Popularity doesn't determine whether an answer is correct or not.

The third question has an obvious answer, so I'm not sure I get your point. The first two are just saying "regulation is hard", and I agree. But it's possible nonetheless, just like every other regulated industry.

Recognize that all your questions could have been asked about, say, sulphate emission regulation in the 1970's. (Or CFC's in the 90's). And that worked out OK.

> For example, as a fisherman it might be cheaper for me to buy some old, shitty, super-polluting boats,

At the level of an individual, yes.* However consider a fleet of cargo ships. They last, and depreciate, over about 20 years. Even if the owner buys newer, cleaner ones, they aren't throwing away the old ones, and the one bought today will stay in service until around 2042. It's not unreasonable to offset this ancient cap ex, especially if governments also ramp up regulation so the economics for the oldest/worst of continued use vs scrapping make them uneconomic.

In a utopian sense this is clearly worse than just replacing all the polluting equipment, but in the real world a "big bang" solution can't work, not the least because there isn't enough shipbuilding capacity to replace the entire fleet overnight.

The ethics of offset vs removal credits, and the whole offset credit market is a complex and sorry situation and this article just scratches the surface. OTOH one reason it's so marginal, despite the efforts of some people (including Verra and Gold Standard) to make it better, are largely because credits of any non-mandatory size are barely used (about $1B traded last year) so there's little incentive to clean it up. Hopefully that is in the process of changing; the market is growing and prices are rising faster than the market is growing indicating that demand is increasing.

* At the consumer level this is all awful. Remember when Obama did "Cash for clunkers" to get polluting cars off the road? You couldn't get the credit unless you bored a hole in the block and injected some epoxy. In Germany they had a similar program, but just took the old cars and shipped them to LDCs in Africa where they could continue to pollute, just someplace else. Or for aging luxury cars, some nefarious companies would send them across the border into Poland and then smuggle them back in and get the credit another time.

Your point on depreciation is fair, but the 'cash for clunkers' program was nothing more than an economic subsidy. There were no reasonable electric vehicles at the time which would have reduced carbon usage and the newer improved efficiency vehicles available would never offset after accounting for the entire vehicle manufacturing process. The old car getting lower mpg was still less polluting than producing an entire vehicle with mpg better by 30%.

Not only that, but it destroyed the secondary market by destroying all those vehicles, as you mentioned, requiring more production to make up for the short fall. Putting those second-life vehicles in other countries was a net benefit, reducing once again the new full production cost of vehicles there. In particular because less developed nations have historically been less accountable for pollution industrially by necessity.

Like the Great Hanoi Rat Massacre. [1] You get what you pay for!

1: https://www.atlasobscura.com/articles/hanoi-rat-massacre-190...

Other examples include India had a bounty for snakes, so people started snake farms.

My favorite one though is about the British paying China for dinosaur fossils, but they paid per fragment, so (naturally!) entire fossils were smashed into many small pieces.

The Mexican government paid for the ears or scalps of Apache Native Americans. A gang of marauders called the Glanton Gang went around murdering anyone they encountered to take their ears/scalps.

If I look at a graph of oil discoveries vs oil production, negative incentives barely matter. Discoveries of oil are already lower than production! We're running down the available oil quickly and it is going to be come less economically competitive over time as we extract the cheap stuff. Natural gas is going to do something similar in the next few decades if it isn't already.

The government needs to be focused on making it easy to build alternative energy sources.

You need to maintain a separate set of accounting books alongside all assets to track net carbon offsets. E.g., in your boat example: The negative carbon offset balance needs to get attached to the boat, so that subsequent owners cannot claim the same benefit. Then there should be a threshold date at which assets get their offset balance zeroed.

Let's just have a CO2 tax already. Revenues given back to the people directly split evenly per person.

No, put all of it into core decarbonization of (first) electricity.

This is driven by policy goals, not market forces, and the gap between profitable behavior and ecological responsibility calls for money.

The policy goals are better served by being aligned with market forces.

A carbon tax which is fully refunded can be larger without causing economic damage, because it nets to zero for the average customer.

Meanwhile you eliminate the overhead and corruption opportunity on the decarbonization side. If you have a meaningful carbon tax, the incentive to decarbonize exists in proportion to the size of the tax, but people can do it however is most efficient rather than according to the way specified by the companies with the best lobbyists.

I am in favour of a carbon tax, but why do you think a carbon tax is less vulnerable to corruption?

I might be if you have lots of exceptions and exemptions to the tax, but you should set it up as a tax of $$/ton of CO2 emitted (with credits for sequestration). You can change the tax rate but you don't have all of these piece meal subsidies and tax credits (wind, solar, electric cars, plug in hybrids, etc.) that can extract donations from various industries to get their specific business subsidized. Pay a small campaign donation for a huge payoff, ie. corruption.

Why wouldn't a high carbon tax drive decarbonization of electricity sufficiently well?

People seem to think that the carbon dividend makes saving CO2 pointless for the average consumer but they forgot that the consumer isn't actually in charge of deciding how much CO2 pollution a production process should result in. The business sees a cost on its balance sheet and it has an incentive to minimize its costs, which also is an incentive to minimize pollution even if the average consumer doesn't give a rat's ass.

Which is also the reason why a $100/ton carbon tax won't raise the price of a laptop that currently causes 0.3 t to be emitted by $30: Some of the components will (somewhere along the value chain!) be replaced with less carbon intensive alternatives that were just slightly too expensive to be worth bothering with. That's how carbon taxes achieve most of their benefit - not by shifting consumption or pricing consumers out!

The above numbers are realistic examples for the magnitude of carbon taxes typically discussed and the manufacturing carbon footprint of a laptop, btw.

That sounds good but it probably wouldn’t work in the developing and undeveloped world. Also, it doesn’t stop the problem of new things being made because they have a floor price set by carbon offsets. A new polluting asset becomes more valuable when it has a fixed rebate for decommissioning it. You can scrap my old shitty polluting boat but I can probably just buy a new shitty polluting boat