The U.K.’s Financial Times has an excellent package today outlining the many, many, many practical flaws with Europe’s credit-trading system for reducing carbon dioxide emissions. In short, people are paying a lot of money and it’s not doing very much good so far.
The question is whether these flaws are growing pains or endemic to a system that has a semi-imaginary thing (an absence of gases going up a smokestack) at its core rather than a concrete thing (like a bushel of wheat) or something that depends purely on long-established mutual trust (like a promise to pay interest on a specified date).
The FT thinks the flaws are endemic, or at least so difficult to repair that a carbon tax is a preferable way of reducing greenhouse-gas emissions. That’s a declaration that has my attention.