Miliband\’s remarks are designed to illustrate the government\’s overall approach to meeting the 2050 target which will not involve imposing a blanket 80% cut on all areas of the economy. The white paper is expected to build on government plans to tolerate relatively high emissions in one area if action is taken in other areas by, for example, lagging lofts and driving less.
Allow, for a moment, that the extremists are correct. That we do indeed need to reduce emissions by 80%.
OK, so, which emissions should we carry on emitting and which should we not?
Clearly and obviously, we should continue with those emissions which provide the highest value in utility per unit of emission. That is, we should attempt to satisfy as much human desire as we can within our new imposed limit.
Now that might mean that all emissions allowances are devoted to allowing the beef industy to continue. Or it might be aviation. Or it might be allowing coal fired barbeques. We don\’t as yet know….but we do have a system of finding out.
Cap and trade*: the permits to emit will be bought by those who value their emissions more highly than others value theirs. Thus each unit of emissions will contribute the maximum amount possible to human happiness. (This would still be true even if we had personal carbon allowances in the name of equity.)
It might even be that the rest of the economy is carbon neutral while aviation continues as we spend all of our allowances on that sector. If that\’s the way it pans out, well, that\’s the way it pans out. The maximum utility within our new constraints.
* No, still not a fan of cap and trade for they way that politicians will have their thumbs on the scales, would prefer carbon tax, but this is just an argument here, not the revelation of the one true faith.