This is a guest post from kiashu

Here in Australia Garnaut, an economist, is undertaking a study on what to do about Australia's greenhouse gas emissions. He has a website about it, and has released a draft report on it. He is in favour of strong action, though what he calls "strong action" and what you and I call "strong action" may be rather different things.

There are two basic ways people think of for dealing with emissions of unpleasant substances, aside from banning them entirely - tax them, and trade them. In taxing them we say, "emit as much as you like, but you have to pay for it." The theory is that people will reduce spending on things with that cost attached to them, thus reducing emissions of it, and that the revenue raised can be spent on dealing with the problems from it. In trading them we say, "you can only emit this much, and you must pay for it." So the government sets a target amount for emissions, creates permits for that much, and lets companies buy and sell these permits as they wish.

The government and Garnaut are in favour of an emissions trading scheme (ETS). I'm not. Remember the point of our schemes is to stop carbon emissions. We did not abolish outright slavery by setting up a slave market. That only encourages it. (Of course it's still not entirely abolished even today, but fewer people as a proportion of the world population are enslaved than ever before, and not because someone established a cap and trade system for slaves.)