Monday, February 1, 2010

Seeking Regulation

From my textbook for "Economics of Energy" (Energy, Economics and the Environment, page 61)-
Although initially skeptical, many electric and gas and telephone companies actively began to seek state regulation. They were being bedeviled by all sorts of inconsistent demands by local governments and they saw state regulation as a way to preempt them. Consequently, most public utilities acts preempted local regulation.

I heard this argument regularly last semester from Andrew Light in the run-up to Copenhagen. Right now, it looks like regional agreements are going to dominate the next few years in terms of carbon pricing. My question is this: if/when companies want to ask for one universal price on carbon, who are they going to ask? It seems the UNFCCC, with its emphasis on consensus, has played its way out of a role in future negotiations. The US is still the top dog in terms of emissions but China is growing fast; however, I don't see any country (America included) with the international clout to make a system happen quickly. Is there any chance of businesses banding together to self-regulate, and simply not providing service to any government that did not accept self-regulation?

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Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty