[djbebs]

Even ignoring the fact that this isn't a free market by any stretch, the fact is the EU imposes massive costs which will necessarily be reflected in the price of electricity.

For example, about 60% of the cost of electricity in Poland is tied up in buying carbon credits [1]. Now you may agree with the existence of such a system, but that doesn't make its consequences cease to be.

[1] https://twitter.com/michal_1979/status/1472635201226428416?t...

[ZeroGravitas]

'Free Market' doesn't mean 'no regulation', in fact the existance of externalites prevents a free market from functioning as it is supposed to.

[djbebs]

It actually does. When your regulations is interfering with the normal functioning and price discovery of the market, you're not in a free market.

You might be able to argue that regulations that simply provide market participants with additional information dont interfere with that, but carbon credits are most certainly not that.

You may agree with the regulations, but that doesnt maoe them any less nefarious.

[ZeroGravitas]

That's literally what Carbon credits are. That indeed is the whole point of economists proposing them as a mechanism.

What do you think they are if not that?

Note electricity is and always has been a highly regulated industry, but Carbon Credits are in fact a move towards more market signals.

You might disagree with the shared consensus reality, perhaps you think CO2 is a hoax molecule invented by the Swiss as a prank, but even then, Carbon Credits are clearly an attempt to price in this fictitious molecule and apply market signals to it.

[djbebs]

Except carbon credits are not providing information, they are imposing costs. The 2 are not one and the same.

You might argue that electricity providers having to inform their customers of how much carbon was generated in the production of electricity is simply informing the customer and therefore compatible with a free market.

You cannot make that argument when the state is imposing the legal requirement to purchase licenses to output said carbon.

Again, you may agree with such a measure (I don't), but agreeing with the measures doesn't change their nefarious effects.

[ZeroGravitas]

The carbon credit is not imposing the cost, it's ensuring that the person who causes the cost pays for it, i.e. that it is priced correctly and people can make decisions based on that. As a result it increases efficiency.

[djbebs]

The carbon is imposing a cost, and an arbitrary and politically defined one at that.

This isn't really up for debate, since its the core idea of having such a licensing system in the first place.

You could argue that a system where carbon isnt allowed to be released into the commons at all is legitimate, you can even support a carbon licensing scheme like the one that exists.

What you can't argue is that those schemes do not impose costs, because that is plain and simply lying.

Personally i think the whole carbon credit system is inherently flawed and should be abolished. There is no difference between emissions, and any other externality going into the commons, and having its supply/demand determined by the state is like always a bad idea that enables more state interference in things that simply arent their business.

Pollution and similar externalities are a problem, but this is not the solution.