A challenge of our time: How to create an auction of carbon extraction permits (e.g.) without a centralized authority running the auction. Democratic principles say the people at large shall determine what limits on overall environmental impacts of various kinds are permissible. A system of random polls can substitute for an impossible system wherein every person is asked how much carbon extraction each year (and how much of every other kind of impact) they think is acceptable.
Starting from a few assumptions: Corporations will function within the limits endorsed by the people; The right of the people to define limits to various kinds of impact implies that corporations at large must know what limits the people will consent to. When industries want to use more of a publicly-owned resource (something made by natural processes, not human effort), they should pay more to the people. The amount paid functions as a lever that the people can use to adjust how much effort is put by industry toward reducing a particular kind of environmental impact. A system of surveys will show to what extent carbon extraction / emission, and to what extent every other kind of human activity that would otherwise be carried to excess, should be limited.)
If we agree that humans have a shared right to set limits to impacts of various kinds, then an economic actor who wants to extract carbon should be expected to determine whether the amount of carbon currently being extracted is or is not already at the limit defined as permissible by average opinion. Assume that, in the absence of any emission fee, the amount of carbon that the sum of all prospective users want to emit (extract) exceeds what a random poll indicates is a permissible amount for the year.
Each prospective user of fossil carbon (each prospective extractor of the buried resource) could publish what they deem to be an appropriate extraction fee per kg of carbon, given expected demand for the resource in relation to the supply that the people at large are willing to permit (as indicated by the random poll). This is a thought experiment: If all prospective users happen to guess (on average) that a $1/kg fee would result in overall demand that is sufficiently low so as to bring overall carbon extraction and emissions into line with what average opinion says is OK (according to the random polls of the population), then the community of users could publicly declare their intent regarding how much carbon extraction permits they intend to buy for the year at $1/kg.
If all prospective extractors of fossil fuels indicate in a public ledger how many carbon extraction permits they expect to buy at the $1/kg price, this group of all prospective buyers of carbon-extraction permits may notice that the total number of permits that would be purchased at that price is still higher than what average opinion says is acceptable. A continued mismatch between supply and demand would indicate that the earlier guess (that a price of $1/kg would be sufficient) was not an accurate guess. The average estimate of the appropriate fee amount (the estimated 'market-clearing' price) was too low.
A reiteration of the process might have all prospective users (extractors) guessing (on average) that a price of $1.50/kg would cause enough prospective users to leave the market or reduce their participation enough to bring overall demand into alignment with what average opinion deems as permissible. With further iterations, the projected auction price will approach the price that a conventional auction of permits would bring. This auction operates through an iterative process rather than by relying on an auctioneer. The process can be automated so that it is not labor-intensive. (The process could be made more efficient if each publicly-declared estimate of a market-clearing price, and declared intention of how much a prospective user of a natural resource or service expects to purchase, is accompanied by an estimate of demand at a 10% higher and 10% lower price. An algorithm could calculate price elasticity and thereby increase the accuracy of each iteration of the process. A desired level of precision in price discovery could be attained in fewer steps.)
The random sample survey of the global population may be the most challenging part of this proposal. Many interested parties could cooperate to share the expense. Many groups would want to find out what public opinion is regarding various kinds of impacts on the environment. The economic actors in, for example, the fossil fuel industry could subscribe to the services of polling organizations that also gather data regarding people's opinions on other kinds of environmental impacts. Or they could conduct their own polls. If the polling process is transparent and well-documented, information gathered by any polltaker could be added to the overall totals.
In a free society, we can expect that anyone who is motivated to verify a public poll result will take their own survey. If they document the process and publish the results, their polling data would become part of the overall data set that would guide the actions of industry.
There is no need for a centralized authority to mange the system. Transparency is needed to enable trust that the process has integrity.
We need to respect PUBLIC property rights, too
Integration of Human Society and the Biosphere
@TallPhilosopher
