In the following words, I briefly discuss the odd-even license plate ban policy in Beijing. Most of the reference I use are in the original language-Chinese, apologies if there are misunderstanding of the language.

Coverage of the policy:

Odd-even license plate rule, a traffic ban based on license plate number, requires that private owned vehicle with last digit number(1,3,5,7,9) on license plate odd can travel on public road only on odd days of each month( 1st,3rd,5th,7th,etc.),and vehicle with last digit on license plate(2,4,6,8,0)even can travel on public rad only on even days of each month( 2nd,4th,6th, 8th,etc.)Beijing Transport Administration Commission toke out this rule in Good Luck Beijing Pre-Olympic Games, aiming to reduce traffic congestion. At that time,  this rule applies on private vehicles, not on taxis, buses, or any public vehicles; until in October 2012,Beijing Transport Administration Commission decided to extended Odd-Even License Plate Rule to all motor-vehicles, excluding the following kinds :

1.post office vehicles,policy vehicles,ambulance,fire trucks,and engineering rescue vehicles;

2.buses, commercial shuttles, taxis, school buses, company commuter shuttles, and sightseeing buses;

3.Law enforcement and administrative vehicles with signs and are on duty;

4.Gardening and sanitation vehicles, road maintenance vehicles, and hearse

And all vehicles disobey this rule will be no longer able to get auto insurance in the following year as punishment.

Equality of the Policy:

Equality has always been the most heated discussed aspect of the Odd-Even License Plate Ban policy. The majority of Beijing residents consider this policy unequal due to the following views:

1. Rich and Poor: With the implementation of odd-even license plate ban policy, Beijing residents with private car find their going out less easier as a result for sure. And wealthier people intend to make their life easier by purchasing another car with an opposite parity in license plate. Some even sell their plate number for large amount of money, and quite a few affordable rich people will buy. While common people have to drive one and the other day, rich people manage to have access to private vehicles just by driving different vehicles one and other day.

2. Folks and Officers: There are some kinds of vehicle that don’t have to follow odd-even license plate ban, as discussed in the first part of this blog. Many residents in Beijing find the exemptions unequal. For instance, this policy rules out law enforcement and administrative vehicles, but actually it is hard to tell whether those car are really on duty or not. What if some officers just misuse of their authority, what can us common people do? In addition, the sign and sirens of emergency vehicles can be purchase in black market, it is not rare that private car decorate itself as an emergency car and just go out every day, ignoring the odd-even license plate ban.

Effectiveness:

There is one paper that has tremendous views online on the effectiveness of odd-even license plate number ban policy, in which indicate the policy has not quite reached the level of “effectiveness” in the following aspects:

1.Lack of Public Transit Priority: The author indicate that a successful reducing congestion policy would provide public transit with enough right of way. However, public transit in Beijing was not treated with priority but with equality with all other vehicles on road, which is not effective. Large numbers of private vehicles would use bus lane in rush hours, making public transit a mess, an effective policy in reducing traffic congestion would enforce the management of private vehicle misusing bus lanes and bus stops.

2. Improper design of road and lanes:

The paper also pulls out that the odd-even license plate ban policy just gave “temporary relief of the symptom”,and it “cures the symptoms,not the disease”. The paper indicate the main cause of the horrible traffic congestion is not too many vehicles on the road, but improperly designed road and traffic lane.

References:

1. BaiduPedia. <http://baike.baidu.com/view/2251702.htm>

2. The estimation and comparison on traffic policies in Beijing.<http://m.club.sohu.com/zz0580/thread/!137e6dedd24b7489>

We have a guest lecturer, Joel Wood, who talked a lot about pollution this Tuesday. And in this lecture, I got to know many different kinds of pollution aside from carbon pollution(greenhouse gas emission) we’ve been so focus on so far this term. And by doing some research, I decided to dig into sulfur tax in Denmark.

BACKGROUND/HISTORY ON DANISH GREEN TAX REFORM

In the 1990s, there were major changes in Danish tax policies and regime. In 1993 the Danish parliament adopted a green tax reform that should gradually shift taxation from labor to environment and energy during 1994-1998. The reform involved new green taxes on water, waste water and packaging as well as increased taxes on petrol, diesel, electricity, coal, waste and motor vehicles.

In total around 1% of GDP was shifted from labor taxes to green taxes with the majority of green taxes immediately burdening households. The aim was to increase the incentives to supply labor and at the same time reduce environmentally harmful behavior – that is a so-called double dividend.

References:
1. Greening the Danish Tax System. http://docufin.fgov.be/intersalgnl/thema/publicaties/documenta/2011/BdocB_2011_Q2e_Larsen.pdf

Putting a Price on Carbon – Cap & Trade, Carbon Tax

Source: Pique

What is a Carbon Tax:

1. A carbon tax is usually defined as a tax based on greenhouse gas emissions (GHG) generated from burning fuels. It puts a price on each tonne of GHG emitted, sending a price signal that will, over time, elicit a powerful market response across the entire economy, resulting in reduced emissions. It has the advantage of providing an incentive without favoring any one way of reducing emissions over another. By reducing fuel consumption, increasing fuel efficiency, using cleaner fuels and adopting new technology, businesses and individuals can reduce the amount they pay in carbon tax, or even offset it altogether.

Personal Incentive to research on BC carbon tax:

1. British Columbia’s carbon tax qualifies as by far the most significant carbon tax in the Western Hemisphere.
2. Also, we live in BC; knowing policy for our province offers more motive:)

History of Carbon Tax in BC:

1. On July 1, 2008, the revenue-neutral carbon tax was implemented-it equates to an additional 2.4 cents on a litre of gasoline
2. On July 1, 2012, the final scheduled increase will take effect-the tax equated to 7.24 cents per litre of gasoline-No further rate increases or expansions are planned at this time. This could be the final increase.

Facts about Revenue-Neutral Tax and BC Principles:

Revenue-neutral means that little if any of the tax revenues raised by taxing carbon emissions would be retained by government. The vast majority of the revenues would be returned to the public, with, perhaps, a very small amount utilized to mitigate the otherwise negative impacts of carbon taxes on low-income energy users. In other words, The carbon tax revenues are being returned to taxpayers through personal income and business income tax cuts, as promised by Carole Taylor, who as BC finance minister spearheaded the push for the tax in the first half of 2008. And these principles below are what BC now following:

1. All carbon tax revenue is recycled through tax reductions
2. The tax rate started low and increases gradually
3. Low-income individuals and families are protected
4. The tax has the broadest possible base
5. he tax will be integrated with other measures

How does It Work?

The carbon tax puts a price on carbon emissions to encourage individuals, businesses, industry and others to use less fossil fuel and reduce their greenhouse gas emissions. The initial tax rate was relatively low and has increased gradually to allow families and businesses time to reduce their emissions. The tax is also intentionally broadly based and paid by all those who consume fossil fuels in the province.

A carbon tax directly suppresses the incentive that we emit a large amount of greenhouse gases. More importantly and more deeply, it provides incentives to develop carbon-reducing measures such as energy efficiency, renewable energy , low-carbon fuels. And people might even change their driving behavior to bicycling, start recycling and become overall mindfulness toward energy consumption.

Is it Effective?

Since 2008 fuel consumption per head in the province has dropped by 4.5%, more than elsewhere in Canada. British Columbians use less fuel than any other Canadians. And British Columbians pay lower income taxes too.

Voices Against Carbon Tax:

Source: Taxpayer.com

In an report I read on Taxpayer.com, it t seems the further you get away from Vancouver, the more hated the carbon tax becomes. Rural B.C. Makes Case Against Carbon Tax:

Farmers, fruit growers, local business owners in rural areas think they are the “victims” of the carbon tax.

Carbon Tax Become Part of “Fiscal Cliff” Debate in the U.S.

A recent report by the Congressional Research Service, suggesting a $20 per ton tax on carbon emissions could halve the U.S. budget deficit over time.

Such a tax would generate about $88 billion in 2012, rising to $144 billion by 2020, the report said, slashing U.S. debt by between 12 and 50 percent within a decade, depending on how high the deficit climbs, the report said.

BC Ministry of Finance Debate: Carbon Tax doesn’t hurt economy

The new tax has not weakened the province’s economy, which has been boosted by high world prices for its commodity exports. Unemployment is slightly below the national average, and growth slightly higher. Because the tax started low and its rises were set out in advance, businesses had plenty of time to make plans to cut their carbon use.

Conclusion:

Although the implementation of carbon tax in BC may hurt small, rural business in some degree, it is unquestionable that carbon tax is working significantly in the aspects of reducing greenhouse gas emission, which is carbon tax’s primary purpose. In addition, BC Ministry of Finance is realizing carbon tax’s “revenue-neutral” nature.

References:

1. Where Carbon is Taxed. http://www.carbontax.org/progress/where-carbon-is-taxed/
2. What is a Carbon Tax? http://www.fin.gov.bc.ca/tbs/tp/climate/A1.htm
3. Motor Fuel Tax and Carbon Tax. http://www2.gov.bc.ca/gov/topic.page?id=1A80D78D2FC440ECB036B9EDE1EA7771
4. Rural B.C. Makes Case Against Carbon Tax. http://taxpayer.com/british-columbia/rural-bc-makes-case-against-carbon-tax
5. Long-shot carbon tax suddenly part of fiscal cliff debate. http://mobile.reuters.com/article/idUSBRE8A71IU20121108?irpc=932

The following chart is a summary of my performance of this trading semester.

I am such a risk averse person that I don’t dare to trade many contracts even if I am not playing with real money here. Generally, I trade 1-2 contracts per week. And seeing my positive gains, my cautiousness might not be a bad thing after all.

I learned a lot in this trading game we had. This is my first contact with commodity future market. At least, I’ve got to know where to search interesting articles and how to make price predictions accordingly. In addition, psychologically, the fear and strangeness I had in the beginning turned into fun and joy at last. To sum up, I had this sense of achievement in the trading game, even if the profits I’ve made is not real! :)) I am glad we were brought into this game :))

As I put much of my interest in Canadian market this week, I found some domestic website for information as well.

1. Grainews. http://www.grainews.ca/

This is a great site for our interest on what is happening in Canada. Some articles are regional while some are nation-wide.

2. Winnipeg Commodity Exchange. http://exchanges.barchart.com/intra/wpg/.

The Winnipeg Commodity Exchange is the former name of a derivatives market based in Winnipeg, Manitoba, Canada now known as ICE Futures Canada. This is of a really small version, with only two commodities(canola and barley) available.

This week, I observed some commodity news regarding Canada, which I found pretty interesting. Rogers, Canada’s biggest refined sugar group, said that its overall volumes in the year to the end of September fell 1.2% to 641,573 tonnes, undermined by the loss of some key contracts late in 2011 and a switch abroad by some customers of food manufacture.

The drop in sugar prices, against strong grain markets, has prompted some reversal in the switch by food and drinks groups towards corn-based sweeteners, Rogers Sugar said, foreseeing the potential for a further increase ahead.

High-fructose corn syrup (HFCS) as it literally shows, are exacted from corns. This news break out are basically forecasting potential increase in corn prices.

As shown in the graph, in this past trading week, corn price indeed increased.

References:

1. Sugar syrup ‘regaining ground’ against HFCS.  <http://www.agrimoney.com/news/sugar-syrup-regaining-ground-against-hfcs–5249.html >

2. http://www.plus500.com/Instruments/ZC?searchInst=corn

In this trading week, I didn’t  trade any new contracts but offset these following contracts from previous week:

Like I said last week, I am a risk averse person. So I guess I just don’t have the guts to made further trades after seeing the price volatility. And According to the price trend I observed, it is truly a better thing to offset early. Or I would bear a lot of losses.

In the next trading week, the first thing I will do is to offset the wheat and soybean contracts. I am not saying the prices of which are likely to increase. I am just a risk averse person who is content already with the current positive gains of the two contracts.

However, I am likely to hold on to the Corn contract that I have for a while, since I am bearing a minimal loss of that. And I’ll hold on to that because I also believe the price would decrease a bit because “in the US, the drop in crude oil prices and seasonally weaker gasoline prices has cut corn demand for ethanol.” Since the contract I got expires in the near future( December).

References:

1. http://www.barchart.com/charts/futures/ZCZ12

2. http://www.agrimoney.com/news/anz-downbeat-on-farm-commodity-prices—for-now—5184.html

In this trading week, I did not purchase any contracts until Friday because there would be a USDA release scheduled on that Friday.

In the report, US eases fears for grain, oilseed supply squeeze. And nearly every grain and oilseed commodities prompted expectations of a further trim to the inventory figure.

I made the following contracts right after reading the report and in only about one hour, I realized positive profits:

However, corn price was actually declining instead of increasing because of some foreseeing a reduction in the USDA estimate of harvested corn area. Luckily, the loss on corn is so small. So I am overall happy with this week’s trading game.

As I researched whether there’s other factors causing corn price to increase, I read  that “in the US, the drop in crude oil prices and seasonally weaker gasoline prices has cut corn demand for ethanol.” This demand shock on ethanol scheduled the corn price down. Corn price was actually decreasing as well:

What I lost was just because of wrong timing.

References:

1. “US eases fears for grain, oilseed supply squeeze“. http://www.agrimoney.com/news/us-eases-fears-for-grain-oilseed-supply-squeeze–5197.html

2. “Pity the grain trader?”  http://www.agrimoney.com/feature/pity-the-grain-trader–177.html

3. http://www.agrimoney.com/news/anz-downbeat-on-farm-commodity-prices—for-now—5184.html

4. http://www.agrimoney.com/futures.php