Reason Magazine
- reason.com
- reason.tv
- reason.org
- Donate
- Site Search:
Reason on Facebook
Reason on Twitter
Reason on YouTube
Reason RSSGet Reason E-mail Updates!
Manage your Reason e-mail list subscriptionsadvertisements
More Libertarians for a Carbon Tax
The Prometheus Institute has come out in favor of a carbon tax as a way to address the problems posed by man-made global warming. The Institute proposes:
A universal, per-unit carbon tax should be calculated and levied against all consumers and producers of the most common greenhouse pollutants demonstrated to enhance the risk of deleterious climate change. The tax rate should be set at the lower of an aggregate market index for carbon trading/offsetting (currently estimated to be approx. $10-20 per ton), and and the scientific/economic cost of carbon consensus estimate. Carbon offsetting purchasing should function as a tax-deductible purchase. The tax will create market incentives to accelerate the development of carbon-neutral alternative fuels, and revenues from the tax should directly adapt and prepare for foreseeable economic and environmental damage. The tax should be levied against all feasible points of greenhouse emissions, including consumer gasoline sales, corporate pollution, private airline and jet use, power generation, and all other transactions of foreign or domestic consumers and producers.
The Prometheus Institute carbon tax proposal is part of its "Pay Your Air Share" policy initiative aimed at encouraging innovators and entrepreneurs to develop and market low carbon energy technologies.
The Prometheus Institute proposal is very similar to the one I discuss in my article "Carbon Taxes versus Carbon Markets." See also last fall's spirited Reason in DC Conference debate over global warming at reason.tv.
Taktix®|2.5.08 @ 3:05PM|#
The Prometheus Institute carbon tax proposal is part of its
"Pay Your Air Share" policy initiative aimed at encouraging
innovators and entrepreneurs to develop and market low carbon
energy technologies.
Why how libertarian, to believe that government is the vehicle for
innovation and change!
*Vomits all over keyboard*
|2.5.08 @ 3:09PM|#
A universal, per-unit carbon tax should be calculated and levied against all consumers and producers of the most common greenhouse pollutants demonstrated to enhance the risk of deleterious climate change.
One or the other, please... Not both, at least for each particular
molecule.
ed|2.5.08 @ 3:13PM|#
(sees Taktix's vomit and vomits himself in concurrence)
Right. Tax everything that may somehow cause the earth to
warm.
Wow. If this is libertarianism I'm getting off the bus.
|2.5.08 @ 3:17PM|#
I think it is legitimately libertarian, to suggest the
replacement of one tax by another, if the "new" tax is less onerous
than the old and especially if it comes along with safeguards to
ensure that we don't end up with a tax-AND-tax situation, rather
than the desired tax-INSTEAD-OF-tax situation. (That is to say, as
we sail toward no-tax libertopia, we may have to tack into the
hot-air political wind on occasion to make progress, but we need to
be sure that we really are making progress, instead of being blown
back to square one.)
In view of the above, how might the proposed carbon tax achieve the
goals of taxing us less onerously in general and replacing specific
existing taxes in particular?
Episiarch|2.5.08 @ 3:17PM|#
I think we should all go to a Reason meeting, beat Ron up, and
take his libertarian decoder ring.
However, by beating Ron up we would have violated the
non-aggression principle, and would then have to have our rings
taken.
Thusly causing a libertarian implosion via cycle of violence
which is exactly what the cosmos want!!!
BARGLE BLAH ARRRGGHHH
|2.5.08 @ 3:18PM|#
I look at the carbon tax as pragmatic damage control: better
this than the true wackiness that will come in the wake of green
triumphalism.
Global Warming doomsayers have already whipped the demos
into a state of "doing some, do anything!" Why not attempt to steer
that something into a plan that might have even the slimmest hope
of not destroying the economy or fundamentally altering our way of
life by adopting technological primitivism.
|2.5.08 @ 3:26PM|#
The tax rate should be set at the lower of an aggregate
market index for carbon trading/offsetting (currently estimated to
be approx. $10-20 per ton), and and the scientific/economic cost of
carbon consensus estimate.
Just to give an idea of the numbers in play here...
10-20 dollars per ton of CO2 corresponds to 10-20 cents per gallon
of gasoline.
The current gas tax in the US is more than twice that. Gas taxes in
other countries are an order of magnitude higher still.
Noel St. John|2.5.08 @ 3:29PM|#
I saw this one coming a mile away. First, the groundwork is done
to convince many people that global warming is an unassailable
fact, then blame humans (and in some cases, livestock) as the
culprits. We're already innured to the idea of "sin taxes," thus it
is no giant leap to equate a carbon footprint with a moral
crime.
While I won't credit government with such a grand scheme set in
motion years ago with increased tax revenues as the ultimate goal,
I will label some politicians as opportunists seizing upon the idea
of siphoning our pockets via unearned guilt.
Whether one believes that our carbon consumption can compete with
our nearest ball of flaming hydrogen or not, the biggest producers
of carbon related wastes are governments themselves. Perhaps we
should start there....
|2.5.08 @ 3:31PM|#
Uhhh the fact that the libertarians are starting to believe in global warming is going to severely hurt our stereotype as the smart ones.
|2.5.08 @ 3:31PM|#
Bottom-line is currently you can't live with our current
standard of living without emitting carbon. The point of the carbon
tax is to give people an incentive to emit less carbon. If you
lower other taxes, then people just have the money to pay the tax
and don't change their behavior. To lower carbon emissions in any
significant way, you have to lower standard and quality of life. It
is just that simple.
The comeback to that of course is that the taxes will create
incentives to make all of these new wonder technologies to stop
carbon emissions. My response is that if there was a cheaper way to
make energy we would already be doing it. There always an incentive
to find more efficient energy sources and to use less energy. The
reason why those sources aren't being used right now is because
they are more expensive than carbon emitting sources. Every dollar
we spend going to more expensive energy sources is a dollar less we
can spend on something else and a lower standard of living. There
is really no way around that. If there are more efficient carbon
neutral energy sources to be had, they will come about regardless
of carbon taxes. Their efficiency alone will drive their
development. If they are less efficient, they cost more money and
ultimately standard of living no matter who pays for it. The only
way a carbon tax could possibly be standard of living neutral is on
the remote possibility that carbon neutral and carbon emitting
technologies cost exactly the same and the tax merely breaks the
tie. Otherwise no magic powers of the market are going to keep
"lowering carbon emissions" from being synonymous with "being
poorer".
|2.5.08 @ 3:33PM|#
[Zardoz reference],
I look good in a bulky red diaper.
And I always had plans of purifying the Earth of Brutals.
Chuck|2.5.08 @ 3:34PM|#
A universal, per-unit carbon tax should be calculated and
levied against all consumers and producers of the most common
greenhouse pollutants....
I try not to consume pollutants, myself. I hear they taste bad and
may be fattening.
Alternatively, if you are consuming pollutants, doesn't
that make them go away? I hear that consuming oil results in less
of it--why is it different with greenhouse pollutants? Shouldn't we
be encouraging people to consume?
|2.5.08 @ 3:34PM|#
As I've chanted here many times before, even if I thought global
warming was pure baloney, I'd rather tax pollution than economic
activity anyway.
Replacing income tax receipts with a tax on carbon emissions, etc.,
makes so much sense for so many reasons, it's hard to imagine the
government would ever do such a thing.
Kolohe|2.5.08 @ 3:39PM|#
my problem with the proposal (other than what MikeP already
pointed out)
The tax rate should be set at the lower of an aggregate market
index for carbon trading/offsetting (currently estimated to be
approx. $10-20 per ton),
This is feasible and achievable (whether it is optimum is unknown
to me, and for all I know possibly unknowable)
and and the scientific/economic cost of carbon consensus
estimate.
This is, dare I say unlibertarian, and definitely non-market based.
It will invevitably be politicized, and thus counterproductive: it
will be captured by interests on one side or the other, and so will
either be useless (too low) or worse than useless (too high).
robc|2.5.08 @ 3:39PM|#
Epi,
By suggesting a carbon tax, Ron initiated violence against us, so
its okay to beat him up.
|2.5.08 @ 3:40PM|#
"Replacing income tax receipts with a tax on carbon emissions,
etc., makes so much sense for so many reasons, it's hard to imagine
the government would ever do such a thing."
Ken, even if you could do it that would not lower emissions. If we
have a carbon tax and lower income taxes an equal amount, people
will just pay the tax and not change their behavior. The fact is
emitting carbon means doing things like heating your house and
driving your car and traveling. Things that people really value.
You are going to have to have one hell of a carbon tax to get
people to change their behavior. Further, since most things that
people want involve emitting carbon, it is difficult to see what
you could purchase with all the money you save in carbon taxes when
you change your behavior. Look at it this way, we have a carbon tax
so your coal fired electricity bill goes from $200 to $400 a month.
Either you saw screw it and use your saved income taxes to pay your
electricity bill or you change to the carbon neutral alternative
which costs $300 a month. Either way you are spending extra money
on energy and are worse off. The only way you are not worse off is
if the carbon neutral electricity costs less than the coal fired
kind, in which case you would already be using it and there would
be no need for a tax.
Christopher Monnier|2.5.08 @ 3:41PM|#
The cafeteria at my workplace recently started charging $0.10
for styrofoam cups without a food purchase. Result: I no longer
take styrofoam cups from the cafeteria. Not because I can't afford
to spend $0.10 every time I want to get a cup, but because I don't
like the principal of paying some nominal fee for something.
IKEA charges $0.05 or $0.10 for plastic bags. Result: I don't use
plastic bags at IKEA anymore.
These are just two examples of how a transparent fee, however
nominal it may be, can cause a person to think twice about
consuming something (regardless of its impact or non-impact on the
environment). Transparently disclosing how much of my electric bill
or gasoline purchase is due to a carbon tax might encourage me
(however irrationally) to use less electricity and gasoline. Not
because I can't afford the extra fee, but simply because I don't
like paying fees.
Kolohe|2.5.08 @ 3:41PM|#
although now I see that the 'too high' should be mitigated by the market index mechanism. Still, it should just be the market index mechanism (on *just* production) if we are actually trying to accomplish something and no just sing kumbayah
|2.5.08 @ 3:43PM|#
"Wow. If this is libertarianism I'm getting off the bus."
Welcome to the Confederacy my Paleotarian brother.
|2.5.08 @ 3:45PM|#
"These are just two examples of how a transparent fee, however
nominal it may be, can cause a person to think twice about
consuming something (regardless of its impact or non-impact on the
environment)."
True, higher prices cause you to consume less. When you consume
less, you are less well off. Further, the things affected by a
carbon tax are not so easily given up like a plastic bag or a cup.
You will always have to heat your house. You will always have to
drive places. Carbon tax proponents should be honest and admit the
goal of the program is to make sure people have colder homes, drive
less, travel less and generally have a lower standard of living
than they did before.
economist|2.5.08 @ 3:45PM|#
Actually, it seems fair that if global warming is real, man-made, and causes damage to property, those who emit greenhouse gases should have to pay the damages imposed by pollution. There's nothing antilibertarian about asking people to shoulder the externality costs they create, and it does give people an incentive to decrease their use of polluting materials to the economically optimal level. Of course, this assumes that global warming IS real(yes), IS man-made(probably in combination with natural factors, extent questionable), and DOES create direct, verifiable harm to individuals' persons or property (possibly but not necessarily).
Joe Allen|2.5.08 @ 3:48PM|#
We cannot effectively counter the tragedy of the commons
respective to carbon emissions in a mannner that respects national
sovereignty.
Global warming is real. It is man made. It is a problem, but it is
not a crises and it is not a relatively big bad problem. A rational
approach (from a cost/benefit perpective) is adaptaion, not
reversal of the phenominon until technology makes the costs of
reducing carbon emissions much lower.
http://www.youtube.com/watch?v=Dtbn9zBfJSs
Bjorn Lomborg has it right.
|2.5.08 @ 3:48PM|#
"If we have a carbon tax and lower income taxes an equal
amount, people will just pay the tax and not change their
behavior."
Somebody call Proctor & Gamble--tell them to double their
prices on everything! Somebody call the oil companies--this is
gonna be big!
"The fact is emitting carbon means doing things like heating
your house and driving your car and traveling. Things that people
really value. You are going to have to have one hell of a carbon
tax to get people to change their behavior."
A carbon tax big enough to replace the income tax wouldn't create a
change in people's behavior?!
People would travel less. People would move to more temperate
climates. What if businesses put as much energy into avoiding
carbon emissions as they do into minimizing their tax bill?
You're right that larger changes would probably have a bigger
impact, but to say that marginal changes wouldn't have any impact?
You're gonna have to back that up with something substantial.
David|2.5.08 @ 3:49PM|#
The Prometheus Institute has recently published a website dedicated to this cause, found here: http://www.payyourairshare.org/. Good looking site! I hope this will get more lay people in favor of a carbon tax.
|2.5.08 @ 3:49PM|#
economist,
It also assumes that cutting emissions have a direct effect on that
harm equal to or greater than the cost of cutting emissions. No one
ever seems to look at that end of the equation. If it costs more to
stop global warming than it does to endure it or adapt to it, it
doesn't pay to stop it. Further, there is no point in the US
cutting emissions if the rest of the world goes merely on and there
is no measurable effect on total emissions. But hey, who wants to
let economics get in the way of doing something? Right?
|2.5.08 @ 3:52PM|#
John: Taxes change the relative prices of things which will
change the way people and business enterprises choose to allocate
their expenditures. As for making people poorer, the question is
how to balance being made poorer from the effects of global warming
versus paying taxes.
As far $10-20 per ton being too low to effect consumption, that's
why I suggest a predictably escalating tax. It allows people to
adjust their consumption and investment patterns.
|2.5.08 @ 3:53PM|#
Yo, geniuses:
aimed at encouraging innovators and entrepreneurs to develop
and market low carbon energy technologies.
innovators and entrepreneurs as the vehicle for
innovation and change. Not "government."
|2.5.08 @ 3:54PM|#
"Somebody call Proctor & Gamble--tell them to double their
prices on everything! Somebody call the oil companies--this is
gonna be big!"
If there is an increase in income you can raise prices. If I didn't
have to pay income taxes, I might not care if my heating bill
doubled. The higher the income the more inelastic the demand is.
For example, you could double the price of salt tomorrow and have
no measurable effect on demand because the stuff is so cheap no one
would notice.
Ultimately, if I am going to use less energy, I am going to live
less well. There is no way around it. Lets say I make my home
really energy efficient and spend a few thousand dollars to lower
my carbon bill. That is money that before I would not have had to
or wanted to spend absent the carbon tax. How is that not lowering
my standard of living? If it were profitable to do absent the
carbon tax, I would have done it already. It is not profitable and
that is why you need the tax to make me do it and I end up with a
lower standard of living than I had before.
Bingo|2.5.08 @ 3:55PM|#
The big picture solution to global warming is to find another
planet so we don't collectively shit our pants every time weather
patterns start to vary.
Of course, the same greenies are going to be against terraforming
the pristine natural landscape of a dead rock in space. Maybe we
are all better off just drinking the koolaid and embracing our
retro-future 18th century lifestyles. It's more natural, you
see.
ed|2.5.08 @ 3:57PM|#
Welcome to the Confederacy my Paleotarian
brother.
I'm so confused. So many -tarians these days...how does
one choose? What if I make the wrong choice? Will people
call me names? I want to hang out with the cool kids! Help me.
economist|2.5.08 @ 3:58PM|#
John,
I'm actually not claiming to be an expert on the issue, I'm just
saying that levying a tax on carbon emissions to help pay for the
damage it does to property makes sense, assuming the things I
mentioned above. I also think that we should make any global
warming agreement contingent on all nations, including developed
nations, going along. Cow farts in Africa actually contribute quite
a bit to greenhouse gases. As for having gas emitters pay damages
via taxes, they could decide whether they wanted to pollute (and
pay the tax and thus indirectly bear the costs of their actions) or
not pollute, depending on which course they found to be more
efficient. From the tax revenue, it should be easier to finance
adaptation measures, once again assuming they are necessary.
|2.5.08 @ 3:58PM|#
"As for making people poorer, the question is how to balance
being made poorer from the effects of global warming versus paying
taxes"
Yes Ron. At this point it is not even clear global warming will not
be a benefit instead of a harm. Further, there is a good case to be
made that the climate is driven by solar output and volcanic
activity more than it is human made greenhouse gases. The costs of
global warming are nearly impossible to calculate and have to be
discounted against the likelihood it won't occur and the likelihood
that reductions in US or the developed world won't equal an overall
reduction in world emissions. Taken those factors into account
along with the uncertainty associated with any theory on something
as complex as global climate, it is pretty damned hard to justify
much of a carbon tax.
Brian Costin, Heartland Instit|2.5.08 @ 3:59PM|#
Hmmm... the solution to a problem is a tax that makes
politicians more money and the people poorer. Yeah that sounds
fair. How about an equivilant tax credit for conservation and
planting of hundreds of millions trees, plants, etc. every
year?
More freedom is the solution to environmental problems.
What about credits where farmers pay carbon producers for the
increase in yields due to extra carbon.
Or the fact that the planet is more bountiful(biomass and
biodiversity) when the planet is much warmer than it is now. Why
isn't this taken into account?
|2.5.08 @ 4:01PM|#
It is an indefensible assumption that the amount of carbon
emitted per unit of energy must always remain constant. See burning
wood vs. burning natural gas vs. solar energy.
It is an indefensible assumption that the amount of energy consumed
per degree of house warming, mile driven, or economic value created
must always remain constant. See 2007 Honda Civic vs. the much
smaller 1980 Honda Civic. See modern on-demand water heaters vs old
oil-fired tank water heaters.
Improving this performance is a technological problem, and creating
a stronger market incentive to solve that problem will make it
happen faster.
|2.5.08 @ 4:02PM|#
I agree economist. It is putting in those numbers that is the hard part. Further, as you point out without a worldwide agreement it is pointless. Of course taking all of those cows away from Africa is probably going to have a lot bigger effect on Africans than turning all of our thermostats down. Africans can afford the costs a lot less than we can. If we took some outrageous cut in our standard of living (say 1/4th) we would still be richer than most of the people who have ever lived. If Africans took such a cut, many of them would die. The effects of global warming better be pretty dire to justify such an action.
|2.5.08 @ 4:02PM|#
As far $10-20 per ton being too low to effect consumption,
that's why I suggest a predictably escalating tax. It allows people
to adjust their consumption and investment patterns.
Yet the escalation -- if computed Nordhaus-style -- will be slow,
and the reason is simple: We are freaking paupers compared to our
children and our children's children. Much better that they pay the
cost of CO2 emission mitigation than that we do.
Given the greater information we will know in the next couple
decades, the difficulty in getting all nations on board, and the
fact that the present-day shadow cost of CO2 barely pays for the
bureaucracy required to collect it, it is most intelligent to delay
the application of any such tax.
But if the alternative that will be shoved down our throats in the
coming years is worse, then a carbon tax set to the shadow cost
with offset deductions may well be the best we can hope for.
|2.5.08 @ 4:03PM|#
You can't have a tax without a government, joe.
No kidding, ed. Nonetheless, it is not the government that is the
engine of innovation, but the private sector.
A million bucks in lowered costs is a million bucks in lowered
costs, even that savings is realized through lowering one's
government-imposed taxes. People responde to the profit motive by
pursuing, regardless of how that profit will be realized.
|2.5.08 @ 4:04PM|#
All of those things happened on their own Joe. There is always an incentive to be more efficient. The day non carbon emitting sources of energy become cheaper than the carbon emitting ones, we will stop emitting carbon. Until that time, reducing carbon emissions will always equal a reduction in our standard of living.
robc|2.5.08 @ 4:05PM|#
innovators and entrepreneurs dont need any extra incentive. Profit motive is incentive enough.
|2.5.08 @ 4:06PM|#
If it were profitable to do absent the carbon tax, I would
have done it already.
Unless you decided not to do it, just to piss those greenies
off.
Of if the yearly savings weren't enough to motivate you to make the
captial investment.
Or if you suffered from a knowledge gap.
Or if your conclusion that there wouldn't be any savings is based
on your ability to externalize the costs of your emissions.
economist|2.5.08 @ 4:07PM|#
John,
I agree, which is why I put forth the three tests the global
warming problem would have to meet before instituting measures such
as carbon taxes. I merely pointed out the thing about cows in
Africa to show that I agree with you that if we are forced to pay a
carbon tax, the rest of the world should be subject to the same
standard.
|2.5.08 @ 4:08PM|#
The day non carbon emitting sources of energy become cheaper
than the carbon emitting ones, we will stop emitting
carbon.
Not if externalizing the costs of global warming allows you to
spend less on the carbon-emitting technologies than their real
cost.
Hence, the idea of a carbon tax.
|2.5.08 @ 4:09PM|#
"A million bucks in lowered costs is a million bucks in lowered
costs, even that savings is realized through lowering one's
government-imposed taxes."
If that millions saved is just a million saved in taxes and I am
left with the same costs I had to begin with I have lost in the
deal. Let's say a business currently pays $1 million a year in
electricity bills. With the carbon tax they now pay $2 million a
year. So in response to that they go out and spend $750K on offsets
or alternative energy to get out of the million in taxes. Yes, the
business is $250K better off that it was. But, it is still $750
worse off than it would have been had their been no taxes.
|2.5.08 @ 4:10PM|#
John,
I agree with you that the true burden of carbon taxes on wealth and
well being usually go unconsidered, but you have got to stop with
the lame understanding of margins.
If the perfectly median household sees its income taxes drop by
$1000 while its carbon taxes increase by $1000, they will be
consuming less carbon and more of something else. It's not rocket
science.
|2.5.08 @ 4:11PM|#
If I can run my sewer line directly into John's basement, it
won't make sense for me to install a septic system.
If I have to pay to have the stuff trucked away, it will suddenly
make a great deal of sense for me to install one. And from a global
perspective, the transaction will be a net gain, as the damage my
sewage does to John's house in just a couple of years will surpass
the cost of installing the septic tank.
robc|2.5.08 @ 4:11PM|#
To expand on my 4:05 comment:
When you use tax policy (or subsidies or whatever) to incentivize
innovators in a particular field, you are simultaneously
deincentivizing by the same amount in other fields (probably all
others spread thinly). This may make sense for government to do to
get an atom bomb before the germans/japanese or to put a man on the
moon (although I think not in that case) but we lose AT LEAST as
much as we gain. I figure we lose slightly more than we gain due to
some transactionally inefficiencies.
Reducing carbon emmissions dramatically does not fit the "Manhattan
Project" exception for me.
|2.5.08 @ 4:11PM|#
"Not if externalizing the costs of global warming allows you to
spend less on the carbon-emitting technologies than their real
cost."
That is true. But you have to know what those costs are and what
the actual benefit of any reduction is to set the tax rates. We are
no where near having anything like that information right now. You
can't have a tax to stop an externality unless you know what the
actual cost of the externality is.
kinnath|2.5.08 @ 4:12PM|#
When you consume less, you are less well off.
Major fallacy there dude. This assumes that people have no choices.
For many human endeavors (but not all), achieving the same result
while consuming fewer resources leads to an improved outcome.
This is not a direct endorsement of carbon taxes. Just pointing out
a hole in your argument that you need to close.
|2.5.08 @ 4:13PM|#
If that millions saved is just a million saved in taxes and
I am left with the same costs I had to begin with I have lost in
the deal.
John, are you familiar with the economic term "externality?" It's
sort of an important concept if you're going to debate
environmental issues.
"If I am left with the same costs..." If you were left with the
same costs, we wouldn't be talking about what to do about this
problem.
robc|2.5.08 @ 4:14PM|#
kinnath
If you find a way to achieve a goal while consuming less in one
area (although I would call that equal consumption, just more
productive), it allows you to consume more in another.
|2.5.08 @ 4:17PM|#
As far $10-20 per ton being too low to effect consumption,
that's why I suggest a predictably escalating tax. It allows people
to adjust their consumption and investment patterns.
Seriously, if you had to guess who was talking about "escalating
taxes" to make people "adjust their consumption and investment
patterns," wouldn't your first thought be "Hillary Clinton"?
This is supposed to be libertarian, how? This is within the purview
of a minimalist state, how? This is necessary to protect the
citizenry against force and fraud, how?
This is social engineering, red in tooth and claw, and I honestly
don't see how it is consistent with any philosophy of minimal
government and maximal freedom of individual choice.
Oh, and all of you saying "Well, its OK if it replaces current
taxes dollar for dollar" - grow up. It'll never happen. And a tax
that is intended to shape behavior is worse, dollar for dollar,
than a tax that is not, in any event.
|2.5.08 @ 4:17PM|#
But you have to know what those costs are and what the
actual benefit of any reduction is to set the tax rates.
Sure you can - just with imperfect precision.
There's also a time element here. Once the improved technologies
are here and dispersed, the carbon tax will become unnecessary. On
the other hand, the costs of increased global warming will continue
indefinitely (at least in human civilization terms).
Russ 2000|2.5.08 @ 4:17PM|#
True, higher prices cause you to consume less. When you
consume less, you are less well off.
We could stop subsidizing credit and accomplish the same thing.
kinnath|2.5.08 @ 4:18PM|#
If you find a way to achieve a goal while consuming less in
one area (although I would call that equal consumption, just more
productive), it allows you to consume more in
another.
One transaction at a time. If I make my current transaction more
efficient, I have a net improvement in my situation. I may or may
not choose to plow my savings into a second transaction.
|2.5.08 @ 4:18PM|#
"If the perfectly median household sees its income taxes drop by
$1000 while its carbon taxes increase by $1000, they will be
consuming less carbon and more of something else. It's not rocket
science."
That is not necessarily true. If the things that consume carbon are
things that you value more than the tax, you will just pay the tax
and continue to consume, especially if you have more disposable
income. If a carbon tax raises the price of an airline flight by
say $300, people will demand it less but they will have more money
to spend on it so the extra $300 won't hurt as much. Yeah, the
airline flight is going to be more expensive than other more carbon
neutral goods but I am not sure that most of the time people
wouldn't just pay the tax and do it anyway because they will have
more money. You would have to have a really big carbon tax to
really change people's behavior. Also, so much of our economy emits
carbon I am not sure there would be any goods that are carbon
neutral. My guess is that a carbon tax would act like a national
sales tax and just raise the price of about everything equally.
Even something as innocuous of a bottle of wine, requires carbon to
transport it to me.
|2.5.08 @ 4:18PM|#
Uh huh. Taxes are "red in tooth and claw."
Causing other people's property to become desert or submerged is,
what? A nice anniversary present?
|2.5.08 @ 4:19PM|#
It's not too often that I find myself on joe's side in threads here. Are you guys seriously arguing that the social, "externalizable" cost of carbon emissions is zero?
robc|2.5.08 @ 4:20PM|#
kinnath,
There is never only one transaction. All transactions are options
with other possible transactions being considered.
There is always an opportunity cost on a transaction. All savings
are eventually plowed into a later transaction.
|2.5.08 @ 4:21PM|#
If you don't believe that anthropogenic global warming is real,
skip the rest of this post.
I'm going to make some assumptions here. These are -
1. The atmosphere and hydrospere are the commons.
2. Privatizing either is not achievabable.
3. Anthropogenic climate change is a reality, causing global
atmospheric warming.
4. The economic and quality of life effects of global warming are
udesirable, possibly catastrophic.
5. The least intrusive, cheapest way to stop said warming is reduce
greenhouse gas emmisions globally.
The question then becomes how do you stop people from desroying the
commons with greenhouse gas emissions while doing minimum of harm
to personal and economic freedom?
IOW, is a global carbon (and methane, and other greenhouse gases)
tax the best way to deal with the problem?
I'm going to argue yes because if there is one thing in the world
that is constant, it is the ingenuity of people trying to avoid
paying taxes. Thus an emissions tax would be the fastest, fairest
way to bring about the desired results.
I don't like cap and trade beause the caps would have to be so low
(per capita) that the industrial world will have to transfer
massive amounts of money to the underdeveloped world for producing
nothing. If you cap based on present national emissions you are
condemnig the third world to poverty.
I'm confident that the assumptions listed above are correct with
the possible exception of #5.
Constructive critique of my reasoning is welcome. The caveat that I
opened with applies. I'm not going to get into the "is man made
global warming real" debate. That's been hashed out enough on these
pages.
robc|2.5.08 @ 4:25PM|#
J sub D,
While I question some of your assumptions, WITH your assumptions, I
think you are right. In that case, a "Global Warming Manhattan
Project" might be justifiable. However, I would need #4
(especially) PROVEN to me, at a level of Japan bombing Pearl
Harbor, before I will favor going forward.
Ugh, the capitals in my post make it look like a MWC post. I should
bold some random words.
|2.5.08 @ 4:26PM|#
If a carbon tax raises the price of an airline flight by say
$300, people will demand it less but they will have more money to
spend on it so the extra $300 won't hurt as much.
The key is in your words "people will demand it less." They will
indeed. There will be less demand and fewer flights, and carbon
will go unburned because of the tax.
My guess is that a carbon tax would act like a national sales
tax and just raise the price of about everything
equally.
That may be the case with most goods -- for which it will be a wash
-- but not for all goods. While the $500 flight might go up $300
(in actuality it would be more like $30, but we'll go with your
numbers), the $50 bottle of wine won't go up $30.
So people will buy more wine and fewer flights. The amount of total
consumption will be the same, but more will be spent on less carbon
intensive products.
|2.5.08 @ 4:26PM|#
J Sub D,
You don't consider the possibility that the costs of stopping
global warming are greater than its effects. You basically assume
that any cost is justified. It is entirely possible that we are
better off adapting to a warmer climate than we are spinning our
wheels trying to prevent one. Until we know the answer to that
question, you can't answer the question of whether a tax is
justified. Further, to answer that question, you have to know with
some certainty both the extent of man made global warming and the
full cost of adapting to it.
robc|2.5.08 @ 4:27PM|#
Also, if #1-5 are all true, I truly favor a manhattan project style answer over a carbon tax. Lock the most brilliant minds up in the desert for 5 years and make them find a solution.
robc|2.5.08 @ 4:29PM|#
MikeP,
So people will buy more wine and fewer flights. The
amount of total consumption will be the same, but more
will be spent on less carbon intensive products.
The bolded part is wrong. That is the best case scenario, but in
reality there will be some transactional losses.
|2.5.08 @ 4:30PM|#
"So people will buy more wine and fewer flights. The amount of
total consumption will be the same, but more will be spent on less
carbon intensive products."
Given a choice, I would rather fly than buy the bottle of wine. But
because of the carbon tax, I chose the bottle of win. I am chosing
less desireable carbon neutral alternatives to avoid the tax. Thus,
my standard of living is reduced.
robc|2.5.08 @ 4:30PM|#
John,
You don't consider the possibility that the costs of stopping
global warming are greater than its effects.
He covered that in #4. I dont accept #4, but he did cover it.
kinnath|2.5.08 @ 4:31PM|#
Also, if #1-5 are all true, I truly favor a manhattan
project style answer over a carbon tax. Lock the most brilliant
minds up in the desert for 5 years and make them find a
solution.
That would be the other thread.
robc|2.5.08 @ 4:31PM|#
Given a choice, I would rather fly than buy the bottle of
wine. But because of the carbon tax, I chose the bottle of win. I
am chosing less desireable carbon neutral alternatives to avoid the
tax. Thus, my standard of living is reduced.
John gets something right!
|2.5.08 @ 4:33PM|#
RobC
He said "4. The economic and quality of life effects of global
warming are udesirable, possibly catastrophic."
That doesn't cover it. Even if the effects are undesirable, that
doesn't mean that the costs of stopping it are even more
undesireable. He just assumes that to be so. I don't think you can
do that. The costs look pretty stark to me and I am in no way
convinced of the benefits.
|2.5.08 @ 4:33PM|#
robc,
That is the best case scenario, but in reality there will be
some transactional losses.
Actually, that is not the best case scenario. The best case
scenario is that the carbon tax ends up being more efficient than
the income tax from an economic perspective. That is, with lower
income tax, labor is more productive, and the increased
productivity more than offsets the losses from lowered carbon
consumption or transaction costs.
kinnath|2.5.08 @ 4:34PM|#
Let's see John,
Burning my trash in an open barrel is a lot cheaper that paying the
cartage company to haul it out. Hauling it away makes my neighbor a
lot happier but clearly reduces my standard of living. It's just
not fair.
robc|2.5.08 @ 4:36PM|#
MikeP,
Fair enough. If the carbon tax is offset from the income tax. I was
assuming a new carbon tax. I dont trust them enough to really trade
off between two taxes.
Just like how I would prefer the Fair Tax to our current system but
not without the 16th amendment going away first (or at the same
time, I guess).
|2.5.08 @ 4:36PM|#
"Burning my trash in an open barrel is a lot cheaper that paying
the cartage company to haul it out. Hauling it away makes my
neighbor a lot happier but clearly reduces my standard of living.
It's just not fair."
Lets see here Kenneth, if having trash service costs 1/2 of your
income, you would probably chose to keep the money and let your
neighbors burn their trash. You can't make that decision until you
know how badly you don't like your neighbors burning their trash
and how much it costs to have garbage pickup. The equation goes
both ways, not just one way.
squarooticus|2.5.08 @ 4:38PM|#
"Libertarians for a carbon tax" is like "Libertarians for torture" or "Libertarians for eminent domain"... or "Authoritarians for the right to keep and bear arms" or "Conservatives for gay marriage", if you prefer: all contradictions.
|2.5.08 @ 4:41PM|#
Robc,
I don't think a carbon tax as a national sales tax would
necessarily be that bad. Like I said, I think a carbon tax would
act a lot like a national sales tax and it would admittedly reduce
carbon emissions. If replacing the income tax with a carbon tax
would appease the gia worshipers, I could go for it. But, like you
I am very skeptical that it would replace an income tax rather than
just add to it.
|2.5.08 @ 4:41PM|#
I am with John on J sub D's number 4.
Assumption number 4 cannot be made in a vacuum. There are certain
costs of global warming. There are certain costs of reducing carbon
emissions. They need to be compared to figure out what the right
course is.
Such analysis is exactly where that $10-20 cost per ton of CO2
comes from. In other words, the best estimate of actual externality
due to CO2 is equal to a dime per gallon of gas. Hardly
catastrophic.
robc|2.5.08 @ 4:43PM|#
John,
I am very skeptical that it would replace an income tax rather
than just add to it.
Exactly. What happens 5 years down the line when some genius
invents a way to cut carbon emissions by 60%? Is the government
just going to accept 60% less revenue?
robc|2.5.08 @ 4:44PM|#
Hardly catastrophic.
I agree. That is why I oppose the carbon tax. Let the innovators
reduce the carbon emissions without extra incentives. It will
happen.
economist|2.5.08 @ 4:45PM|#
squarooticus,
If global warming actually does stem from human causes and results
in damage to property, a truly libertarian solution would be to
compensate the property owners for damages caused, at the expense
of those who caused them. A carbon tax devoted to helping repair
and adapt to global warming damages accomplishes this in the most
efficient manner possible. But like I said before, you have to
prove the reality of a problem, prove that pollution is the cause
of it, and that this is actually a problem, that is, it harms
individuals or their property.
|2.5.08 @ 4:45PM|#
"Exactly. What happens 5 years down the line when some genius
invents a way to cut carbon emissions by 60%? Is the government
just going to accept 60% less revenue?"
Hell no. I never thought of it until now but the next time someone
advocates a carbon tax, I am going to ask them "so you want the
government to be dependent on my greenhouse emissions for its
income?" Look at tobacco taxes. The last thing the government would
ever want is for people to stop smoking. In some wierd way, I could
see carbon taxes causing the government to embrace greenhouse
emissions.
kinnath|2.5.08 @ 4:46PM|#
Lets see here Kenneth, if having trash service costs 1/2 of
your income,. . .
We're currently talking about a carbon tax that is about 3% to 4%
of the cost of a gallon of gas. There would be some corresponding
increase in heating and cooling costs etc. This is a really long
fucking way from 1/2 of someone's net income.
There are a lot of really, really good arguments against a carbon
tax. Why don't you try finding one of them.
Don't strain yourself though.
|2.5.08 @ 4:46PM|#
robc,
I think John was going with the same assumption that the carbon tax
would supplant the income tax.
But we can all agree that it is hard to believe that that would
really happen.
Wire Fiend|2.5.08 @ 4:55PM|#
The last thing the government would ever want is for people
to stop smoking. In some wierd way, I could see carbon taxes
causing the government to embrace greenhouse emissions.
Mos Def
squarooticus|2.5.08 @ 4:57PM|#
A carbon tax devoted to helping repair and adapt to global
warming damages accomplishes this in the most efficient manner
possible.
A tax is never the best way of awarding damages.
For one thing, it presumes guilt without the damaged party having
to provide evidence in court.
But more importantly: who is going to mandate to the legislature
(with a bunch of guns backing it up) that they distribute the tax
money in the best possible way to those who are damaged, in order
that they repair their damaged property?
I understand one purpose of the tax is to factor the price of
cleanup into the cost, so people can make more efficient choices
about energy sources; but the other purpose has to be to distribute
the tax money in such a way that it actually ends up benefiting
people in proportion to how much damage they incur.
Who here believes this will actually happen, and the tax money
won't instead be used to fund yet another entitlement for the swing
voter group du jour?
Goddammit, STOP ADVOCATING THE USE OF GOVERNMENT COERCION TO GET
WHAT YOU WANT. As long as you continue to do this, you effectively
validate every bad thing government does, because there's no way to
get the good without the bad.
|2.5.08 @ 4:58PM|#
"Goddammit, STOP ADVOCATING THE USE OF GOVERNMENT COERCION TO
GET WHAT YOU WANT. As long as you continue to do this, you
effectively validate every bad thing government does, because
there's no way to get the good without the bad."
Very true.
|2.5.08 @ 5:06PM|#
People don't like assumption #4. The economic and quality of
life effects of global warming are undesirable, possibly
catastrophic.
If the icecaps melt, the costs will be ???
I don't know, nobody here knows, nobody credible claims to. All
agree the number is extremely large. The numbers associated with a
carbon (and other greenhouse gases) tax have been computed. The
fact that doubling the price of coal generated electricity (40% of
US CO2 emissions) will drastically reduce coal generation of
electricity is pretty obvious to me. It will, of course, reduce
electrical usage some, but mostly we'll switch to other sources,
and pay a bit more because coal is the cheapest when the
commons aren't factored in.
Peoplee are still going to use and waste energy. All other things
being equal, if gasoline was 50% greater in cost than other methods
of propulsion (elec. hydrogen ...) what happens to gasoline
consumption? People will still drive to the country (less often
initially, I'm not a dreamer) with a carbon tax, they'll be using
different energy sources to do it.
Maybe I'm not libertarian enough, but the private market, my
default position on issues, can't solve every problem.
Just don't burn me at the stake, OK? :-(
|2.5.08 @ 5:07PM|#
John,
I think one of the things you're missing is the damage done to our
quality of life via the income tax. Regardless of whether carbon
emissions are harming our environment, taxing economic activity is
definitely harming our economy. Any calculation of the damage done
to our standard of living by taxing carbon rather than economic
activity will have to account for the benefit of doing away with
that harm.
In terms of living with less energy necessarily meaning a lower
quality of life, why do you think so many retired people move to
the South and Southwest? My folks have lived without air
conditioning and very little heat since '84 or so, and they don't
miss it at all. I think their heating bill in the Winter is like
$80 a month. They paid a lot more than that back in DC, and their
quality of life is probably better.
economist|2.5.08 @ 5:08PM|#
squarooticus,
I understand that there are problems with the legislature imposing
these taxes and having control over where the money goes. However,
my idea does not presume guilt. To implement it, I would say that
the government should first have to prove beyond reasonable doubt
that global warming does indeed cause damage to property before
implementing such a tax. I was only explaining that if global
warming damage was indeed real, this would be the most efficient
way of allocating damages.
Gilbert Martin|2.5.08 @ 5:12PM|#
"Burning my trash in an open barrel is a lot cheaper that paying
the cartage company to haul it out. Hauling it away makes my
neighbor a lot happier but clearly reduces my standard of living.
It's just not fair."
Indeed not, since you are under no obligation to make your neighbor
happy.
squarooticus|2.5.08 @ 5:12PM|#
I was only explaining that if global warming damage was
indeed real, this would be the most efficient way of allocating
damages.
There are two outrageous presumptions there, though:
(1) Global warming is proved beyond a reasonable doubt.
(2) Damages would be allocated rather than simply fall into the
entitlement blackhole, as I indicated.
But please do go on debating the number of angels who can dance on
the head of a pin. ;-)
Ventifact|2.5.08 @ 5:13PM|#
I can't believe nobody here has yet mentioned the obvious fact
that carbon-emitting energy sources are not competing on a level
field anyway. Why exactly do we devote so much work to maintaining
oil export from unstable and unfriendly nations, and how much
exactly does that cost? How libertarian is that?
Now, that's not to say extra taxes are the solution. However, a
logical consideration of "externalities" as mentioned above by
several others does lead to these taxes.
robc makes a really interesting point about the government becoming
dependent on pollution income. I personally think we're already
approaching this point with the gas taxes. Much of the government
has a strong interest in avoiding any significant energy
infrastructure shift -- at least one that is not overseen by the
government. If the transition occurs spontaneously, the gov't will
be left behind, even if only temporarily, and will suffer revenue
disruptions. If the government controls the transition, that risk
is mitigated.
There is this problem with taxing "bad" things to curtail their
prevalence: the government acquires an interest in perpetuating the
existence of those bad things it claims it is attempting to
eliminate. Thus I propose that the only acceptable tax of such a
type, e.g. against pollution, is one in which the revenue never
directly enters a government budget. The only good example I can
think of to satisfy this criterion is that such tax revenue could
be entered into college endowments, where the revenue would never
be directly spent.
This wouldn't totally eliminate government interest in perpetuating
"bad" things that are taxed, but it would seriously weaken that
conflict of interest, by: 1) giving that revenue in a fairly
indirect form, spaced out over decades as dividends; 2) giving the
revenue to governmental branches with relatively marginal political
importance and relatively little influence on tax policy; and most
importantly 3) avoiding devoting the revenue to social services
that no one will want to cancel in the future when tax revenue
threatens to decrease -- the money given to the endowment will
represent a permanent income stream independent of future infusions
of money, as is the nature of endowments.
Um, not that that would ever happen. Hmm.
Vent|2.5.08 @ 5:14PM|#
And when I say "relatively little influence on tax policy" I mean, among other things, that universities are already so intellectually statist that there's nothing to lose by furthering their incentive to that ideology...
economist|2.5.08 @ 5:14PM|#
John,
If you've noticed, both J sub D and I, both fairly
conservative/libertarian on economic issues, agree on the point
that IF global warming does provable damage, then we should tax the
actions that cause the damage in proportion to how much they
contribute to it and use the revenues to help repair the damage or
adapt to it. This doesn't make us statists. Ensuring that those who
cause damages compensate the victims falls within the proper role
of government.
|2.5.08 @ 5:16PM|#
Regardless of whether carbon emissions are harming our
environment, taxing economic activity is definitely harming our
economy.
The analogy I'm going to use is is sewage treatment. Taxing
economic activity, to build collection and treatment systems harms
the economy in Cleanville, giving economic advantage to
Coliformburg, right?
economist|2.5.08 @ 5:17PM|#
squarooticus,
I never said it was proven beyond reasonable doubt. I actually
think it's premature for the Prometheus Institute to make a
judgment about it at this time and recommend a carbon tax. I was
defending the underlying principle on which they based their
action, not the action itself.
economist|2.5.08 @ 5:18PM|#
J sub D
Actually, Coliformburg should pay for its own sewage treatment
system.
|2.5.08 @ 5:19PM|#
And nobody has called me any obscene names. Yet. Civil
discussions can be interesting.
Not that I'd want all discussions here to be polite and civil.
;-)
|2.5.08 @ 5:19PM|#
IF global warming does provable damage, then we should tax
the actions that cause the damage in proportion to how much they
contribute to it and use the revenues to help repair the damage or
adapt to it.
Out of curiosity, how much do you imagine a North Dakota farmer
will have to pay under your scheme for the externalities of warmer
winter nights and longer growing seasons?
squarooticus|2.5.08 @ 5:22PM|#
Ensuring that those who cause damages compensate the victims
falls within the proper role of government.
If you believe government should have a monopoly on justice, then
absolutely. So, under such a system, how do you propose to get
Congress to distribute all the carbon tax revenue fairly?
squarooticus|2.5.08 @ 5:24PM|#
Hit "submit" too early.
I.e., will there be guillotines or the threat of guillotines
involved?
My point is simply that you're expecting a system (democratic
government) to do something that it has no incentive to do
properly. In fact, it has every incentive to screw it up, because
that's how the people in power retain power.
|2.5.08 @ 5:28PM|#
BTW, assumption #5, "The least intrusive, cheapest way to stop
said warming is reduce greenhouse gas emmisions globally" needs to
be seriously thought about.
Powdered aluminum in a high orbit? Other schemes are certainly
possible.
|2.5.08 @ 5:29PM|#
If the icecaps melt, the costs will be ???
I don't know, nobody here knows, nobody credible claims to. All
agree the number is extremely large.
And almost all agree that this isn't going to happen for several
centuries. The possibility simply doesn't enter into any rational
-- i.e., mathematically useful -- cost-benefit analysis.
In fact, bringing up sudden and improbable catastrophic results
brings your assumption #5 into question...
The least intrusive, cheapest way to stop said warming is
reduce greenhouse gas emmisions globally.
The greater the variance in potential costs of global warming, the
more likely you want to choose a high variance solution -- the more
likely that you will want to or need to solve global
warming by geoengineering.
penxv|2.5.08 @ 5:33PM|#
Exactly. What happens 5 years down the line when some genius
invents a way to cut carbon emissions by 60%? Is the government
just going to accept 60% less revenue?
You mean 30 years ago.
|2.5.08 @ 5:45PM|#
If you've noticed, both J sub D and I, both fairly
conservative/libertarian on economic issues, agree on the point
that IF global warming does provable damage, then we should tax the
actions that cause the damage in proportion to how much they
contribute to it and use the revenues to help repair the damage or
adapt to it.
But arguing for carbon taxes as a means of restitution only works
if the other side of the equation works - that is, the carbon tax
revenues are paid out to those whose property is damaged to the
degree it is damaged.
That ain't gonna happen. It would require a massive international
wealth transfer to property owners. Simply. Not. Gonna.
Happen.
Restitution does not provide a justification for carbon taxes.
|2.5.08 @ 5:49PM|#
The analogy I'm going to use is is sewage
treatment.
The cost/benefit loop for genuine public health (meaning, disease
prevention) is much tighter. I'm not sure you can generalize from a
local system with local benefits to a global system.
And, lets not forget, carbon taxes only work if they are
international in scale. The US can tax the shit out of carbon, but
if the Chinese keep building one new coal-fired generating plant
per week, it won't make enough of a difference to matter.
|2.5.08 @ 6:06PM|#
robc (3:39pm) assures Epi that, by "suggesting a carbon tax, Ron
initiated violence against us..."
Whoa there, robc! "Suggesting" is now violence? Can't we wait until
someone sees Ron assisting in the violence and, er..., I
think we have to wait until there is a carbon tax,
too.
Even then, I'm with Ken Shultz (3:34) who thinks it doesn't qualify
as "new" violence unless the net-sum tax rate goes up.
|2.5.08 @ 6:13PM|#
"Restitution does not provide a justification for carbon
taxes."
I agree that restitution does nothing to justify carbon taxes, and
it does even less to justify income taxes or capital gains...
What if we could get Al Gore and people like him to support the
elimination of the income tax? Who here wouldn't trade the income
tax for a tax on carbon emissions?
...I hear a lot of people saying that trade isn't going to happen,
for whatever reason, but don't most of us agree that we'd make that
trade if we could?
|2.5.08 @ 6:16PM|#
And, lets not forget, carbon taxes only work if they are
international in scale. The US can tax the shit out of carbon, but
if the Chinese keep building one new coal-fired generating plant
per week, it won't make enough of a difference to
matter.
From my first post,
IOW, is a global carbon (and methane, and other greenhouse
gases) tax the best way to deal with the problem?
But we agree. If India, China, et al don't play, we don't
either.
|2.5.08 @ 6:17PM|#
R C Dean (5:19) and economist (5:14) are keying off the point,
"IF global warming does provable damage, then [stuff}"
Not good; not close enough at all. The argument only follows if we
add a condition: "IF the human contribution to global
warming does provable damage, then [stuff]".
And, then too, you have to PROVE it.
And the proof goes like this: "computer models predict..." That's
right; the ONLY connection between human causation and the looming
disaster is computer models. Make that demonstrably flawed
computer models.
|2.5.08 @ 6:20PM|#
"What happens 5 years down the line when some genius invents
a way to cut carbon emissions by 60%? Is the government just going
to accept 60% less revenue?"
I would expect the government to raise the rate of the carbon tax,
no question. Some will argue that no matter what we tax, the
government will eventually increase the tax rate up to whatever
limit the voters are willing to tolerate.
...but what would seem to follow from that is that they wouldn't be
able to take more of a share of GDP than we were willing to
tolerate anyway. ...and, I would argue, that after a decade of not
having to pay income taxes, people might come to be less accepting
of the idea of surrendering a portion of their income.
|2.5.08 @ 6:21PM|#
"IF the human contribution to global warming does provable
damage, then [stuff]".
And, then too, you have to PROVE it.
Considering that some alledgedly intelligent people think evolution
hasn't yet been proved, we might just have to ignore the
deniers.
|2.5.08 @ 6:24PM|#
"Considering that some alledgedly intelligent people think
evolution hasn't yet been proved, we might just have to ignore the
deniers."
I'd think, even for the deniers, you should only have to prove that
taxing carbon is better than taxing income, not that carbon is out
to get your grandkids.
Kolohe|2.5.08 @ 6:34PM|#
Such analysis is exactly where that $10-20 cost per ton of
CO2 comes from. In other words, the best estimate of actual
externality due to CO2 is equal to a dime per gallon of gas. Hardly
catastrophic.
And with J sub D's #4 the devil is in the details of
quanitification.
Is is $10 or $20? That's the key question. When talking of
27 gigatonnes it makes a difference (just like it made a
difference to the oil state economies when oil went from $20 to
$10)
As a said above, I like the hybrid idea of a carbon tax to capture
the cost the externality with loosely basing it on a market
mechanism with cap/trade. I am, however, very suspicious of even
good faith estimates of assessing externality costs, because its a
Drake's equation-like problem.
|2.5.08 @ 7:16PM|#
J sub D (6:21pm) says "Considering that some alledgedly
intelligent people think evolution hasn't yet been proved, we might
just have to ignore the deniers."
Nice. Ignore the rest of the post. For "proof" the warmists have
flawed computer models and... nothing else.
Oh, well, the media all believes in it. That settles it;
nevermind.
Matt Harrison|2.5.08 @ 7:49PM|#
Dear Mr. Costin from Heartland: Please read our actual proposal
at PayYourAirShare.org - we propose the carbon tax revenues be
returned to the people through an income tax cut. We even deny
politicians any control over the rate-setting. Accordingly, your
objections have no merit. The power (and the money) remain in the
people's hands - not the government's.
Special thanks to Mr. Bailey and others who have recognized the
sound economics behind taxing externalities.
We all believe the market will solve global warming. The carbon tax
helps the market do so by allowing energy markets to take into
account the true costs of the damage to other people's property
from their emissions.
There is no cookie-cutter Coasian solution to global warming.
Transaction costs are nearly infinite, victims and transgressors
are virtually indistinguishable, and CO2 emissions are untraceable.
Therefore, there likely will be no market solution until all energy
prices reflect their true costs.
Nothing is more libertarian than compensation for harm. The carbon
tax is simply proactive compensation, plain and simple.
Thanks for reading.
M. Willard Thornton|2.5.08 @ 9:36PM|#
So are we living in a climate of
fear, or a fear of
climate?
We Must All Do Our Part To Preserve This Climate Of
Fear
January 30, 2008
The last six years have been a golden age of American apprehension
and mistrust. Thanks to the events of Sept. 11, 2001, all of
America was united, standing shoulder to shoulder in sheer,
unrelenting fear. But tragically, that atmosphere of panic and
confusion has begun to fade, and without another terrible attack to
bond us as a nation, we are dangerously close to entering a
post-post-9/11 era.
We cannot allow that to happen.
We must all do whatever we can to preserve America by refocusing
our priorities back on the contemplation of lethal
threats-invisible nightmarish forces plotting to destroy us in a
number of horrific ways. It is only through the vigilance and
determination of every patriot that we can maintain the sense of
total dread vital to the prolonged existence of a thriving,
quivering America.
Our country deserves no less than every citizen living in
apprehension.
Fear has always made America strong. Were we ever more determined
than during the Yellow Scare? When every Christian gentleman lived
in mortal terror of his daughter being doped up on opium and raped
by pagan, mustachioed Chinamen? What about the Red Scare, when
citizens from all walks of life showed their pride by turning in
their friends and associates to rabid anticommunists? Has America
ever been more resolute?
Not so very long ago, we winced every time we saw someone with
facial hair or a backpack. Average people were terrified of opening
their mail for fear of getting a face full of anthrax. Those were
perhaps our country's greatest days. Yet that once-phobic spirit
that defined our times is drastically changing.
Today, people are making eye contact with strangers on the street.
They are whistling on subway platforms, strolling down sidewalks,
and generally behaving as if they do not feel they could be killed
at any moment. Children can be seen running playfully in public
parks, their parents smiling and watching idly from afar when they
should be obsessing over an unseen child abductor who will snatch
and rape their babies first chance they get. It breaks my heart to
see the land I love fall into such a state of non-panic.
My God, what have we become?
We can no longer rely solely on our enemies to menace the
populace-we must find that horror within ourselves. Though we have
made great strides in frightening ourselves about illegal
immigrants, bird-flu pandemics, and random psychotic school
shootings, it is not enough. What happened to that country I used
to know and love, where a Korean grocer could be killed out of
irrational xenophobia merely because someone thought he was an
Arab? Such an act is, I am disappointed to say, almost unthinkable
in today's increasingly less-than-utterly-petrified climate.
You may say, "I am only one person. What can I do?" But all of our
efforts are needed if we are to maintain a state of constant
anxiety. We can all do more, but here is a good starting place:
Twice a week, for at least 15 minutes, take the time to worry about
any Muslims who may live in your area; lose sleep each night
thinking about our thousands of miles of unguarded borders; stock
up on water bottles and canned goods for no discernible reason
other than that vague sense that civilization will collapse any
second; as the election heats up, be sure to support candidates
whose rhetoric appeals to your base survival instincts and
fight-or-flight reflexes rather than to your hopes and
dreams.
And remember: Each and every one of us, no matter how big or small,
possesses the ability to jump to conclusions.
The strength of our nation depends on all of us feeling-and, more
importantly, acting-as if a sniper could blow our head off at any
moment. Let's all come together as in fearful days of yore and do
what we must to keep America free from peace of mind once and for
all.
Mike Laursen|2.5.08 @ 11:53PM|#
It's pure fantasy to believe that the government will set its tax rates according to some mathematical formula. The tax rates will end up being set based on all kinds of political considerations having nothing to do with the climate, most prominently sustaining whatever bureaucratic and entitlement budgets that come to depend on the carbon tax for their funding.
|2.6.08 @ 2:51AM|#
Firstly I think anthropogenic global warming is true beyond any
reasonable doubts ('Proof' btw belongs only in abstract
sciences e.g. Geometry, not the material kind e.g. climatology).
This belief is based on the observations that CO2 absorbs heat
(Tyndall 1859), CO2 is increasing (Revelle since the 50's), that
isotope signatures show that this CO2 increase could only come from
human activity (somewheres on the internets I am too lazy to show
properly, sorry, will find it later), and the observations from
ground and sea stations, as well as satellites that the Earth's
temperature is generally rising over the past several decades;
combined with the observations of the lack of other forcings which
could explain such warming. These are observations, NOT the models;
which btw do actually pretty good IMO.
I can't say yet whether such warming will be 'catastrophic'. But I
do think there will be an increase in bad effects. Good weather and
climate means a good economy (given a reasonably free market that
is). Bad weather and climate has the opposite effect. Even without
global warming over our heads I don't need to know whether AGW will
be catastrophic to know that taking appropriate action really is
worth our while. The minimum standard is the cost of global climate
control relative to historical negative climate behavior adjusted
for a future global economy. (this is ignoring for now the costs of
a rapidly variable sea level associated with climate change versus
the benefits of a reliably static sea level)
John has mentioned fairly often that he thinks that there is no
reason to think the cost of halting CO2 emmissions will be less
than the cost of not halting them e.g. adaptation. There is a
different outlook which he should explore:
1. while about 1/3 of the CO2 reduction would be quite costly,
another third would much smaller in cost; and the final third would
be so small in cost that it might actually help make people richer;
ie, it is cost neutral. This means that about two thirds of the
needed emissions reduction is achievable in the short term at a
cost which wont threaten the wealth of the world. By the time we
get to the last third, better technology will have come around
which reduces those hardest third costs better than we can
now.
2. There are other value adding reasons to minimize fossil fuel
use. Better independence from highly subsidized centralized
utilities. Resilience from natural disasters. In some cases the
non-CO2 system is actually a better overall wealth/good than the
CO2 intensive system. My SolaTube in my otherwise shadowed kitchen
cost much more than I will ever save in electricity, but it rocks
awesomely while reducing CO2 emissions.
3. Returning again to the issue of global climate control, if done
right, these 'Costs' might just 'Buy' something of actual value
that mere adaptation can't: A Global Climate Control Infrastructure
(which upgrades to Global Weather Control). This will greatly
minimize economic costs of bad climates, by minimizing bad
climates. Given that such a structure would have decreasing costs
as it matures, and when measured against an exponentially
increasing global economy, any solid investment now in such science
technology, and infrastructure, more than pays for itself. ie,
Launch the f*king GoreSat already!!!! (google: Deep Space Climate
Observatory (DSCVR)) it's already built and paid for, and is
costing $1 million/year just to store it! just F*ING LAUNCH IT!!!
jeez...
'Doing It Right' begins with proper policy. From a proper
libertarian perspective Carbon Taxes should be just another
boondoggle which will fail miserably. I personally agree with this
sentiment; 'They' are going to f*k it up. But I can at least
understand this proposal is RealPolitik stuff of just trying to
actually get something in place.
At this point in time wrt to Global Climate Control, 'Doing It
Right' means not dumping any more CO2 into the air than necessary,
while doing science to better understand the climate.
My proposals here in the past (largely uncommented upon) have been
basically thus:
First end all corporate welfare. No big surprise there. Limiting
this to the fossil fuel industry would likely be RealPolitik;
pushing for the same in agriculture would also help as they are the
most vulnerable to climate change and need to 'uproot' themselves
from their old ways the second fastest.
Our government should be carbon neutral. Make it so. This isn't
imposing on my neighbor, it's getting value for my tax dollar by
getting my percentage of the paid public 'service' to stop stepping
on me that much less.
A Tariff on all imported goods and travel which has not otherwise
been shown to be Carbon-Neutral. This can be from Certified Carbon
Offsets, or from emissions audits; or some combo. If only partial
compliance is met, then only a partial tariff is applied. All
proceeds from that tariff must go towards making the subject carbon
neutral via certified offsets. This whole shebang can be
implemented gradually, so as to not shock the global system.
Only after such is implemented would I consider a domestic carbon
tax. Such should only be used to pay for whatever government
assistance is truly useful in creating a real Global Climate
Control Infrastructure. Fat chance of that, but these are at least
steps in the same direction.
economist|2.6.08 @ 8:00AM|#
MikeP,
You actually make a good point with pointing out the benefits to ND
farmers. To be perfectly honest, I don't know how we consider
benefits of global warming. When I was talking about repairing
economic damage, however, I was mainly considering transaction
costs (ie, farmer in Southern plains loses crops to drought, and
production has to shift to northern states. These would be real
costs if global warming were a genuine problem).
economist|2.6.08 @ 8:02AM|#
Sam-hec
Just where do you get your assertion that "two-thirds of emissions
reductions can be achieved in a way that does not harm the wealth
of the world". If you're going to make assertions like that, you
have to cite sources.
|2.6.08 @ 9:58AM|#
Out of curiosity, how much do you imagine a North Dakota
farmer will have to pay under your scheme for the externalities of
warmer winter nights and longer growing seasons?
I think it's safe to sat that
1) Climate change will benefit some people and harm others.
2) The number of people harmed will be greater than the number
helped.
3) The economic negatives will outweigh the positives.
4) Identifying the winners and losers and quantifying their
benefits and losses is an implausible task at best.
I'm not really thinking about comensation for those harmed. I'm
thinking about minimizing the ecological and economic costs of
anthropogenic glbal warming by reducing the amounts of greenhouse
gases human activity emits.
Any compensation scheme would rapidly degenerate in the asbestos
fiasco time 1,000.
|2.6.08 @ 11:08AM|#
I'm not really thinking about comensation for those harmed.
I'm thinking about minimizing the ecological and economic costs of
anthropogenic glbal warming by reducing the amounts of greenhouse
gases human activity emits.
Exactly. That was the point I was getting at.
I think the problem of global warming can only be solved
holistically, as you note, and not based on any sort of
compensation or accounting. I.e., it should be treated as a fact of
nature that has a cost to the human environment and economy, and
not as a fact of human activity that has a cost to the human
environment and economy. As Matt Harrison says above, there is no
present day Coasian solution.
|2.6.08 @ 11:20AM|#
As Matt Harrison says above, there is no present day Coasian
solution.
..but there may be a future day Coasian solution.
I think the most likely solution to global warming is the discovery
of an industrial scale process for sequestration of atmospheric
CO2. Algae, bioengineered plants, nanoparticles, surface chemistry,
even hard core factories filling the desert to take advantage of
the sun for the energy required to crack CO2.
If and when such atmospheric sequestration is possible, then there
is a Coasian solution. For every tonne of CO2 production, the
producer, distributor, or consumer must buy a tonne of CO2
reduction. The externalities of CO2 production would be completely
internalized, and the trade would perfectly drive markets and
competition. And government never touches the money: Its only role
is assuring that the reduction is real and the production is
offset.
|2.6.08 @ 6:33PM|#
"Just where do you get your assertion that "two-thirds of
emissions reductions can be achieved in a way that does not harm
the wealth of the world". If you're going to make assertions like
that, you have to cite sources."
Basic Bayesian reasoning suggests as much. Personal experience with
trying to reduce my CO2 footprint. And of course Some Guy(s) On The
Internet(tm) claimed to have calculated as much. (no link handy, I
am at lunch)
Put simply, not all of the costs of CO2 emmision reduction are
going to be equally costly. Why would they be?
|2.6.08 @ 6:43PM|#
J sub D: Your #5 can be loosened slightly, if you have a carbon
tax that can go negative, i.e., if you also have the government
offer subsidies for carbon sequestration equivalent to the cost of
emitting carbon.
The ideal here would be if we knew who was harmed and exactly how,
and could funnel the tax money to those people. Assuming that's not
possible, reducing taxes or having some rebate spreads the benefit
relatively evenly.
alisa|2.6.08 @ 8:13PM|#
"Put simply, not all of the costs of CO2 emmision reduction are
going to be equally costly."
That actually turns out to be true. Take a look at the
Stern Review .
There's a rundown and a dramatic graph of the costs and savings of
various carbon-reducing steps. The biggest savings come from
efficiency modifications in buildings and appliances; also fuel
efficiency. I believe sugar ethanol (if we dropped the tariff) is
either a net gain or a pretty low cost. The most expensive tactic
is reforestation. Most alternative energy sources are in between,
with nuclear among the cheaper.
It would be smart to start with the projects that save money, but
policy doesn't always work that way.
|2.7.08 @ 10:33AM|#
Nuclear power is going to have some serious challenges in a drier America. http://tinyurl.com/35e55b
Carl|2.7.08 @ 12:31PM|#
A carbon tax is far more libertarian than the personal income
tax. It is a set of excise taxes and tariffs -- no 16th Amendment
needed. The number of collection points are tiny and very public.
Privacy gets restored.
Without conservation, a carbon tax could replace the income tax at
a rate of roughly $2/gallon of gasoline and $0.11/kw-hr of
electricity. Derivations
of these figures here.
Of course such a tax would cause immediate conservation. Charts
here. Whether the carbon tax Laffer Curve peaks high enough to
match the current income tax is debateable. But with a few
libertarian inspired spending cuts, it might be feasible...
|2.7.08 @ 8:31PM|#
Carl wrote, "Without conservation, a carbon tax could replace
the income tax at a rate of roughly $2/gallon of gasoline and
$0.11/kw-hr of electricity. Derivations of these figures
here."
But would it really affect carbon usage all that much? I remember,
back when gas was $1-1.50/gallon, the alternative transportation
supporters kept saying that if gas got to $2.00-2.50/gallon, people
would DEFINITELY start shifting over to carpooling and buses. Well,
we're well over $3.00/gal. in many areas, and public/mass transit
still handles a very small (practically negligible) number of
trips. Now those same people are saying, "if only gas would rise to
$5-6/gallon..."
The way they want the price to rise, of course, is in the form of a
tax, with revenues going to a government that has proven itself
incapable of fiscal restraint, and equally incapable of solving the
high-visibility problems (poverty, drugs, education, finding OBL,
and many, many more) it once asked us to let it handle.
If the Peak Oil theory is correct, then oil and gasoline prices
will rise naturally, and wean people off of petro-fuels gradually.
Of course, the government wouldn't get much of a piece of THAT
action, would it?
If the idea is to replace the income tax with a carbon tax, and the
idea of the carbon tax is to get people to emit less carbon, isn't
that a recipe for failure? As people emit less carbon, less will be
coming into the treasury. If we could drastically lower our
emissions of carbon, our federal revenues would fall precipitously,
as well. At that point, government -- always wanting to keep
spending -- would turn to sales taxes, a resurrection of the income
tax, or whatever, to keep the coffers filled. My prediction: if you
think carbon tax vs. income tax is an X OR Y situation, and not an
X AND Y situation, you will be disappointed. The precedent for
income tax is already established. Let's not set the precedent for
taxing something that citizens normally EXHALE.
Site comments/questions:
Media Inquiries and Reprint Permissions:
(310) 367-6109
Editorial & Production Offices:
3415 S. Sepulveda Blvd.
Suite 400
Los Angeles, CA 90034
(310) 391-2245