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.

Comments

[Taktix?]

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*

[MikeP]

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]

(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.

[Ron Bailey]

Taktix: Is vomit an externality, too? I keed. I keed.

[James Anderson Merritt]

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]

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

[SugarFree]

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.

[Kolohe]

I agree with MikeP

[[Zardoz reference]]

"Pragmatic damage control" de-fallacizes the slippery slope.

[MikeP]

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]

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....

[gorak]

Uhhh the fact that the libertarians are starting to believe in global warming is going to severely hurt our stereotype as the smart ones.

[John]

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".

[SugarFree]

[Zardoz reference],

I look good in a bulky red diaper.

And I always had plans of purifying the Earth of Brutals.

[Chuck]

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?

[Ken Shultz]

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]

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]

Epi,

By suggesting a carbon tax, Ron initiated violence against us, so its okay to beat him up.

[John]

"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]

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]

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

[Jimbo]

"Wow. If this is libertarianism I'm getting off the bus."

Welcome to the Confederacy my Paleotarian brother.

[John]

"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]

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).

[economist]

They're comin' right for us, Ned!

[Joe Allen]

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.

[Ken Shultz]

"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]

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.

[John]

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?

[Ron Bailey]

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.

[joe]

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."

[John]

"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]

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]

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]

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.

[John]

"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.

[ed]

Not "government."

You can't have a tax without a government, joe.

[Brian Costin, Heartland Instit]

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?

[joe]

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.

[John]

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.

[MikeP]

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.

[joe]

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.

[John]

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]

innovators and entrepreneurs dont need any extra incentive. Profit motive is incentive enough.

[joe]

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]

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.

[joe]

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.

[John]

"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.

[MikeP]

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.

[joe]

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]

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.

[John]

"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]

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.

[joe]

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]

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.

[economist]

Holy crap, I can't believe joe and I are arguing similar points.

[R C Dean]

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.

[joe]

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]

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]

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.

[John]

"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.

[joe]

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?

[Anonymous]

So are we living in a climate of fear, or a fear of climate?

[Juan]

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]

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.

[J sub D]

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]

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.

[MikeP]

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.

[John]

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]

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]

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.

[John]

"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]

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]

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]

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!

[John]

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.

[MikeP]

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]

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]

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).

[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."

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]

"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.

[robc]

all contradictions.

Drink!

[John]

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.

[MikeP]

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]

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]

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]

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.

[John]

"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]

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.

[MikeP]

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]

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]

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.

[John]

"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.

[J sub D]

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? 🙁

[Ken Shultz]

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]

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]

"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]

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]

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]

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]

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.

[J sub D]

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]

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]

J sub D
Actually, Coliformburg should pay for its own sewage treatment system.

[J sub D]

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. 😉

[MikeP]

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]

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]

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.

[J sub D]

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.

[MikeP]

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]

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.

[penxv]

And no... they won't allow it.

[R C Dean]

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.

[R C Dean]

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.

[PiperTom]

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.

[Ken Shultz]

"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?

[J sub D]

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.

[PiperTom]

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.

[Ken Shultz]

"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.

[J sub D]

"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.

[Ken Shultz]

"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]

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.

[PiperTom]

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]

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]

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]

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.

[Sam-Hec]

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]

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]

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.

[J sub D]

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.

[MikeP]

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.

[MikeP]

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.

[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."

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?

[greenish]

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]

"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.

[Sam-Hec]

Nuclear power is going to have some serious challenges in a drier America. http://tinyurl.com/35e55b

[Carl]

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...

[James Anderson Merritt]

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.