Climate Change

Why Carbon Pricing Is Preferable to Carbon Regulation

And, within those policies deemed "carbon pricing," a carbon tax is preferable to cap-and-trade.


A new paper from the Niskanen Center explains why "carbon pricing" is a better way to reduce greenhouse gas emissions than traditional emission control regulations. As study authors Shuting Pomerleau and Ed Dolan explain, setting a price on carbon (such as through a tax) allows for the more efficient reduction of greenhouse gas emissions because the costs of emission reductions can vary widely across sources. The result is more cost-effective emission reductions and the imposition of fewer constraints on economic dynamism. Moreover, carbon pricing regimes more readily accommodate changes in technology over time than do centralized regulations.

One common complaint about carbon pricing, and a carbon tax in particular, is the potential regressive effect of increasing energy prices. Yet as Pomerleau and Dolan note, such regressive impacts can be readily addressed by rebating carbon tax revenues.

While the potentially regressive effects of carbon pricing are widely discussed, there is relatively little attention paid to the regressive impacts of other proposed greenhouse gas policies. As Pomerleau and Dolan note:

On purely theoretical grounds, there is no reason to believe that the impacts of environmental regulations are any less regressive than those of a carbon tax. Since regulations tend to raise the cost of doing business, they can be expected to raise prices of goods, with a disproportionate impact on the purchasing power of low-income households.

While traditional regulatory measures of greenhouse gas emitters are also likely to increase energy prices, such measures do not generate a revenue stream that could be rebated to offset the potentially regressive effects. Thus it is a mistake to assume that carbon pricing is more regressive than regulatory alternatives.

Another reason to prefer carbon pricing to traditional regulations is that carbon pricing is easier to adopt and less vulnerable to legal challenge and delay. As I explain in this paper (originally published by the Niskanen Center as well), traditional regulatory approaches to greenhouse gas emission control face substantial legal and administrative obstacles, even if expressly authorized by Congress.

Where I differ with Pomerleau and Dolan is with the extent to which they characterize carbon taxes and cap-and-trade systems as largely equivalent approaches. This is common in the economic and political science literature, but I believe it is a mistake. While price and quantity instruments can be modeled as equivalents, they are quite different in operation and in terms of political economy. While Pomerlau and Dolan acknowledge some of the differences, I think they understate the reasons why one approach (a carbon tax) is vastly preferable to the other (emission trading).

Supply constraints, such as those that are created for tradeable permit systems, tend to produce significant price volatility, which can discourage investment in low-carbon technologies. Further, cap-and-trade systems, in practice, often require regulators to engage in many of the same quantification and assessment measures required under traditional regulations. This is why even a relatively simple cap-and-trade system imposed on a limited number of sources, such as that which was used for acid rain-causing emissions under the 1990 Clean Air Act Amendments, required years to put in place. By comparison, British Columbia adopted and imposed its carbon tax system in a matter of months.

The political incentives created by the two approaches are also quite different, as are the rent-seeking vulnerabilities. Imposing a supply constraint creates the sort of fixed-pie allocation problem that accentuates the demand for rent-seeking. Further (as a I discuss briefly in my paper linked above), implementing a cap-and-trade system requires far more of the administrative process than does imposing a simple price or tax, and greater complexity creates greater vulnerability to rent-seeking. In short, each discreet determination regulators must make is an opportunity for rent-seeking, and the implementation and adoption of cap-and-trade systems require far more such determinations than does the adoption of a tax or price system.

The problem, of course, is that a carbon tax or other carbon pricing system would almost certainly require action by Congress, and that seems quite unlikely. This could change with the election of a conservation-minded Republican, or a sudden Democratic willingness to consider the adoption of a carbon tax through reconciliation, but neither seems all that likely right now. Thus for the moment, the best greenhouse gas emission policies are those the United States seems least likely to adopt.

NEXT: Two More Worthy Additions to the "Anticanon" of Constitutional Law - Berman v. Parker and Euclid v. Ambler Realty

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  1. This one way of slaving is slightly less slave-y than this other way. Yay? Libertarian moment?

    1. Sorry Art. I can’t hear you. Talk louder!

    2. Libertarianism, where the “Common Good” goes to die.

      1. the “Common Good”

        An ethereal term that’s generally used as shorthand for the particular policy preferences of a painfully small number of decidedly non-commoners.

    3. So what’s the libertarian solution for externalities–class action lawsuits against polluters? A rebated carbon tax seems way less burdensome (and with way less being paid to lawyers) on the people who’d end up paying out, and it’s hard to call it “slavery” when the government doesn’t even keep the revenue.

  2. “This could change with the election of a conservation-minded Republican, or a sudden Democratic willingness to consider the adoption of a carbon tax through reconciliation,”

    Don’t forget elimination (or diminution) of the filibuster!

  3. Trading or taxing have downsides, like in practice not all uses of carbon are equal. Recall the problems with corn prices during ethanol mandates, pricing it out as food.

    Also, a new tax is a tax that enters the upratchet cycle as bloviation about not paying their fair share engages.

    Also, government wants more taxes so it can spend more, and borrow more. Rarely is it used to reduce borrowing.

    Both taxes and direct regulation suffer from corruption impulses to back off, some, for the right “donation”.

    1. Of course, the idea of taxing carbon is to get it to its most productive uses.

      Ethanol mandates are not a good comparison, because they were mandates, and didn’t allow this kind of flexibility.

      1. “the idea of taxing carbon is to get it to its most productive uses.”
        I doubt that bernard.
        The goal is to discourage the use of CO2 producing products and processes. Nothing says the result will maximizes productivity

        1. of course, local taxation of carbon will lead to an increase in global production of carbon….

        2. Don,

          The point is to use the price system to get carbon used only when it is very productive.

          I guess I stated that badly, but I was responding to Krayt’s comment that “not all uses of carbon are equal.” Of course, but it’s the more productive uses we want it to go to. The idea is to use carbon in its “more equal” applications.

          I personally like cap-and-trade better in the abstract, but I think Jonathan makes some good points about practicalities.

          In any event, both systems are examples of “market-based solutions,” which conservatives seem to like, except when someone actually proposes one.

    2. The carbon tax can and should be applied at the source. That eliminates the perverse incentives to which Krayt refers

      1. Its not clear to me what you mean here, either about incentives or the value of applying it at the source. One way or another the tax will find its way to the ultimate user.

        1. I meant that the tax should be applied at the source to avoid gaming the system and creating perverse incentives. Of course the tax does find its way augmented by carrying charges to the ultimate users of products

    3. I think low-carbon prices vs carbon regulations is not the debate we should be having, the real question should be is do we currently have the technology or infrastructure to go low carbon by 2030-2050, in Europe and the US (because we already know most of Asia and Africa and South America aren’t going to even try)?

      Currently the answer is a resounding NO. We barely have enough electricity from all sources to meet current demand.

      The reasons we can’t get their yet are:

      Currently 39% of US electricity carbon free, only 11% is “renewable”, so we need to replace 61% percent of current energy production first off, that means increasing our current renewables production by 5x.

      Second after that we have to conservatively double our entire energy production again as all new cars become electric and petroleum in transportation and industrial uses is phased out, and natural gas which currently provides almost 1/2 of residential energy use is phased out.

      Ok, I’m not going to just assume we can meet just that technological hurdle, but let’s move on to the next problem: right now 0.0 percent of renewable energy is stored for later use, it may be as much as 0.01%, but I doubt it. So unless we are going to keep all our current coal and natural gas plants on ready standby for use every night, and whenever weather and other foreseeable and unforeseeable events occur we have to figure out how to store at least 40% of our current energy usage. And we have absolutely no even remotely feasible solution to do that.

      The current policy path seems to be to keep outlawing or making prohibitively expensive forms of carbon energy 95% of the economy runs on, and minor tinkering around the edges to provide the other 5% of the energy our modern lifestyle demands.

      Its not hard to see how this all ends, first there will be energy shortages and discomfort, then there will be hunger and even starvation, and then there will be politicians decorating lampposts.

      1. . . . we already know most of Asia and Africa and South America aren’t going to even try , , ,

        Kazinsky, the endlessly repeated prognostication seems peculiar that most of the world will not even try to reduce carbon emissions. In the parts of the world so often cited, the choice of what kind of energy infrastructure to use has yet to be made.

        During its transition to new energy sources, the developed world will suffer a loss of productive energy capacity already built and invested in. That will be notably less a problem in nations which have not yet invested so heavily. For them, the choice will be more like taking up the new technology at the outset of energy resource development. Whatever technology they choose, they will suffer notably less loss of utility from previously existing investment. If cleaner energy technologies are otherwise competitive, as they ought to be, it would a foolish policy indeed which did not prefer them.

        So your assertion really amounts to nothing more than a speculation that cleaner energy technology cannot be made economically competitive. None of us knows the future, but I suspect that is mistaken.

        1. SL,
          You can be assured that Nigeria will have a rising percentage of its energy to and past 2050 supplied by natural gas of which it has abundant supplies. Other developing nations will do the same. Don’t assume what you do not know

        2. We do know what type of energy plants India, Indonesia, Bangladesh, and China are building, mainly coal.

          “speculation that cleaner energy technology cannot be made economically competitive.”

          Well I think it can be made economically competitive, eventually, but I don’t think we can build anywhere near as much as we need, at any price, to meet the goals politicians are trying to mandate.

          We all know coal is dirty, oil has probably another half century lifespan, certainly not more than a full century, and natural gas a few hundred more years. So it all does need to be replaced, but don’t replace it until the successor technology is ready.

          Nuclear is scalable and ready, nothing else is.

          1. Kazinski, problem with nuclear is that uneducated people think it blows up, and educated people think of nuclear as the energy technology that policy makers lie about. Nuclear energy advocates may have made nuclear energy unavailable for practical use, just by lying all the time.

            At this point, nothing a pro-nuclear advocate can tell me will make me even a little more confident I am not being lied to again: whether about safety (much safer than anything!), security (it’s all securely secret!), accountability (the pipes!, how much plutonium is in the pipes?!), the environment (by the way, the latest hot spot maps of the Rockies are out, maybe you live in one!), economy (too cheap to meter!), waste disposal (the policy is, forget it!), practicality (perfect, unless something goes wrong, then back to wilderness!) or clean-up (don’t worry, there’s a many-year’s plan; nobody is going to leave that hot mess sitting on the banks of the Columbia!).

            I think too much lying (world-wide and cross-cultural) has made nuclear a dead duck. Whether that applies permanently, or just until the older lied-to generation dies out, and enough younger suckers are positioned to be newly gulled en masse, I cannot predict.

            Until you boosted nuclear as,”scalable and ready,” I had no reason to suppose you were a liar. Now I wonder. Against a 75-year historical backdrop of incessant lies, “scalable and not-ready,” seems like too big a risk.

            1. France produces 70% of it’s electricity from nuclear and has for decades. And France has not suffered environmentally from their reliance on nuclear. So it really is irrefutable that it is scalable and ready.

      2. In Spain we’re paying the price right now. These dummies thought they could rely on wind as baseload and it seems to have never occurred to them that all of Europe might experience a period of little to no wind. And everybody would then pile into the NG spot market jacking up the price of it with no end in sight. My electricity bill quadrupled from June to August.

        On top of which, they plan on closing the four existing nuke plants we have here between 2027 and 2035. Madness.

  4. The bigger question is whether CO2 is the dangerous greenhouse gas as advocated the activists. The quality of the paleo reconstructions (the HS studies) don’t inspire a lot of confidence in the scientists work. Far too much relience on low resolution long term proxies which dont show a blade. Note that there are virtually no long term proxies that extend back to 1000 or even 1500 that have a HS blade. Further, advocating renewable energy by the climate scientists as a solution in spite of the massive engineering limitations, doesn’t quite demonstrate much in the way of the mental acuity / mental ability or critical thinking skills necessary to ascertain the validity of the climate science.

    1. Tom, while I understand you are talking about the hockey stick diagram, 99% of readers won’t be able to make heads or tales of it. A chunk of your readers weren’t even BORN when that reconstruction came out.

      1. Ben – I was making several points regarding the HS, (or attempting to point out several issues with the HS). In spite of the numerous reconstructions, all of which, find a HS, there remain numerous deficiencies in those reconstructions, including low resolution proxies, none of the long term proxies having a HS, cherrypicking proxies, post ante proxy selection. Those deficiencies show a lack of scientific rigor . In most every field of science, a correlation of less than 80% is disregarded or tossed, yet in the paleo reconstructions, correlations of 30-40% are treated as the gold standard.

        The other point – is that climate science is complex, developing an understanding of a complex chaotic system requires significant brain power. Yet those same individuals who cant understand the basic science and engineering limitations of “renewable green” energy, somehow possess the superior intellectual capacity to understand climate science.

    2. Talk is cheap demonstrate to us your expertise with respect to paleo reconstructions of temperature change and the correlate CO2 levels. Choose any proxy, describe how its constructed and the flaws you find in that methodology. They have all run the gauntlet at least once, but maybe you can help the scientists to refine their methods.

      1. D straws – it not so much that there are flaws in the proxies, its that the resolution of the proxies, (the long term proxies) is generally too low to provide any meaningful insight into the prior temps. The Shaft in the HS is coming from the long term proxies which dont show a blade (which means that the calibration is unreliable or too low resolution) The blade in the HS studies is coming from the short term proxies that start post 1750. Basically the blade and shaft are coming from two different sets of proxies , none of which show both a shaft and a blade.

    3. Well it is a problem that the current climate models show absolutely no skill predicting temperature based on CO2. The models that use the 8.5RCP predict temperature rises 2-3 times what we are seeing, although that is supposed based on business as usual.

      If the precautionary principle dictates we have to take drastic action to prevent possibly catastrophic climate change, wouldn’t the precautionary principle also dictate not to take any drastic action that can cause loss of livelihoods, lives, and almost assuredly cut standards of living in half, at least in countries that sign the suicide pact, but probably the developing world to that depends on our capital and expertise.

      1. Standards of living cut in half? That’s utter crap. Predictions like those are long-since discredited. Like unreliable climate models, they were made decades ago, and have not panned out at all.

  5. Reduce carbon or have enough energy? Tough choice

    “The UK is suffering the most from the drop in wind power output, caused by mild weather. The country, which prides itself on its wind capacity and whose Prime Minister last year said wind farms could power every home by 2030, produced less than 1 GW of wind power on several days. This compares with a generation capacity of 24 GW”

    I choose electricity and heat.

    1. As mark jacobson claims
      The US can operate 100% renewables –
      1) Ignoring England and the EU problems as noted by bob Above
      2) ignoring that the entire north american continent lost 90% of electric generation for 9 days from Feb 12th through Feb 19th > Anyone recall the Texas Feb 15th fiasco which lost 30%-40% of electric generation for 3 days. Wind lost 90% for 9 days across the entire north american continent.

      1. What did people use for light before candles?
        Answer – electricity

      2. Tom, your No. 2 above seems both arithmetically challenged, and also demented. I’m pretty sure a 9-day interval between February 12th and February 19th would have caused a stir.

  6. When we all live under lean-to’s and can’t enjoy the creature comforts of modern society while China cranks out as much CO2 as they like, in the name of whatever they call it at the time, I hope the libs are finally happy.

  7. Meh … I’l take neither thank you very much slaver!

    1. Amazing how libertarians regard paying for the resources they use as slavery.

      1. I pay (much more now thanks to Biden!) for every bit of energy that I use.

        What I will not do is tithe your stupid religion.

        1. No. You don’t.

          Do you really not understand that environmental effects actually damage people’s health? Do you think climate change is all a Chinese hoax? Or are you just sticking your fingers in your ears?

          1. We’re coming out of an ice age; calm the fuck down.

            Sorry, I lived through the “Global Cooling!” 70s AND the “Global Warming!” 90s so please try to sell that crap somewhere else.

            You know what is damaging to people’s health? Socialism. 150 million dead and counting. I’m not in the market for mass murder today, thank you very much!

            1. So how many have died due to capitalism? You know due western expansion, the British empire, America being at war for our entire history,and unconstrained growth

              1. “So how many have died due to capitalism?”

                A fraction of those saved. Poverty kills, capitalism decreases poverty.

                Capitalism is so awesome that even the ChiComs have it!

              2. DStraws,
                Almost every country on earth, regardless of political system, acts as if continual economic growth is a physical possibility, when clearly it is not.
                You don’t have to dump on america to realize the pipe dream that pervades the ruling class.

                1. Why, precisely, is continual economic grown not a physical possibility?

                  As you contemplate the answer, please consider that to date 100% of Malthusian predictions of disaster and economic collapse have been wrong. Remember also that economic growth includes services – the Merchantilists were also wrong.

                  1. Very simple Rossami.
                    Unlimited growth at any positive percentage implies an infinite supply of natural resources and and infinite supply of energy

                    1. Neither of your postulates are true. Your failure is known as the ‘lack of imagination fallacy’. Consider, by way of counter-example, the many instances of economic growth that occurred from reductions in consumption of resources or from increases in efficiency. Per capita, we use fewer resources but have a far higher level of economic success today than equivalent populations did during Andrew Carnegie’s day.

                      I will concede that there is a continual demand for energy. Thankfully, we have that huge fusion reactor hanging in the sky providing near-limitless energy on a continuous basis. I suppose you are right that physics does require us to constrain economic growth when the sun finally burns out but that’s rather a bit beyond the planning horizon that the rest of us think about when we consider economic growth.

                    2. Rossami,
                      Your understanding of the laws of physics are sorely lacking. They are the 1st and 2nd laws of thermodynamics.
                      You are correct that increasing efficiency can produce economic growth despite a reduction of resources used, but that only postpones the inevitable. The increasing use of energy can be forestalled by more use of energy from the sun, but at the cost of use of resources.
                      You failed to note that I did not say “in 20 years” or “in thirty years.” Rather I wrote deliberately said indefinitely.
                      We scientists and engineers have considerable imagination, more than the general public or economists, but we also recognized fundamental limitation imposed by the physical laws.

                    3. Conservation of energy and the existence of entropy don’t have anything to do with the discussion at hand because a) we don’t live in a closed system (as defined in those theories) and b) those theories don’t in any way address economic growth. You assert as a postulate that growth always and invariably demands greater consumption of resources. That is not true. Economic growth can occur because of the input of creativity to a system despite the addition of no other resources.

                  2. Malthus was “wrong” because of colonialism. Services require energy and collecting and using energy takes resources. .
                    Note that I did not predict a date when growth must stop, but ideas of 7% annual growth indefinitely are preposterous as a matter of physics.

                    1. No, Malthus was just wrong. He neglected to take into account that we are an intelligent species that adapt and plan. His predictions were the equivalent of saying, “You’re walking towards a cliff, obviously you’re going to fall over it.”, and ignoring that an intelligent being would pole vault, or build a bridge, or climb the cliff face, or anything but just walk over the cliff.

                      Yes, trivially, production measured in tons of good made per year, can’t grow indefinitely at a fixed percentage. (Though it could grow a heck of a lot longer than your average Malthusian would predict.) Production in terms of economic value produced per year? Yeah, it appears that can grow indefinitely, or at least the fundamental physical limits are absurdly further out.

                    2. Brett,
                      The Europeans postponed the reckoning because they took new resources from their colonies. Limits imposed by physical laws must limit or slow growth 2% growth can be sustained a lot longer than 7% growth. And 7% growth requires a lot most “free” resources” and imagination than the US has managed to get in quite a while.
                      Yet we are terrified that China posts a 7% (accept that ad argumentum) figure and the US posts a 2% number.

                      Don’t read more into my argument than I wrote. I see people do that to you all the time; extrapolate the written post until thay have an absurdity to criticize.

                    3. I agree with Brett. Every time we approached what we thought was a hard limit, we found a new opening. For the last half century futurists and science fiction writers have been talking about exploiting space. But there was a theoretical limitation in the future that seemed to be rapidly dwindling – the hydrocarbon fuel to get us into space, and with the government bureaucracy in charge of space exploration, we weren’t going anywhere. Then, all of a sudden, several tech billionaires, who had probably read the same stuff I had read, realized that getting humanity into space was not an insurmountable problem, as long as they, and not government bureaucrats, did it. Quadrillions of dollars to be made, and they were just the ones to do it. Effectively unlimited energy in space, as well as immense quantities of raw materials. Just build the factories, and collect the energy there.

                      But not just space. I have belonged to and actively participated in the IEEE for decades. Their monthly magazine Spectrum has had articles on nuclear energy at least yearly for much of that. There have been continual developments with both fission and fusion throughout. One of the critical problems with the designs of the fission reactors is that they were not designed to fail safely. That means that if they start to runaway, their nuclear reactions have to be actively stopped, or there will be a meltdown, and if that shutdown fails… The newer designs are designed to fail safely. You put energy in to make them work, and when you cut that off, they stop. Moreover, these new designs have addressed size and modularity. The wave of the future is likely to include standardized factory built, modular, reactors. Sure, progress here in the US is stymied by leftist wackos, through the governmental regulatory process. But there are some 190 other countries in the w Thatorld, and the obvious solution is to prove out designs in one or more of them. Heck, the ChiComs, seeing their dense smog covered cities no doubt are working hard here (and if anyone is going to screw up the safety here, it will be the Chinese). And surprisingly, fusion power seems to actually be advancing. The NIF at LLNL hit breakeven for a very time a week or two ago. Etc.

          2. It is tough to make the case that more mild winters are a bad thing when people who die of heat are a small fraction of those that die of cold.

      2. Carbon is just a part of air, not a “resource”.

        Liberals taxing air is the ultimate joke.

        1. Could you be any stupider?

          1. Good response!

            1. Money is electronic now. Electrons are found in all matter.

              Bingo bango taxes are over.

          2. Could you?

            CO2 is essential for life. It is a byproduct of animals metabolizing carbohydrates to produce the energy required by our bodies to operate. Plants then take the CO2, and using sunlight as energy, produce the carbohydrates that animals need to burn for energy, as well as the O2 that we also need for that reaction. Yes, Middle School science, but so basic that it seems often to be forgotten. Moreover, since CO2 is needed for plants to produce carbohydrates, the more CO2 they have available, the better, on average, they grow, resulting in more and more food. CO2 has been a little lower in the past (presumably due to various ice ages), it has been far, far higher.

            1. And I eat food to provide me with energy, etc.

              Does that mean there is no quantity of food that would be unhealthy for me to eat?

              1. See my comment below on the atmosphere of Venus.

        2. Next time I fart in an elevator when you’re around…..

        3. Bob,
          “Carbon is just a part of air, not a “resource”.”
          That is plain stupid.
          Moreover, not all carbon is in the air

          1. I sometimes wish that all carbon was in the air. That would have saved me the money I spent on my wife’s new diamond ring.

  8. The real advantage of cap and trade is that the word ‘Tax” does not come up. I agree that a simple tax to raise the cost of carbon is best. It would incentivize the market to find non-carbon alternatives. It would mean less regulation and less regulators. But there is that word “tax”. Most Republican would rather bit their tongue out rather than say “tax”.

    1. Exactly, remember it was conservatives and Republicans that originally proposed a carbon market, but of course that was just a ploy to divert from the proposed carbon tax.

    2. cap and trade almost inevitably comes into the realm of trans-border transfer of wealth while a carbon tax at the source does no such thing.

  9. Supply constraints, such as those that are created for tradeable permit systems, tend to produce significant price volatility, which can discourage investment in low-carbon technologies.

    I’m not sure why this is necessarily so. Further, cap-and-trade systems, in practice, often require regulators to engage in many of the same quantification and assessment measures required under traditional regulations.

    But doesn’t setting a tax level also require “quantification and assessment measures?”

    I suppose you could just pick a number and then hope to adjust, but it’s going to be a giant political fight.

    1. The California cap-and-trade debacle makes me prefer a flat carbon tax to an artificial market.

      1. “an artificial market.”
        You hit the nail on the head. The artificiality of the market is a primary flaw of cap and trade and also makes that system far less amenable to tailoring to drive governmental policy choices. Taxes can (not always do) acheive that far more efficiently and effectively.

  10. Find me a “conservation minded Republican” who would propose something called a tax.

    1. Well, there’s Jonathan, and, um.. give me a minute.

    2. The idea of cap and trade for carbon prices was, I believe, initially proposed by Republicans economist Greg Mankiw.

      1. Carbon taxes are a much older idea than that. I was taught the virtues of tradeable pollution permits when I took Econ. 101 in the 1970’s.
        But I should have been more clear and inserted the word “politician.”

  11. On purely theoretical grounds, there is no reason to believe that the impacts of environmental regulations are any less regressive than those of a carbon tax. Since regulations tend to raise the cost of doing business, they can be expected to raise prices of goods, with a disproportionate impact on the purchasing power of low-income households.

    I don’t think it’s accurate to talk about environmental regulations having regressive effects without considering the benefits of those regulations. If environmental degradation, and climate change, primarily harm lower-income households then it is plausible that the regulations or the tax are not regressive at all.

    Now, I don’t claim to know one way or the other, but claiming these things are regressive based on costs alone, without considering the distribution of the benefits, is really unjustified.

    1. Do you consider destroying large tracts of tropical rain forest to make bio diesel an example of environmental degradation?

      1. You do understand that bio-diesel has carbon in it and so would be subject to a tax or carbon market constraints.

        1. Actually, in no currently proposed carbon tax or carbon market structure is that the case. In every one, CO2 consumed during the growth of the bio-fuel is counted as an offset to the CO2 released during combustion. Bio-fuel is politically treated as carbon-neutral.

          1. ” Bio-fuel is politically treated as carbon-neutral.”
            That is because if carried out correctly it is carbon neutral with respect to atmospheric CO2

            1. Which doesn’t change Abdul’s point (which DStraws tried to contradict) that biodiesel has other severe adverse consequences to the environment. Biodiesel is neutral as regards to atmospheric CO2 – and strongly negative in every other regard.

              1. Not necessarily.
                Your argument suffers from what you wrote back to me in another post., namely, lack of imagination.
                Biofuels can be produces in a sustainable way. That includes converting wastes into fuels.
                The is no need to clear cut tropical forests.

                1. Apples and oranges. You said as an absolute statement that continuous economic growth is impossible. A single counter-example is sufficient to rebut an absolute statement. Abdul, however, said that as practiced biodiesel is net harmful. A theoretical way to make biodiesel non-harmful does not rebut that statement.

                  I am curious, by the way, to know what waste stream you think can be turned into biofuel at a scale to be economically significant. Yes, cooking oil is already repurposed to that use today – but even if you successfully converted 100% of the world’s cooking oil waste to biofuel, you wouldn’t even get to the rounding error in our global energy budget. Most waste streams that can be put to economically productive uses already are. No rational business person is going to send money to a landfill unnecessarily.

    2. bernard,
      Just consider the effect on California’s poor of Newsom’s plan to end sales of all but BEVs by 2035. Cars can easily last 20 years here. It is very hard to imagine that such a policy has no disparate effect on the poor

  12. The downsides of cap and trade are especially apparent right now in Europe where carbon prices are soaring above economically justified levels, and the UK is imposing energy price caps and considering bailing out energy firms. Obviously, they are not willing to tolerate upside volatility in the carbon price, so they might as well just set a fixed price to begin with.

  13. Carbon pricing is preferable to carbon regulation in the same way that arbitrarily cutting off three fingers is preferable to cutting off your whole hand. Neither is really good for you and neither should be even considered without very clear evidence that they will do more good than harm.

    The case for CO2 regulation is based on flawed reasoning from corrupted and/or misinterpreted data sets. The predictions of the catastrophic warming activists have a track record as bad as Paul Ehrlich’s “population bomb” fear-mongering.

    1. Worse. It isn’t science. It is cargo cult religion. What a astrophysicist will probably tell you is that if you do multivariate regression on the possible drivers of global temperature (regardless of fudging by NOAA), the main drivers are going to be things like solar activity (sun spot cycles), Earth wobble, distance from the Sun, El Niño/La Niña, etc. Together, they account for almost all of the variations in the Earth’s global temperature. Their error terms swamp whatever minor effect CO2 concentration in the atmosphere might have.

      We know that it is religion because the theory of CAGW was falsifiable, was falsified, and replaced with unfalsifiable Global Climate Change. It cannot be a valid scientific theory, because it cannot be falsified. It doesn’t matter if the number of hurricanes goes up or down, rebirths severity is greater or lesser, etc. They all supposedly prove Climate Change. But then, the proponents talk as if they were still dealing with CAGW (or, probably soon, again, CAGC), which was falsifiable and falsified. We’re all going to burn up!!! Except that we aren’t, and are probably more likely to freeze to death with a renewed cold period.

      Always keep that in mind: when you hear “Climate Change”, combined with the evils of CO2 and the Earth overheating, they are acknowledging that the theory of CAGW has been falsified, and are just trying to bootstrap their new buzz term to include all of the Global Warming predicted horribles, without opening themselves up to questions about why their CAGW models always ran so hot, and failed so notably in both predicting the past and the future.

      1. The atmosphere is the main driver of temperatures.

        Look at Venus, Mars, and Earth. Their man difference in terms of heat is not their distance from the sun, as it turns out.

        I went to school for cosmology, not astrophysics, but you can pick most of this up in the Air and Space museum.

        1. Despite your username, it’s sometimes really hard to tell when you’re being sarcastic. I have heard catastrophic-warming activists try to claim exactly that with a straight face.

          1. What, that atmosphere is a greater cause of surface temp than the flux of solar energy?

            Yeah, I’m being serious.

            I’m not a catastrophist, I just think it’s a thing that deserves managing.

            1. If you’re being serious, I’m afraid you have been sadly misinformed. We can measure the net effect of the earth’s atmosphere by comparing earth’s average temperature to the moon’s average temperature. The moon’s temperature varies greatly but the average is only 33 degrees below earth’s. That’s the entirety of the terrestrial atmosphere’s effect – and the vast majority of that is from water vapor, not CO2.

              The temperature effect of Mars’ atmosphere can also be measured by comparing it’s average to Phobos. Even after adjusting for that, most of the difference from Earth’s to Mars’ temperature is the result of distance – less sunlight per meter squared.

              The atmosphere of Venus does have a greater impact on temperature but its composition is so extreme that the comparison is only marginally useful. Venus’s atmosphere is 96% CO2 and has pressures approximately 90 times that of earth. (For comparison, Earth’s atmosphere is 0.04% CO2. Burning every fossil fuel reserve on the planet would raise Earth’s atmospheric CO2 percentage to maybe 0.08%.) Venus’ atmosphere has essentially no water. Earth’s atmosphere is dominated by the water cycle.

              1. Rossami,
                Here again your are half wrong and half right. The effect of the Martian atmosphere is minimal because the atmosphere is minimal AND because the the solar flux is lower.
                While Earth’s atmosphere does create climactic and weather patterns, the principle driver is the large difference in solar flux between the equator and the poles.

                1. You are missing the point (though in fairness, I might not have made it as clearly as I should have). Let me try again.

                  Temp of Earth w/o atmosphere approx equals temp of Moon.
                  Temp of Earth w/o atmosphere – temp of Earth w/ atmosphere approx equals 33 degrees.
                  Temp of Earth – temp of Mars approx equals 140 degrees.
                  Conclusion: Contrary to Sarcastr0’s claim, the effect of solar flux is greater than the effect of terrestrial atmosphere by almost a factor of 5.

                  Extension: Most of the 33 degree effect of the terrestrial atmosphere is the result of water vapor, not CO2. The effect of solar flux between Earth and Mars is greater than the effect of CO2 by several orders of magnitude.

                  1. Typo in line 2. Should have been “Temp of Earth w/ atmo – Temp of Earth w/o atmo”, not the reverse. Temp w/ atmo is higher.

                    (Can we please have an edit button?)

                  2. I know that point very well from my colleague Dick Lindzen.
                    The simple calculation of radiation balance gives a very narrow band (±20° C) fro the Earth, Venus and Mars. It is the effect of the atmospheres that produces average surface temperatures outside of that band. See for example
                    “An oversimplified picture of the climate behavior based
                    on a single process can lead to distorted conclusions”
                    Eur. Phys. J. Plus (2020) 135:462
                    So you are correct that it is the atmospheres of the planets that leads to the mean surface temperatures.
                    But S_0 is correct that it is the difference in solar flux from equator to the poles that drives the global circulaion in the atmosphere.

                    1. Junk. Regurgitation of the IPCC nonsense. Totally ignored all of the known primary global temperature drivers like solar radiation generated, distance from sun, etc. Any study that tries to predict global temperatures or temperature sensitivity, without first controlling for how much energy was received from the sun is junk.

        2. Ok. Mars effectively has no atmosphere because it does not have a magnetic field, because it doesn’t have a molten core, like the Earth does. Several billion years ago, it probably did have an atmosphere, but it almost all leaked away into space. Venus is just the opposite, with an atmosphere a hundred times as dense as ours (~1350 psi vs ~150 psi). It’s CO2 content is >900k ppm (~96.7%), while ours is approx 415 ppm (~.0407%) – a ratio of roughly 2k to 1. That means that the Venetian atmosphere has roughly maybe 250k times as many CO2 molecules as does ours. Moreover, it has negligible H2O in its atmosphere, which in our atmosphere, in the form of clouds, provides significant negative feedback to the Greenhouse Effects of the CO2 in our atmosphere. (For the innumerate here: k=thousand, and ppm=parts per million).

          So, no, you really cannot look at Mars and Venus, and conclude that the a small increase in CO2 in our atmosphere is going to lead to runaway global warming. Or, indeed, conclude much of anything.

  14. Let’s talk about costs. What are the costs of relying on power sources that produce at the whim of the weather? Lower than normal wind speeds are causing an impending food shortage in the UK. If the situation continues into cold weather months lives will almost certainly be lost. Bio diesel is the main driver of tropical rain forest reduction at a frightful cost to the health of the planet.

    Instead of a price on carbon how about a price on looney and destructive “green” products? Or as a half measure just stop subsidizing them.

    1. If the situation continues into cold weather months lives will almost certainly be lost.

      Thus driving down longer-term energy consumption to match the new reduced capacity! 4-dimensional chess indeed.

  15. “While traditional regulatory measures of greenhouse gas emitters are also likely to increase energy prices, such measures do not generate a revenue stream that could be rebated to offset the potentially regressive effects. ”

    Just because you’re generating a revenue stream that could be used to offset the damage doesn’t mean that it will be so used.

  16. Let’s go nuclear and we won’t have to worry about carbon.

    1. Problem here is that there are no nuclear advocates. Every hear a Republican push nuclear. They are so afraid to address climate change that they will not even advocate for a solution like nuclear. Imagine the progress we could make with the Democrats advocating for renewables (wind and solar) and the Republican supporting nuclear.

        1. Nice but the fact that it is buried in some agenda doesn’t help. When did a leading Republican speak on support for nuclear power? I don’t doubt the Republicans support I just question why they are not pushing the issue as hard as voting reform and CRT.

          1. Right now nuclear power is not economically competitive in the US. Small modular reactors have the possibility to change that, but only if the concept of factory manufactured reactor cores is practical. No one yet knows if that is true. Until a pilot factory is operated and some data on the learning curve can be gathered, nuclear power will remain a possibility unless it is perused with large government subsidies

            1. It’s not economically competitive, largely because the regulatory agencies got captured by anti-nuke activists, and set about a dual strategy of choking the industry on wastes it was forbidden to recycle or place in long term storage, (While demanding payments to set up a long term storage facility that would never be built!) and driving up costs by regulatory churn.

              Nuclear power could easily be economical if subject to sane regulation that didn’t have the objective of discouraging its use.

              1. I disagree and don’t think regulation are the biggest problem for nuclear energy. Energy companies are highly regulated for a good reasons and any energy company is well experienced in addressing regulations.

                Nuclear power suffers from a bad reputation for disasters like Three Mile Island, Chernobyl, and Fukushima. All of which show that however unlikely these incidents were they were very significant. A second problem is NIMBY. We all want power but no one wants a reactor in there neighborhood. The third problem as I have mentioned is a lack of advocacy. Our nuclear navy is due in part to the advocacy of Admiral Rickover. Commercial nuclear power needs someone like that to advocate. It had this in its infancy but it was abandoned.

              2. To be maybe a bit more accurate, the nuclear storage facility (under Yucca Mountain in NV) was mostly completed when it was shut down by Obama, presumably at the behest of Yucca home state Senator Harry Reid, the Dem Senate leader at the time. Apparently, this was driven by fears of nuclear accidents with the trains carrying the nuclear waste through Las Vegas, Reid’s power base. Of course, they could have routed the trains well outside Las Vegas, which wouldn’t have been that expensive, since most of the land is very flat federally owned (BLM) desert.

              3. Brett,
                Your explanation and conclusion is a couple of decades out of date. Right now it is not economically competitive without massive government subsidy in the range of 30% or more.
                You are correct that proposed nuclear plants must account (in the US) for full lifecycle costs while wind and solar generators do not, but even then the economics are not favorable with the present generation of light water reactors.
                Have a look at the paper by my strongly pro-nuclear colleagues,
                “Keeping the Nuclear Energy Option Open” USAEE Working Paper No. 21-488

    2. Pure nuclear is a bad idea for pretty clear reasons of waste and robustness via diversity.

      A lot more nuclear in the mix is a good idea though.

      But gotta wait for the cold war folks to die off some; they’re pretty jumpy about nuclear anything by and large.

      1. “Pure nuclear is a bad idea for pretty clear reasons of waste”
        I assume that you meant 100% nuclear.
        I know of no nuclear power advocates who speak of anything close to 100% nuclear power.

        1. Yeah, even I wouldn’t advocate powering motorcycles with nuclear power, even if I have done napkin sketches of how to accomplish it.

          100% of electricity, though? Yeah, that’s perfectly achievable.

          1. France is about 80% nuclear, so that’s doable.

            100% nuclear is actually pretty difficult. The issue is, nuclear is baseline power load, and it can be difficult to ramp up or down the production from a nuclear plant. If you start producing a lot of excess energy, with no where to go…that can be problematic at times.

            1. AL,
              Even 80% is only practical because France can sell power to Germany when the sun does not shine and the winds are calm.

          2. In principle yes, but in practice not a good idea, as present generation LWRs are not good peaking sources of electricity or good at load-following

  17. Selfish, half-educated, right-wing, climate change Luddites are among my favorite culture war casualties.

    1. For the record do you have a hard science or engineering degree? Just asking..

  18. The problem, of course, is that a carbon tax or other carbon pricing system would almost certainly require action by Congress, and that seems quite unlikely.

    We could live with a carbon tax. We could live without it. But maximum harm to the future comes from the uncertainty of “maybe”.

    For the love of God, bring it up for a vote. If it passes, fine. If it goes down in defeat and it is never mentioned again, fine. But stop dangling it in front of the noses of wannabe investors in renewable or nonrenewable resources. Uncertainty paralyzes decision making.

  19. Oy…Let’s review the biggest issue. A carbon tax will increase global carbon emissions.

    1. The single largest problem of taxing carbon on a national basis is that it will INCREASE global carbon emissions, thus eliminating the entire reason to tax carbon.

    -Why you say? The issue is, in taxing carbon (and carbon emissions intensive industries), it simply promotes offshoring of those carbon intensive industries. Why produce something that takes a lot of energy to produce in the US (and pay all the carbon taxes), when you can produce it in China, and then import it into the US (paying more in carbon emission for the transport), saving all those carbon taxes. Thus the effect of taxing carbon emissions in the US, paradoxically INCREASES global carbon emissions, by outsourcing the manufacture, and adding the transport on top.

    2. “No, you say, that won’t be a problem. We’ll tax imports from China to account for those carbon emissions”

    -Will you? Really? Well, why not, if you’re serious about halting carbon emissions, start with this. Tax China on their CURRENT carbon emissions, compared to the US. Currently, manufacture in China is significantly more carbon intensive than in the US. This is due to a variety of reasons, including: 1. Less efficient factories. 2. An electrical system that depends vastly more on coal-power plants rather than more carbon friendly natural gas plants. 3. The very carbon-intensive expensive transport costs.

    3. “No, you say. We can’t POSSIBLY tax Chinese imports based on their carbon emissions. I mean…U.S. taxpayers would end up paying the cost. That wouldn’t be right”.

    I see….

    1. Another of AL’s instant analyses. They all go as follows:
      That won’t work because I say so.

      Carbon control advocates have gotten pretty good at estimating the carbon footprint of a large variety of products. Those estimates could be the basis on an import duty on products that come from countries without a comparable carbon tax structure.
      And US Us taxpayers will pay more for goods whether produced in the US, EU, or China.
      Naturally those estimates should also be made to assess the birth to death carbon footprint of solar PV’s, thermal solar plants, and windmills.

      1. Oh Don…you didn’t actually read what was said.

        The question isn’t whether the carbon footprint of imported products CAN be estimated (and you’re correct, it can be). That’s a question of scienc.

        The question is, whether such a carbon footprint for imported will actually be taxed. And the answer is, it won’t be. That’s a question of political will.

        And the reason is, we could be taxing that carbon differential today for imports. And we aren’t. And any such import taxes are being vigorously argued against by those who support carbon taxes.

      2. AL,
        You’re just insisting that things won’t happen because you say that they won’t happen. The world does not work that simplistically.

        1. I assume they won’t happen, because they have the opportunity to happen right now…and are not occurring.

  20. Why Carbon Pricing Is Preferable to Carbon Regulation

    If only there were something preferable to both.

  21. I joked with my woke “liberal art” ivy league neighbor who works for a university that I should pay a carbon tax because I’m a runner. She looked blank for a moment and they said “your right..runners produce more CO2 and are helping to cause climate change.” I was joking of course but god knows what I have created. I might not be laughing at this in 5 years with the woke morons running the country.

    For the final time in Reason climate is not a precise science. It is an applied art at best with very complex models trying to simulate horrendously complex nonlinear physical systems that are the “climate.” Modeling isn’t very precise..hence we honestly don’t know if the CO2 we are releasing is causing climate change and if so it is bad or good? seems like a problem created in the think tanks/non profits to shake us down for money. Oh and for the fusion fanatics..I worked at a major “laser laboratory” 40 years ago in college and fusion was 20 years away…it still is..and always will be 20 years away. A waste of tax dollars.

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