Why Carbon Taxes Work(timharford.com)
timharford.com
Why Carbon Taxes Work
https://timharford.com/2021/11/why-carbon-taxes-really-work/
106 comments
>Prices will adjust all the way down the supply chain
Hitting the poorest most, since rise in energy prices has a cumulative effect on everyday spending. Also "adjustments" can very easily lead to shocks if not done carefully. And don't forget, we are talking about it in a highly inflationary environment. To summarize: small mistakes in introducing such policy can easily lead to a sizable civil unrest.
>Use this huge income source as global helicopter money
So effectively you pay back money to people which they additionally spend due to the increased prices. In the best case scenario, additional spending and such UBI may equalize each other, but more realistically I think the former will be bigger than the latter. And I am not even touching the matter of exports becoming less competitive on global markets against countries which do not implement such policies. So I don't think that most people magically will be able to invest into green projects en masse.
Yes, eventually everything will stabilize and we will have an economy with properly taxed carbon externalities, but my point is that it's very easy to make mistakes on this path with very drastic consequences. And I would advice against magic hand-wavy thinking.
Hitting the poorest most, since rise in energy prices has a cumulative effect on everyday spending. Also "adjustments" can very easily lead to shocks if not done carefully. And don't forget, we are talking about it in a highly inflationary environment. To summarize: small mistakes in introducing such policy can easily lead to a sizable civil unrest.
>Use this huge income source as global helicopter money
So effectively you pay back money to people which they additionally spend due to the increased prices. In the best case scenario, additional spending and such UBI may equalize each other, but more realistically I think the former will be bigger than the latter. And I am not even touching the matter of exports becoming less competitive on global markets against countries which do not implement such policies. So I don't think that most people magically will be able to invest into green projects en masse.
Yes, eventually everything will stabilize and we will have an economy with properly taxed carbon externalities, but my point is that it's very easy to make mistakes on this path with very drastic consequences. And I would advice against magic hand-wavy thinking.
We are in drastic damage-limitation mode. Every option is unappealing. Many will result in mass suffering and death. Pick one. (And yes, the current strategy, 'doing nothing', is picking one, probably the worst one).
The above strategy at least has the benefits that 1) it is fair 2) it will actually work. Incidentally, 1) is also the reason that it will never get implemented.
The above strategy at least has the benefits that 1) it is fair 2) it will actually work. Incidentally, 1) is also the reason that it will never get implemented.
Not OP, but...
> And I am not even touching the matter of exports becoming less competitive on global markets against countries which do not implement such policies. So I don't think that most people magically will be able to invest into green projects en masse.
you tax imports in the same way
>Hitting the poorest most, since rise in energy prices has a cumulative effect on everyday spending
Every person will get the same share, so with no behavior change there's no reason to have a greater impact then current system, but the incentives align to go green, and poor people can definitely act on that
> And I am not even touching the matter of exports becoming less competitive on global markets against countries which do not implement such policies. So I don't think that most people magically will be able to invest into green projects en masse.
you tax imports in the same way
>Hitting the poorest most, since rise in energy prices has a cumulative effect on everyday spending
Every person will get the same share, so with no behavior change there's no reason to have a greater impact then current system, but the incentives align to go green, and poor people can definitely act on that
Sounds like a way to end up with women forced into having children they do not want.
This used to be a conservative and Republican idea. I'm grown up enough to admit that they are right: The market is absolutely the best way to decide who pays based on the cost of the externality, in this case, Kg of Carbon Dioxide in the atmosphere. We need this to start now, so it can be phased in over 10 years. We need to get all the big nations to jump off this cliff with us at the same time. The alternative is crazy. Yes there will be winners and losers, there always are. It will be very hard on some folks in the midwest, and the 150 coal miners left, and the fossil fuel companies and people in that industry. I hope they've all diversified into solar and wind by now. It's all too late, they suppressed this change for 20 years now. In that time, average temperature has risen by .8 degrees where I live. Time to put on the big boy pants and make the hard decisions, folks.
No. Carbon taxes are an accounting trick.
Just fucking deploy modern nuclear technology. Run trains and heating and industrial heating for entire cities limitlessly with a predictable dollar budget. Zero carbon emissions.
The problem I have with this entire line of argument is how in reality you have nations such as China generating significant volumes of carbon credits in exchange for that sweet cash generated by gullible nations.
We have the Department of fucking Energy and a thousand other agencies that have researched and operated this technology for decades in the most grueling environments (Nuclear Submarines and other classified domains) and it is more than ready for large scale commercial use.
Imagine having limitless power to run projects of Earth scale -> Literally convert saltwater of an ocean into freshwater and pump it continuously into deserts or inland. . . Turn off natural gas heating entirely in the northern hemisphere thanks to electric heating . . The possibilities are endless.
Just fucking deploy modern nuclear technology. Run trains and heating and industrial heating for entire cities limitlessly with a predictable dollar budget. Zero carbon emissions.
The problem I have with this entire line of argument is how in reality you have nations such as China generating significant volumes of carbon credits in exchange for that sweet cash generated by gullible nations.
We have the Department of fucking Energy and a thousand other agencies that have researched and operated this technology for decades in the most grueling environments (Nuclear Submarines and other classified domains) and it is more than ready for large scale commercial use.
Imagine having limitless power to run projects of Earth scale -> Literally convert saltwater of an ocean into freshwater and pump it continuously into deserts or inland. . . Turn off natural gas heating entirely in the northern hemisphere thanks to electric heating . . The possibilities are endless.
Gasoline prices have little impact on demand. https://www.eia.gov/todayinenergy/detail.php?id=19191
For this reason alone Carbon taxes do not work. In my jurisdiction, we already have over 100% tax on gasoline. Partly for road building purposes, but still obviously not impacting usage.
Hybrids coming around ~2000 certainly had a visible effect but it wasn't enough. Which is why Rivian, a company which has delivered no cars, is worth 97 billion. Tesla is worth a trillion. Whereas Ford is only worth $78 billion. We must get to EV transportation asap. We must electrify our railroads. We must electrify our planes.
In fact, carbon taxes are bad. Very bad right now. Because prices are inelastic it makes the tax regressive and anti-compounding.
So gasoline prices go up. Trucking immediately is more expensive. Products prices go up. But because product prices are higher, inflation etc. trucking gets more expensive. Alberta recently had a carbon tax and allowed this circle to run for some time. An interesting thing happened. The prices didn't go higher. This is a problem. The price available to oil value crashed instead. So while WTI was about $50/barrel. WCS from Alberta went to $5/barrel. The albertan oil industry couldn't sell their oil. The trucks weren't running. Alberta repealed their carbon tax which nearly immediately fixed the problem. Their economy was basically halted. No trucks running means people will soon stop eating.
Imagine 10 years from now. We have maybe 30% of vehicles gone EV. Who owns those? The rich. The rich no longer pay the 100% tax for building roads. Who is paying for the road tax and carbon tax? the poor buggers driving the 15 year old shitmobile. The poor end up paying and the rich dont? Pretty regressive.
For this reason alone Carbon taxes do not work. In my jurisdiction, we already have over 100% tax on gasoline. Partly for road building purposes, but still obviously not impacting usage.
Hybrids coming around ~2000 certainly had a visible effect but it wasn't enough. Which is why Rivian, a company which has delivered no cars, is worth 97 billion. Tesla is worth a trillion. Whereas Ford is only worth $78 billion. We must get to EV transportation asap. We must electrify our railroads. We must electrify our planes.
In fact, carbon taxes are bad. Very bad right now. Because prices are inelastic it makes the tax regressive and anti-compounding.
So gasoline prices go up. Trucking immediately is more expensive. Products prices go up. But because product prices are higher, inflation etc. trucking gets more expensive. Alberta recently had a carbon tax and allowed this circle to run for some time. An interesting thing happened. The prices didn't go higher. This is a problem. The price available to oil value crashed instead. So while WTI was about $50/barrel. WCS from Alberta went to $5/barrel. The albertan oil industry couldn't sell their oil. The trucks weren't running. Alberta repealed their carbon tax which nearly immediately fixed the problem. Their economy was basically halted. No trucks running means people will soon stop eating.
Imagine 10 years from now. We have maybe 30% of vehicles gone EV. Who owns those? The rich. The rich no longer pay the 100% tax for building roads. Who is paying for the road tax and carbon tax? the poor buggers driving the 15 year old shitmobile. The poor end up paying and the rich dont? Pretty regressive.
As long as the pollution tax is higher than the cost to clean up the pollution it works, because then the company cleans up the pollution for you.
Also massive incentives to reduce pollution, and reduce cost of pollution cleaning technologies.
Also massive incentives to reduce pollution, and reduce cost of pollution cleaning technologies.
Except who actually pays the tax? Energy consumers, which is anyone who needs electricity or fuel for their household.
You just don't see it in the explanation of why your electric rates went up 50-100%. Or, if it doesn't go up, you start living with brown outs and blackouts like California.
You just don't see it in the explanation of why your electric rates went up 50-100%. Or, if it doesn't go up, you start living with brown outs and blackouts like California.
That's why the proceeds of the carbon tax should be split up and paid out evenly across the whole population.
It's not just a uniform increase in prices. It's people who emit an above average amount of carbon paying the people who emit a below average amount of carbon.
It's not just a uniform increase in prices. It's people who emit an above average amount of carbon paying the people who emit a below average amount of carbon.
The proceeds should be used to clean up the pollution, isn't that the whole point?
Consumers should switch to low carbon goods and services to avoid paying the carbon tax.
The consumers, they pay all for everything after all.
The point is to stop companies cheating by polluting for free to make their product cheaper at our expense
The point is to stop companies cheating by polluting for free to make their product cheaper at our expense
That's not what will happen. The consumers have to pay for electricity, otherwise your sending them back to the stoneage.
But they should prefer to get solar/wind/nuclear, which would be half the price of coal/oil/gas if those 3 weren't cheating by polluting our air for free
Carbon Taxes work because the market can't solve a problem it doesn't have a price for.
Knowing the word "externality" is all you need to know.
In the Adam Smith/Ayn Rand fantasy of money and the invisible hand, markets are a form of Artificial Intelligence. The fantasy is this AI can run the markets better than any centralized authority. Even if we assume that's true right now the AI has no price for carbon, can't take into consideration, hence it can't "solve" it.
This is the equivalent of having a self driving car that wasn't trained to see bycicles. Obviously, it will keep killing cyclists until you give it training data to see them. There is no "market solution" for a blind AI system that doesn't see carbon, because the AI has no data set for carbon costs.
Knowing the word "externality" is all you need to know.
In the Adam Smith/Ayn Rand fantasy of money and the invisible hand, markets are a form of Artificial Intelligence. The fantasy is this AI can run the markets better than any centralized authority. Even if we assume that's true right now the AI has no price for carbon, can't take into consideration, hence it can't "solve" it.
This is the equivalent of having a self driving car that wasn't trained to see bycicles. Obviously, it will keep killing cyclists until you give it training data to see them. There is no "market solution" for a blind AI system that doesn't see carbon, because the AI has no data set for carbon costs.
> The fantasy is this AI can run the markets better than any centralized authority.
I agree with a literal reading of your comment, but will just point out that the wealthy countries all tend to be the ones that let the market do its thing though. We've got a lot of examples now of authoritarian vs free market (the Koreas, Germanys and China pre- and post- Deng Xiaoping leap to mind). People routinely do better when they control their own destiny rather than strong central authorities.
If we pick which end of the spectrum is more likely to keep people fed, the answer is pretty much always the intelligence of a free market will do the best job. Starvation tends to be isolated. This is something that central authorities don't do so well, and that has been tested out quite a few times in practice now. I'm still mildly amazed that the continued and ongoing failures of political leadership for decades hasn't made an obvious dent in the number of people wanting the politicians to be in charge. Politicians are popular, not competent. Markets are really good at putting competent but unpopular people in charge which is a better strategy.
I agree with a literal reading of your comment, but will just point out that the wealthy countries all tend to be the ones that let the market do its thing though. We've got a lot of examples now of authoritarian vs free market (the Koreas, Germanys and China pre- and post- Deng Xiaoping leap to mind). People routinely do better when they control their own destiny rather than strong central authorities.
If we pick which end of the spectrum is more likely to keep people fed, the answer is pretty much always the intelligence of a free market will do the best job. Starvation tends to be isolated. This is something that central authorities don't do so well, and that has been tested out quite a few times in practice now. I'm still mildly amazed that the continued and ongoing failures of political leadership for decades hasn't made an obvious dent in the number of people wanting the politicians to be in charge. Politicians are popular, not competent. Markets are really good at putting competent but unpopular people in charge which is a better strategy.
> Markets are really good at putting competent but unpopular people in charge which is a better strategy.
It's only a better strategy if your goal is to increase the wealth and power of the largest entities, i.e. corporations and the rich. If your goals include "popular" ideas like human rights and a non-polluted biosphere, then it can be better to make market participants share their power with elected politicians.
It's only a better strategy if your goal is to increase the wealth and power of the largest entities, i.e. corporations and the rich. If your goals include "popular" ideas like human rights and a non-polluted biosphere, then it can be better to make market participants share their power with elected politicians.
How is capitalism supposed to work against people's human rights? The capitalists haven't had an enforcement arm since the days of the East India Company.
If human rights are getting systematically abused it is pretty much necessary that someone in government is responsible. They control the police and the army. Capitalism didn't produce Guantanamo bay; for example.
If human rights are getting systematically abused it is pretty much necessary that someone in government is responsible. They control the police and the army. Capitalism didn't produce Guantanamo bay; for example.
> How is capitalism supposed to work against people's human rights?
By "capitalism" I assume we are still talking about "unrestrained corporate power". As such, I would remind you that corporations after often found guilty of wage theft, unsafe working conditions, unfair dismissal, spying on employees, and discriminatory hiring practices. None of those practices are strictly necessary for capitalism to function, but letting markets put "competent" people in charge is not going to prevent those abuses from happening.
> The capitalists haven't had an enforcement arm since the days of the East India Company.
I think you haven't been keeping up with modern developments of this practice.[0]
> If human rights are getting systematically abused it is pretty much necessary that someone in government is responsible.
So you agree that it is the government's responsibility to limit the actions of companies to prevent them from harming human rights? I think we're on the same page then.
[0] https://www.ohchr.org/EN/NewsEvents/Pages/PrivateSecurityOve...
By "capitalism" I assume we are still talking about "unrestrained corporate power". As such, I would remind you that corporations after often found guilty of wage theft, unsafe working conditions, unfair dismissal, spying on employees, and discriminatory hiring practices. None of those practices are strictly necessary for capitalism to function, but letting markets put "competent" people in charge is not going to prevent those abuses from happening.
> The capitalists haven't had an enforcement arm since the days of the East India Company.
I think you haven't been keeping up with modern developments of this practice.[0]
> If human rights are getting systematically abused it is pretty much necessary that someone in government is responsible.
So you agree that it is the government's responsibility to limit the actions of companies to prevent them from harming human rights? I think we're on the same page then.
[0] https://www.ohchr.org/EN/NewsEvents/Pages/PrivateSecurityOve...
I never suggested that centralized authorities do better!
However, there is a convincing argument - made particularly well by the book "How Asia Works" - for a hybrid approach where the state "steers" the economy through nudges and incentives. The book makes the argument that's what happened in Korea, China and Japan. They, at least from their perspective, followed the example of German development.
Their source was the "Historical School" of economics - https://www.newworldencyclopedia.org/entry/Historical_school...
However, there is a convincing argument - made particularly well by the book "How Asia Works" - for a hybrid approach where the state "steers" the economy through nudges and incentives. The book makes the argument that's what happened in Korea, China and Japan. They, at least from their perspective, followed the example of German development.
Their source was the "Historical School" of economics - https://www.newworldencyclopedia.org/entry/Historical_school...
So who do you propose to be the centralized authority?
The governments. They recognize market failures and mitigate with things like the carbon tax. In fact, the whole concept of a market, even the traditional physical one, by definition implies regulation with enforcement (e.g. weights and measures). Without those, there's no market, there's just a free for all.
I never suggested anything of the sort.
I would think a reading of history - ie the book "How Asia Works" has a lot of material on this - shows that there is a hybrid model where intervention of the govt is needed to "steer" the direction of things in order to ensure sustainable income and economic growth. I highly recommend reading that book for an alternative history on how Germany, Korea, Japan and China have succeeded while the West has mostly stagnated.
I would think a reading of history - ie the book "How Asia Works" has a lot of material on this - shows that there is a hybrid model where intervention of the govt is needed to "steer" the direction of things in order to ensure sustainable income and economic growth. I highly recommend reading that book for an alternative history on how Germany, Korea, Japan and China have succeeded while the West has mostly stagnated.
> In the Adam Smith/Ayn Rand fantasy of money and the invisible hand, markets are a form of Artificial Intelligence.
Don't equate Adam Smith and Ayn Rand.
Adam Smith was not a free market fundamentalist. Adam Smith has unnecessarily bad reputation because he is quoted very selectively. Adam Smith was aware of negative and positive externalities.
Don't equate Adam Smith and Ayn Rand.
Adam Smith was not a free market fundamentalist. Adam Smith has unnecessarily bad reputation because he is quoted very selectively. Adam Smith was aware of negative and positive externalities.
True. I think the current usage is sort of a blend of the two though, to justify market maximalism.
I agree that externalities should be priced in - but I wonder if in practice Governments would end up footing the bill via subsidies.
For example, look at what happened in France with the fuel tax rise which lead to the “gilets jaunes” protests.
If people need to get to work and heat their homes etc. then putting a tax on all of that will hit them hard while the rich will be relatively unaffected and can continue polluting. A simple flat tax on CO2 emissions, while far easier to implement, would be regressive compared to one that scaled with your personal emissions or something.
Such a regressive tax, levied on basic things like energy, fuel etc. that are fundamental to normal life seems incredibly likely to trigger political unrest as we saw in France.
For example, look at what happened in France with the fuel tax rise which lead to the “gilets jaunes” protests.
If people need to get to work and heat their homes etc. then putting a tax on all of that will hit them hard while the rich will be relatively unaffected and can continue polluting. A simple flat tax on CO2 emissions, while far easier to implement, would be regressive compared to one that scaled with your personal emissions or something.
Such a regressive tax, levied on basic things like energy, fuel etc. that are fundamental to normal life seems incredibly likely to trigger political unrest as we saw in France.
> If people need to get to work and heat their homes etc. then putting a tax on all of that will hit them hard while the rich will be relatively unaffected and can continue polluting.
So much this. Here in NL, my heating bill is 70% tax and 30% gas charges (not exaggerating).
The government claims to do this to encourage installation of better insulation and other energy saving measures - however, as a renter (like the vast majority of NL is), I can’t do anything about this and just pay the exorbitant heating bill (1). I have no option but to use gas, and even if I move to a (rare) neighborhood with city heating, they’ll charge me the same amount (2).
(1) https://www.dutchnews.nl/news/2021/09/as-gas-bills-rise-more...
(2) https://www.dutchnews.nl/news/2021/11/homes-with-district-he...
So much this. Here in NL, my heating bill is 70% tax and 30% gas charges (not exaggerating).
The government claims to do this to encourage installation of better insulation and other energy saving measures - however, as a renter (like the vast majority of NL is), I can’t do anything about this and just pay the exorbitant heating bill (1). I have no option but to use gas, and even if I move to a (rare) neighborhood with city heating, they’ll charge me the same amount (2).
(1) https://www.dutchnews.nl/news/2021/09/as-gas-bills-rise-more...
(2) https://www.dutchnews.nl/news/2021/11/homes-with-district-he...
To be fair, the policy was to raise gas taxes while lowering those on electricity in a way that it evens out for most people.
Additionally, while I don't know the numbers of renters vs. buyers, I do know that the vast majority of renters in NL live in social housing, which means the government has some leverage there to get the housing corporations to lower gas use.
Additionally, while I don't know the numbers of renters vs. buyers, I do know that the vast majority of renters in NL live in social housing, which means the government has some leverage there to get the housing corporations to lower gas use.
My electricity bill is less than 10x lower than my heating bill, with all taxes accounted for. Electronics are surprisingly efficient - radiator heating is definitely not.
> social housing, which means the government has some leverage
I’m not sure if you’ve seen social housing, or even the average rental in places like The Hague. They are definitely not maintained well - insulation or otherwise.
Whatever the gov “could” do, isn’t being done. Other than high taxes.
> social housing, which means the government has some leverage
I’m not sure if you’ve seen social housing, or even the average rental in places like The Hague. They are definitely not maintained well - insulation or otherwise.
Whatever the gov “could” do, isn’t being done. Other than high taxes.
If your gas bill is increased then your ability to spend money on rent decreases. Wouldn't this in turn decrease demand for energy ineffective apartments giving an incentive for landlords to take energy saving measures?
That only works in a balanced supply-demand market. Housing is an essential requirement, and is severely under serving demand in NL.
https://www.iamexpat.nl/housing/real-estate-news/urgent-call...
https://www.iamexpat.nl/housing/real-estate-news/urgent-call...
Most renters still have the option to turn down the thermostat though, so whilst the ability to respond to incentives may be dampened, they should still have an effect.
Admittedly, there are some rentals with bills included. But if gas was very expensive, few landlords would offer it.
Admittedly, there are some rentals with bills included. But if gas was very expensive, few landlords would offer it.
> Most renters still have the option to turn down the thermostat though
I can’t tell if this is serious? You’re saying that the gov policy’s effect should be the common man freezing during winter? I don’t know anyone who runs their heating for shits and giggles.
> Admittedly, there are some rentals with bills included
I’ve seen very few (<10%) of rentals that come with utilities included. It wouldn’t make sense either, I’d rather pay for my usage. Not the upper limit of usage that the landlord is accounting for while determining rent.
I can’t tell if this is serious? You’re saying that the gov policy’s effect should be the common man freezing during winter? I don’t know anyone who runs their heating for shits and giggles.
> Admittedly, there are some rentals with bills included
I’ve seen very few (<10%) of rentals that come with utilities included. It wouldn’t make sense either, I’d rather pay for my usage. Not the upper limit of usage that the landlord is accounting for while determining rent.
> I don’t know anyone who runs their heating for shits and giggles.
Heating isn't a binary thing - we want people to minimise their use of gas within reason.
Most people I know could turn their heating down a couple of degrees and put on a warmer jumper, some thermal underwear, or sit with a hot water bottle whilst at their desk if working from home. I've managed to save >30% of my households gas usage in this way.
Yes, there are people on the poverty line who already use their heating at a minimal level. And at risk elderly people. This problem is best solved with subsidies to these specific groups, rather than gas that is too cheap for everyone relative to its environmental impacts.
This view (that a sizable portion of people can reasonably turn down their heat) is substantiated by UK government research, see e.g. https://assets.publishing.service.gov.uk/government/uploads/...
For instance, there are lots of people heating rooms they don't even use, and heating their whole house overnight.
Heating isn't a binary thing - we want people to minimise their use of gas within reason.
Most people I know could turn their heating down a couple of degrees and put on a warmer jumper, some thermal underwear, or sit with a hot water bottle whilst at their desk if working from home. I've managed to save >30% of my households gas usage in this way.
Yes, there are people on the poverty line who already use their heating at a minimal level. And at risk elderly people. This problem is best solved with subsidies to these specific groups, rather than gas that is too cheap for everyone relative to its environmental impacts.
This view (that a sizable portion of people can reasonably turn down their heat) is substantiated by UK government research, see e.g. https://assets.publishing.service.gov.uk/government/uploads/...
For instance, there are lots of people heating rooms they don't even use, and heating their whole house overnight.
> I've managed to save >30% of my households gas usage in this way.
That’s good for you! I fully support educating families that are indeed superfluously running heating.
However, I would also like the exorbitant taxes to go towards actually fixing insulation/heating, or investigating/penalising landlords that don’t fix the overpriced rentals they provide.
That’s good for you! I fully support educating families that are indeed superfluously running heating.
However, I would also like the exorbitant taxes to go towards actually fixing insulation/heating, or investigating/penalising landlords that don’t fix the overpriced rentals they provide.
We need to be wary of counter-productive moralising:
> the rich will be relatively unaffected and can continue polluting
If the tax revenue is spent on cleanup/offsetting/etc. then that doesn't matter. That's the point of the tax.
In fact, if the tax is set slightly higher than the net cleanup cost, that (a) acts as a disincentive (rather than just 'cost of doing business'), and (b) we would want the rich to pollute even more, since they would be paying to clean up more than just their own mess.
For comparison: I take care to avoid making a mess at home, since it would take me a lot of time and effort clean up. The rich can just throw money at cleaners. Now imagine that some Global Cleaners Union sets the price-per-hour of cleaning to cover 61 minutes of work; those extra minutes are aggregated and spent on charitable activities. In such a situation, we would want the rich to make more mess.
> Such a regressive tax, levied on basic things like energy, fuel etc. that are fundamental to normal life seems incredibly likely to trigger political unrest as we saw in France.
This is mentioned in the article:
> In the UK, carbon dioxide emissions are less than six tonnes per person per year, plus two or three tonnes more to reflect the carbon footprint of imported goods. A £100/tonne tax that covered those emissions would raise the cost of living by just over £2 a day, and cover more than 5 per cent of UK tax revenue. That’s not nothing: the government would be wise to send everyone a monthly lump sum in compensation.
> the rich will be relatively unaffected and can continue polluting
If the tax revenue is spent on cleanup/offsetting/etc. then that doesn't matter. That's the point of the tax.
In fact, if the tax is set slightly higher than the net cleanup cost, that (a) acts as a disincentive (rather than just 'cost of doing business'), and (b) we would want the rich to pollute even more, since they would be paying to clean up more than just their own mess.
For comparison: I take care to avoid making a mess at home, since it would take me a lot of time and effort clean up. The rich can just throw money at cleaners. Now imagine that some Global Cleaners Union sets the price-per-hour of cleaning to cover 61 minutes of work; those extra minutes are aggregated and spent on charitable activities. In such a situation, we would want the rich to make more mess.
> Such a regressive tax, levied on basic things like energy, fuel etc. that are fundamental to normal life seems incredibly likely to trigger political unrest as we saw in France.
This is mentioned in the article:
> In the UK, carbon dioxide emissions are less than six tonnes per person per year, plus two or three tonnes more to reflect the carbon footprint of imported goods. A £100/tonne tax that covered those emissions would raise the cost of living by just over £2 a day, and cover more than 5 per cent of UK tax revenue. That’s not nothing: the government would be wise to send everyone a monthly lump sum in compensation.
Note, offsets don't clean up. They are just reducing emissions in our future compared to some other hypothetical future.
For example, giving out gas burning stoves to replace wood burning ones in a developing country can generate offsets. But who's to say we accurately forecast the chopped wood demand that was reduced by the program, and the gas demand that was increased by the program? Can we say 100% the recipients were not going to purchase these stoves themselves in their future? All incentives go to biasing the assumptions and printing as many offset certificates as possible.
To actually clean up we would need Direct Air Capture. The cost is 100+x higher than the usual cost of carbon offsets, and supply is very limited. The DAC industry would need to grow to a similar size (in terms of tonnes of product produced) as our current fossil fuel industry. But the output product, such as carbonate rock, would be useless, unlike fossil fuels. Its only use would be how it removed carbon from the air. I don't see anybody paying for that.
Source on the carbonate rock and scale of DAC industry: https://journals.plos.org/plosone/article?id=10.1371/journal...
Info on offsets accounting: https://www.climatechangenews.com/2020/12/11/10-myths-net-ze...
For example, giving out gas burning stoves to replace wood burning ones in a developing country can generate offsets. But who's to say we accurately forecast the chopped wood demand that was reduced by the program, and the gas demand that was increased by the program? Can we say 100% the recipients were not going to purchase these stoves themselves in their future? All incentives go to biasing the assumptions and printing as many offset certificates as possible.
To actually clean up we would need Direct Air Capture. The cost is 100+x higher than the usual cost of carbon offsets, and supply is very limited. The DAC industry would need to grow to a similar size (in terms of tonnes of product produced) as our current fossil fuel industry. But the output product, such as carbonate rock, would be useless, unlike fossil fuels. Its only use would be how it removed carbon from the air. I don't see anybody paying for that.
Source on the carbonate rock and scale of DAC industry: https://journals.plos.org/plosone/article?id=10.1371/journal...
Info on offsets accounting: https://www.climatechangenews.com/2020/12/11/10-myths-net-ze...
I'm not too versed in the terminology, but my intent with 'offset' was to mean e.g. planting X amount of trees to counter the exhaust of a long-haul flight (or other such activities which can't easily be decarbonised)
I agree that the wood->gas stove example creates perverse incentives. It can certainly be a good investment, but the costs/risks/rewards need to be distributed to the appropriate stakeholders. In this example, I could imagine a setup like:
- Country levies a flat tax on carbon emissions
- Country pays out a flat/progressive dividend, to prevent the carbon tax making the poor worse off
- We can imagine the above balance out, such that person A with a wood-burning stove doesn't notice any cost difference
- Person A now has an incentive to switch to a gas-powered stove (reducing their tax without affecting their dividend)
- Person A can purchase such a gas-burning stove using a loan, paid for by their dividend saving (with some dividend left over to incentivise the switch)
Such a setup would be essentially the same as giving away gas-burning stoves, but the incentive structure is different: the 'potential future emissions' question has to be answered by the people who stand to gain. In the above example, Person A knows how much they spend on wood fuel (including tax); they decide whether a particular gas-stove loan is worth taking; and they gain the dividend savings during and after the loan's repaid.
I'm always iffy when it comes to loans for the most economically vulnerable; but the state can still play a role, by reducing predatory lending practices, etc.
> To actually clean up we would need Direct Air Capture. The cost is 100+x higher than the usual cost of carbon offsets, and supply is very limited.
Whenever I see such schemes I always like to see what happens if we incrementally simplify the setup. For example, we might start with:
- Extract oil -> burn oil -> synthesise carbonate rock (DAC) -> bury carbonate rock
If we use a different DAC system, we can synthesis hydrocarbons instead of carbonate rock:
- Extract oil -> burn oil -> synthesise oil (DAC) -> bury oil
The burning and DAC steps cancel out, saving money and energy:
- Extract oil -> bury oil
The extraction of fossil oil cancels out with the burying of (fossil or synthetic) oil:
- Do nothing
In other words, the simplest, cheapest form of carbon capture is to leave the oil in the ground. In that sense, DAC has two roles:
- Cancel out the burning we've already done
- Decouple energy usage from energy availability, e.g. if some remote location is great for hydro/geothermal/etc., but there's no local demand, we could use that energy for DAC. However, the majority of the time it would be even more efficient to just run electricity cables (e.g. HVDC).
I agree that the wood->gas stove example creates perverse incentives. It can certainly be a good investment, but the costs/risks/rewards need to be distributed to the appropriate stakeholders. In this example, I could imagine a setup like:
- Country levies a flat tax on carbon emissions
- Country pays out a flat/progressive dividend, to prevent the carbon tax making the poor worse off
- We can imagine the above balance out, such that person A with a wood-burning stove doesn't notice any cost difference
- Person A now has an incentive to switch to a gas-powered stove (reducing their tax without affecting their dividend)
- Person A can purchase such a gas-burning stove using a loan, paid for by their dividend saving (with some dividend left over to incentivise the switch)
Such a setup would be essentially the same as giving away gas-burning stoves, but the incentive structure is different: the 'potential future emissions' question has to be answered by the people who stand to gain. In the above example, Person A knows how much they spend on wood fuel (including tax); they decide whether a particular gas-stove loan is worth taking; and they gain the dividend savings during and after the loan's repaid.
I'm always iffy when it comes to loans for the most economically vulnerable; but the state can still play a role, by reducing predatory lending practices, etc.
> To actually clean up we would need Direct Air Capture. The cost is 100+x higher than the usual cost of carbon offsets, and supply is very limited.
Whenever I see such schemes I always like to see what happens if we incrementally simplify the setup. For example, we might start with:
- Extract oil -> burn oil -> synthesise carbonate rock (DAC) -> bury carbonate rock
If we use a different DAC system, we can synthesis hydrocarbons instead of carbonate rock:
- Extract oil -> burn oil -> synthesise oil (DAC) -> bury oil
The burning and DAC steps cancel out, saving money and energy:
- Extract oil -> bury oil
The extraction of fossil oil cancels out with the burying of (fossil or synthetic) oil:
- Do nothing
In other words, the simplest, cheapest form of carbon capture is to leave the oil in the ground. In that sense, DAC has two roles:
- Cancel out the burning we've already done
- Decouple energy usage from energy availability, e.g. if some remote location is great for hydro/geothermal/etc., but there's no local demand, we could use that energy for DAC. However, the majority of the time it would be even more efficient to just run electricity cables (e.g. HVDC).
The solution here is a payout of (most of) the taxes equally for every citizen and also use some of it for special groups (exceptions) that can't deal with even that (realistically).
This is called a dividend: https://en.m.wikipedia.org/wiki/Carbon_fee_and_dividend
Yep, Canada does this. Carbon tax revenues are returned as rebates. If you "do the right thing" and reduce your fossil fuel usage, you get back more than you paid in taxes. Canada's tax is far too minuscule to make a big difference, but the design itself is very good.
> For example, look at what happened in France with the fuel tax rise which lead to the “gilets jaunes” protests.
I think people actually underestimate the effect of a carbon tax. The tax has to be extreme enough that it changes behaviour in the real wold, and something like 70-80% of energy comes from fossil fuels.
If people aren't near to rioting because their lifestyle is being forced to change then the tax isn't doing anything. It isn't going to look like cheerful.
I think people actually underestimate the effect of a carbon tax. The tax has to be extreme enough that it changes behaviour in the real wold, and something like 70-80% of energy comes from fossil fuels.
If people aren't near to rioting because their lifestyle is being forced to change then the tax isn't doing anything. It isn't going to look like cheerful.
I understand your viewpoint, but if you tax the common man such that they are unable to travel to work in the only car they can afford - the world will stop functioning.
I often wonder why the elites don’t understand what their mistreatment of the proletariat will lead to…
I often wonder why the elites don’t understand what their mistreatment of the proletariat will lead to…
Or they'll just move closer to work, or will implement Home Office, or will demand public transport (which can be combined with bicycles), or will drive electric (car, ebike, electric scooter/motor cycles) or will drive as groups instead of individuals, or a dividend will implemented making this scenario unlikely in the first place while still enabling carbon taxes.
> they'll just move closer to work
This is often way more expensive than paying for heating.
> will implement Home Office
This only works for well paying IT jobs. Not the working class that actually physically work at factories, stores, restaurants, hospitals, etc etc that are underpaid and hit the most by taxes.
> will demand public transport
Demands are cool and everything, but you can’t sit around jobless for 1-2 decades waiting for laws to pass and municipalities to build out the transport infrastructure.
> will drive electric
Very few cities have the infrastructure for this. Once that’s fixed, carbon taxation would work better.
> drive as groups instead of individuals
This already happens in Europe, but people are still wage slaves. It changes nothing.
This is often way more expensive than paying for heating.
> will implement Home Office
This only works for well paying IT jobs. Not the working class that actually physically work at factories, stores, restaurants, hospitals, etc etc that are underpaid and hit the most by taxes.
> will demand public transport
Demands are cool and everything, but you can’t sit around jobless for 1-2 decades waiting for laws to pass and municipalities to build out the transport infrastructure.
> will drive electric
Very few cities have the infrastructure for this. Once that’s fixed, carbon taxation would work better.
> drive as groups instead of individuals
This already happens in Europe, but people are still wage slaves. It changes nothing.
Another option: get work nearby.
Some jobs will also get pay raises if there is demand for them, but people can't afford to take them.
Working remote doesn't work just for IT, and I didn't claim everything works for everybody. And incrementally increased taxation will allow for planning.
Poor people have a low enough foot print to profit with a dividend anyways.
The real problem with carbon taxing is that it must be realized globally
Some jobs will also get pay raises if there is demand for them, but people can't afford to take them.
Working remote doesn't work just for IT, and I didn't claim everything works for everybody. And incrementally increased taxation will allow for planning.
Poor people have a low enough foot print to profit with a dividend anyways.
The real problem with carbon taxing is that it must be realized globally
I’ve lived in the USA, EU, and Asia. Very very rarely can you get a job near your housing (suburbs) - residential vs commercial areas are intentionally zoned against this. Getting housing near your work (city center) is much easier, due to mixed zoning, but obviously way more expensive.
> profit with a dividend anyways
See, the thing is, there are no carbon dividends yet. We do have lots of carbon-like taxes (in the EU and elsewhere) though. So, there’s only loss, no gain.
> profit with a dividend anyways
See, the thing is, there are no carbon dividends yet. We do have lots of carbon-like taxes (in the EU and elsewhere) though. So, there’s only loss, no gain.
So you have found things to be changed (back).
Same goes for shops having centralized a lot especially in the US at it seems, while local shops are much more bicycle or even foot friendly.
Generally, there is no silver bullet, but there are a lot of possible solutions as you can see. And I am sure I didn't include most of them
> See, the thing is, there are no carbon dividends yet. We do have lots of carbon-like taxes (in the EU and elsewhere) though. So, there’s only loss, no gain.
Well, what not is ...
Generally, there is no silver bullet, but there are a lot of possible solutions as you can see. And I am sure I didn't include most of them
> See, the thing is, there are no carbon dividends yet. We do have lots of carbon-like taxes (in the EU and elsewhere) though. So, there’s only loss, no gain.
Well, what not is ...
> Generally, there is no silver bullet
I’m not ascribing to a perfection mindset. Just pointing out the ridiculousness of the elites telling others how to live their lives, while simultaneously finding ways to further suppress them.
“We could have an ideal world, if you just stopped doing everything that enables your survival. Me? I just make/support the rules - despite them not materially affecting me.”
I’m not ascribing to a perfection mindset. Just pointing out the ridiculousness of the elites telling others how to live their lives, while simultaneously finding ways to further suppress them.
“We could have an ideal world, if you just stopped doing everything that enables your survival. Me? I just make/support the rules - despite them not materially affecting me.”
If you don't stop global warming - it's not going to be pretty either. And taxing rich, while a good idea - won't solve the problem, because there's so few of them that it won't matter, nevermind how exuberant they CO2 emissions are.
So basically choose your poison or hope for magic tech to appear soon.
So basically choose your poison or hope for magic tech to appear soon.
> because there's so few of them that it won't matter
What do you mean?? Literally, you could redistribute billionaire/millionaire wealth and it would be more useful than taxing the average person tens/hundreds of euros more, when they can barely afford to survive.
In fact, ongoing taxation that reduces the loopholes that elites get away with, would be even more beneficial.
What do you mean?? Literally, you could redistribute billionaire/millionaire wealth and it would be more useful than taxing the average person tens/hundreds of euros more, when they can barely afford to survive.
In fact, ongoing taxation that reduces the loopholes that elites get away with, would be even more beneficial.
Wealth is numbers on a page. Chop fossil fuel use in half (picking a random ratio) and there physically isn't a way for everyone to maintain their lifestyle. They have to travel less, receive less goods and spend less on heating and cooling.
There may not be a way to make that burden fall on the rich. I'm not sure what percentage of a society's energy is spent on maintaining the lifestyles of the wealthy but it wouldn't be weird if it is low in absolute terms.
There may not be a way to make that burden fall on the rich. I'm not sure what percentage of a society's energy is spent on maintaining the lifestyles of the wealthy but it wouldn't be weird if it is low in absolute terms.
> I'm not sure what percentage of a society's energy is spent on maintaining the lifestyles of the wealthy but it wouldn't be weird if it is low in absolute terms.
I think this is patently false; but even more generally, wealthier people and “developed” countries are the biggest polluters.
https://www.theguardian.com/environment/2020/sep/21/worlds-r...
I think this is patently false; but even more generally, wealthier people and “developed” countries are the biggest polluters.
https://www.theguardian.com/environment/2020/sep/21/worlds-r...
The global 1% are, by definition, around 80 million people (more than the population of most countries). As the article points out, earning more than around $100,000. They aren't billionaires.
I suppose they might be millionaires since around 9% of the US are millionaires [0]. That isn't a very exclusive club these days. A tax that knocks the lifestyle of that many people down to something like what an individual with a <$100k income experiences is going to be look radical.
[0] https://en.wikipedia.org/wiki/List_of_countries_by_the_numbe...
I suppose they might be millionaires since around 9% of the US are millionaires [0]. That isn't a very exclusive club these days. A tax that knocks the lifestyle of that many people down to something like what an individual with a <$100k income experiences is going to be look radical.
[0] https://en.wikipedia.org/wiki/List_of_countries_by_the_numbe...
> A tax that knocks the lifestyle of that many people down to something like what an individual with a <$100k income experiences is going to be look radical.
Why shouldn’t it be radical? Why should the %-ers get to pollute and live lavish lifestyles, while enforcing frugality and poverty on the remaining 90-99%?
Why shouldn’t it be radical? Why should the %-ers get to pollute and live lavish lifestyles, while enforcing frugality and poverty on the remaining 90-99%?
> What do you mean?? Literally, you could redistribute billionaire/millionaire wealth and it would be more useful than taxing the average person tens/hundreds of euros more, when they can barely afford to survive.
Most of that wealth is stocks of companies that only exist because they serve needs of billions of people that are not rich. If you redistribute the wealth (so - who owns the stocks) - you don't change the emissions because the needs of billions of people are still there (in fact - you will probably increase net emissions because now more people have money to spend) and companies will continue to try to satisfy these needs to earn money. And emit CO2 while doing so.
If you want to reduce the emissions you have to stop these needs from being satisfied (or invent magic tech). Redistribution of wealth (while reasonable for other reasons) - won't help with global warming.
Side effect of cutting CO2 emissions is that these companies lose big percent of their value, so wealth of everybody drops, but that's the least of our problems.
Another thing is - significant part of the world is just now achieving living standards considered bare minimum in the west. That's more than billion people that will double their CO2 emissions soon. If you cut the 15% of emissions caused by top 1% to 0 - it doesn't matter because at the same time 20% or 30% of world population is increasing their emissions by 100%.
We have 2 issues - life is unfair (and to fix that we need to tax the rich), and global warming (and to fix that we need to tax CO2 emissions, no matter who cause them). The end result will be that everybody but the poor people in 3rd world countries will significantly lower their living standards.
What will actually happen is probably that we just tax CO2, so everybody living standards will drop. Or we do nothing and we all suffer the climate crisis, mass imigrations, starvations, wars etc.
Most of that wealth is stocks of companies that only exist because they serve needs of billions of people that are not rich. If you redistribute the wealth (so - who owns the stocks) - you don't change the emissions because the needs of billions of people are still there (in fact - you will probably increase net emissions because now more people have money to spend) and companies will continue to try to satisfy these needs to earn money. And emit CO2 while doing so.
If you want to reduce the emissions you have to stop these needs from being satisfied (or invent magic tech). Redistribution of wealth (while reasonable for other reasons) - won't help with global warming.
Side effect of cutting CO2 emissions is that these companies lose big percent of their value, so wealth of everybody drops, but that's the least of our problems.
Another thing is - significant part of the world is just now achieving living standards considered bare minimum in the west. That's more than billion people that will double their CO2 emissions soon. If you cut the 15% of emissions caused by top 1% to 0 - it doesn't matter because at the same time 20% or 30% of world population is increasing their emissions by 100%.
We have 2 issues - life is unfair (and to fix that we need to tax the rich), and global warming (and to fix that we need to tax CO2 emissions, no matter who cause them). The end result will be that everybody but the poor people in 3rd world countries will significantly lower their living standards.
What will actually happen is probably that we just tax CO2, so everybody living standards will drop. Or we do nothing and we all suffer the climate crisis, mass imigrations, starvations, wars etc.
That taxation is redistributing wealth (supporting climate change).
Reducing loopholes won't reduce carbon emissions. Internalizing the cost will, so I can't even imagine how this would be more beneficial. So, just do both
Reducing loopholes won't reduce carbon emissions. Internalizing the cost will, so I can't even imagine how this would be more beneficial. So, just do both
1% (richest) = 15% emissions, so much for that
But carbon tax (ideally with a dividend) catches this anyways
But carbon tax (ideally with a dividend) catches this anyways
On the other hand if you can't get the common man out of their polluting activities then you aren't going to solve the problem.
> common man out of their polluting activities
The common man is definitely less polluting than the average HNer - HN represents the upper % of the upper middle class. So really, the way you frame your reply makes me think you haven’t thought through the impact on your own polluting lifestyle.
The common man is definitely less polluting than the average HNer - HN represents the upper % of the upper middle class. So really, the way you frame your reply makes me think you haven’t thought through the impact on your own polluting lifestyle.
>The common man is definitely less polluting than the average HNer - HN represents the upper % of the upper middle class.
The common man in the developed world is still part of the problem.
>So really, the way you frame your reply makes me think you haven’t thought through the impact on your own polluting lifestyle.
You are jumping to an incorrect conclusion there. I've been thinking about it for decades which is why I don't fly nor own a car. My spending (hence consumption) is around the poverty line for my country.
The common man in the developed world is still part of the problem.
>So really, the way you frame your reply makes me think you haven’t thought through the impact on your own polluting lifestyle.
You are jumping to an incorrect conclusion there. I've been thinking about it for decades which is why I don't fly nor own a car. My spending (hence consumption) is around the poverty line for my country.
Is it even possible to make a CO2 tax that is not regressive?
The purpose of a CO2 tax is reduce emissions and a lot of emissions are not caused by luxury products and services but simple stuff like growing food or driving to work.
Increasing the price of fuel to the point where people switch to biking to work would be very successful from a climate standpoint but extremely unpopular.
The purpose of a CO2 tax is reduce emissions and a lot of emissions are not caused by luxury products and services but simple stuff like growing food or driving to work.
Increasing the price of fuel to the point where people switch to biking to work would be very successful from a climate standpoint but extremely unpopular.
Superyacht fuel efficiency is measured in gallons per mile.
Private jets use ridiculous amounts of fuel.
The middle class will drive while the poor take the bus.
It's not as regressive as you'd think.
This can also be offset with tax rebates for those on lower incomes.
Politically the problem is that the wealthy will use every lobbying, legal and propaganda tool to shift the burden off their backs.
Private jets use ridiculous amounts of fuel.
The middle class will drive while the poor take the bus.
It's not as regressive as you'd think.
This can also be offset with tax rebates for those on lower incomes.
Politically the problem is that the wealthy will use every lobbying, legal and propaganda tool to shift the burden off their backs.
>while the poor take the bus.
Except in most of America, where the poor have to drive as well, and spend a much higher percentage of their income on cars. Evidently most don't mind or are even supportive, because it supposedly buys them freedom (From what? Disposable income?).
Except in most of America, where the poor have to drive as well, and spend a much higher percentage of their income on cars. Evidently most don't mind or are even supportive, because it supposedly buys them freedom (From what? Disposable income?).
In many poorer areas bus services aren't reliable - and that can cost you your job.
> emissions are not caused by luxury products
I think this is patently false; but even more generally, wealthier people and “developed” countries are the biggest polluters.
(https://www.theguardian.com/environment/2020/sep/21/worlds-r...)
I think this is patently false; but even more generally, wealthier people and “developed” countries are the biggest polluters.
(https://www.theguardian.com/environment/2020/sep/21/worlds-r...)
Price of gas in France this week EUR 1.650/l ($7.018/gallon)
It depends on who gets the taxes.
If it goes to greedy bureaucrats that waste it or are themselves bought and for it will be worse than no tax at all.
Then the system will be used by lobbiests to attack one industry in favor of another.
If it goes to greedy bureaucrats that waste it or are themselves bought and for it will be worse than no tax at all.
Then the system will be used by lobbiests to attack one industry in favor of another.
Global warming is a global problem. While carbon tax would be levied locally, creating incentives to just shift production to low or no tax locations.
Just as harmonisation over Cororate Tax is finally emerging, similar cross-border agreements should be needed for a Carbon Tax.
Just as harmonisation over Cororate Tax is finally emerging, similar cross-border agreements should be needed for a Carbon Tax.
Which is why mechanisms like carbon tariffs on imports are being designed.
https://en.wikipedia.org/wiki/Carbon_Border_Adjustment_Mecha...
https://en.wikipedia.org/wiki/Carbon_Border_Adjustment_Mecha...
That seems like it could become very messy and open to fraud. The nice thing about carbon tariffs within borders is they would be trivial to implement because there are relatively few targets (oil wells, coal mines, etc).
Do you think the natural game theoretic result might be "carbon havens"?
Areas that have the worst carbon enforcement / corruption (so issuing certificates to avoid tariffs etc without real action) would be more competitive than areas with effective enforcement so they will attract the most manufacturing.
I don't think importing from countries without a carbon price will be a problem (border taxes seem like they can work).
I suspect the problem will be that for countries that DO set a carbon price it is in everyone's interest within that country that the system not actually be effective.
Areas that have the worst carbon enforcement / corruption (so issuing certificates to avoid tariffs etc without real action) would be more competitive than areas with effective enforcement so they will attract the most manufacturing.
I don't think importing from countries without a carbon price will be a problem (border taxes seem like they can work).
I suspect the problem will be that for countries that DO set a carbon price it is in everyone's interest within that country that the system not actually be effective.
If high levels of fraud are detected other countries can just slap high "emergency" tarriffs until the country fixes the problem. This would most certainly disincentivize lax enforcement.
The problem has always been lack of a will, not a way.
The problem has always been lack of a will, not a way.
[deleted]
Perhaps this can work as strategic arms limitation treaties: trust but verify.
Satellite monitoring is almost at the point where an individual country may be held accountable for emissions from their territory.
Satellite monitoring is almost at the point where an individual country may be held accountable for emissions from their territory.
As a country you also can enforce restrictions/taxes onto the whole supply chain, as a initial measure (can't be done by weak countries though).
Of course, mid term everyone should push for global carbon pricing models
Germany was the only country that seems to have understood this, given they were the only ones that advocated for it at COP.
Of course, mid term everyone should push for global carbon pricing models
Germany was the only country that seems to have understood this, given they were the only ones that advocated for it at COP.
> As a country you also can enforce restrictions/taxes onto the whole supply chain, as a initial measure…
Isn’t this an extremely hard problem, possibly unworkable, when trade is in assembled goods with complex, global supply chains?
Isn’t this an extremely hard problem, possibly unworkable, when trade is in assembled goods with complex, global supply chains?
Should be doable, see recent supply chain law of Germany regarding human rights
There's a problem between non-tariff measures and tariffs, with carbon taxing being too obviously a tariff measure. And you can't just throw in a tariff thanks to WTO rules, especially if it wouldn't apply to countries that do collect carbon tax - WTO requires that tariffs are applied the same to all countries except through certain bilateral trade treaties. Which is workable, but makes for considerable stumbling block in "quick apply" of carbon tax
EU is making carbon tariffs to prevent exporting emissions to avoid paying for carbon emissions outside EU Emissions Trading System.
Carbon tariffs are essential feature of any functioning system. Either countries enter agreement where they harmonize their carbon trade/tariff or there will be tariff.
Carbon tariffs are essential feature of any functioning system. Either countries enter agreement where they harmonize their carbon trade/tariff or there will be tariff.
Watch "Lords of Scam". Carbon taxes not only don't work, they breed corruption.
Carbon taxes only work if they are applied universally worldwide.
If a carbon tax is applied in just one country, then people are rewarded for shifting carbon intensive activities to another country.
There also needs to be a clear answer to 'who should receive the carbon tax revenue?'. If countries receive the revenue, they have an incentive to try to attract carbon intensive industries to collect revenue from them.
The only real solution is a worldwide tax paid by countries to something like the world Bank. Each country could then tax their citizens equally.
If a carbon tax is applied in just one country, then people are rewarded for shifting carbon intensive activities to another country.
There also needs to be a clear answer to 'who should receive the carbon tax revenue?'. If countries receive the revenue, they have an incentive to try to attract carbon intensive industries to collect revenue from them.
The only real solution is a worldwide tax paid by countries to something like the world Bank. Each country could then tax their citizens equally.
Another tax on the middle class, because they don't have enough of a fiscal burden already, in the goods they need, in paying gas when they drive to work (no, not everyone has a very green public transportation that gets them to work in an efficient fashion).
Do these people even know the carbon footprint of manufacturing a solar panel or a wind mill for their "green" energy?
I do agree that products should be manufactured locally, but that has nothing to do with the environment.
Do these people even know the carbon footprint of manufacturing a solar panel or a wind mill for their "green" energy?
I do agree that products should be manufactured locally, but that has nothing to do with the environment.
> Do these people even know the carbon footprint of manufacturing a solar panel or a wind mill for their "green" energy?
Yes, and it can't be ignored. A carbon tax is universal
I don't get your whining on the middle class. Everyone can strive for a climate friendly life style. This generates a demand on a big scale, thus also solutions.
A dividend would help people having not much money and still need to use carbon intensive products (until there are alternatives), because they have a small footprint anyways
Yes, and it can't be ignored. A carbon tax is universal
I don't get your whining on the middle class. Everyone can strive for a climate friendly life style. This generates a demand on a big scale, thus also solutions.
A dividend would help people having not much money and still need to use carbon intensive products (until there are alternatives), because they have a small footprint anyways
>Another tax on the middle class, because they don't have enough of a fiscal burden already, in the goods they need, in paying gas when they drive to work (no, not everyone has a very green public transportation that gets them to work in an efficient fashion).
So build it, then. You have lots of money available to construct it from your carbon tax, and even more money when you stop subsidizing the ridiculously expensive car-oriented infrastructure.
>Do these people even know the carbon footprint of manufacturing a solar panel or a wind mill for their "green' energy?
Total emissions from these technologies are significantly lower than fossil-powered energy generation.
Stop spreading disinformation, it's extremely frustrating. It's very obvious that you're doing it on purpose.
So build it, then. You have lots of money available to construct it from your carbon tax, and even more money when you stop subsidizing the ridiculously expensive car-oriented infrastructure.
>Do these people even know the carbon footprint of manufacturing a solar panel or a wind mill for their "green' energy?
Total emissions from these technologies are significantly lower than fossil-powered energy generation.
Stop spreading disinformation, it's extremely frustrating. It's very obvious that you're doing it on purpose.
>So build it, then. You have lots of money available to construct it from your carbon tax, and even more money when you stop subsidizing the ridiculously expensive car-oriented infrastructure.
You don't know what you're talking about. And just because you're ignorant doesn't make me argue in bad faith.
You don't know what you're talking about. And just because you're ignorant doesn't make me argue in bad faith.
I do know what I'm talking about - and we can conclude on the basis of your statements on renewable energy production that you either don't know what your talking about (willfully ignorant) or that you're attempting to willfully sabotage the conversation.
[deleted]
That a carbon tax is a source of information about the highest leverage areas we can change is a great framing.
Unfortunately, the main barrier to implementing a carbon tax is how we treat imports, which is the key to getting the whole thing to work. Failing to solve this means importers deindustrialize in favor of countries with more lenient carbon pricing regimes.
“Do I have to spell it out for you? Just implement a border-adjusted carbon tax!” they’ll retort: “that will cause exporters to harmonize their standards with the markets they sell to.”
I can see how this works for plastics (producing PTFE in <Exporter> would have a carbon tax of $2/ton), but what about complex, assembled goods like cars with complex supply chains, like a Hyundai assembled in S Korea with parts from more than 60 countries? The Americans need to trust the S Koreans to tax that, and the S Koreans need to trust the Chinese, Indians, Canadians and Japanese to be implementing theirs properly. Every major component in an assembled good becomes a problem.
Carbon tax works when all countries implement it, but what’s the equilibrium given current starting conditions?
Unfortunately, the main barrier to implementing a carbon tax is how we treat imports, which is the key to getting the whole thing to work. Failing to solve this means importers deindustrialize in favor of countries with more lenient carbon pricing regimes.
“Do I have to spell it out for you? Just implement a border-adjusted carbon tax!” they’ll retort: “that will cause exporters to harmonize their standards with the markets they sell to.”
I can see how this works for plastics (producing PTFE in <Exporter> would have a carbon tax of $2/ton), but what about complex, assembled goods like cars with complex supply chains, like a Hyundai assembled in S Korea with parts from more than 60 countries? The Americans need to trust the S Koreans to tax that, and the S Koreans need to trust the Chinese, Indians, Canadians and Japanese to be implementing theirs properly. Every major component in an assembled good becomes a problem.
Carbon tax works when all countries implement it, but what’s the equilibrium given current starting conditions?
Of course they work. Fuels have historically been taxed quite highly in some countries. EVs are doing well in those countries and these countries tend to be a bit ahead of the curve in terms of adoption. Financial incentives help so they are a useful tool.
One caveat here is that governments also hand out subsidies and a much more effective way to penalize carbon emissions is simply to stop subsidizing it and then add the carbon tax on top. Yes, EVs get subsidized too. But it's peanuts to the many billions the oil and gas companies still continue to get their hands on to perpetuate the problem.
Whenever you hear oil companies defend blue hydrogen what they are really talking about is getting payed (with tax money) for the process of pumping insane amounts of natural gas for the next few decades so they can use that to produce hydrogen. That's "the hydrogen economy": pumping yet more gas to speed up how quickly our planet heats up. They'll emphasize how important that is and how green it is (or could be). Never mind that it is completely unprofitable to capture carbon at scale and of course tax payers are going pay for them pretending that it's going to be meaningful amounts. That's the game right now in terms of handouts. We're talking tens of billions being allocated for this madness.
Companies often double dip even and get also get subsidies for cleaning up their act (or pretending to) while also taking full advantage of governments wielding their power on their behalf, public spending on their infrastructure (e.g. pipelines), leniency when it comes to environmental issues, permits, and public money generally being used to clean up their mess.
A carbon tax would go towards balancing that; but only a little bit. Eliminating subsidies for carbon producers would cost the worst offenders the hardest and actually level the playing field in terms of cost for the alternatives that they've been allowed to unfairly undercut in pricing.
The irony is that getting rid of the subsidies is somehow more controversial than carbon taxes. That's how messed up our world is. We're actively paying to destroy it quicker currently. Every time you pay your taxes.
One caveat here is that governments also hand out subsidies and a much more effective way to penalize carbon emissions is simply to stop subsidizing it and then add the carbon tax on top. Yes, EVs get subsidized too. But it's peanuts to the many billions the oil and gas companies still continue to get their hands on to perpetuate the problem.
Whenever you hear oil companies defend blue hydrogen what they are really talking about is getting payed (with tax money) for the process of pumping insane amounts of natural gas for the next few decades so they can use that to produce hydrogen. That's "the hydrogen economy": pumping yet more gas to speed up how quickly our planet heats up. They'll emphasize how important that is and how green it is (or could be). Never mind that it is completely unprofitable to capture carbon at scale and of course tax payers are going pay for them pretending that it's going to be meaningful amounts. That's the game right now in terms of handouts. We're talking tens of billions being allocated for this madness.
Companies often double dip even and get also get subsidies for cleaning up their act (or pretending to) while also taking full advantage of governments wielding their power on their behalf, public spending on their infrastructure (e.g. pipelines), leniency when it comes to environmental issues, permits, and public money generally being used to clean up their mess.
A carbon tax would go towards balancing that; but only a little bit. Eliminating subsidies for carbon producers would cost the worst offenders the hardest and actually level the playing field in terms of cost for the alternatives that they've been allowed to unfairly undercut in pricing.
The irony is that getting rid of the subsidies is somehow more controversial than carbon taxes. That's how messed up our world is. We're actively paying to destroy it quicker currently. Every time you pay your taxes.
Energy runs the world. It isn’t as one dimensional as you paint it.
Governments don’t simply subsidize burning coal. . . They do so as a means to meet the growing demand of their people for electricity.
India for example, has one of the most expensive fuels sold in the world thanks to immense taxation. Even with one of the lower per capital incomes in the world, they are a massive energy market because ENERGY IS NEEDED FOR SUSTENANCE.
We need to realize that what sounds like a great idea on paper to minimize one dimension is actually counter productive when we factor in many more.
Governments don’t simply subsidize burning coal. . . They do so as a means to meet the growing demand of their people for electricity.
India for example, has one of the most expensive fuels sold in the world thanks to immense taxation. Even with one of the lower per capital incomes in the world, they are a massive energy market because ENERGY IS NEEDED FOR SUSTENANCE.
We need to realize that what sounds like a great idea on paper to minimize one dimension is actually counter productive when we factor in many more.
I wasn't talking about Indian (I'll assume we are talking about India) coal plants, who are indeed benefiting from quite a bit of foreign subsidized manufacturing and coal exports by various countries. All I'm saying is that there's no need for any of these countries to subsidize or support that in any way. The Indians of course have some difficult choices to make regarding how they grow their economy and energy sector. Global warming sucks and it is going to hit them hard. There's no need to sugar coat that. We'd like them to stop burning coal and we'd especially like the Australians to stop subsidizing the process of supplying it to them.
Less subsidies would make coal less attractive for India. That kind of is the point. It's only attractive because we subsidize it. They'll need to find cheaper and cleaner solutions. Lots of countries are squeezing the coal sector hard now and it is rapidly disappearing. India will have to adapt. So will China.
The new German government for example intends to move forward the closure of remaining coal plants to 2030 apparently. As I'm writing this, I'm literally looking at one from the train window. It will stop smoking between now and 2030. Lots of wind mills around it. Good riddance.
Less subsidies would make coal less attractive for India. That kind of is the point. It's only attractive because we subsidize it. They'll need to find cheaper and cleaner solutions. Lots of countries are squeezing the coal sector hard now and it is rapidly disappearing. India will have to adapt. So will China.
The new German government for example intends to move forward the closure of remaining coal plants to 2030 apparently. As I'm writing this, I'm literally looking at one from the train window. It will stop smoking between now and 2030. Lots of wind mills around it. Good riddance.
Wait, it’s hard to take you seriously if you think India pays below market rate for coal from Australia. Is that really your stance or am I misreading that?
They have domestic production that accounts for a significant portion of domestic electricity generation that is bought at market value and then sold commercially through government supported subsidy to help their economic needs.
This isn’t a question of “they’re getting it for cheap because of subsidies” - if indeed that’s what you’re saying, it’s a rather uninformed position on the matter.
Also, I don’t care what the new German government “intends” to do. The old one “intended” to turn off the bulk of their Nuclear sources leading to coal use surging at peak (which is happening all the more frequently now with the winter energy mix being thrown off)
You seem to have a stock position for increasing the cost of dirty sources without a care for what compels economies to use them in the first place. That is precisely the point I’m trying to get you to see. They aren’t used one dimensionally because they’re dirty and no one has prioritized clean energy sources yet, but because they are necessary and the alternatives don’t fit the bill for the need of the hour.
Adding a carbon tax in this context is a very arrogant way of saying “Fuck your needs, if you have to pay more, you’ll learn to live with less”
When the point is we want to innovate so we get the economic value that modern technology such as SMRs produce without needing to subject a billion people to continue living with powercuts that stretch hours a day because the “civilized” world thinks the pollution from them wanting a better life is too dangerous for the world.
They have domestic production that accounts for a significant portion of domestic electricity generation that is bought at market value and then sold commercially through government supported subsidy to help their economic needs.
This isn’t a question of “they’re getting it for cheap because of subsidies” - if indeed that’s what you’re saying, it’s a rather uninformed position on the matter.
Also, I don’t care what the new German government “intends” to do. The old one “intended” to turn off the bulk of their Nuclear sources leading to coal use surging at peak (which is happening all the more frequently now with the winter energy mix being thrown off)
You seem to have a stock position for increasing the cost of dirty sources without a care for what compels economies to use them in the first place. That is precisely the point I’m trying to get you to see. They aren’t used one dimensionally because they’re dirty and no one has prioritized clean energy sources yet, but because they are necessary and the alternatives don’t fit the bill for the need of the hour.
Adding a carbon tax in this context is a very arrogant way of saying “Fuck your needs, if you have to pay more, you’ll learn to live with less”
When the point is we want to innovate so we get the economic value that modern technology such as SMRs produce without needing to subject a billion people to continue living with powercuts that stretch hours a day because the “civilized” world thinks the pollution from them wanting a better life is too dangerous for the world.
I’ve never been more astounded than when in the company of absolute geniuses in Silicon Valley, watching them discuss the economics of a carbon tax without having once encountered a real world carbon tax credit trade or having seen the dishonesty of the entire system.
Tl;dr: It isn’t a system to “inform one of the behavior one needs to change most urgently” as the author puts it. It’s a transfer of wealth from the economies that impose it to the economies that find a way to leverage the arbitrage.
Going green doesn’t need to be a punitive process, Infact, all indications from our efforts over the past decade indicate that punitive measures are far from perfect. The incentive for solar and wind energy, for example, has saddled places like Germany and California with systems that dont scale with growing demand, leading to temporary large burns of dirty coal or arguably worse, cutting off power to whole cities for hours.
Intelligent societies solve problems through innovation. A billion dollars to five or so independent contractors to set up efficient modular nuclear reactors with some entity like the Army Corps of Engineers or experts from the energy department assisting with oversight and safety would completely change the game over night.
You can still fly to meet your family and cities can run public infrastructure around the clock carbon free for any demand load we can imagine for the next century.
The issue is precisely the idiots who come up with the ideas of a carbon tax. Bureaucrats. Won’t be around by the time the idea fails so the blame falls to someone else.
The legal and regulatory barriers holding nuclear back in the US right now is one of the gravest mistakes of the coming century.
Tl;dr: It isn’t a system to “inform one of the behavior one needs to change most urgently” as the author puts it. It’s a transfer of wealth from the economies that impose it to the economies that find a way to leverage the arbitrage.
Going green doesn’t need to be a punitive process, Infact, all indications from our efforts over the past decade indicate that punitive measures are far from perfect. The incentive for solar and wind energy, for example, has saddled places like Germany and California with systems that dont scale with growing demand, leading to temporary large burns of dirty coal or arguably worse, cutting off power to whole cities for hours.
Intelligent societies solve problems through innovation. A billion dollars to five or so independent contractors to set up efficient modular nuclear reactors with some entity like the Army Corps of Engineers or experts from the energy department assisting with oversight and safety would completely change the game over night.
You can still fly to meet your family and cities can run public infrastructure around the clock carbon free for any demand load we can imagine for the next century.
The issue is precisely the idiots who come up with the ideas of a carbon tax. Bureaucrats. Won’t be around by the time the idea fails so the blame falls to someone else.
The legal and regulatory barriers holding nuclear back in the US right now is one of the gravest mistakes of the coming century.
2) Use this huge income source as global helicopter money, the dividend every person in the world gets from allowing other people to destroy their global shared ecosystem
3) Create various green energy projects into which citizens can invest their dividend
4) Planet does not become unliveable mad-max hell within our lifetimes?