[Vision2020] carbon tax

Sun Jun 3 00:46:38 PDT 2012

I am against a carbon tax as the solution. It will be punishing everyone, including the poor and middle class that have no other alternative but to pay it, and it is essentially a tax that will be regressive and cause massive inflation on every good and service.

Instead, I would be for a consumer or sales tax on less fuel efficient vehicles and equipment. Require a 50% tax on the purchase of all machines that are not fuel inefficient. Then use the tax revenues for public transportation and alternative energy sources.

This would reduce the number gas guzzling vehicles on the road, more buses, and cleaner sources of energy without a heavy tax on the poor that cannot afford it. With reduced demand for fuel inefficient equipment and vehicles, private enterprise will be forced to produce more cars that have better fuel efficiency. This will also reduce demand for fuel causing gas prices to go down, not up. 

Donovan J. Arnold 

From: Paul Rumelhart <godshatter at yahoo.com>
To: Vision 2020 <Vision2020 at moscow.com> 
Sent: Saturday, June 2, 2012 10:56 AM
Subject: [Vision2020] carbon tax

The following article has gone a long way to convince me that we might need a small carbon tax as a hedge against the uncertainty of our climate change projections.  We would need to keep it small, because a carbon tax will affect everything from the price of gas to the price of milk.  If we care about the underprivileged in our society, we'd want to phase it in slowly and give our society time to make more fuel-efficient cars and whatnot.  I would set it up so that the taxes fund more research into alternative energy solutions, power grid updates, and energy storage solutions.  I would also suggest setting up potential adjustments to this tax so that as the uncertainty goes away we use raise or lower it as appropriate.

The reason I could get behind a small carbon tax and not carbon credits is basically a look at where the money goes.  Money from a tax can be tracked and re-purposed as needed with accountability.  Carbon credits will only make the richest of us richer, and more work will go into ways to screw the system than will go into research into possible alternative energy sources. 

I wish more people would look towards the center of this debate.  You have the Far Right kooks (of which I'm not one) and you have the Far Left kooks (of which I'm also not one).  A complete lack of concern on one side and a desire to return us to the Middle Ages on the other.

Anyway, here is the article: http://blogs.telegraph.co.uk/finance/timworstall/100017600/yes-climate-change-is-a-problem-and-yes-we-do-have-to-do-something-but-in-britain-weve-done-it-already/

Yes, climate change is a problem and yes, we do have to do something: but in Britain, we've done it already

By Tim Worstall Economics Last updated: June 1st, 2012

Perhaps we can sit down and discuss this climate change thing like the adults we are? Put the Delingpoles over here, the vilenesses that are Greenpeace, FoE and the rest of the forward-to-the-Middle-Ages crowd over there, and in that vast howling wasteland between the two positions discuss what we really know and what we ought to do about it?
Start with the simple fact that there are really only two important things we know about the entire idea. The first of these is that the direct effect of a doubling of atmospheric CO2 is trivial, something simply not to get worried about. Yes, we convert all the methane, NOx and all the rest into their CO2 equivalents, giving us not CO2 but CO2-e. And we know very well what the effect, directly, of a doubling of this from pre-industrial levels will be. A 0.7 degree rise in average temperature. This is simply straight physics and it is indeed highlighted in all of the IPCC reports. Less than the difference between Yorkshire and Cornwall, possibly than Somerset and Cornwall. At this level, quite frankly, who gives a damn?
The second thing we know absolutely is that this is not the end of the story, for there are feedbacks, and the really important thing is that we don't know where they will lead. Feedbacks are all of the processes started by that 0.7 degree warming, and which then amplify (positive feedbacks) or dampen (negative feedbacks) that initial direct effect of the CO2. You can take your pick from an improbably long list: sea ice melting reduces reflection of light back out into space, allows the ocean underneath to be warmed: a positive feedback. More CO2 increases plant growth (which is why commercial greenhouses pump the stuff in) which leads to more humus formation and thus more carbon locked up in the soil: a negative feedback.
The cumulative effect of all of these feedbacks is something we simply do not know. We don't even know what all the feedbacks are; and of those we do know about, we're not sure in which direction they move. While there are some reasonable guesses about what the total number and direction of them all added together, we're not certain whether that total effect is positive or negative.
The general answer from the IPCC and the like is that climate sensitivity, the total effect adding in all the feedbacks positive and negative, is in the 2 degree to 4.5 degree range, most likely at about 3 degrees. But there are entirely honest and reasonable scientists (meaning those not bought by either Big Oil or Big Environment) out there arguing that this range is either too high or too low: that climate senstivity is such that possible outcomes range from "who the hell cares" to "whoops, there boils Flipper!"
It is this "we don't know" that leads to needing to do something. Economists call this uncertainty, and the correct and reasonable reaction to uncertainty is insurance. It can sound a little odd: the idea is that the less we know about the effects of climate change, the more we ought to do about it. But consider insurance against your house burning down. If you know the chance is 1 in a million then you'll not be willing to pay (much) more than one millionth of its worth to insure it. If the risk is 1 in 10,000, then perhaps one ten-thousandth of the value. But if you are uncertain what the risk is then you are willing to pay much more of the value in order to gain insurance.
At our current state of knowledge about climate change, we do not face risk. We face uncertainty: the greater that uncertainty about climate sensitivity, the more we should be willing to expend to insure ourselves.
So this is what we know about climate change. We know there will be some effect from emissions, and we also are uncertain about what that effect will be. The uncertainty itself means that we should do something. But what?
I've already explained this here. Don't listen to the ignorant hippies to our Left, or to those shouting that there's nothing to it from the Right. The answer is, quite simply, a revenue-neutral carbon tax.
The outcome of all of this climate science is that we face an economic problem. How much will it cost us to reduce this uncertainty, against the benefit we will receive from reducing it? The answer is not going to come from those who are ignorant of economics, nor from those who deny the uncertainty. It's an economic problem, so we need to use the tools of economics to study it.
Which is what a number of people have done. Amazingly, over on the hysteria-about-Flipper side, Nasa's James Hansen manages to get the point: a tax on fossil fuels as they come out of the ground, rebated to households. It's worth noting that this would add $1 to a gallon of gas in the US: in Europe we're already paying this, so we're done on that score. There's also William Nordhaus, the granddaddy of researchers into the economics of climate change. Start with a small tax now and commit to raising it in the future. This enables us to work with the technological and capital cycle, reducing the total cost. Or there's the Stern Review, which essentially states that throw a bit of money at R&D and a carbon tax of $80 per tonne CO2-e and she'll be right. Gaia that is, or at least our relationship to her.
Which brings us to our final question: is this expense worth the reduction in uncertainty? Entirely arguable, that one. The argument revolves around how much you value what happens now against how much you value what happens in the future.
Except for one little point: we in the UK are already paying that carbon tax. With emissions around the 500-million-ton mark, that $80 per tonne tax works out at about £25 billion or so that should be paid in tax to solve the problem, entirely and absolutely. And in the UK, when you add up fuel duty, Air Passenger Duty and all the rest, we already pay that and more in carbon or greenhouse taxes. We're not paying it in all the right places, this is true: fuel duty and APD are too high, while diesel for farmers and trains is too low. But given that the total amount is already being levied, all we need to do is shift around what is already being charged to solve the climate change problem.
We've then got to go and convince everyone else: but think how much easier that will be once we show quite how cheap and simple the solution is. No more of the mantra that we've got to end industrial civilisation: three squares a day has become something of a habit for many of us. And no more of the shouts that nothing needs to be done.
There really is a Climate Change Conspiracy, of course, something we'll come to next time. But it isn't about the science. The science tells us that there is uncertainty; uncertainty is an economic problem to be solved through economic methods. And given that we're all already being forced to cough up enough green taxes to provide that economic solution, why don't we just get on with the tinkering around the edges of the current system to enforce that solution?
Rather than, say, either version of howling at the Moon that is the current Left and Right of the debate?

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