Global Warming Stuff

[got tonkaed]

I guess something that has always kind of confused me to some extent is the way which people seem to really fight against the endgame of climate policy.

To me on a simple level, it seems like making businesses more efficient and homes more eco-friendly probably just ends up saving people money in the long run. It also seems philosophically better to be like, we took steps to try and make things better for our descendants rather than eh screw 'em.

Certainly it is a lot more complicated than that and you deal with bureaucracy and big government. It just seems like people from the get go dislike the idea of positively impacting climate change, which seems odd.

What sucks in a way about that though it's likely any savings that can be gained are even more likely to be swallowed up by a growing population.

Pretty decent shot of that id figure. Either way though, it's kind of like going down swinging vs just giving up. I'd rather if everything is going to go to crap, at least we made an effort not to turn the planet into the movie Wall-E

[mrswdk]

The effect of this would merely be to make all domestically-consumed goods more expensive, meanwhile allowing exporters to get away without having to pay any sort of carbon tax on their exported goods (despite the fact that exporting is more environmentally unfriendly than producing for a domestic market).

Yes, that is precisely the effect. Domestically consumed goods should be made more expensive; that is how you curb their usage. However, I do advocate returning 100% of the tax revenues as a rebate so that consumers do not end up hurt. Meanwhile, the border tariff will ensure that any country exporting to the US will see tax revenue being lost and have an incentive to implement their own carbon pricing scheme, so that the revenue can end up in their own coffers.

You're contradicting yourself. You want to disincentivize consumption by making goods more expensive, but you also want to give consumers a complete tax rebate so that they don't end up hurt? How does that work?

In any case, what you're saying is that you want domestic consumption to drop. How would you offset that? Because any politician who tells people to just suck up low growth rates and higher unemployment while thinking about global warming is going to get voted out of office at the next election.

What's more, many countries exporting to the US will not be able to afford to just slap a huge carbon tax on their producers. Stick a huge, developed world carbon tax on Chinese factories and you'll price a lot of those producers out of business. Some will see their operations shrink, others would end up priced out of business altogether. On top of that, consumption in China will drop sharply as Chinese consumers now struggle to afford to pay the higher prices that would result from a developed world-level carbon tax. This would happen not only in China but in any country which has significant trade relations with the US.

From my Chinese policy making perspective, imposing developed world-level environmental controls on China would threaten to throw some serious brakes on China's development, jeopardizing the future welfare of the tens of millions of rural dwellers who still live in absolute poverty, not to mention destabilizing central and local governments whose legitimacy rests more heavily on sustained economic growth than governments in Western countries do. So, no dice.

China is already one of the world's leading developers of alternative energy technologies (both in renewables and nuclear). China stands to be one of the biggest relative winners from this transition. That's why the production there is so strong already.

China stands to make at least some money from selling renewable energy technology to other countries. That doesn't mean that a transition to renewable energy is economically viable for China itself though. Renewable energy is expensive and China has a GDP per capita of $8-9k a year.

[Metsfanmax]

You're contradicting yourself.

Surely you would give me the benefit of the doubt and assume that I have thought about this carefully?

You want to disincentivize consumption by making goods more expensive, but you also want to give consumers a complete tax rebate so that they don't end up paying more? How does that work?

It works because it shifts consumption away from a specific category of goods into consumption of other categories of goods. Fossil fuel products will be more expensive, and that will decrease demand. Consumers get a share of the complete tax revenue from fossil fuel products regardless of how much they purchase. If I buy no fossil fuels at all in a year, I still get a check from a government corresponding to my equal share of the revenue corresponding to everyone else's purchases. If I continue my normal usage patterns I can still come out roughly even, but why would I when I have a clear economic incentive to buy cheaper goods?

In any case, what you're saying is that you want domestic consumption to drop.

What I am saying is that I want domestic consumption of fossil fuels to drop. I want that to be replaced by consumption of energy produced by cleaner sources. I am totally fine with people continuing to buy as much as they did before, as long as the consumption is biased towards those goods which are less environmentally damaging.

What's more, many countries exporting to the US will not be able to afford to just slap a huge carbon tax on their producers.

Why do you think this? If the carbon tax is fully rebated, then consumption should stay approximately flat*, and it more or less doesn't hurt the economy (while avoiding later, large impacts due to extreme weather and changing climate).

*Actually according to some sources the economy will improve and more jobs will be created after a carbon tax is implemented, due to the nature of the industries it favors.

Stick a huge, developed world carbon tax...

You keep on making this distinction, but it is artificial. The size of the carbon tax has nothing to do with the specifics of any country and has to do with the global damage we are facing from global warming. If anything the size of the carbon tax is larger due to the existence of the developing world, which has less ability to cope with a changing climate and will face much greater damages.

... on Chinese factories and you'll price a lot of those producers out of business. Some will see their operations shrink, others would end up priced out of business altogether.

Again, where's the evidence for this? Why can't they just source cleaner products that are less energy intensive? If they cannot do that, they'll be replaced by businesses who can.

China stands to make money from selling renewable energy technology to other countries. That doesn't mean that a transition to renewable energy is economically viable for China itself though. Renewable energy is expensive and China has a GDP per capita of $8-9k a year.

Renewable energy is already at grid parity in many places in the world. Furthermore, the whole point here is that fossil fuel energy is what is expensive; if you factor in the true social cost of carbon, renewable energy is cheaper than fossil fuels basically everywhere. We only think that fossil fuels are cheap because we only pay part of their price as the gas pump. The rest is paid down the line, in tax revenue for storm damage and the like.

[mrswdk]

You want to disincentivize consumption by making goods more expensive, but you also want to give consumers a complete tax rebate so that they don't end up paying more? How does that work?

It works because it shifts consumption away from a specific category of goods into consumption of other categories of goods. Fossil fuel products will be more expensive, and that will decrease demand.

The reason those carbon energy-based products are currently as in demand as they are is because they are relatively cheap. If you make them more expensive, people won't simply continue consuming the same about but switch to non-carbon energy-based products - they will consume less.

If I continue my normal usage patterns I can still come out roughly even, but why would I when I have a clear economic incentive to buy cheaper goods?

You don't have that incentive. If you continue with your normal usage patterns then you will come out roughly even. Buying the products you always used to buy has not become any more expensive.

What's more, many countries exporting to the US will not be able to afford to just slap a huge carbon tax on their producers.

Why do you think this? If the carbon tax is fully rebated, then consumption should stay approximately flat*, and it more or less doesn't hurt the economy (while avoiding later, large impacts due to extreme weather and changing climate).

*Actually according to some sources the economy will improve and more jobs will be created after a carbon tax is implemented, due to the nature of the industries it favors.

If the carbon tax is fully rebated then it is utterly pointless. The whole point of taxes like carbon taxes is to disincentivize a behavior by making it more expensive. It completely defeats the point if you then just give the tax money back to the consumer, thereby off-setting the penalty imposed by the tax.

Stick a huge, developed world carbon tax...

You keep on making this distinction, but it is artificial. The size of the carbon tax has nothing to do with the specifics of any country and has to do with the global damage we are facing from global warming. If anything the size of the carbon tax is larger due to the existence of the developing world, which has less ability to cope with a changing climate and will face much greater damages.

My point is that a tax which may be relatively affordable for rich American consumers is not affordable for relatively poor Chinese consumers, and if your system requires China to put a tax comparable to the American one in place in order to avoid tariffs, then the Chinese government will have to tax Chinese producers and consumers as heavily as the American government taxes American producers and consumers.

... on Chinese factories and you'll price a lot of those producers out of business. Some will see their operations shrink, others would end up priced out of business altogether.

Again, where's the evidence for this? Why can't they just source cleaner products that are less energy intensive? If they cannot do that, they'll be replaced by businesses who can.

You think that a competitive business is not already using as little energy as it possibly can in order to keep costs down?

China stands to make money from selling renewable energy technology to other countries. That doesn't mean that a transition to renewable energy is economically viable for China itself though. Renewable energy is expensive and China has a GDP per capita of $8-9k a year.

Renewable energy is already at grid parity in many places in the world. Furthermore, the whole point here is that fossil fuel energy is what is expensive; if you factor in the true social cost of carbon, renewable energy is cheaper than fossil fuels basically everywhere. We only think that fossil fuels are cheap because we only pay part of their price as the gas pump. The rest is paid down the line, in tax revenue for storm damage and the like.

Renewable energy comes with prohibitive up-front costs, and in most countries is only capable of supplying a fraction of energy needs. Countries that start seriously transitioning away from fossil fuel will have to eat some pretty huge costs (assuming they even have the money), and a significant amount of fossil fuel consumption will still required anyway.

I highly doubt that dampened global economic growth would be offset by the savings of a few less tropical storms per year.

[Dukasaur]

What's more, many countries exporting to the US will not be able to afford to just slap a huge carbon tax on their producers.

Why do you think this? If the carbon tax is fully rebated, then consumption should stay approximately flat*, and it more or less doesn't hurt the economy (while avoiding later, large impacts due to extreme weather and changing climate).

*Actually according to some sources the economy will improve and more jobs will be created after a carbon tax is implemented, due to the nature of the industries it favors.

If the carbon tax is fully rebated then it is utterly pointless. The whole point of taxes like carbon taxes is to disincentivize a behavior by making it more expensive. It completely defeats the point if you then just give the tax money back to the consumer, thereby off-setting the penalty imposed by the tax.

I'm not necessarily in favour of this, but your objection is ridiculous. If the money is rebated equally to all taxpayers, but only those using carbon-intensive product are paying for it, then those who find non-carbon-intensive products are being rewarded with a large windfall.

[mrswdk]

Mets said that 'If I continue my normal usage patterns I can still come out roughly even'. He's the one who's spent lots of time thinking about this, and according to him his proposed tax and rebate system is not going to be putting consumers out of pocket.

[_sabotage_]

Global warming predictions:

CO2 emmissions multiplied by positive feedbacks, creating a loop, melting ice caps, and creating a warm spot.

Feedbacks prove negative, loop fails to materialize, ice caps don't melt, warm spot doesn't exist except in one report using a data tool which can literally find any data you desire:

http://www.reddit.com/r/science/comment ... is/crd0euc

Controlled opposition: it's the oil companies funding the research; except the government takes more off oil sales than the companies do. Funding for AGW climate change research grossly outdoes independent research. Oil companies would profit by having the populace accept output restrictions.

Letter from 6 major oil companies supporting AGW theory and enforcement of Carbon taxes:

http://www.bp.com/content/dam/bp/pdf/Pr ... carbon.pdf

A report on the focus of cigarette companies ensuring the most addictive product:
http://www.econ.upf.edu/%7Elemenestrel/ ... a_1998.pdf

Their conclusion (paraphrased): cigarette companies use freebase nicotine and chemical accelerants as well as every aspect from the rolling paper to filter and cause the most addictive product thereby causing 400,000 deaths annually.

Written in 1998, they suggest raising taxes.

Aftermath, deaths are up to 480,000 annually, tobacco companies profits are up, government tax profits way up, researchers funding way up, Garner choked to death by cops who justify it by alleging he attempted to sell untaxed cigarettes.

My conclusion: why didn't they just tackle the addictiveness of cigarettes instead of maximizing profits?

http://www.world-nuclear.org/info/Count ... G-N/India/

"In October 2013 BARC said that premature deployment of thorium would lead to sub-optimal use of indigenous energy resources"

When you start making carbon tax payments, remember that technology which could prevent the need for the payments was intentional held back to maximize profits.

When folks like Mets go talk to members of government, they tell them to tax, not to pursue clean energy.

If a there truly is a scientific consensus on global warming, why then do India's scientists decide a technology which could eliminate coal powered plants should wait until after "optimal use" of coal prior to deployment of clean energy?

Hegelian Dialect

Problem, Reaction, Solution

Problem:

Cigarettes are addictive, leading to addiction, leading to death.

Reaction: Cigarette companies are bad.

Solution: let's keep it up and get paid and more power. Hegelian dialect results in more money for all parties involved in setting the dialect up.

Problem (unverified claim):

CO2 emissions are bad.

Reaction: Oil companies are bad.

Solution: let's keep it up and get paid and more power. Who will profit?

[Metsfanmax]

The reason those carbon energy-based products are currently as in demand as they are is because they are relatively cheap. If you make them more expensive, people won't simply continue consuming the same about but switch to non-carbon energy-based products - they will consume less.

No, they will consume less carbon intensive products. If tomorrow the government implemented a large tax on spinach, and spinach is my preferred salad base (I eat salad quite often), I'm not going to just stop eating salad -- I'll just switch to arugula and continue eating salad. There's no clear reason why people would just consume much less when there are easily available substitutes at comparable prices.

If I continue my normal usage patterns I can still come out roughly even, but why would I when I have a clear economic incentive to buy cheaper goods?

You don't have that incentive. If you continue with your normal usage patterns then you will come out roughly even. Buying the products you always used to buy has not become any more expensive.

Yes, buying the products I used to buy has become more expensive. It may be that if I continue to buy them I will have the same net income as I did last year (roughly), but that is not how the human mind works. If I go to the supermarket and see the spinach and arugula next to each other, and the spinach is more expensive, I'm not going to think "well, I know the spinach is more expensive, but it's OK, I'm getting a check so that justifies wasting money," I'm going to think, "I can get the arugula and get a free check from the government -- #winning!"

Of course, it's not really that simple for individual consumers and fossil fuel products, since you can't just go to the gas pump and buy a charge-up if you don't have an electric car -- but when it comes to businesses it really is that simple (especially because they're not directly getting the rebates). But nevertheless the effects will be felt over time, as more expensive products and services are consumed less.

If the carbon tax is fully rebated then it is utterly pointless. The whole point of taxes like carbon taxes is to disincentivize a behavior by making it more expensive. It completely defeats the point if you then just give the tax money back to the consumer, thereby off-setting the penalty imposed by the tax.

Again, no, it does not, for the above reasons. But if you can't work this out in your head, don't just take my word for it -- there's clear evidence of it working in practice. The Canadian providence of British Columbia implemented a carbon tax and gave the money back to citizens in the form of a tax swap that decreased income taxes. Five years after implementation, I think greenhouse gas emissions from the province had decreased by 15% (compared to a slight increase for Canada as a whole).

My point is that a tax which may be relatively affordable for rich American consumers is not affordable for relatively poor Chinese consumers,

The size of the tax is mostly irrelevant, if the rebate is doled out in equal checks to all citizens. This is because the poor tend to use the smallest absolute fraction of fossil fuels, and so actually the poorest citizens get more money than they pay in when this tax is applied. Again, if they continue to use products at their old rates, they won't substantially be harmed, regardless of the size of the tax.

and if your system requires China to put a tax comparable to the American one in place in order to avoid tariffs, then the Chinese government will have to tax Chinese producers and consumers as heavily as the American government taxes American producers and consumers.

Yes, that is what I desire. (Well, note that I don't want to tax consumers, I want to tax producers and have that be reflected in a price increase down the line. I think that is much cleaner and more efficient than like a VAT for gas at the pump.)

You think that a competitive business is not already using as little energy as it possibly can in order to keep costs down?

That is precisely my point. Because they have to be competitive and keep energy costs down, as soon as we remove the artificial price subsidy for fossil fuels, they will have no choice but to start switching to cleaner energy sources.

Renewable energy comes with prohibitive up-front costs,

May be true for household consumers right now, but that's alright. I am guessing that the bulk of the transition will occur from utility-scale moves towards renewables, and that will provide enough capital to start bringing the up-front costs down even further. (Though I am not really sure what you mean by prohibitive, since plenty of middle-class households here can afford to do it now.)

and in most countries is only capable of supplying a fraction of energy needs.

Perhaps. Not really clear to me what the long-term fraction of renewables will be in places like the US and China. I expect that in the short-term fission (and eventually fusion) will have to fill the gap.

Countries that start seriously transitioning away from fossil fuel will have to eat some pretty huge costs (assuming they even have the money), and a significant amount of fossil fuel consumption will still required anyway.

This transition is inevitable -- there's not an infinite amount of oil and gas underground. There's already a large amount of capital sunk into fossil fuel investments and we had better stop that now before we sink even more money into that dying enterprise. The transition becomes more expensive with time, not less, if we keep on clinging to a sinking ship.

(Of course fossil fuel consumption will not sink to zero within the next couple decades, but that doesn't mean we should sit around and twiddle our thumbs.)

I highly doubt that dampened global economic growth would be offset by the savings of a few less tropical storms per year.

I don't expect that global economic growth will really be dampened by this transition. But at either rate, you should look into this before simply making wild guesses. Estimates of the social cost of carbon -- the price per ton of carbon-dioxide equivalent greenhouse gas emissions as measured in the eventual economic damages climate change will cause us -- range from $30 to over $200 per ton. Humanity is responsible for 45 billion tons of emissions every year. So we're talking at least $1 trillion of damages per year -- you tell me if you think it's just a drop in the bucket.

[Metsfanmax]

When folks like Mets go talk to members of government, they tell them to tax, not to pursue clean energy.

A tax on fossil fuels is a pursuit of clean energy. It is just one that economists recommend as much more efficient than direct subsidy. It always makes more sense to tax the thing you don't like than to try and pay for the thing you do, because the government will in general be pretty bad at predicting who the winners of the energy transition will be -- and at any rate the choice won't even be based on who they think the winners are, and instead will be based on which companies are in the districts of influential representatives.

[khazalid]

tax shmax.

two things.

1) don't procreate

2) don't eat meat

hate to be a reductionist and all that, but really...

[mrswdk]

If I continue my normal usage patterns I can still come out roughly even, but why would I when I have a clear economic incentive to buy cheaper goods?

You don't have that incentive. If you continue with your normal usage patterns then you will come out roughly even. Buying the products you always used to buy has not become any more expensive.

Yes, buying the products I used to buy has become more expensive. It may be that if I continue to buy them I will have the same net income as I did last year (roughly), but that is not how the human mind works. If I go to the supermarket and see the spinach and arugula next to each other, and the spinach is more expensive, I'm not going to think "well, I know the spinach is more expensive, but it's OK, I'm getting a check so that justifies wasting money," I'm going to think, "I can get the arugula and get a free check from the government -- #winning!"

Of course, it's not really that simple for individual consumers and fossil fuel products, since you can't just go to the gas pump and buy a charge-up if you don't have an electric car -- but when it comes to businesses it really is that simple (especially because they're not directly getting the rebates). But nevertheless the effects will be felt over time, as more expensive products and services are consumed less.

If that's true then we return to the original problem, which is that consumers are now faced with shelves full of more expensive goods, and will therefore consume less.

My point is that a tax which may be relatively affordable for rich American consumers is not affordable for relatively poor Chinese consumers,

The size of the tax is mostly irrelevant, if the rebate is doled out in equal checks to all citizens. This is because the poor tend to use the smallest absolute fraction of fossil fuels, and so actually the poorest citizens get more money than they pay in when this tax is applied. Again, if they continue to use products at their old rates, they won't substantially be harmed, regardless of the size of the tax.

If China's poorest people go to any shop and see that prices on most of the things they buy have gone up (which they would if a carbon tax was applied in China), they are not going to console themselves with the thought of an indeterminate-sized check some time next year. They are just going to consume less, and when the check comes stick it into their savings.

and if your system requires China to put a tax comparable to the American one in place in order to avoid tariffs, then the Chinese government will have to tax Chinese producers and consumers as heavily as the American government taxes American producers and consumers.

Yes, that is what I desire. (Well, note that I don't want to tax consumers, I want to tax producers and have that be reflected in a price increase down the line. I think that is much cleaner and more efficient than like a VAT for gas at the pump.)

Well as I already said, Chinese producers and consumers are much less able to afford a tax that an American can afford.

Renewable energy comes with prohibitive up-front costs,

May be true for household consumers right now, but that's alright. I am guessing that the bulk of the transition will occur from utility-scale moves towards renewables, and that will provide enough capital to start bringing the up-front costs down even further. (Though I am not really sure what you mean by prohibitive, since plenty of middle-class households here can afford to do it now.)

Keyword being 'here'. What happens when you stop talking about one of the richest countries in the world and start talking about the developing world? Middle class people living in the developed world are a tiny fraction of the world's population. What are people in China, India, SE Asia, Africa etc. expected to do?

I highly doubt that dampened global economic growth would be offset by the savings of a few less tropical storms per year.

I don't expect that global economic growth will really be dampened by this transition.

It's a scenario in which the cost of living is raised for everyone. Consumption will fall.

But at either rate, you should look into this before simply making wild guesses. Estimates of the social cost of carbon -- the price per ton of carbon-dioxide equivalent greenhouse gas emissions as measured in the eventual economic damages climate change will cause us -- range from $30 to over $200 per ton. Humanity is responsible for 45 billion tons of emissions every year. So we're talking at least $1 trillion of damages per year -- you tell me if you think it's just a drop in the bucket.

Again, you're not looking at the offsets. The global economy is predicted to grow by about $33 trillion between 2010 and 2020, and who knows how much more it will grow in the decade that follows. Is it feasible to say that environmental measures which dampen global growth could end up causing greater losses than that pipeline figure of $1 trillion per year? Yes.

[Metsfanmax]

If that's true then we return to the original problem, which is that consumers are now faced with shelves full of more expensive goods, and will therefore consume less.

You're discussing the worst-case scenario: no alternatives to products using cleaner energy sources. Even if this is likely, and it isn't, it's only a short-term issue: eventually there will be a large-scale move away from fossil fuels among electricity producers, and so the effects of the tax won't be felt any more.

However, even in this worst-case scenario, there's not much evidence for the claim that there will be less net consumption. When the consumers get their rebate check, it will be seen as a stimulus check, a short-term windfall, which will encourage them to spend more. (Almost everyone I know uses their income tax refund to buy a little something for themselves, even though it's really money that was a free loan to the government and doesn't represent additional income.) I am not sure what the size of the net effect on consumption will be, but you can't just assert that it's large and negative without at least some sort of evidence.

If China's poorest people go to any shop and see that prices on most of the things they buy have gone up (which they would if a carbon tax was applied in China), they are not going to console themselves with the thought of an indeterminate-sized check some time next year. They are just going to consume less, and when the check comes stick it into their savings.

China's poorest people don't have savings accounts that they have the freedom to just put their rebate checks into -- they'll use them to buy the things they need. The poorest individuals spend the largest fraction of their income on goods that have mostly inelastic demand -- food, water, energy, etc.

Keyword being 'here'. What happens when you stop talking about one of the richest countries in the world and start talking about the developing world? Middle class people living in the developed world are a tiny fraction of the world's population. What are people in China, India, SE Asia, Africa etc. expected to do?

It's a scenario in which the cost of living is raised for everyone. Consumption will fall.

The empirical evidence simply disproves you. There has been no drastic (or even measurable) shortfall in economic output in the regions that have implemented a carbon pricing scheme.

[mrswdk]

If that's true then we return to the original problem, which is that consumers are now faced with shelves full of more expensive goods, and will therefore consume less.

You're discussing the worst-case scenario: no alternatives to products using cleaner energy sources. Even if this is likely, and it isn't, it's only a short-term issue: eventually there will be a large-scale move away from fossil fuels among electricity producers, and so the effects of the tax won't be felt any more.

The scenario I'm discussing is one in which everything is now more expensive. There are products made using cleaner energy sources, and there are products made using less clean energy sources, which are now more expensive. If your tax is high enough to discourage people from buying 'dirty' products, then demand will fall and the amount of those products being produced will fall. Those who can still afford the higher price will switch to 'cleaner' products, those who can't will reduce consumption. Either away, the drop in consumption of 'dirty' products will lower the revenues from your carbon tax considerably, and therefore shrink everyone's rebate. The real cost of everything will increase.

As for the long-term: when you say 'eventually', at what point after imposing this tax do you see the entire national grid moving away from fossil fuels and into renewable energy, providing such energy at a low enough cost for production at its current levels to remain sustainable?

If China's poorest people go to any shop and see that prices on most of the things they buy have gone up (which they would if a carbon tax was applied in China), they are not going to console themselves with the thought of an indeterminate-sized check some time next year. They are just going to consume less, and when the check comes stick it into their savings.

China's poorest people don't have savings accounts that they have the freedom to just put their rebate checks into -- they'll use them to buy the things they need. The poorest individuals spend the largest fraction of their income on goods that have mostly inelastic demand -- food, water, energy, etc.

lol. What? Any old bank account will do. Do you think Chinese people don't have bank accounts or something?

And to go back to your point about what people will do with those rebate checks:

When the consumers get their rebate check, it will be seen as a stimulus check, a short-term windfall, which will encourage them to spend more. (Almost everyone I know uses their income tax refund to buy a little something for themselves, even though it's really money that was a free loan to the government and doesn't represent additional income.)

Maybe the global rich (middle class Americans) spunk away rebate checks for a laugh, but that's not how most of the world lives. It's hard enough trying to persuade poorer Chinese people to spend as it is - how is increasing their cost of living and then giving them a meager lump sum once a year going to help?

Keyword being 'here'. What happens when you stop talking about one of the richest countries in the world and start talking about the developing world? Middle class people living in the developed world are a tiny fraction of the world's population. What are people in China, India, SE Asia, Africa etc. expected to do?

Great. Well then you can come and cover the developing world in enormous solar panels and several billion poor people will start using the electricity those generate. Until then, good luck convincing developing economies to drop billions to trillions of dollars on completely replacing their energy infrastructure all by themselves.

You're asking people to eat up-front costs that they can't afford. It's no good saying 'in 50 years you will experience unspecified costs from global warming', when the solution is to spent a ton of money now and then decades for a saving that may or may not materialize.

[Metsfanmax]

The scenario I'm discussing is one in which everything is now more expensive.

Yes, and this is a false proposition. A number of products, the ones which don't principally rely on fossil energy sources, will not increase in price. A great many more may have their price increase only very slightly, since the energy costs in producing those are negliglble compared to the other costs. And as time goes on, that price increase will vanish because the economy switches to other energy sources. The principal effect of a carbon tax is to increase the price of goods in proportion to their greenhouse gas intensity, and those that are cleaner will have a comparative advantage.

However, I cannot stress enough that many things now now are more expensive than the price we pay at the supermarket. We just have an illusion that they are not, because we aren't seeing yet the full effects of these choices. There is an artificial price subsidy in effect for fossil energy sources because the full future effects of global warming damage are not priced in, and any argument to the effect of "these will get more expensive" are simply revealing that those products truly are that much more expensive when the price really reflects the social costs.

There are products made using cleaner energy sources, and there are products made using less clean energy sources, which are now more expensive. If your tax is high enough to discourage people from buying 'dirty' products, then demand will fall and the amount of those products being produced will fall.

And, since people still need to eat, and have electricity and a car, the amount of products produced using cleaner energy sources will increase. This doesn't in itself provide any evidence that consumption will diminish.

Those who can still afford the higher price will switch to 'cleaner' products

The cleaner products will soon be cheaper than the dirtier ones, because of the effect of the carbon tax. In turn, the increased demand for these products will help their price fall. Even if the price decline from the increase demand doesn't quickly reach parity with the pre-tax levels of the dirty products, the rebate will more than offset the price increase (at least for the poorest 50-60% of the population).

Either away, the drop in consumption of 'dirty' products will lower the revenues from your carbon tax considerably

Well, I would love to live in a world where the revenues from the carbon tax are zero. But at any rate, the carbon tax should be brought in at a low level (say $5-15 per ton of CO2) and steadily increased over time (say $10/ton per year). At least over a 20 year timespan the revenues from the tax would actually not be declining in this scenario, since the decreased demand would be compensated for by the increasing tax level. Eventually revenue would decline, which is exactly the point, but in either case we've achieved the desired effect of moving away from fossil fuels.

As for the long-term: when you say 'eventually', at what point after imposing this tax do you see the entire national grid moving away from fossil fuels and into renewable energy, providing such energy at a low enough cost for production at its current levels to remain sustainable?

If we use the increasing tax I suggested, one estimate is that by 2035 about 10% of electricity generation in the US would be contributed to by currently existing gas and coal tech (mostly gas). The rest would be a combination of renewables, nuclear, and natural gas with carbon sequestration tech built in.

lol. What? Any old bank account will do. Do you think Chinese people don't have bank accounts or something?

Actually, I apologize for the unclear wording; I was not making the point that poor people don't have bank accounts -- although that is actually true. Rather, I was making the point that poor people don't have the luxury of saving much money, because the vast percentage of their income has to be spent on non-negotiable products and services. By the time they've paid for groceries, rent, and bills, they don't have much left to put in savings.

Maybe the global rich (middle class Americans) spunk away rebate checks for a laugh, but that's not how most of the world lives. It's hard enough trying to persuade poorer Chinese people to spend as it is - how is increasing their cost of living and then giving them a meager lump sum once a year going to help?

I would advocate that the check goes out monthly or quarterly at the very worst, to help those people who persist paycheck to paycheck. Splitting the revenue equally -- or in a progressive fashion, even -- would guarantee that they get more money than they're paying in increased prices. But it's pure fantasy to suggest that poor people are simply saving money and not spending nearly every dime they have -- see above.

Great. Well then you can come and cover the developing world in enormous solar panels and several billion poor people will start using the electricity those generate. Until then, good luck convincing developing economies to drop billions to trillions of dollars on completely replacing their energy infrastructure all by themselves.

I didn't say it would be easy; I understand well why it is so hard for countries like the US to find a solution that works for both the US and for developing countries. But the fact is that this replacement of energy infrastructure is inevitable, and also that it is those poorest people who will be hit the hardest by global warming. And the technology exists now to replace fossil fuels; it is merely a question of political will to speed up that transition.

You're asking people to eat up-front costs that they can't afford.

No, I am not. I would be advocating that only if I didn't simultaneously advocate for a return of all of the revenue.

[mrswdk]

The scenario I'm discussing is one in which everything is now more expensive.

Yes, and this is a false proposition. A number of products, the ones which don't principally rely on fossil energy sources, will not increase in price. A great many more may have their price increase only very slightly, since the energy costs in producing those are negliglble compared to the other costs. And as time goes on, that price increase will vanish because the economy switches to other energy sources. The principal effect of a carbon tax is to increase the price of goods in proportion to their greenhouse gas intensity, and those that are cleaner will have a comparative advantage.

However, I cannot stress enough that many things now now are more expensive than the price we pay at the supermarket. We just have an illusion that they are not, because we aren't seeing yet the full effects of these choices. There is an artificial price subsidy in effect for fossil energy sources because the full future effects of global warming damage are not priced in, and any argument to the effect of "these will get more expensive" are simply revealing that those products truly are that much more expensive when the price really reflects the social costs.

And now we're back to the mystery future impacts of climate change that won't necessarily even affect me that much.

There are products made using cleaner energy sources, and there are products made using less clean energy sources, which are now more expensive. If your tax is high enough to discourage people from buying 'dirty' products, then demand will fall and the amount of those products being produced will fall.

And, since people still need to eat, and have electricity and a car, the amount of products produced using cleaner energy sources will increase. This doesn't in itself provide any evidence that consumption will diminish.

People consume far more than just daily essentials such as food, water and power. What about all the non-essential consumables?

Either away, the drop in consumption of 'dirty' products will lower the revenues from your carbon tax considerably

Well, I would love to live in a world where the revenues from the carbon tax are zero. But at any rate, the carbon tax should be brought in at a low level (say $5-15 per ton of CO2) and steadily increased over time (say $10/ton per year). At least over a 20 year timespan the revenues from the tax would actually not be declining in this scenario, since the decreased demand would be compensated for by the increasing tax level. Eventually revenue would decline, which is exactly the point, but in either case we've achieved the desired effect of moving away from fossil fuels.

What about exporters? What happens when other countries refuse to sign up to the same tax system as the US?

As for the long-term: when you say 'eventually', at what point after imposing this tax do you see the entire national grid moving away from fossil fuels and into renewable energy, providing such energy at a low enough cost for production at its current levels to remain sustainable?

If we use the increasing tax I suggested, one estimate is that by 2035 about 10% of electricity generation in the US would be contributed to by currently existing gas and coal tech (mostly gas). The rest would be a combination of renewables, nuclear, and natural gas with carbon sequestration tech built in.

Can the same results be expected in countries like China and India?

lol. What? Any old bank account will do. Do you think Chinese people don't have bank accounts or something?

Actually, I apologize for the unclear wording; I was not making the point that poor people don't have bank accounts -- although that is actually true. Rather, I was making the point that poor people don't have the luxury of saving much money, because the vast percentage of their income has to be spent on non-negotiable products and services. By the time they've paid for groceries, rent, and bills, they don't have much left to put in savings.

Incorrect. Poor people in China save even more of their incomes (as a proportion) than richer people, in no small part due to their need to provide their own security net in the absence of comprehensive social welfare. The last figures I saw said migrants save somewhere in the region of 60% of their incomes, although I forget where I saw that and it's too late here for me to go searching for it. It's one of the challenges the government here faces in rebalancing the economy away from exporting and towards domestic consumption - how to get people to actually start using their income for consumption instead of stashing it away.

Maybe the global rich (middle class Americans) spunk away rebate checks for a laugh, but that's not how most of the world lives. It's hard enough trying to persuade poorer Chinese people to spend as it is - how is increasing their cost of living and then giving them a meager lump sum once a year going to help?

I would advocate that the check goes out monthly or quarterly at the very worst, to help those people who persist paycheck to paycheck. Splitting the revenue equally -- or in a progressive fashion, even -- would guarantee that they get more money than they're paying in increased prices. But it's pure fantasy to suggest that poor people are simply saving money and not spending nearly every dime they have -- see above.

It's not -- see above.

You're asking people to eat up-front costs that they can't afford.

No, I am not. I would be advocating that only if I didn't simultaneously advocate for a return of all of the revenue.

I mean the cost of overhauling energy infrastructures.

[Metsfanmax]

And now we're back to the mystery future impacts of climate change that won't necessarily even affect me that much.

The impacts are quite real and will affect you that much -- even if the effects are smaller, persistent ones like increased price of agriculture goods and water instead of larger, singular ones like hurricanes. The latest IPCC report's Working Group 2 submission has a good summary of the state of our knowledge about the impacts of climate change.

People consume far more than just daily essentials such as food, water and power. What about all the non-essential consumables?

They'll become more expensive in proportion to their energy usage from fossil fuels, but eventually the ones that do will become cheaper again as their producers switch to the now-cheaper clean energy sources. And again, the carbon rebate will compensate for this.

What about exporters?

As mentioned, exporters will effectively be exempted, to ensure American competitiveness abroad. We can't solve everyone else's uses of fossil fuels all by ourselves, but that doesn't mean we shouldn't start with our own.

What happens when other countries refuse to sign up to the same tax system as the US?

Then they'll be effectively letting the US take their tax money, or cutting themselves off of access to our markets. If that is a price they're willing to pay, so be it. I feel that the US has to at least try to do its part, and hope that the economic incentives will spur other countries to do the same (especially coupled with their own realization of the effects that fossil fuels are having on their own countries).

If we use the increasing tax I suggested, one estimate is that by 2035 about 10% of electricity generation in the US would be contributed to by currently existing gas and coal tech (mostly gas). The rest would be a combination of renewables, nuclear, and natural gas with carbon sequestration tech built in.

Can the same results be expected in countries like China and India?

Qualtiatively yes, the same trend will happen; unfortunately, I do not think it can happen on quite as short a timescale; China and India are rapidly expanding their investments into fossil fuels as part of their growth strategy, and I think it will take a little longer to reverse that trend. On the positive side, China and India are also rapidly expanding their investments into alternative energy sources, including solar and nuclear, and so in the long run may be relatively well-positioned to make that transition.

Incorrect. Poor people in China save even more of their incomes (as a proportion) than richer people

It is important to understand what is going on when a poor person saves money rather than spends it. The poor person is not saving money in the hopes that the interest earned from that account will eventually make them better off. (After all, many aren't even saving in bank accounts at all -- see the earlier link.) They are "saving" a rather large share of their income because they know that a financial shock could hit them at any time (the kid gets sick, the crop goes bad, etc.) and they need to be prepared to have all of those savings nearly wiped out in order to survive the financial shock. Over the long-term, they aren't actually increasing their total savings all that much, which is why it can be misleading to simply look at savings rates as evidence that they have spare money to go around. Thus when they get a rebate check, they may very well take the cash and put it under the bed for the next income shock; but at any rate, it won't fundamentally change their attitudes about what percentage of their income they need to save and what to spend. Each time they get a check, they'll allocate some portion of it for savings and some for the increased cost of many goods. They don't have the ability to simply save all of it, because the price of many of the things they're buying has increased, so they won't save all of it. If they do, they'll likely spend it eventually anyway.

In other words, if your own assertion is correct (and it is) that the price of many goods will increase, then there's no way for people to save all of the money from the rebate checks without persistently losing money. And if they do have the economic freedom to do so -- good for them, it means they've got enough money to live on. Why are you going to begrudge them the opportunity to spend or save their money as they see fit?

You're asking people to eat up-front costs that they can't afford.

No, I am not. I would be advocating that only if I didn't simultaneously advocate for a return of all of the revenue.

I mean the cost of overhauling energy infrastructures.

The cost of overhauling energy infrastructures is not going to fall on the poor, and you well know that.

[WingCmdr Ginkapo]

Neither of you are considering where the revenue from tax is going to end up... It wont just vanish, depending upon the government it will return to the bottom. This conversation has gone well beyond global warming, and is now a discussion on the whether taxation is a viable method of altering citizens actions.

[Metsfanmax]

Neither of you are considering where the revenue from tax is going to end up...

A very large fraction of my discussion has focused on where the revenue from the tax is going, and how that offsets the increased cost to consumers. I am not sure where you got this perception from.

This conversation has gone well beyond global warming, and is now a discussion on the whether taxation is a viable method of altering citizens actions.

I maintain that direct taxation is the least onerous method of altering citizen behavior, as it allows maximal freedom of choice while still obtaining the desired outcome. Any other method of altering behavior (such as subsidy to renewable energy companies) also requires taxation but requires the government to guess the right energy technology and also adds a layer of opacity to what is happening to tax money.

[_sabotage_]

Mets,

What percent of total annual CO2 emissions is anthropogenic?

In previous discussions you've said an effective tax rate to help curb global warming is $300 per tonne, which works out to $2.68 per gallon or $0.71 per litre.

A carbon tax links oil to money and will require a global currency, currently the US isn't looking too bright when it comes to handling money, do you think a new global non-US based currency should be implemented for taxation?

The US previously benefitted from the Petrodollar, do you feel roughly doubling the price of fuel while experiencing loss of national buying power could prove a shitty idea?

How much of total CO2 emissions do you foresee your tax preventing as a percent at year 1, 5, 10?

[Metsfanmax]

Mets,

What percent of total annual CO2 emissions is anthropogenic?

That depends on what you mean by emissions. The sum total of carbon dioxide released by natural processes (e.g. respiration and destruction of plant material, as well as ocean emissions) each year dwarfs the amount released by humans (a couple percent of the total). However, the absorption processes that kept the atmosphere roughly stable before the industrial revolution ensured that net emissions were approximately zero. So in terms of the net emissions that are being newly added to the atmosphere each year, anthropogenic emissions are almost entirely dominant.

In previous discussions you've said an effective tax rate to help curb global warming is $300 per tonne, which works out to $2.68 per gallon or $0.71 per litre.

I did not argue for that specific number. I avoid trying to place a specific dollar amount because of the wide uncertainties involved. I think that $300 per metric ton would be sufficient for making the transition happen but we don't need it to be quite that high. Even a $100 per ton tax would be sufficient to get things moving, I believe. I would start a steadily rising carbon tax at a relatively small amount and have it increase at least until it was in the ballpark of $200 to $300 per ton.

A carbon tax links oil to money and will require a global currency, currently the US isn't looking too bright when it comes to handling money, do you think a new global non-US based currency should be implemented for taxation?

I don't think a global carbon tax is feasible to start out with. (Though I applaud the people who keep trying at the UN meetings.) I would rather have countries take individual leads by implementing domestic taxes coupled with appropriate border adjustments, and let this patchwork of countries be the beginning of a massive global transition. At the end, once most countries are on board, we could start talking about how to manage a global carbon tax if we really need to.

The US previously benefitted from the Petrodollar, do you feel roughly doubling the price of fuel while experiencing loss of national buying power could prove a shitty idea?

The age of the "petrodollar" is coming to a close whether we like it or not. Currently we're giving away the game by letting China and India be leaders in solar and nuclear tech; this carbon tax is one of the best chances America's got to retain its leadership.

How much of total CO2 emissions do you foresee your tax preventing as a percent at year 1, 5, 10?

In about 20 years, it would reduce US emissions by about 50%.

[_sabotage_]

A 50% reduction based on what rate?

With the six major oil companies calling for a tax, how will it be possible not to have a global marketplace for it? With the US foregoing 50% of its consumption while foreigners are increasing emissions, are we just the whipping boy?

How do you account for governments poor performance when it comes to providing solutions when it accrues vast amounts of taxes to do so: the war on drugs, education, war, spying, prison population, poor infrastructure and little public transport?

Currently 93% of goods made by US companies in China are not meant for the US markets. How will the impact of a weakening dollar, lack of an attractive marketplace and high taxes affect US businesses?

What makes a business "American". If Ford is making all it's cars abroad, directed from abroad, focusing its products on foreign markets, is it still American?

Or we could just develop thorium, and see the same reduction.

[Metsfanmax]

A 50% reduction based on what rate?

A starting rate of $10/ton, increasing at a rate of $10/ton every year thereafter.

With the six major oil companies calling for a tax, how will it be possible not to have a global marketplace for it?

A global marketplace needs a global regulator, and none exists for something like this.

With the US foregoing 50% of its consumption while foreigners are increasing emissions, are we just the whipping boy?

We are usually the stumbling block when it comes to a global accord: we demand that other countries pay for their emissions without being willing to pay for the emissions we were responsible for in the past. Since we won't own up to that, we don't really have a choice but to go it alone our own way.

How do you account for governments poor performance when it comes to providing solutions when it accrues vast amounts of taxes to do so: the war on drugs, education, war, spying, prison population, poor infrastructure and little public transport?

The government also has good examples of success in certain cases. See the CFC reduction after the Montreal Protocol as an example of a similar example of the success we could achieve on this issue.

Currently 93% of goods made by US companies in China are not meant for the US markets. How will the impact of a weakening dollar, lack of an attractive marketplace and high taxes affect US businesses?

What does this have to do with a carbon tax?

What makes a business "American". If Ford is making all it's cars abroad, directed from abroad, focusing its products on foreign markets, is it still American?

A question fit for a philosopher indeed.

Or we could just develop thorium, and see the same reduction.

Yes, perhaps, if thorium reactors can be operated at scale at reasonable life-cycle operating costs. (And if there wasn't such a thing as an electricity demand curve.) It makes no sense to bet the whole thing on thorium.

[mrswdk]

What about exporters?

As mentioned, exporters will effectively be exempted, to ensure American competitiveness abroad. We can't solve everyone else's uses of fossil fuels all by ourselves, but that doesn't mean we shouldn't start with our own.

What's even the point then? 'Oh you're exporting, we're going to leave you alone to keep emitting then'

You're also starting to get into the sort of territory where the US can be accused of price dumping if you do that.

Incorrect. Poor people in China save even more of their incomes (as a proportion) than richer people

It is important to understand what is going on when a poor person saves money rather than spends it. The poor person is not saving money in the hopes that the interest earned from that account will eventually make them better off. (After all, many aren't even saving in bank accounts at all -- see the earlier link.) They are "saving" a rather large share of their income because they know that a financial shock could hit them at any time (the kid gets sick, the crop goes bad, etc.) and they need to be prepared to have all of those savings nearly wiped out in order to survive the financial shock. Over the long-term, they aren't actually increasing their total savings all that much, which is why it can be misleading to simply look at savings rates as evidence that they have spare money to go around. Thus when they get a rebate check, they may very well take the cash and put it under the bed for the next income shock; but at any rate, it won't fundamentally change their attitudes about what percentage of their income they need to save and what to spend. Each time they get a check, they'll allocate some portion of it for savings and some for the increased cost of many goods. They don't have the ability to simply save all of it, because the price of many of the things they're buying has increased, so they won't save all of it. If they do, they'll likely spend it eventually anywayI.

n other words, if your own assertion is correct (and it is) that the price of many goods will increase, then there's no way for people to save all of the money from the rebate checks without persistently losing money. And if they do have the economic freedom to do so -- good for them, it means they've got enough money to live on. Why are you going to begrudge them the opportunity to spend or save their money as they see fit?

So then those rebate checks given to poor people and migrants are not going to get used for extra consumption. Assuming poor people spend the same proportion of their rebate check as they do of the rest of their income, their levels of consumption will stay the same.

So again, I don't see how this is causing consumption to drop.

You're asking people to eat up-front costs that they can't afford.

No, I am not. I would be advocating that only if I didn't simultaneously advocate for a return of all of the revenue.

I mean the cost of overhauling energy infrastructures.

The cost of overhauling energy infrastructures is not going to fall on the poor, and you well know that.

The cost would fall on the governments. I'm saying that those governments can't afford it.

[Metsfanmax]

What's even the point then? 'Oh you're exporting, we're going to leave you alone to keep emitting then'

Well, one should never need a justification for doing the right thing. The US is a significant contributor to global greenhouse gas emissions, and anything we can do to reduce our own contribution is a good thing for the world. But in this case, the relevant point is (as mentioned) that an import tariff placed on non-carbon pricing countries should be a strong economic incentive for them to implement their own carbon pricing schemes (since their domestic exports to the US would be taxed, but they won't get the income from it). That may not solve global warming by itself, but it may help speed up the transition.

You're also starting to get into the sort of territory where the US can be accused of price dumping if you do that.

It is legal by international trade law, and that's ultimately what will matter. Since most other countries have been demanding that the US take meaningful action on climate change and the US has been one of the major roadblocks to it, I can't imagine we'll earn bad feelings internationally for it.

So then those rebate checks given to poor people and migrants are not going to get used for extra consumption. Assuming poor people spend the same proportion of their rebate check as they do of the rest of their income, their levels of consumption will stay the same.

So again, I don't see how this is causing consumption to drop.

Again, I never once argued that we need a drop in consumption, nor that this would be an effect of a carbon tax. We only need consumers to switch from one set of goods to a substitute set of goods. For this we merely need to make the goods we don't like, the ones that pollute, more expensive. The market will sort the rest out.

The cost would fall on the governments. I'm saying that those governments can't afford it.

Those governments can afford it and they want to do it (the major exceptions being the ones that are relying on natural fossil fuel resources for their economic growth). The small island nations and equatorial countries are some of the least developed in the world and also the ones who are most stridently demanding global climate action at the UN conferences. Why? Because they know they will be the hardest hit by global warming, and they definitely cannot afford that.

[mrswdk]

What's even the point then? 'Oh you're exporting, we're going to leave you alone to keep emitting then'

Well, one should never need a justification for doing the right thing. The US is a significant contributor to global greenhouse gas emissions, and anything we can do to reduce our own contribution is a good thing for the world. But in this case, the relevant point is (as mentioned) that an import tariff placed on non-carbon pricing countries should be a strong economic incentive for them to implement their own carbon pricing schemes (since their domestic exports to the US would be taxed, but they won't get the income from it). That may not solve global warming by itself, but it may help speed up the transition.

Their exports to any country which does not have a carbon tariff (i.e. most) will remain the same price as before. By responding to the US tariff, all they'd be doing is handicapping their products in pretty much every market in the world. Even for a country which exports a lot to America, like China, it would make more economic sense to just carry on regardless.

'sides, Chinese local governments already skip over the environmental crap because they think economic growth is more important. Even if you somehow managed to spook the central government and persuade them to legislate some onerous carbon tax, local governments will ignore it. Never gonna happen.

You're also starting to get into the sort of territory where the US can be accused of price dumping if you do that.

It is legal by international trade law, and that's ultimately what will matter. Since most other countries have been demanding that the US take meaningful action on climate change and the US has been one of the major roadblocks to it, I can't imagine we'll earn bad feelings internationally for it.

It's basically an export subsidy allowing American exporters to sell more cheaply abroad than they sell in the domestic market. That's dumping, so I don't see how that's legal.

Again, I never once argued that we need a drop in consumption, nor that this would be an effect of a carbon tax. We only need consumers to switch from one set of goods to a substitute set of goods. For this we merely need to make the goods we don't like, the ones that pollute, more expensive. The market will sort the rest out.

I cba to argue this point any more. I don't really care what American consumers do with their money. That said, at the very best your tax would result in a temporary drop in consumption that would only level out once renewable energy has become cheap enough and widespread enough to replace non-renewable energy, which even in developed countries will not be happening for decades.

The cost would fall on the governments. I'm saying that those governments can't afford it.

Those governments can afford it and they want to do it (the major exceptions being the ones that are relying on natural fossil fuel resources for their economic growth).

Yeah, all those developing countries should just dig into their enormous secret Swiss bank accounts and use that money to overhaul their entire national power infrastructures.

The brackets raise an interesting point though. What's going to happen to the Middle East once you've destroyed its main source of income?

The small island nations and equatorial countries are some of the least developed in the world and also the ones who are most stridently demanding global climate action at the UN conferences. Why? Because they know they will be the hardest hit by global warming, and they definitely cannot afford that.

Of course little island nations are demanding change. Demanding change is free. You can demand anything you want if you're not the one footing the bill for it.