U.S. Needs a Robust Carbon Tax, not an Exxon Carbon Tax?

Via email spam, I end up pointed at U.S. Needs a Robust Carbon Tax, not an Exxon Carbon Tax. It is more Exxon stuff, fashionable again now that Rex Tillerson is confirmed as Trump’s pick for Sec of State (if you want to see exactly the kind of stuff you’d expect – so much so that I hardly see why they bothered write it, it is so drearily predictable – see the Graun of course).

Anyway, after a bit of #exxonknew drivel they try desperately to explain why their wheel carbon tax is so much better than Exxon’s wheel carbon tax. Because when you’re both supporting the same thing, and yet clearly you’re the good guys and they’re the bad guys, there has to be an excellent reason why your wheel carbon tax is so much better than theirs. In this case the answer is dull: they’d like it set at a different value. Or at least, they’d probably like a different value, because as they’re forced to admit after a bit, they don’t actually know what level Exxon are proposing (largely because Exxon has been so vague on the subject).

But really, couldn’t they try to be a bit more positive? “We want a carbon tax, you say you want a carbon tax, let’s see if we can work together and maybe get one; and worry about the exact level somewhat later” would be so much better than “we don’t want your stinkin’ carbon tax and we’d like to make it plain that we won’t cooperate with you in any way shape or form”.

Notes

1. I know; with a bit more effort I could have faked up a XX to replace the BOC symbol; and maybe drawn something entertaining on one of the cards. Sorry.

Advertisements

41 thoughts on “U.S. Needs a Robust Carbon Tax, not an Exxon Carbon Tax?”

  1. First of all, call it a greenhouse gas emissions fee. That is actually correct while ‘carbon tax’ is technically wrong.

    [I think that Hansen’s idea that calling it a “fee” will somehow make it more palatable is silly -W]

    Like

  2. I like an “Exxon carbon tax” of $25 per ton. Not a bad start. Maybe it would be better to phase in at $5 per ton per year, so would hit $25 in 5 years. Similar to BC’s C$30 per ton, phased in at C$5 per year. Then leave the tax rate there for an investment cycle. Investment cycles are a decade or two.
    The “Robust carbon tax’ rises far too fast for investment cycles. It would kill the current economy before any new replacements would come on line.

    What do I mean by an investment cycle? Start with any industrial or commercial equipment. Expected lifetime is well over a decade. So when it is bought, it is expected to be used to repay the investment and not be replaced for a decade or two. To replace the function with a lower carbon alternative (say rail for long distance trucking) takes years to build track, tunnels, bridges and buy rolling stock to move goods. While this is happening, the economy will rely on the old way of doing things, which shouldn’t be too badly impacted by the tax, or there will be a lot of economic pain from the tax.

    The “robust carbon tax” is too abrupt.

    [Good grief, we’re in agreement 🙂 -W]

    Like

  3. >”The “Robust carbon tax’ rises far too fast for investment cycles.”

    Yes and solar falling to a third of its cost in 6 years
    https://www.bloomberg.com/news/articles/2016-12-15/world-energy-hits-a-turning-point-solar-that-s-cheaper-than-wind

    is obviously too disruptive to be allowed to interfere with investment cycles, we need to stop that interference as well or the 1% will lose money. {/sarc}

    [I gather that Trump is doing his best by putting tariffs on Chinese panels -W]

    Like

  4. OK then, self driving electric trucks would reduce labour cost of transport by far too much, we must tax this to the hilt to stop it happening.

    >’Still take years’. Well yes obviously, and your quicker plan is?

    My suggestion would be phase in at $5/ton carbon a year when it reaches $20 start an assessment of how much higher it needs to go and how quickly. Freeze at $25/ton for a decade or two seems a bad idea if it becomes clear this is the wrong level.

    Like

  5. [I gather that Trump is doing his best by putting tariffs on Chinese panels -W]

    I believe we’ve had tariffs on Chinese panels for years now.

    Like

  6. My objection is to, incorrectly, call it a ‘carbon’ tax-or-fee. It is a levy, by whatever term, on excess greenhouse gas emissions, not graphite or even diamonds, that is, carbon.

    Do not we do science here? Am I the only one who has studied beginning chemistry?

    Like

  7. I want a plan that works. That is why I’m agreeing to a revenue neutral carbon tax. It might work politically. It’s not economically ideal in a lot of ways.

    One of the real problems with a carbon tax level is finding a tax level. The best estimate of the optimum carbon tax level will change with time: both for internal economic factors, and for external climate change events. The time to significantly change the economy without Great Depression levels of suffering is on the order of decades, which puts real limits on how fast the carbon tax, or any other change done any other way, can ramp.

    So yes, I don’t have a quicker plan. Slower plan than optimum by design, misses on a lot of key points, but has the advantage of it might work.

    Like

  8. Checking in the Oxford English Dictionary I find that ‘fee’, as in gate fee or tipping fee, fits better than ‘tax’ for what is levied on excess greenhouse gas emissions.

    But whatever…

    Like

  9. Carbon Tax? It’s the political equivalent of arguing over how many angels can dance on the head of a pin. As has been noted ad nauseum, libertarians live in a fantasy world. Entertaining this as a realistic possibility is pure fantasy.

    Also, the difference in ‘tax’ versus ‘fee’ is a political reality. It may be purely semantic or PR, but it is a reality nonetheless. Again, denying reality is not an optimum position.

    Meanwhile, you should be ecastatic; the Freedom Caucus has already found 232 regulations for President-elect Trunp to focus on getting rid of says The Washington Post- House conservatives want Trump to undo regulations on climate, FDA, Uber
    Climate. The Freedom Caucus suggests that Trump open up oil exploration on federally owned land, pull out of the Paris climate accords (which will produce “little, if any, environmental benefit”), kill the State Department’s office on climate change and the special envoy for climate change, and basically scratch any office assigned to study it — even one at the Securities and Exchange Commission.”

    And you appear to have forgotten your Graun from this past June — The Grand Oil Party: House Republicans denounce a carbon tax. The chances of a USA carbon tax are Slim and None and Slim has left town.

    Like

  10. A carbon tax is a no-brainer. But I’d combine this with laws against selling horribly inefficient lighting/heating/cooling/transport etc. You’d want to look at this in a holistic way. It might be that junk that lasts for a microsecond before ending up in landfill may be the most inefficient stuff ever. And how cruel would it be to stop people buying cheap and nasty crap?

    [This is the standard “we know better than you” stuff; but it is bad. Once you start that way, there is no end. You don’t know why people want to buy cheap crap, so you’ve got no way of knowing if your forbidding them to buy it makes sense or not. If you’ve imposed carbon taxes enough to internalise the externalities, then your job is done; your aesthetic preferences should not come into it -W]

    Once the appropriate level of carbon tax is reached, then we can let people have horribly inefficient devices again.

    [Ah, now I’m puzzled. Because just above you’re “combining” laws with the tax. I would favour not having the stupid laws, and just having the tax -W]

    Like

  11. “If you’ve imposed carbon taxes enough to internalise the externalities, then your job is done” – W

    If you want to treat a carbon tax as merely a fix to a market problem (i.e. currently the externalities of carbon emissions aren’t captured in the price), then you may be correct to say “your job is done”.

    However, for most people a carbon tax is more than that; it is a partial solution to a social problem (i.e. climate change). It’s seen as a good first step but it will not (and is not designed to) be the solution to climate change *on its own*. In that case, your job is certainly not done.

    This is the “carbon tax…and then what?” problem again. Now we see John Brookes mentions a possible (and partial) answer to “and then what?” – increase efficiency standards and regulations. You oppose it based off ideological principals, which I was afraid you would. However, if you, based on ideological principals, reject these initiatives, then I cannot see how you think we are going to address climate change.

    [I think you’ve misunderstood. Notice how JB ends with “Once the appropriate level of carbon tax is reached, then we can let people have horribly inefficient devices again”. He is only arguing that in the meantime, for slightly unclear reasons that may be entirely aesthetic, people should not be allowed to buy devices he regards as ugly -W]

    Like

  12. I have found just about everything but science on this page. It begins with the false premise that CO2 and methane pose threats to the climate. This is simply not the case. I can elaborate if asked but for purposes of brevity: CO2’s effect on temperature increase is logarithmic, we are near the bottom of that curve, and methane’s absorption bands are very narrow and masked by water vapor. As such, a carbon tax is a punitive measure with no offsetting benefit.

    [Sorry, you’re on the wrong blog for that comment. You want WUWT or similar. Over here we all – well, pretty well all – take the IPCC baseline as correct; if you want to hew to something different, then you need very good evidence for it. I recommend you to read Scott Adams is a tosser – you won’t like it, so try to read the thoughts behind it, and discard the nasty words that will jar you. Start at “The fundamental question he poses, How the heck can you – a non-expert – judge who is right? – remains a good one” -W]

    Like

  13. Ah, you’re right. But I’m not sure this changes my point.

    I don’t believe your contention with them was purely because they were suggested for the interim only. So, put more directly, would you support increased energy efficient standards/regulations (that would effectively ban inefficient products/processes) in addition to a carbon tax?

    [Probably not, unless they were accompanied by the removal of a large number of other regulations. We have far too many regulations, we reach for them to “solve” problems far too readily, and too many people fruitlessly waste their lives creating them -W]

    If not, my point remains unchanged.

    Like

  14. I appreciate the moderator for being polite but the CO2/methane hoaxes can be refute at a rather basic level of science (though it does rise above what I am reading here). Your mind if closed to anyone who disagrees with you. You don’t want to hear my arguments because you know you can’t refute them. So you will block this comment or offer a flip response rather than hear me out. You live in an echo chamber and more and more people are figuring this out.

    [If you have a coherent viewpoint, it will inevitably be too long for a blog comment. I’d recommend you to write it down in your own blog, and link to it here. Or, better still, point at some other blog post by someone else who represents your views – it is, after all, unlikely that you have anything novel to say. I don’t mean that dismissively; *I* don’t have anything very novel to say, at least in scientific terms; it would be strange if I did. You find the novel stuff in the scientific literature -W]

    Like

  15. “If you’ve imposed carbon taxes enough to internalise the externalities, then your job is done” – W

    Only if the proceeds of the tax go to those impacted by the externalities.

    Poortown isn’t likely to get paid for their losses.

    Like

  16. Actually, my interest is not in creating my own echo chamber but in finding those who disagree and challenging them to explain where I am wrong. If my ideas are so categorically incorrect that should not prove as challenging a task as I am finding. But again, thanks for your courtesy.

    Like

  17. Peter D Anderson (cut it out with the ALL CAPS please)

    The argument that science that is well established needs to be presented to you in detail here and now is typical Rovian tactical maneuvering. We are all too busy to reproduce ordinary standard science and simple physics to satisfy your newfound power politics, but here’s a short version:

    Heat-trapping greenhouse gases are accumulating in our atmosphere, and they are increasing the energy (heat) in the system (global warming) which is resulting in disruption of the planetary circulatory system (climate change).

    Try Wikipedia for the terminology, such as heat trapping, greenhouse gases, and all.

    Your arguments are political, and rely on post-truth (nonsense) posturing. You would not accept these arguments for your health, your computer (where we are now), your plumbing, your bridges, your automobile, or anything else that requires expertise to work.

    Rove suggests that each argument be returned to its building blocks, and no commonly accepted knowledge be accepted. This takes up a lot of time and energy on the part of people who have better things to do, and prevents real discussion about real problems.

    Like

  18. Oh, and get out of that sealed room and take in the evidence. Today, for example, there are extreme floods in southwestern Pennsylvania. Here are a couple of links for evidence-based up to date news:

    http://floodlist.com/

    http://mashable.com/author/andrew-freedman/

    You would try the BBC, the Met Office, the Weather Channel, Wunderground, and others. Extreme weather is certainly increasing, and so are billion dollar weather emergencies, the 500-year and 1000-year events.

    Like

  19. PETER D ANDERSON

    ‘ I can elaborate if asked but for purposes of brevity: CO2’s effect on temperature increase is logarithmic, we are near the bottom of that curve, and methane’s absorption bands are very narrow and masked by water vapor’

    That sounds plausible and indeed was believed around 1900 but science has moved on since then

    http://www.realclimate.org/index.php/archives/2007/06/a-saturated-gassy-argument/

    ‘Some people have been arguing that simple physics shows there is already so much CO2 in the air that its effect on infrared radiation is “saturated”— meaning that adding more gas can make scarcely any difference in how much radiation gets through the atmosphere, since all the radiation is already blocked. And besides, isn’t water vapor already blocking all the infrared rays that CO2 ever would?’

    Like

  20. More up to date PETER D ANDERSON:

    Major Scientific Theory Disproved On Internet Comment Thread, Boffins Shocked!

    You won’t BELIEVE what this theory looks like after 225 years!

    Venusian billionaires want this secret banned RIGHT NOW!

    People are CANCELLING their Nature subscriptions because of THIS ONE SITE!

    Like

  21. “Only if the proceeds of the tax go to those impacted by the externalities.” (Phil Hays @22).
    I always thought more of those impacted by increased costs (like energy and goods) the most, but also a bit about the displaced workers.

    [Hansen’s plan is “to everyone” (well, children count as half); naturally, within national boundaries. So no distinction as to impact. I think Hansen is right in that: anything else is just asking to be pork-barreled -W]

    Like

  22. I agree there are pork-barrel risks, but consider this opinion on WA’s try at a carbon tax:
    “But I-732 is still being opposed by a variety of social justice groups, and more quietly opposed by some environmental groups. The stated reason is that I-732 doesn’t do enough to help poor people in Washington, who would be disproportionately impacted by a carbon tax.” (Slate, Oct 20.)

    [The inability of the “left” to pull together, for reasons of idealogical purity, is notorious -W]

    I’ll go further to say I was not trying to be practical, I was pointing to what I thought more perfect (which may damage the merely good).
    Practically, I fully agree it should not try to be too tricky. Note: Hansen supported I-732, though I’m sure he thought it capable of improvement. I will cogitate further.

    Like

  23. Anything other than direct rebate is problematic. Sending rebates across national borders runs into politics, corruption and such what. Hard or impossible to get correct. The people harmed are mostly outside of national boundaries from the carbon taxes. So no rebate for them.

    There is also the generational aspect problem. The people getting the rebates are alive today. The people harmed are mostly in the future. There is no realistic way to save the rebates for later. So no rebate for them.

    People impacted by the increased costs are currently getting a better deal than a fair deal. Sure, the change is going to hurt a little. Set the tax rate lower than the harm, and give them the same fraction of the rebate as everyone else gets, and then they have little real reason to be upset.

    So set an Exxon rate carbon tax and some sort of rebate. Advantage is that this might work politically. But is, at best, a half solution. Or even less. Once we set it, we need to stick to it for at least a decade.

    Bad, poor, but the best of all choices. I’m OK with it, as long as you don’t pretend it is in some way the ideal choice.

    It isn’t.

    [“ideal” has many meanings. I’m happy to concede that a carbon tax inevitably has flaws when applied in the real world; in much the same way that I’ll concede that democracy has flaws, but is better than anything else yet found -W]

    Like

  24. I signed the petition for I-732, and contributed money.

    It was flawed and doomed from the start. I didn’t know that when I signed the petition, or when I gave money. Not for the reasons that Slate gave, but for the reason that the rebates in terms of reduced sales taxes and other taxes were significantly larger than the likely amount of carbon tax collections.

    Blowing a hole in the state budget is bad.

    Still, I voted for it.

    [I wasn’t directly connected, being this side of the pond, and it was only a state, so I didn’t look too carefully. But I think I too would have voted for it, despite caveats, had I had the chance -W]

    Like

  25. >”People impacted by the increased costs are currently getting a better deal than a fair deal. Sure, the change is going to hurt a little.”
    Poor pensioners are likely to be adversely affected spending more on heating than a typical person. If already close to deciding on whether to heat or eat, the effects look pretty dire unless you spend a good chunk of the money on pensions or heating benefit for pensioners. Put too much into that to ensure there aren’t too many pensioners losing out by too much and a lot of pensioners become better off mainly the well off ones unless you means test the benefits but that creates significant administration costs. The problem then is that a majority of people will work out they are going to lose out and could well want to vote against it. Seems like it is going to require quite a lot of detailed measures to get the rebates and any tax reductions to be somewhat similar to the cost for most people. Lots of detailed measures might make it look like being ‘tricky’.

    Highly desirable aim and quite a bit disliked effects may have to be accepted when trying to work out the details.

    Like

  26. “I like an “Exxon carbon tax” of $25 per ton. Not a bad start. Maybe it would be better to phase in at $5 per ton per year, so would hit $25 in 5 years. Similar to BC’s C$30 per ton, phased in at C$5 per year. Then leave the tax rate there for an investment cycle. Investment cycles are a decade or two.
    The “Robust carbon tax’ rises far too fast for investment cycles. It would kill the current economy before any new replacements would come on line.”

    Well that’s another lost decade or two then. $25 per tonne would be lost in the noise. It’s something like 15 cents on a gallon of gas in the US (back in February prices were 50 cents lower than they are now). In the UK it’s about 5p on a litre of petrol, 1p on a kWh of electricity and 0.4p on a kWh of gas. Woefully insufficient.

    Like

  27. “Woefully insufficient.”

    Yes.

    The key point isn’t the current value. The key point is the future re-adjustment in a decade that will have an economic impact well before the decade is out.

    Like

  28. “Poor pensioners are likely to be adversely affected spending more on heating than a typical person.”

    As a fraction of income, I’d expect a pensioner to pay more for energy. But in absolute terms?

    With a carbon tax with a rebate set to the same amount per person, then the pensioner would need to use more energy than the average person to get less in rebate than pay in higher energy costs.

    I doubt if many pensioners use more than per capita average of energy. Do you have any source that says otherwise?

    Like

  29. http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/rel/household-income/expenditure-on-household-fuels/2002—2012/full-report–household-energy-spending-in-the-uk–2002–2012.html

    £97 for 1.5 people versus £110 for 2.6 people. That looks like more per person for the pensioners than for everyone else.

    I also said poor pensioners. That link also suggests poorest fifth spend 11% of income on energy compared to 3% for the richest fifth though that is obviously a proportion of income not absolute amount.

    Also these figures are for UK, different countries/states may well have different situations. Sorry if I am concentrating on my own country.

    Reducing sales tax (like I-732) obviously helps the richest more than the poorest. So this does seem a bad way to distribute the tax income. Your same amount per person would look to be much better at compensating the people that most need compensating.

    Sorry if my post mixed a few of these things together and wasn’t clear.

    Like

  30. “£97 for 1.5 people versus £110 for 2.6 people. That looks like more per person for the pensioners than for everyone else.”

    Note that this isn’t total energy use, but household energy use. I don’t know for the UK, but the USA household and commercial energy use is about 40% of the total. Pensioners might buy less goods, commute less, travel more or less and so on. I’ve not seen a complete analysis. If you find one, please pass it along.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s