125 thoughts on “Hansen’s Tax Plan: Discuss”

1. Will wood be taxed? If not, people will buy wood burning stoves and fell trees. No matter which carbon sources are taxed, it seems likely the tax will lead to increased food and clothing costs. If implemented poorly, it could favor imports from countries with no carbon tax; thereby encouraging consumption of high carbon footprint bananas and mangoes rather than locally grown apples.

   I doubt wood would be taxed because it is a renewable resource and can be made carbon neutral.

   One point Hansen makes is that the tax can be used to lead the world, so we might need to consider tariffs on countries that do not have such a tax.

2. Sorry to be glib, but if Hansen wants to bet on future climate outcomes, he should follow the excellent policy of this blog and limit bets to cookies, instead of using my money.

3. oops. Last two paragraphs are me.

4. Boris– Fixed. 🙂

   Wood is renewable. That doesn’t automatically cause it to renew. When I lived in Iowa, my lot and those of my neighbors’ were wooded. If there was a tax on wood, we could very well chop trees down and make no effort to regrow. After it’s grown, maybe we’d grow corn or soy like Hansen across the street. (Not making the name up. I lived on Hansen drive, and the farmer across the road was farmed by “young Hansen”. He was only young relative to his mother who was probably 80 or so! 🙂 )

   I’ve never been persuade by exhortations to lead the world. If the action is wise, it’s wise. If it’s foolish, it’s foolish. If the most persuasive arguments in its favor are ‘we can lead the world’, then I suspect the policy is foolish. We should avoid it and hope no one else jumps off that cliff.

   So…. what about the bananas and mangoes? If we impose this, do we end up importing bananas and mangoes from El Salvador, the country of my birth, while they figure out it’s in their interest not to impose the the tax and sell us bananas, and manufactured goods?

5. Well, as I said a tariff could be levied. Obviously we’d need to be careful and negotiate with other countries in this regard.

6. Boris– Is that Hansen’s proposal? Or not?

   My point is that, as far as I can tell is the proposal is utterly vague. Unless someone describes something in much greater detail than Hansen has, for all we know the plan they envision could result in more CO2 emissions, not less.

   It’s not as though people aren’t creative about working around plans. Weren’t CAFE standards supposed to reduce fuel consumption? Didn’t we end up with SUV’s as a work around?

   I’m going to the store to buy some bananas now. (The strawberries I planted aren’t bearing yet.)

7. He mentions it. I agree the proposal is vague. I’m looking for a more detailed plan.

   Nothing’s growing for me except my hot banana peppers. So if anyone wants to bet cookies against hot banana peppers….

8. Lucia,

   I believe that Hansen is only proposing a policy which 1) imposes an excise tax on carbon emission (no details described) and 2) a 100% refund of the tax in terms of dollars to the individuals who paid the tax. In economics this is called “compensated price change” and the change in the quantity (of the taxed good) consumed is the (Slutsky) “substitution effect.” The idea of the tax and refund is to remove the “income effect” of the increase in the price (from the tax).

   Whether or not I agree with Hansen on other point, I agree that effluent taxes are administratively more practical, albeit less politically practical, at this stage than caps. Right now almost all major countries have either tax or price regulation systems for energy services and commodities. And the receipt of taxes is no more corrupting than other excise taxes in contrast to caps which almost beg to have allotments to industries or groups. The refund is a more troublesome point because Hansen seems to assume that the incidence of taxation will be 100%. That is, 100% of the tax will be passed on the ultimate consumer. This result is seldom if ever the case. Hence, the tax will produce a differential effect on one energy industry versus another. Hansen probably doesn’t care, but the result will be not quite the pure textbook substitution effect he was envisioning.

   Hansen might also be advocating a carbon tax as opposed to a cap-and-trade because he has looked at things like the ethanol subsidies and decided, from a net-carbon-in-the-atmosphere position, that ethanol is at most a small reduction in greenhouse gases per btu and most likely a net increase. Of course, that won’t make Dr. Hansen very popular in his home state, Iowa.

9. I contributed a version of this as an “article” to Roger Pielke, last week, but he apparently has chosen not to post it. Lucia has made it relevant here:

   STIMULATING INNOVATION BY TAXING CO2- AND ECOLOGICAL-FOOTPRINTS

   Invisible impacts (especially future impacts) of products and processes are often overlooked and therefore don’t ‘properly’ influence their market prices. This, and excessive discounting of future risks and rewards, are ‘diseases’ that seriously degrade marketplace efficiency, and are only ‘curable’ by informed intervention.

   The deleterious effects of chlorofluorocarbon refrigerants on stratospheric ozone and of industrial sulfate emissions on the acidity of rain, are examples of ‘doubly invisible’ pollutants. Both of these have been successfully ‘cured’ with ‘managed’ markets. CO2 and H2O are invisible gases produced when hydrocarbons are burned. It wasn’t until the 70’s, after the Keeling Curve revealed that atmospheric CO2 was steadily and inexorably increasing, that its also previously ‘invisible’ impacts were carefully reexamined, and Anthropogenic Global Warming (AGW) emerged as a potential threat to world climate, prosperity and to the biome.

   Whether the magnitude of the trend is 1º or 2 º C/century, it’s almost certainly not zero (despite the ‘flat’ trend in the last 8 years). AGW needs attention.

   Recently, as an alternative to ‘ordinary’ carrots and sticks of subsidies and taxation to stimulate energy-market innovations, Jim Hansen proposed taxing fossil fuels at their sources, and ‘evenly’ redistributing all the proceeds to citizens, as dividends.

   http://www.columbia.edu/~jeh1/mailings/20080604_TaxAndDividend.pdf

   If such taxes were high enough, and proportional to the ‘CO2 footprints of fuels’ (the amount of CO2 produced by both extracting a fuel and ultimately burning it), producers and customers should automatically and efficiently turn to other forms of energy which produce smaller net footprints. Hansen seems to imply that such taxing of fossil fuels would be straightforward and ‘easy’.

   Until 1800, the main fuel for heating, cooking and power was wood. As populations grew, the forests of the world began to be destroyed at an increasing rate. Old-growth forests in the Northeastern US were decimated by the beginning of the twentieth century. If fossil fuels are heavily taxed, wood will be the first alternate fuel to which many will turn, especially as a substitute for coal. (This, of course, is Lucia’s leading point, above.) In underdeveloped regions like the African Sahel, because of fossil fuel transportation costs, wood is still a first choice.

   For Hansen’s scheme to work, footprints will need to be assigned not only to fossil fuels, but to biofuels as well. But this is a MUCH trickier task.

   To cartoon the problem:

   A fallen dead tree, if harvested for fuel, might actually deserve a ‘negative tax’ (a subsidy to be paid to the user). If allowed to rot, virtually its entire carbon content would have been converted to CO2 and released into the atmosphere. If it’s harvested, that amount equals its negative footprint because that harvested carbon can be used for its energy, rather than being ‘just wasted’ to rot before returning the same amount of CO2 to the atmosphere. This is completely renewable…CO2 in equals CO2 out.

   But the same isn’t quite true of any live, forest-canopy tree which is generating net primary productivity (NPP). Like the fallen tree, there’s a negative footprint equal to the harvested trunk. But there’s also a positive footprint about equal to its lost potential NPP, summed from harvest date to its otherwise projected ‘natural death’, (or until an equally productive tree grows from the understory in its place).

   Unless, for each tree harvested, such positive and negative footprints are correctly estimated, assigned ‘appropriate’ values…and policed, Hansen’s Tax and 100% Dividend might quickly lead to massive deforestations!

   The CO2 footprint of US-corn-ethanol is substantially larger than that of Brazilian sugar-cane-ethanol. But the footprint of the Brazilian ethanol should also contain an additional component. That should at least equal the difference between the NPP of the tropical rain forest (that was cut down…and burned?..to make way for the sugar cane plantation), and the NPP of the sugar cane that replaced it. The equivalent ‘prairie NPP footprint’ for US corn is much smaller. Identical gallons of ethanol therefore can be burdened with large differences in tax. And of two ‘identical’ pieces of wood, one may carry a subsidy, and the other a tax…lots of opportunity for cheating.

   And so it goes. Potential NPP forgone by clearing or harvest as well as additional eco-damage and associated “Ecological-Footprints” are not easily computed to construct necessary regulations.

   But without them, and without strict policing and enforcement, almost any plans to manage markets (with footprint taxes, trade-and-cap or subsidies…Hansen’s…or others) may easily fail their purpose…like the dumb subsidies for corn-ethanol. Management of AGW is almost certainly necessary, and highly desirable…but “it sure ain’t no lead pipe cinch”!

   In the spirit of full disclosure; I’m an ancient professional biologist…and a kind of Jim Hansen/GISS groupie 😉

   Len Ornstein

10. Martin– It’s the “no details described” and the claimed 100% refund that have me worried. But yes, direct taxes are probably better than cap and trade, which has just got to introduce weirdness into the economic system. (“Weirdness is the correct economic term, right? 🙂 )

    Lots of Iowa corn is underwater right now. Maybe the Iowa farmers don’t mind a fuel tax this month. But no, reducing demand for corn, isn’t going to make him popular with corn or grain farmers. Hog farmers might not mind at all though! Also, I’m not sure how energy prices affect farmers in general. How does it impact fertilizer costs? And fuel costs to run tractors etc.? Do higher energy costs have a large or small impact on these?

    Len– Being a Hansen/GISS groupie is fine around here. I haven’t seemed to attract many, but there ya’ go.

    I agree with you that management of AGW is no lead pipe cinch! That’s why I think the details need to be fleshed out.

    Oddly enough, I’ve been for a gas tax since the 80s! I’m one of those people who thought Ross Perot had it right. In fact, I wished we’d imposed a $0.05 gas tax back in 80 and raised it 0.05 a year until now. I wouldn’t have minded some taxes on fuel oil and natural gas. The proceeds could have been used for subsidizing public transportation, general revenue or a number of things. So, a gas tax per se doesn’t bother me.

    A gas tax no one can describe bothers me!

    What bothers me is the utter vagueness of the plan. Also, I don’t think any old gas tax by itself will automatically result in creation of baseload. There are plenty of places where poverty is the norm. If things are done badly, that could happen here too.

11. @Len: Not great examples…

    Acid rain turned out not to be a problem primarily from emissions… see the 1988 National Acid Precipitation Assessment. Ten year, $500 million dollar assessment that showed most of the concerns about acid rain were not due to auto or power plant emissions.

    Chlorofluorocarbons: again, not really the cause of anything to do with ozone depletion despite the rhetoric. Limiting CFC production in the developed world did nothing to affect “the ozone hole” and simply increased the price of refrigerants and refrigeration in the developed world.

    Carbon taxes are simply another in a long line of taxes that “sound” like they should be good for the environment and sound like they should help all sorts of people, but functionally do nothing except unnecessarily increase prices for those in developed world and continue to repress those in the less developed world. The impact this has is both positive and negative. Example: Positive if you happen to be a company like DuPont, that profited handsomely from the switch from traditional CFCs to newer CFCs. Negative if you happened to be someone who needed to re-fill their home or car air conditioner after traditional CFCs got phased out. Negative if the cost for refrigerators has now increased to the point where many in the less developed world can’t afford them.

    What’s the impact of a carbon tax? Let’s see the numbers for actual impact on global temperatures. So far, predictions about what will happen to global temps for a given rise in CO2 have been consistently incorrect (see Lucia’s recent comparisons for Hansen’s predictions, but also see the computer projections used by the IPCC).

    One quickly realizes that the cost for implementing these taxes vs. the actual temperature impact is such that it doesn’t make any sense at all.

    Bruce

12. Bruce-
    I haven’t said predictions are totally incorrect. Hansen 1988 predictions look noticeably high compared to data available to data. The IPCC AR4 projections are hight.

    But trends are positive, and it’s likely we could benefit from some action. That said, I think the tendency of advocates to be very vague about what is to be done makes things impossible. Also, I suspect the only plan forward is linked compromises. I’m for doing something to stave off the possible (though not certain) worst consquences. But, I’m also for including provisions to make sure the steps we undertake are rational, and not designed to simultaneously a) fail to reduce CO2, b)throw the economy in a tailspin and c) have unintended consequences like massive deforestation.

13. A couple of points:

    * a carbon tax (or a truly equitable cap and trade system) would have vastly greater impact on coal than on oil prices. That’s a good thing from the “reduction of CO2” perspective – coal is the worse problem and needs to be addressed first. The reason for the greater impact is simply that the relative price of coal is very low, compared to the price of oil (even when oil was “cheap”), per ton of CO2 emitted. Let’s say the tax is set at $50 per ton of CO2 that would be emitted by the fossil fuel (and is directed only at fossil sources: coal, oil, natural gas). That amounts to $185 per ton of carbon (each ton of carbon results in 3.7 tons of CO2). The effect on gasoline prices would be about 50 cents/gallon, adding about 12.5% to gasoline at $4.00/gallon.

    Compare that with the impact of a $50/ton-CO2 tax on coal: right now the most expensive coal in the country is Appalachian at a little over $100/short ton. Coal isn’t pure carbon, more like 75% by weight; also a short ton is slightly less than a metric ton. But that still adds about $125 to the price of each short ton of coal, or an over 100% increase in the price of the most expensive coal in the nation. Cheaper coal, such as the Powder River Basin variety currently sold for less than $20/short ton would see over 500% price increases.

    So any such tax would have a much greater impact on coal than on oil. Gas prices are a minor effect. If you need to worry about something, worry about electricity prices. Such a tax would quickly make renewable electricity supplies much more competitive.

    * the big issue not clarified that I’m aware of in Hansen’s proposal is how to deal with the CO2 impact of imported goods. Imposing a corresponding tariff ($50/ton of CO2) would require good estimates of CO2 costs of manufacturing in the producing country. It would also likely run into trouble with world trade rules. There’s an awful lot of room for funny business in the import/export part of this problem. Other than that, Hansen’s proposal does have significant merit on grounds of simplicity!

14. those who cannot do
    elementary school math
    will vote for CO2 tax

15. From his behavior I think Hansen’s tax plan is the same as his other plans “I will say and you will obey”.

    Since he doesn’t have that power we can present our own ideas.

    I favor a temporary, stepped, increase.

    i.e. The federal tax on motor fuel will rise at the rate of inflation plus five percent each year for five years. Then it will revert to the present tax rate unless new legislation is passed.

    That forces Congress to review matters in light of what we learn in the next few years. And, faced with the loss of revenue, they will act.

    If we merely pass a rising tax w/o an expiration provision then the government has no incentive to make sensible adjustments later.

16. the big issue not clarified that I’m aware of in Hansen’s proposal is how to deal with the CO2 impact of imported goods.

    The apples at the grocery store were from New Zealand. They were delicious. Clearly, shipping from New Zealand has got to take more carbon than growing applies in Illinois or Washington state.

    Like you, I favor simplicity. Taxing is at least potentially simple. Returning the money? In a pig’s eye! ( Sorry, but in the not so short run, I don’t trust politicians to really return money.)

17. I found this
    http://www.carbontax.org/blogarchives/2008/06/24/hansen-lays-it-out-yes-a-carbon-tax/
    maybe it can help focus the discussion.

18. Pie in the sky, this talk of a carbon tax. It is assumed that this tax will have an impact on temperature. I beg to differ.

    Before any such action, tax or cap, is taken, a cost/benefit analysis needs to be done, and not by the IPCC.

19. The Liberals in Canada have just announced a carbon tax as part of their platform. It is available at the website thegreenshift.ca (the plan is a 48 page pdf, however there has already been comment by Liberal party members that it is incomplete.) Not everybody thinks the plan is a good one. The premiers of the two largest oil producing provinces have condemned it, as have the premiers of the three northern territories. There has been lots of newspaper articles and columns in the last few days on the subject, and the political oriented blogs have been busy. While the situation in the US is somewhat different, many comments from Alberta and Saskatchewan have proposed an immediate reduction of Canada’s GHG emissions if a carbon tax is imposed. This will be accomplished by Alberta and Saskatchewan separating and become an independent country. It seems there is a little opposition out west.

20. has hansen published his idea in a peer reviewed economic journal?

21. In fairness to Hansen, I don’t get the impression he was offering a detailed plan so much as stating a desire that the forces of evil be heavily taxed and that the new tax revenue be given to the public as a political incentive to support enactment of the punitive tax. It was a general suggestion presented in a slightly rambling style whose length mimicked the outline of an actual program proposal. The responses on The Blackboard and elsewhere have been far more sophisticated and detailed than the “plan” warrants.

    If we were to move to government controlled allocations like cap and trade coupled with a huge new slush fund from carbon producer taxes, I may just have to come out of retirement and don those old alligator shoes because it will be a great time to be a lobbyist. The “refund” from the carbon tax will increasingly be “returned” in the form of new “services” and “public investments”. Washington will be flush, the evil carbon fuel producers will simply pass on the costs (including the additional costs of more lobbyists) and the consumer/taxpayer will get the tab and the shaft. On the downside, it will be nearly impossible to get a lunch reservation at Sam & Harry’s or the Palm.

    Len Ornstein makes a good point about the return to wood fuels. The destruction would be broad and deep if we make energy more unaffordable. And the models will never include that particular truth. Wealth is ultimately good for the environment. Poverty is war on the environment. The solution is technology not politics. And if you disagree with me, you hate the planet and should be arrested. So there.

22. George–
    Sure, Hansen may not intend to offer a an actual plan. But if no one is offering a plan, then what’s the point about complaining about delayers? Or suggesting CEOS be charged with crimes against nature.

    If there is no plan about what to do, there is nothing to delay.

23. To take a page from Bjorn Lomborg, is “human influenced global warming” REALLY the most pressing human need right now??? Should we really take measures that will cost trillions of dollars and will impact people in very tangible ways when it’s not even clear exactly what, if any, the impact of human emissions of CO2 are having on temperatures?

    In the same way that one allocates one’s own resources to meet certain specific goals and objectives, it seems quite reasonable to do the same with public funds. And, if one were going to prioritize global human problems and set about ways to address them, one would probably start with things like malaria [500 million cases per year with ~ 1 million deaths and most occurring in women and children], leshmaniasis [~ 12 million of people affected worldwide with women and children primarily affected], cholera {millions affected, thousands of deaths, again mainly in children], etc. In each of these cases of disease, increasing access to inexpensive energy (in the form of CO2 emitting sources like coal and oil) would dramatically reduce or even eradicate the disease. Seems that increasing access to inexpensive energy is of greater benefit to humanity than is limiting access to energy through increasing costs in the form of taxes.

    Bruce

24. Bruce,

    It is nice — heck, more than nice — to see someone who remembers NAPAP — don’t forgot the last ‘P’ (for “Program”). And it was $600 million, but you got the important part right: the effect of power plant emissions (the Illinois, Indiana, Ohio to Northern NY and New England pipeline being the most noted) was slight (remember the Red Spruce?), and the acidification of the N. NY and NE lakes was a natural phenomenon. Of course, here in NE there are plenty of people — who matter with regard to environmental regulation — who seemed to have a complete memory lapse with regard to NAPAP and still talk about the terrible acid rain from Ohio.

    Re carbon taxes as user fees

    Whether we have a carbon tax, cap-and-trade or anything, we should increase the taxes on both gasoline and diesel. The fuel taxes used to more than cover the highway construction and maintenance. Not so today. Fuels taxes are not necessarily the best way to tax highway users, but the mechanism is in place and the tax mechanism is close enough that I am not going to worry about optimality. Again this has nothing to do with climate change, just the user fee.

    Re: carbon taxes as effluent taxes

    As I look at the 2008 elections, the current Congress, and the opinion surveying of the country, I think there is a better than 50% chance the US will have some kind of energy use restriction coming in 2009. Presuming that this comes to fruition, then there is the issue of what kind of restriction is least harmful to the economy. This is not an argument about the desirability Copenhagen Consensus (Bjorn Lomborg). It is a question of political reality. And alas, I think we are not only likely to have restrictions but we are likely to have them in the form of cap-and-trade. The good news is that given the desire to be re-elected Congress and whoever the new President is will push the painful part fairly far off. Thus, if we continue the current lack of warming trend, we have might have an electoral re-evaluation in four or so years.

    PS: cap-an-trade

    I am actually a believer in cap-and-trade and have testified to that effect regarding the Clean Air Act of 1990 concerning the SOX emissions. That program was a pretty clear economic success, at least with respect to the costs of abatement. (Probably less than 50% of the median of the cost estimates during the 1990 debates on the bill.) The trouble with doing it with carbon (as opposed to other forms of restriction under the presumption there will be restrictions) is that there are too many possible physical leakages (on coverage) and an almost impossible to control political leakage of allotments. It is the latter that bothers me most, and it will make the “dirty 100” compromise in 1990 look like child’s play.

25. Here is a test for the genuiness of motives of any tax plan.

    Alternative methods of changing behaviour are rationing, and criminalisation. It could be said that taxation of Carbon use was regressive and impacted the poor far harder than the rich.

    Rationing cards and Armed Guards, and Prison time as deterents. Surely environmental Husbanders like Hansen should be all in favour of such measures. If not, why not?

26. PS. Also, tax the producers. Taxes on Saudi and Russia at source. Why not?

27. I have a general question. Unrelated to any specific plans as there seem to be none anyway.

    Are there any examples of successful applications of taxation of other significantly important aspects of life that have resulted in the degree of curtailment of the activities to the extent deemed necessary for the ‘CO2 problem’?

    Or examples for activities that are not necessary for the health and safety of the public?

    Or any examples at all?

    Oh, a tax imposed on tea just came into my mind.

    Thanks

28. Dan Hughes– I think the tea tax curtailed tea drinking. People in Boston got angry, but in the end American’s seem to drink more coffee. 🙂

29. Being a convservative, when Federal taxes are discussed I always examine the following statement:

    The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States

    To which is global warming a threat: common defense or general welfare?
    How is it a threat?
    Will the tax provide a relief to the threat?

    If you can’t answer these questions, tell me why Congress has the power to levy the tax in the first place.

30. Maybe I should not have thrown in that bit about the tea tax; but it did in fact pop in as I was writing.

    It detracts from my main question, and I think the question requires serious thought. Do we have any data at all to indicate that the (fuzzily) proposed remedies have any chance for success?

    Why is the idea that The Scientific Method should be applied to all proposed mitigation and adoption proposals not considered?

    ps

    After the tea tax popped up, my next thought was what that precipitated. The subsequent activities went somewhat beyond curtailment of tea drinking 🙂

31. Do we have any data at all to indicate that the (fuzzily) proposed remedies have any chance for success?

    First you have to define success.

32. Raphael, I have read, I recall, that CO2 emissions must be decreased by 50 to 90 % below the levels of the late 1990s or early 2000s by about mid-2000s.

    All corrections appreciated.

33. Dan Hughes,

    Corrections aside, should we allow for room in the definition of success for other criteria? Such as the impact on Global Warming, the impact on the economies (Global, National, States, local), or any other impact that can be deemed important?

34. Of course, Raphael.

    The objective of applying the scientific method would be exactly to determine all the costs and all the benefits and all the adverse consequences of all proposed mitigation and adoption procedures and processes. If the scientific method is good enough to define the problem way isn’t it good enough for investigation the proposed solutions.

    But I’m still looking for examples for which, let’s say taxes, have significantly reduced the consumption of anything. My understanding is that the Precautionary Principle firstly demands that consumption of carbon be curtailed significantly and immediately and taxes (or in general additional costs for carbon) are the method of choice.

35. Dan Hughes,

    I was wondering if only the reduction of carbon emissions would be considered a success and if there would be photo-ops of the AGW crowd would be standing on the deck of an aircraft carrier with a banner which reads, “Mission Accomplished.” Which really leads back to the definition of success. Because without it, everything else is just gums flapping in the wind.

    I can’t help with the search for a “sin tax” which worked.

    But applying theory, price, whether through tax or market forces, can have an effect on demand if the demand is not perfectly inelastic. This is rather clear from all those economic courses I took and never use (except for things like this).

    There are (at least; doing this off the top of my head) three economic principles of demand which need to be considered for any given “sin tax”.

    1. Price elasticity: Price Good A vs Demand Good A
    2. Cross price elasticity: Price Good A vs Demand Good B
    3. Income elasticity: Income of consumer vs Demand for good A

    All three of these are involved in the Carbon Tax.
    1. Carbon tax reduce demand
    2. Carbon tax increase demand of alternatives
    3. Revenue from carbon tax is redistributed

    If all (not to say this is a complete list) of these principles are not examined, any given tax intended to reduce demand could have unforseen results.

    But, as I said success would need to be defined first. Personally I don’t think there is enough information on AGW to define success. I’ve been trying to nail down the questions I listed previously in this post, with little success. 😉

36. To which is global warming a threat: common defense or general welfare?

    General welfare obv.

    It could be said that taxation of Carbon use was regressive and impacted the poor far harder than the rich.

    The rich use more energy than the poor, so the poor would gain in this plan.

37. Lucia, actually there was a carbon tax proposal put forth by Gore in 1992 and pushed in his book Earth in the Balance. Opposition to that proposal as a central planning device led to the Clinton administration proposing a Btu tax instead in 1993, which was quickly set aside as too onerous for an energy hungry U.S. economy. The GOP attack on the Btu tax, along with Hillary care, helped set the stage for the GOP takeover of the House after 50 years — by attacking tax and spend Democrats. Hansen astutely proposes eliminating the “spend” in order to make the “tax” more palatable. A tax credit would actually make a carbon tax progressive. Cap and trade with permit auctions came about because politicians wanted to levy taxes but make it look like they weren’t — avoid the “tax” label but not the “spend.” ;-).

38. Alas, I suck at blockquoting. Third line is MarkR’s.

    Re a sin tax. After taxes on cigarettes are raised, pregnant women smoke less and birth weights go up.

    Also, apparently the AEI supports a carbon tax. Yeah, I know.

39. Darwin–
    I would need to read some analysis of how this works to believe the return provision makes this a progressive. In particular, I would need to see that to believe this is as progressive as the current income tax.

    When we say progressive, we usually mean that the rich pay a higher fraction of their income in taxes. That is, someone making $1,000,000/year might pay 40% in taxes, while someone making $20,000/year might pay 1%.

    I suspect it is true that per capita the wealthy use more energy. So, as a flat amount, I suspect they would pay more in carbon taxes than a poor person.

    But, I’m not entirely sure they use more carbon as a fraction of their expenditures. Many, many luxuries would seem at first glance to be less carbon intensive than needs. Heat, and food transported large distances are energy intensive. The poor spend a lot on those things. The poor need to use transportation to get to work, I’m not under the impression they walk. Many live far from work precisely because energy has been expensive, and convenient locations demand a premium on the housing market.

    Imported walmart sweaters are no less carbon intensive than cashmere. The rich may buy Ipods, stereos, cell phones etc. Are those particularly carbon intensive? Is cable tv carbon intensive? Compared to paying a gas bill? I know rich people who own horses– is that carbon intensive? My house isn’t leaky because it already has good windows. The same can’t be said for some poorer people I know renting old buildings rural parts of the midwest.

    So, given the way we actualy define “progressive” or “regressive”, I’m not sure this particular sort of consumption tax would be progressive?

    Does anyone have any analysis? Or just assurances that what amounts to a consumption tax with a return policy must be progressive? If it’s progressive, how progressive is it compared to the current federal income tax?

40. Boris,

    While I agree general welfare is the most likely catagory, I’m not certain the tax is for the general welfare. While I can see how global warming could be considered a threat people living in coastal regions, what about the rest? General means general, not a select group of states.

    Lucia,

    I hate the way political rhetoric has been redefining the meaning of regressive and progressive taxes. Most of the times I hear the terms, I roll my eyes and ignore the comment (to prevent rants about socialism). The terms have nothing to do with a percentage of income unless it is income being taxed. :-/

    There isn’t much stuck in my head as far as hard information carbon by income.

    If I recall correctly, its something like:

    Estimated Carbon emissions from energy usage by income:
    0-80% median income: 35%.
    80-120% median income produce: 19%.
    >120% median income produce: 45%.

    I’m not sure where that tidbit came from as no referenece immediately comes to mind when I recall the information. But, I am sure I could find it again if it’s extremely important.

41. Rafael:
    Here’s a link to definitions: http://www.google.com/search?hl=en&defl=en&q=define:Progressive+Tax&sa=X&oi=glossary_definition&ct=title

    The top entry is:
    A tax structure where people who earn more are charged a higher percentage of their income (eg, the federal income tax).

    They all capture the idea that those with higher incomes pay a higher percentage of their income. That’s the way I’ve always understood the term.

42. Oh– on the statitics, those numbers add up to 100%. But what fraction of a low income persons income is spent on energy? It looks like the lower 1/3 of median incomes use more carbon per capita than the middle 1/3. It looks like the poorest group would be walloped on this carbon tax.

43. Lucia,

    Long ago, when I stored the definitions in my memory, a progressive tax was a tax in which the tax rate increased as the value of the item taxed increased. While a regressive tax was a tax in which the tax rate decreased as the value of the item taxed increased. When we talk about income tax, the number one talk about tax in America, everything works out fine, as income is what is the item being taxed. Too much talk about income tax has likely mutated the definitions. *shrugs* I’ll still roll my eyes and ignore the comment. 🙂

    Here is a back of the envelope look at a carbon tax with revenue redistribution.

    PS: The percentages should have been a percentage of the total carbon emissions. I need to find the reference that had those numbers. Give me a few minutes.

44. Lucia, a rebate would be applied at a flat rate set at the average of households. Poor families, according to the Census studies, consume more as a percentage of their income than wealthier families, but they still consume less overall. As the credit is rebated at a flat amount per person per household, only if poor families used more than wealthier families would it become regressive.
    They don’t, so its progressive. It operates, in short, much like flat rate taxes, which as the IMF has pointed out are progressive and, often, more progressive than income taxes, with their myriad tax arbitrage schemes.
    Checkout the tables on energy costs by quintile in Alaska (an extreme state for energy usage) http://community.adn.com/sites/community.adn.com/files/Fuelcostupdatefinal.pdf
    Under cap and trade, with the way the allocations were developed and the auctions income going to renewable producers, the result would have been regressive. That’s why Boxer threw in a rebate at the last minute.
    BTW.To make the current income tax “progressive” they had to create the Alternative Minimum Tax to deal with all the deductions. The ATM has proven to be a loser for the economy though great for tax accountants. We spend more on them than we ought, and less helping the poor as a result.

45. Raphael,
    I’m not an economist. But, I guess I’ve read it used both ways. A tax has a progressive structure is one defined as progressive your way. But, I also see it read as applied relative to a groups income over all.

    So, a flat sales tax applied to retail sales, though flat, is often described as regressive. The reason is that poor people must spend nearly 100% of their income of food, clothing and necessities. Others might save some for investments, or spend it on real estate or services that aren’t taxed.

46. Darwin–
    I know the general idea. Theory goes like this:

    Poor Guy: Pays $30 in tax, gets back $40. He’s gained $10.
    Medium guy: Pays $40 in tax, gets back $40. He’s gained $0.
    Rich guy: Pays $50 in tax, gets back $40. He’s paid $0.

    Of course… this assume the poor really do pay less of the tax in the first place. Given the effect of import/ export etc. I’d still like the analysis taking into account how costs pass along to the consumer in th end. My older sister buys $200 cashmere sweaters, I buy $20 cotton or acrylic. Or maybe wool, but not cashmere.

    I’m not sure I see that the tax loaded on the two things is going to result in her paying more of the CO2 tax on individual purchases than I do. After all, it’s not just a matter of her buying more stuff. She buys nicer quality stuff.

47. Lucia,

    I’m not an economist either. But I did sleep at a holiday inn express last night. (I also took a great many economic courses which I never use and likely misremember. 😉 ) Though I’ve often wonderd why people use the terms that way, it doesn’t matter how the terms are used. I understand the intent of the usage, even though I disagree with the usage.

    I found the reference for those first numbers. The numbers came from table 4. I’m not sure how any of that is useful to the current discussion.

48. comment 3820 lucia July 1st, 2008 at 3:09 pm

    The reason is that poor people must spend nearly 100% of their income of food, clothing and necessities.

    Necessities = energy. Plus, the others listed and everything else will include carbon tax.

49. I am against ANY federal tax.

    A tax as presented is supposed to accomplish something.

    A tax implemented by the federal gubmint will eventually include regulations favoring their favorites. (you pick your favorite evil corporation who corrupts virginal legislators with their money and influence) CFC’s affected only a small, uninfluential group compared to Carbon. Don’t expect comparable results.

    A tax implemented by the federal gubmint will have its revenues used for its intended purpose for a very short time after which the revenues will be wasted on (you pick your favorite charity/special interest group that lobbies for more CASH corrupting virginal legislators) I offer Social Security as the best example. Implemented with the best of intentions, it is now a bleeding hole of red ink from the IOU’s with which successive Congresses and Presidents have stuffed it.

    Basically it will be perverted to the point it will have little of its intended effect other than to give companies an excuse to raise prices and gubmint to waste more of our money.

    Just say NO to federal gubmint regulation and taxes!!! The unintended consequences ALWAYS outstrip the Good Intentions!!

50. Boris: what general welfare is (positively) affected when people can do things less expensively (without the CO2 tax) vs. more expensively (with a CO2 tax)?

    In effect, poor people should freeze in the winter and swelter in the summer because they can’t afford to pay for heating and or cooling?

    I’d argue that the MUCH greater harm to the general welfare comes when additional tax burdens are placed on people.

    Bruce

51. Lucia, thanks for the link.

    I’ve just put up another post that pulls together a number of significant recent references on rebated carbon taxes, that may serve as a useful jumping off point for you and others in trying to figure out what Hansen might be talking about.

    As Darwin notes, CarbonTax.org seems to be the most useful single site on carbon taxes, starting with their intro box on the right hand side.

    I note that Dot Earth had an earlier thread on Hansen’s plan, which was based on various proposals by Peter Barnes.

    The LA Times, and NY Times both ran editorials on carbox taxes last year.

    And here’s an interesting discussion by George Lakoff, on how difference between Warner-Lieberman and a “Cap and Dividend” approach (of which “tax and Dividend” is a derivative).

52. Lucia, thanks for the link.

    I have gathered in a new blog post (http://preview.tinyurl.com/46bbx2
    ) a few handy references on rebated carbon taxes of the type Hansen is presumably discussing.

    I share KuhnKat’s approach, but if our choice is between cap and trade (Warner-Lieberman mega pork) or carbon taxes, I’d take the taxes hands down. They are much more transparent and, IF coupled with a full rebate, both fair and efficient.

    (I lost an earlier post with additional links. Oh, well.)

53. Bruce and Dan,

    In this plan a 100% dividend is returned to Americans, so poor people actually gain under this plan since they use less energy than rich people. If they decide to conserve energy, they gain even more.

54. TokyoTom’s comment was eaten by the spam filter. He sent a few links that might interest readers. Each describes the tax plan in more details.

    http://www.carbontax.org/blogarchives/2008/06/24/hansen-lays-it-out-yes-a-carbon-tax/
    http://dotearth.blogs.nytimes.com/2008/06/06/james-hansen-tax-c02-emitters-pay-citizens/
    http://www.carbontax.org/blogarchives/2008/06/27/a-convenient-tax-june-2008/
    http://www.nytimes.com/2007/11/02/us/politics/04web-redburn.html
    http://www.latimes.com/news/opinion/la-ed-carbontax28may28,0,2888366.story?coll=la-opinion-leftrail
    http://www.carbontax.org/issues/carbon-taxes-vs-cap-and-trade/
    http://www.carbontax.org/blogarchives/2007/11/08/a-convenient-tax-%e2%80%94-issue-3/
    http://www.carbontax.org/winning-arguments/
    http://www.rockridgeinstitute.org/research/rockridge/comparing-climate-proposals-a-case-study-in-cognitive-policy (Lakoff)
    http://www.rachel.org/lib/cap_and_dividend.071213.htm (Peter Barnes)

55. To all: Any working examples of 100% tax dividend returned??? Although not my area of expertise and I’d appreciate others insight, it seems really unlikely that poor people will ever get anything close to “benefit” from such a tax plan. Poor people use energy. Poor people buy things that are products or services that are derived from energy. How is a tax on energy going to “help” them???

    Also, what are the costs for setting up a carbon tax system… someone will have to count the amount of CO2 derived fuel that each person uses. Someone will have to make sure that people are filling out their paperwork appropriately. Someone will have to ENFORCE the tax. All of which requires, well, energy! How can there possibly be a 100% return?

    Bruce

56. Bruce, You don’t count what people emit, you count the carbon content of the fuel or material going into the production process. It’s a content in, not an emissions out, which is cheaper to count and enforce. The exception would come from the release of emissions of methane in cement and coal production. Those will reguire monitors, but you aren’t talking about hundreds of thousands of places. As with any tax regime, there is bookkeeping, but it is lower than with a cap and trade and should require less policing.
    The question is where to set the rebate at to hold the poor harmless. Under any plan that seeks to curb or limit carbon emissions, there will be a cost and the question is what is the most equitable and efficient way to do so.
    A cap and trade system without a rebate hands the poor the cost in higher prices — the budget office has said cap and trade amounts to a tax. You would have to auction the credits and rebate them to hold the poor harmless.
    If you do nothing, what is the plan to lower emissions and encourage conservation?

57. No matter what, prices for everything WILL go up. Why? Producing stuff costs energy. Under this tax plan, the price for energy will go up.

    No matter what, there will be costs for administering the program.

    Someone pays those costs. All of those costs will be passed along to consumers. Poor people will pay as will rich people.

    So…. what’s the point? If one wants to attempt to solve world problems using taxes, then lets start with the really important problems first, shall we? When you get down to it, the effect of human emissions of CO2 on climate is pretty well down the list of priorities… at least viewed from the perspective of harm caused, lives impacted, and overall deaths.

    If the goal is to reduce human CO2 emissions, this type of tax isn’t gonna work (see the Kyoto experience). Why? A US based tax will ultimately fail to reduce emissions because there’s no way to enforce it globally. What it WILL do is increase the cost of doing business in the US (and whatever countries go along with this silly plan), it WILL push energy intensive production off-shore, further eroding the US economy and the economies of those who go along with these types of plans. It WILL help those countries that don’t implement these taxes, and you can bet that a whole lot of countries will not go along with this plan.

    So, if there are other countries that will continue to develop, continue to emit CO2, will continue to use lots of energy, the result is simply a shift in who it is that’s producing the CO2. Which really turns this into an exercise of economic redistribution.

    So, what really is the point? if a tax won’t actually be able to achieve the stated goals, if it won’t be able to reduce temperatures in a meaningful way, if it will negatively impact the economies of countries that implement it, if it de-prioritizes more meaningful programs, what’s the point?

    If the point is the feeling that “We have to do SOMETHING!!!”, I’d ask the question: why?

    The best evidence to date seems to imply that the addition of human produced CO2 has some effect on temps. What that effect is, no one really knows. Based on the evidence to date, it seems like it’s less than the IPCC projections, it’s WAY less than the Al Gore projections. And the reality is that despite all the rhetoric, despite all the hand wringing, whatever the negative effects of human emissions of CO2 might be, they are still NOTHING compared to the real problems that face the world today.

    Bruce

58. Poor people will pay as will rich people.

    You seem to be missing the main point of the 100% dividend. Yes, prices will go up, but poor people buy less and use less energy, so they will have MORE money. If they conserve energy they will have EVEN MORE money.

    It is more difficult to enforce the plan globally, but you must remember that the world wants to act on global warming and that we can use the threat of tarrifs to encourage other countries to implement a tax.

    Finally, your claim that the IPCC is wrong is not backed up by any fact or analysis I have seen.

59. I wonder if all posters here are North American .
    For there indeed IS a scientific approach to these issues that Dan Hughes mentioned – look at experimental data .
    They are all out there .
    Europe has 10 years advance on NA regarding the CO2 tax and we now know what it does .
    Europe has dozens of years of advance on AN regarding taxes on fuel and we now know what it does .
    Europe has 6 years davance on NA regarding biofuels and we now know what it does .
    You only need to look at the “lab” results .

    The CO2 tax (despite the name “the certificate trading” , it is indeed a tax) had for consequence an increase of power prices .
    The biggest emitters being the power companies , they immediately incorporated the tax in the power price and often actually added a bit .
    They did it for different reasons – the German who have much of cheap coal increased sharply , the French who are 80 % nuclear amusingly increased as sharply because they could afford to follow the German and stay competitive while making much more profit .
    Followed the refiners with another method .
    As the refining margins are traditionnaly poor in Europe , some refiners reduced runs and sold the “spared CO2” … presumably to power companies 🙂
    That had for result a reduction of production with a sympathetic side effect in form of increasing refining margins .
    The consumer paid this whole game and many more similar environmental games .
    The growth of purchasing power markedly slowed and EU , first world’s economy , stands now on the board of recession .
    Ah yes , I almost forgot CO2 . Well the emissions broadly continued to increase as the economical growth and begin to slow down now because the economical growth is slowing down .
    Get a severe recession , that is the surest way to reduce CO2 because the first order corellation of CO2 emissions is with economical growth .

    Now to fuel taxes .
    In most European countries , taxes make 50 – 70 % of the fuel price .
    The NA people probably don’t even dare to say the figure aloud .
    They have been introduced and then heavily increased for one open and one hidden reason .
    The open reason was energy saving (back then nobody bothered about CO2) and the hidden one was the necessity to increase the state revenues (cause being unemployment , retirement and health care) because the VAT (first revenue source) began to hit its limit .
    Today there is not one European country whose budget would survive without fuel taxes .
    Raphael got it brilliantly right even if nobody followed up – indeed the gasoline elasticity is extremely low .
    It is higher for diesel but as diesel consumption mainly comes from professional activities , here the taxes transit over to the customer .
    What happened ?
    Well , nothing because gasoline is inelastic and diesel grows like the economy does .
    So Europe consumes more fuel today than yesterday and will continue .
    There did happen things with the product mix diesel/gasoline but that is a complicated story that is little relevant to the issue here .
    Here again a severe recession would be the most efficient way crash the diesel consumption and probable even the specific gasolin consumption .

    Last to biofuels or other “renewables” .
    Here the politics was unambiguously CO2 driven .
    Let’s substitute to emitting fuels fuels with net 0 emission aka biofuels .
    But as people wouldn’t do it spontaneously (it is necessary to change cars , modify distribution networks , logistics , not mentionning that it would generally increase the prices) , they must be forced .
    So most countries introduced a tax/penalty system (called “general tax on poluting activities”) that forced refiners and marketers to blend a certain amount of bio in the classical fuels . If they do it they pay nothing , if they don’t do it they pay a sever penalty (I won’t go in detail of the mechanism but that’s the idea) .
    As the professionals , subject to the tax had not a clue about the prices , the availability and the timing they could only calculate the potential tax and … passed it over to the customer .
    Of course then they did all that was necessary to comply with the obligation and in most cases avoided the tax .
    The result was that the fuel marketing companies never did so much money in history as since this tax system was introduced .
    However the idea of “forcing” a fuel substitution by arbitrary half a…d tax measures was so moronic that now even the generally uneducated public begins to realize that they have been taken for idiots by politically motivated environmentalist measures .
    Oil at 140 $ indeed also helped to speed up the waking up .

    So what is the lesson ?
    Europe (I should rather say some European political morons) declared that it was its “historical role” to lead the world and especially to teach the truth to the ignorant americans , who had yet to see the light of the principle of precaution and the joys of carbon taxing .
    As the public only understood the buzzwords (fight against poverty , decrease our environmental imprint , duties to the Third world , save the planet etc) it thought that it was a free lunch .
    Of course it wasn’t .
    The price paid has been a general and gradual decrease of the standard of living and a general and gradual decrease of economical growth .
    In polls in all EU countries the issue No1 has now become the “problem of decrease of standard of living” and people begin to get increasingly nervous with appearing violence trends .

    In the late nineties and especially with Bush (refusing Kyoto f.ex) , US have been my hope because I believed that the historical american pragmatismus would prevent them from comitting economical suicide whereas Europe has been known for a thousand of years to periodically exhibit exceptionnal suicidary capacities .
    Perhaps the NA would stop us before it was too late .
    Now reading what I read in NA media and on blogs like this one , I realize that sadly Europe might have indeed have taught the light to the ignorant americans .
    But then we’ll both crash down together well before any hypothetical 1°C temperature increase in 100 years has time to make disappear some forgotten pacific island that nobody cares of .

    It makes me fear where my children might flee once the s..t begins to hit the fan in the so called “developped countries” .
    Perhaps China or Brazil .

60. Thanks for the info Tom.

    I’m far far from being a Certified Economist, even farther than being a Certified Climatologist, and I haven’t at all started doing my homework on this subject, but let me say the following.

    100% dividend isn’t going to happen. There will be administrative costs, and if the system set in place to accomplish that follows all historical data for such things, it will not be the picture of efficiency, but quite the opposite. Of course the administrative costs could be taken from the general revenues.

    If the taxes are collected at the source, like maybe countries that export significant amounts of carbon-based raw materials, how will the distributions of the consumption be determine so as to ensure that everyone gets 100% return on their individual costs. To say that the poor can actually make money requires that the actual amounts paid for carbon are determined on an individual basis. That too is not going to happen. Are methods to ensure that individual costs paid are in fact returned? How do they work? It is easy to see the situation for which a lower-income family spends much larger than the average of its income for carbon-based consumption.

    If it’s a 100% dividend method, where does the money for replacing a very significant fraction ( 100% in some cases ) of enormous (and I do mean enormous) infrastructures come from?

    It is my opinion that many people, even those that should know, have yet to even begin to grasp the time scales that are associated with displacement of even small segments of infrastructures. Consider the evolution from water power via waterwheels, to conception of the steam engine, to a steam engine that was acceptable to consumers, to electric motors, to distributed electric motors. And of course there is the internal combustion engine branch too also consider. It was not until the power source ( a motor ) got distributed down to where it was needed on individual machines that significant gains in efficiency, productivity, and energy conservation were achieved. And, by the way, an important part of the efficiency gains came only due to large central-generating electricity systems for which power production per unit volume continuously increased over the same time period. As these high-power-density sources are attempted to be replaced by diluted sources having significantly lower density, efficiency will decrease. Or consider the case of wood being displaced by coal and coal (almost) being displaced by nuclear. Both these examples involve time scales of 100s of years, as shown by historical data.

    And many people, even those that should know, haven’t yet realized the costs involved. It’s been said that nobody knows what a trillion of anything is. I’m beginning to wonder if most people aren’t even aware of what a (non-UK) billion is.

    Finally, taxing the source is based on a false analogy. In all previous cases of the commons being harmed, the harm was at the source, plus those downstream of the source of the harm did not participate in the ‘destruction of the commons’. In the case of carbon and energy, those downstream of the source are in fact the greatest source of the harm, by far. I’m suspecting that movement leaders have decided that yet another attack on Big Whatever will be very much easier to pull off rather than telling those who will in fact bear all the costs that they will be bearing all the costs.

    In the cases that I can think of for which those downstream of the primary source did in fact contribute to the ‘destruction of the commons’ the source was more or less outlawed and simply banned from use. Hey, there’s an idea, let’s ban consumption of carbon 🙂 And at least one of those has proven by historical data to be misguided. In another case, all local distributed sources have been modified so as to effectively reduce the harm.

    Have at me.

61. TomVonk,

    Europe? Please! There should be a study to determine how many Americans can find it on a map. 🙂 On the bright side, not all Americans are as oblivious. There is an MIT report commissioned by the Pew Center on Global Climate Change which takes a look at the European Laboratory.

    Get a severe recession , that is the surest way to reduce CO2 because the first order corellation of CO2 emissions is with economical growth .

    While there is some wiggle room in the “Severe” of your recession, the corellation isn’t as strong as you seem to believe. Back in 2004, the Oxford Institute for Energy Studies did a study comparing per capita emissions with per capita GDP. While this is pre-EU carbon cap, it does show that, for developed countries, increase in GDP is not dependant on increase in carbon dioxide.

62. Raphael

    The study GDP/emissions you linked is not better than (or as bad as) similar studies .
    The problem here is not so much the figures even if “correct” emission figures are very hard to come by and generally contain a big part of estimations , but the interpretation of the figures .
    A simple model explains things better .
    Coupling 1 Energy emissions
    Coupling 2 Transport emissions
    Coupling 3 Energy and transport GDP

    The strongest coupling is 2 .
    99 % of what you and me consume from pills through refrigerators has been brought to us by a truck .
    The trucks emit proportionaly to kg.km transported . Perfect correlation .
    The personnal cars also emit proportionaly to kg.km transported but here is a saturation effect and rather a kind of inverse correlation .
    As the GDP increases in developing countries , people buy cars so the per capitas emission increase with the GDP .
    The important word here being “developing” – the study doesn’t cover countries where this correlation is very strong (China , India etc) . US and most of western europe are saturated so the personal car coupling is weak there .

    Coupling 2 is very strong globally with important geographical dispersion .
    France with 80 % nuclear power generation and the rest hydraulic is almost completely decoupled .
    China with its 1.5 billions of tons of coal production that has been increasing around 7- 10 % (equivalent rates as the GDP) is extremely strongly coupled .

    The dispersion of the coupling 3 is great too .
    One extreme are saturated , rich , little industrialised countries (f.ex Denmark) where the coupling is very weak .
    At this stage it is important to mention the trap of looking only at per capita figures .
    It has the merit to eliminate the population variations but a redhibitory flaw that it prevents to see what matters and what doesn’t .
    Putting on the same chart Denmark or Belarus with their couple of million people and China (or India) with their 1.4 billions is obviously misleading when trying to estimate GLOBAL trends .
    For all practical purposes what matters here are places with :
    a) strong and developing industry
    b) large and/or fast developing populations
    c) starting GDP per capita figures (lower ones increase and higher ones saturate) .

    I have amused myself once to calculate what the world will be like once China achieves a per capita GDP equal to the one of Hungary today .
    Why Hungary ?
    Because their development after the fall of communism was well managed and because their absolute level today is satisfactory to the population without being “too rich” .
    Well we’ll add then ONE MORE USA economy to the planet !
    If China happened to ambition a bit better than that and come to the level of Portugal , we’ll add TWO USA to the planet .
    Useless to say that this will happen with all 3 couplings very strong .

    So indeed the fastest and surest way to reduce the overall emissions is to crash the world’s economy or the world’s population (but the latter is harder to do) .
    Is the reciprocal true too ?
    Well looking at Europe , it appears that increasing energy and transportation prices via CO2 taxes and similar “environmental measures” with no added value leads indeed to the reduction of growth rates and very certainly to the reduction of the purchasing power of the population .

    At least for Europe , it is only a matter of time untill the public realizes that it is becoming poorer because of the amplification and acceleration of the “environmental policies” and then the backlash could be terrible .
    We see signs of it already today – the fishers in France , Italy and Spain are blocking ports and burning buldings because they don’t accept anymore getting strangled by biodiversity “laws” .
    The truckers in many countries are blocking refineries and crashing the trade because they don’t accept taxes on fuel anymore and they promiss that they’ll radicalize if they are not heard .
    The average citizen looks at all that rather with sympathy because he is being hit by price increases in the same way and begins to blame politicians (and foreigners) for the reduction of his purchasing power .

    As for the US americans , I would not like to be a voter there .
    There is no choice – whether voting for McCain (who lives in another century) or for Obama (who is a barometric void) , both promiss CO2 taxes and regulations .
    There’s only Al Gory missing but Obama is surely able to catch up with that oversight .

63. TomVonk,

    One thing I can safely say is that your posts make me think. 🙂

    First, there is nothing wrong with using per capita in the study. When comparing GDP with CO2 emissions, the global trends you say matter, don’t. Look at it this way, if the study was about global emissions and global GDP, showing these numbers per capita would not change the ratio of the numbers, only the magnitude. Using per capita allows us to compare GDP and emissions growth in different countries on a common scale.

    Second, I will concede that there are sectors included in the GDP which are tightly bound to carbon emissions, but the comparison shows that the change in GDP of a developed nation is not dependant on them. Or to phrase it another way, a severe recession in developed countries will not guarantee a reduction in emissions from those countries.

    Third, I will concede that a developing nation’s GDP is closely related with their carbon emissions. But from my perspective, this leads back to the definition of success for the tax.

64. now we got astronomers ( hansen) and Linguists ( lakoff) talking about taxes. I engineers can talk about climate science

65. Steven mosher– Well, obviously we are going to discuss climate science. Anyway, what are blogs for?

66. Steven, Hansen’s resume is here: http://www.columbia.edu/~jeh1/cv_hansen_200702.pdf. Are you suggesting that Hansen’s studies and training in solar systems and planetary systems leaves him incompetent not merely to discuss climate policy, but even to research, study and write on the consequences of continuing GHG emissions?

    I know that it is controversial for some to think that scientists should ever have an opinion, but I hadn’t heard that Hansen lacks relevant scientific knowledge and expertise on which to ground any concern that he may express.

    As for Lakoff, certainly he is “spinning” a particular policy view. How he differs from the sophisticated PR campaigns run by various parties at interest and by politicians is that Lakoff is doing it openly and explictily, for purposes of public debate, rather than trying to manipulate opinion in a clandestine manner.

    I linked to Lakoff because he actually has an interesting discussion of the principled differences between cap and trade and a rebated, auctioned cap. Did you not find his discussion useful or interesting?

    TT
    http://mises.org/Community/blogs/tokyotom/default

67. TokyoTom–
    Steven is indulging is irony. He does that so frequently, those at climate blogs pretty much suspect it the moment they see his name at the top of a comment.

    If you hang around climate blogs enough, you’ll find it’s fairly common to read various bloggers and people in comments at blogs suggesting engineers, economists, statisticians and physicists can’t comment on climate sciences and that only climate scientists may do so.

    So, Steve’s irony quip is to note that one of the major climate scientist is an astronomer by training (suggesting that somehow people without formal training in climate scientist just might be able to gain some understanding.) The other irony is that climate blogs are now suggesting we learn economics from linguists. The final irony is that many of those working in climate science have degrees outside climate science. The discipline draws heavily from those who were trained in other fields.

    In fact, Steve is not saying climate scientists can’t discuss politics.
    It just reads that way.

    He thinks the absolute opposite. It’s entirely permissible for them to discuss economics. Just as it’s permissible for engineers, economists, statisticians, physicists and even linguists to discuss some results of climate science!

    Your links are interesting, and if I know steven, he will read them. Given steves educational background, I can assure you he loves the idea of a linguist writing about economics!

68. Lucia, thanks for the exegesis on Steve`s irony. That kind of thing is always the toughest for newbies to judge.

    I admire anyone who is still road-testing his view of reality. That`s hard work, as we aren`t particularly well-evolved for that, but instead are hobbled by perceptive filters and cognitive predilections.

    Regards,

    Tom

69. Dan, was #3870 addressed to me, or TomVonk? If to me, then let me respond as follows:

    100% dividend isn’t going to happen. There will be administrative costs.
    No one particularly trusts politicians not to use new revenues for more social engineering/pork. But conceptually it`s possible to rebate the whole tax, net of administrative costs – which costs would be far lest than the costs of a cap and trade system

    If the taxes are collected at the source, like maybe countries that export significant amounts of carbon-based raw materials, how will the distributions of the consumption be determine so as to ensure that everyone gets 100% return on their individual costs. … It is easy to see the situation for which a lower-income family spends much larger than the average of its income for carbon-based consumption.

    This is really not so tricky – the wealthy consume far much more energy per person than do the poor, so if revenues are captured across the economy (whether upstream at the point of first sale or midstream or downstream) and the rebated per capita, the result will be progressive, that is, a per capita transfer from the wealthy to the poor and middle class. Thus a rebate would elicit long-term support from voters.

    If it’s a 100% dividend method, where does the money for replacing a very significant fraction ( 100% in some cases ) of enormous (and I do mean enormous) infrastructures come from?

    The tax would shift demand, increasing it in some directions and decreasing it in others. Investors – the utilities, industry, road and infrastructure builders, lenders and equity and debt capital markets would continue to invest as they do for their own reasons – chiefly because they think they can make money providing something that they think people will pay for.

    It is my opinion that many people, even those that should know, have yet to even begin to grasp the time scales that are associated …. And many people, even those that should know, haven’t yet realized the costs involved. It’s been said that nobody knows what a trillion of anything is.

    True, but many people DO understand these time scales, which is one of the reasons why many utilities and oil and gas firms are in favor of carbon taxes, because they see the need to start changing the economics now, before a whole new fleet of coal plants that don`t include CCS are brought online.

    Finally, taxing the source is based on a false analogy. In all previous cases of the commons being harmed, the harm was at the source, plus those downstream of the source of the harm did not participate in the ‘destruction of the commons’. In the case of carbon and energy, those downstream of the source are in fact the greatest source of the harm, by far.

    Sorry, I disagree. The classic cases of pollution all involve upstream sources and harm felt downstream. In the case of industrial pollution, all consumers who were getting cheap products that did not reflect the costs of pollution contributed to the destruction of the commons. This is still going on today with respect to air pollution, ground and water pollution, overfishing, destruction of tropical forests, etc., even when these activities take place abroad. We import cheap goods, while local people or the commons generally feel the harm.

    I’m suspecting that movement leaders have decided that yet another attack on Big Whatever will be very much easier to pull off rather than telling those who will in fact bear all the costs that they will be bearing all the costs.

    I understand your suspicion, but I think it`s more like this: the enviros want to see action and don`t particularly want to see major polluters given free rights to pollute, so that consumers get all of the costs, but fossil fuel interests like making money while shifting risks to society. Enviros may be reluctantly concluding that a dirty deal (that compensates the fossil fuel industry) is better than nothing. In addition, our fearless Congresscritters are both spineless and venal. They are afraid to actually “tax”, as they have no intention to rebate voters would be onto them, so they prefer the indirect cap and trade, which allows them to bureaucratize the economy and rather opaquely dole out favors to those in the best position to buy them. Warner-Lieberman was really porky; we`d be better off if all of the taxing was in the open, as it`s less likely to be corrupted and, if rebated, will be more politically sustainable.

    Regards,

    TT

70. TokyoTom–
    I don’t trust politicians to return all the money, partly because I’m not sure I even want them to do so! I have always been infavor of higher gas taxes to better maintains roads, and wanted a portion to maintain public transportation.

    I think good, widely available public transportation is a huge benefit to people at all income levels, and particularly the poor. Without it, everyone needs to buy a car. This is a large capital expenditure for the poor, the young and the old.

    But, I know that if I’m for skimming off some of the money and not returning it, others will propose other projects I don’t like. So, no, I don’t trust politicians to return all the money.

    On the other hand, a direct tax does seem less costly, and less subject to behind the scenes machinations than cap-and-trade.

    and the rebated per capita, the result will be progressive, that is, a per capita transfer from the wealthy to the poor and middle class. Thus a rebate would elicit long-term support from voters.
    Well… there are those who think the tax system is already too regressive. I disagree– but these people exist. Still, as a generality, I think we could more likely pass a tax that is thought to be progressive, or to positively benefit the poor, rather than the alternative.

    In reality, this isn’t even marketed as a progressive tax, but almost direct income transfer from wealthy to poor. That starts to sound like socialism, which has not gained huge support in the US.

    My major question is just that I’d like to see an analysis that showed that this would end up progressive and how progressive. Or, if it’s money transfer from the rich to the poor, how much is being transferred?

71. Why is it seldom, if ever, suggested that the same careful and comprehensive methodology that has been applied to The Climate Change Problem be applied to investigations of proposed solutions? That’s how science works. And now we have to note, because various disciplines of engineering should absolutely be required to enter the problem-solution phase, that’s how engineering works, too.

    It should not be possible to run arbitrary experiments on humans. Those disciplines that use humans in experimentations are always required to follow specific mandated guidelines. There are not exceptions.

72. Some excellent commentary here.

    Prior to enacting any AGW amelioration taxation schemes, there are a few prerequisites, I think.

    For example, a rigorous cost/benefit analysis of “doing nothing” to prevent AGW versus various schemes (e.g. taxes) to, perhaps, slow AGW down. That is, the dollar cost of just letting AGW happen and fixing the problems as they arise versus the dollar cost of the suggested proactive prevention.

    Prior to that analysis, we (the world) needs to know, realistically, the physical harm/good associated with unrestrained AGW. Perhaps, calculated accurately, the good outweighs the harm. That is, maybe we want AGW — but, just don’t know it yet.

73. Allen:

    Prior to enacting any AGW amelioration taxation schemes, there are a few prerequisites, I think. For example, a rigorous cost/benefit analysis of “doing nothing” to prevent AGW versus various schemes (e.g. taxes) to, perhaps, slow AGW down.

    It’s not like economists and others haven’t been studying the costs and benefits of climate change and actions to mitigate for decades now. One can practically throw a dart and hit a well-respected Nobel prize-winning economist who says that a cost-benefit analysis is in favor of prompt action. Here’s a start if you’re interested:

    http://www.reason.com/news/show/122960.html
    http://mises.org/Community/blogs/tokyotom/archive/2008/06/20/gao-releases-report-summarizing-views-of-leading-economists-on-climate-change-policy.aspx
    http://mises.org/Community/blogs/tokyotom/archive/2008/06/06/bob-murphy-plays-with-dice-calls-nordhaus-reluctant-advocacy-for-a-gradualist-carbon-tax-over-eager.aspx
    http://mises.org/Community/blogs/tokyotom/archive/2007/12/16/the-social-cost-of-ignoring-carbon.aspx

    Richard Nordhaus, 2008, http://nordhaus.econ.yale.edu/Balance_2nd_proofs.pdf
    Joseph Stiglitz, A New Agenda for Global Warming, http://www.bepress.com/ev/vol3/iss7/art3/
    Kenneth J. Arrow, Global Climate Change: A Challenge to Policy, http://www.bepress.com/ev/vol4/iss3/art2/
    Thomas C. Schelling, Climate Change: The Uncertainties, the Certainties and What They Imply About Action, http://www.bepress.com/ev/vol4/iss3/art3/
    Richard Tol, “THE SOCIAL COST OF CARBON: TRENDS, OUTLIERS AND CATASTROPHES”,
    http://www.fnu.zmaw.de/fileadmin/fnu-files/publication/working-papers/margcostmetawp.pdf
    Marty Weitzman: “On Modeling and Interpreting the Economics of Catastrophic Climate Change”, February 8, 2008; http://www.economics.harvard.edu/faculty/weitzman/files/modeling.pdf

    Prior to that analysis, we (the world) needs to know, realistically, the physical harm/good associated with unrestrained AGW. Perhaps, calculated accurately, the good outweighs the harm. That is, maybe we want AGW — but, just don’t know it yet.

    Um, ever hear of the IPCC reports, which are really just digests of the science literature?

    The chief problems that have delayed action are that:

    (1) the climate obviously involves a global commons – the atmopshere – that no owns, so no single nation can act effectively by itself. We manage similar commons, like ocean fisheries very poorly. They are in fact open access, unpoliced, winner-take-all type scrambles to use before others, with “management” occurring, if at all, only after the resource crashes. We handle our purely domestic commons somewhat better (but we’ve still managed to destroy the salmons fishery, and acid rain continues);

    (2) the effects of GHG emissions are not all felt immediately, but on a long-term basis (centuries), so that present generations do not feel the costs of their own actions, but those who preceded them which are already there, so that acting to mitigate GHG emissions carries an immediate cost without a matching immediate gain;

    (3) the costs and benefits of climate change are not evenly shared. In fact, the costs (and few benefits)are largely felt by the poorer tropical nations, while temperate nations experience both benefits and costs, also unevenly shared; and

    (4) those capturing the greatest benefit from allowing GHG emissions to continue to be free, while costs are shifted to others, have invested heavily in securing government inaction.

    TT

74. Allen, another problem of course is cognitive:

    – since climate change doesn’t happen overnight and is an overlay to a very noisy system, it is difficult for any of us individually to directly experience and confirm that it is occurring – unlike matters more immediate such as the change from day to night, seasonal changes in weather or other phenomena we can confirm with our own eyes even if we don’t understand them.

    – thus, coming to a conclusion that climate is changing and that man is contributing thus inevitably involves soem degree of reliance on others, even among scientists.

    – where we have a contrary belief or fall into a particular group that has a contrary belief, it is extremely difficult for us to change our minds. Rather, we have predilections (cognitive filters even) to exclude or explain away inconsistent information, and often find ourselves suspicious of and arguing on an ad hominem basis about the good sense and motives of others. This is an artifact of our tribal nature.

    The discussion over climate change is just one of manifestation of these tendencies. Debates over evolution and politics are other arenas.

75. Dan, Why is it seldom, if ever, suggested that the same careful and comprehensive methodology that has been applied to The Climate Change Problem be applied to investigations of proposed solutions? That’s how science works. And now we have to note, because various disciplines of engineering should absolutely be required to enter the problem-solution phase, that’s how engineering works, too.

    Interesting observation. Are you aware that we are now running an uncontrolled, planetary-scale experiment relating to the climate system, the experiement is picking up speed, with an increasing lack of control by Western nations, and none of us has an ability to step away from the experiment? Does your admirable concern for “careful and comprehensive methodology” extend to such experimenting?

    Perhaps you can see that it is the nature of the experiment that is itself the answer to your question. As the experiment/Problem is a public and not a private one, there is no single private party analyzing alternatives and deciding on the basis of costs, benefits and risks what proposed solutions are preferable. Rather, we have a fight between groups with varying preferences over what to do, at what cost and for whose benefit, with politicians at all times trying to maximize their personal interests as well.

    There is, of course, an open debate on these issues, but it is rather striking that the Bush administration never commissioned any of its scientists (or economists) to review possible solutions. It’s almost as if they didn’t want to have such knowledge, as it might prompt even greater calls for action. (I wonder who that benefitted.) What we have instead are a few scientists leaving their academic and scientific dens to venture out into the policy agenda on their own.

76. Lucia,

    I don’t trust politicians to return all the money, but unlike you I certainly do not favor government expenditures, which tend to spread costs to axpayers generally while concentrating benefits on a few. What we end up with is the distorting pork-barrle politics that Dems were once famous for – though they’ve now been out-done by Republicans. The interstate highway system has been very distorting and is responsible for our painful gas addiction.

    Where you refer to “good, widely available public transportation”, prefer “mass transit”. Public transit is often an expensive, poorly administered boondoggle. This is why the Japanese have privatized their public transit.

    As you mention, support for federal energy spending is an invitation not only for massive waste (Synfuels) and distortion (biofuels), but politicized squabbles by groupd with different preferences.

    I would prefer a direct tax over cap-and-trade precisely for the reasons you mentioned. Also, because it is more transparent and will obviously raise prices, voters will pay more attention, demand more fairness, and as a result be more likely to support it in the long run over cap and trade.

    Some might sell carbon taxes as “almost direct income transfer from wealthy to poor”, but even then I think it will win support from the wealthy, who are actually more interested in the poor in seeing action taken on climate. The wealthy have much more, per capita, to lose from the continuing misuse of the atmospheric commons. Also, if you’d read a little deeper you’d note that the tax and rebate proposals have roots in the concept that rights to use the atmosphere should be divided conceptually on a per capita basis among individuals rather than given directly to the largest users or owned by government. This is hardly socialistic.

    Regards,

    TT

    My major question is just that I’d like to see an analysis that showed that this would end up progressive and how progressive. Or, if it’s money transfer from the rich to the poor, how much is being transferred?

77. TokyoTom,

    Thanks for the links.

    Nordhaus seems particularly interesting. Thing is, even that report indicates a lot of “expert opinion” underlies the studies (which proceed with much attention to detail). In my experience with “big science”, “expert opinion” means off the top of the head “guesswork”. And, also, being opinion, it is subject to subjectivity (not objectivity).

    What I would be looking for would be objective, impartial, quantifiable scientific and engineering evaluations across all relevant disciplines in place of “expert opinion”. These evaluations would need to be on the scale of the IPCC, but without its political ties and agendas — to justify the upheavals and costs some AGW amelioration plans seem to portend.

    I fear the time when such studies could be undertaken, has passed — as the world seems to be moving on without it (e.g. current G8 meetings).

78. TokyoTom,

    Also, if you’d read a little deeper you’d note that the tax and rebate proposals have roots in the concept that rights to use the atmosphere should be divided conceptually on a per capita basis among individuals rather than given directly to the largest users or owned by government. This is hardly socialistic.
    

    How can a concept, which removes the right to use the atmosphere from a nation’s sovereignty and conceptually redistributes that right equally among the people, be anything but socialistic?

79. Allen:

    What I would be looking for would be objective, impartial, quantifiable scientific and engineering evaluations across all relevant disciplines in place of “expert opinion”. These evaluations would need to be on the scale of the IPCC, but without its political ties and agendas — to justify the upheavals and costs some AGW amelioration plans seem to portend.

    Allen, I`m not sure what you`re saying. What are “amelioration” plans? If scientists and engineers “evaluate” such plans, how is this not “expert opinion”? And are those the groups able to determine costs and benefits, or economists, who have done reams and reams of analyses on climate change and climate change policies over the past twenty years.

    And why do you want a single master/massive study? And would your really expect that the parties fighting to advance their own interests would not do their best to cook the books, so that such a project would be very controversial?

    the world seems to be moving on without it (e.g. current G8 meetings).

    The fact that a hugely important aspect of climate change policy takes place at global shows both that a single cost-benefit document is impossible, but not needed. At the global level, climate policy is not imposed but AGREED, so that negotiations between nations are very much like voluntary negotiations among resource users, like tanchers over how to close and manage a range. The prisoners dilemma aspects are not encouraging, as it`s easy to see how we managed to trash the oceans etc.

80. Raphael: How can a concept, which removes the right to use the atmosphere from a nation’s sovereignty and conceptually redistributes that right equally among the people, be anything but socialistic?

    There`s a good point here, but you`ve got it backwards. Who says that “the nation” owns our atmosphere? Instead, at present the atmosphere is an open-access, unmanaged commons that we all have rights to use (essentially “owned” by all of us), and it is efforts to use the state to regulate it – via cap and trade or carbon taxes – that conceptually says that it is the state rather than all of us who own the atmosphere. Thus, it is the use of the state that “socializes” the commons. If the state did nothing, eventually society would develop norms, legal doctrines and so on that more explicitly apply to GHG emissions and activities affecting climate, which since they don`t involve the state, would not be socialistic. It`s just hard to see such an evolution as anything but a long way off.

81. TokyoTom Says,

    “…I`m not sure what you`re saying. What are “amelioration” plans? …”

    The amelioration plans include all the responses to perceived AGW (e.g. carbon taxes, windmills, biofuels, CO2 sequestration, etcetera). These plans are already in the works to various degrees. So, I was not communicating anything about them.

    Rather, while some may believe that AGW, itself, has been sufficiently proven, it seems that the “good and harm” have not been objectively established. Rather, the IPCC, “green” spokespersons, and media have stressed (and often sensationalized/exaggerated) the potential harm (which is based less on solid calculations and more on opinion). The “good” impacts of rising CO2 and rising temperatures have received almost no comprehensive study or publicity. Before committing trillions of dollars to amelioration, we need harm/benefit studies of AGW/CO2 — developed independently of the IPCC (and independently of people who stand to make a lot of money if nations follow through on amelioration).

    TokyoTom Says,

    “…And why do you want a single master/massive study? And would your really expect that the parties fighting to advance their own interests would not do their best to cook the books, so that such a project would be very controversial?…”

    Exactly! Your quote describes the IPCC study which, in my opinion (having read much of their recent report and events surrounding it), was not impartial. Rather, it was “goal directed”. AGW was assumed and generally regarded as bad. Moreover, generally, the IPCC studies were lead by people who already had decided AGW was real. The IPCC was merely a forum for AGW activists to express their concerns to the world (dissenting voices on the study teams were muffled, if not silenced).

    In any case, I propose a “counter study”. To attain credibility with the masses and politicians, an officially commissioned study of similar “size” to IPCC may be needed (e.g. 2500 scientists and engineers). Perhaps this study should be goal directed and run by skeptical scientists (since you are concerned it could not remain impartial — me too). The goal: disprove that “AGW is a serious issue needing immediate attention” or similar (note: I did not say disprove AGW itself — though that could happen). If the study can do that, then “the issue/science is not settled” — and world leaders should rethink pending CO2 restrictions etcetera. If the study can not do that, then maybe “the AGW issue is settled” and CO2 amelioration plans could proceed (but with a more concrete/realistic estimate of good and harm making the planning more effective).

    Anyhow, a battle of the studies seems judicious. Considering the infinite lifetimes and humongous estimated costs of AGW amelioration plans, a few billion dollars and, say, 5 years for the “counter studies” I propose would be a trifling investment.

82. TokyoTom,

    I suppose I may have it backwards on some conceptual and theoretical level. But, in practice, there are precedents in the Supreme Court of the United States concerning the atmosphere and sovereignty.

    MASSACHUSETTS v. EPA uses language like, “That Massachusetts does in fact own a great deal of the “territory alleged to be affected” …”

    STATE OF GA. v. TENNESSEE COPPER CO. uses language like, “In that capacity the State has an interest independent of and behind the titles of its citizens, in all the earth and air within its domain. It has the last word as to whether its mountains shall be stripped of their forests and its inhabitants shall breathe pure air.”

    In order for your “long way off” theoretical concept to be realized in the United States, right to use the air must first be removed from the sovereignty of the states before it is given equally among the people.

    So, I am again driven to ask, “How is this not socialistic?”

83. My apologies, that quote from Mass v EPA refers to what is being harmed by CO2 emissions. I had no intent to mislead by taking the quote out of context.

    Substitute, “Just as Georgia’s “independent interest … in all the earth and air within its domain” supported federal jurisdiction a century ago, so too does Massachusetts’ well-founded desire to preserve its sovereign territory today.”

    While this may refer to the damages, it re-affirms that the state does have sovereign interest in the air.

    🙂

84. Raphael, I’m not sure how to respond as I’m afraid I fail to understand the point you are trying to make. Are you suggesting that you’d prefer a state and local approach to climate change rather than a national or global one? That any action taken by the federal government is “socialistic”? Or a more narrow one that the federal government has no authority to regulate or tax GHG emissions?

85. Allen, thanks for the further explanation of your concerns. I see I misunderstood you – you are looking for a “do over” of the IPCC reports. Well, it’s clear that the reports are a work product that has been approved at an inter-governmental level and not purely on a private basis, so it is easy to understand concerns that the report may be partial, incomplete or wrong, like any other “government report”. Perhaps it would have been better had the IPCC been structured differently, but we have what we have (approved by the Reagan administration, BTW); it would be interesting to hear your understanding of how the IPCC works and what alternative process would be better and how it would work.

    BUT the IPCC reports of course are in important ways different from typical government reports:

    – no single government prepared this report. Rather, it was prepared by scientists from around the world (based on scientific literature published by 2005) and each nation – all with very different climate and economic situations and interests – acted only in approving the language in the Summaries for Policy-Makers, with the result that the reportsare essentially conservative documents, catering to the least common denominator and excluding the most recent science (the reports are basically summaries of the published scientific literature, not any new work); certainly no one made the Bush administration (certainly no fan of taking action on climate change) (or China or India) approve the reports;

    – the reports have been published and updated over the past 20 years on a rolling basis, giving all ample opportunity to criticize;

    – the reports do not dictate policy, which is rather up to each nation – each of which of course retains the ability and responsibility to conduct further cost-benefit and risk analyses when deteriming domestic policy and what position to take on international coordination, so there are ample bites at the scientific, economic and political apples, and nothing etched in stone by the IPCC;

    – there are simply no major criticisms of the IPCC reports or process from private industry, or demands by private groups to prepare their own reports (though of course they are free to do so). Exxon scientists, for example, sit on the IPCC panels.

    As for the benefits of warming, I think that these are fairly well-known and widely discussed. Certainly no one is stopping anyone from talking about them (and they are addressed in the IPCC reports).

    And about the “humongous estimated costs”, let me make a few remarks. First, I oppose any government investments in mitigation or in choosing and underwriting new energy technologies. This would be a great way to let politicians and bureacrats waste trillions by directing them to insiders (a la Synfuels, ethanol and the war on terror).

    Second, as already noted, there are alot of reports by prominent economists that conclude that, on a cost-benefit basis, action to price carbon is warranted now (skepticism about whether the likely costs of letting the government do anything will be less than the costs of government doing nothing remain worthwhile).

    Third, frequent experience tells us that if we do not introduce property rights or management regimes for open-access resources, the likely result is undesirable waste/destruction of resources. In fact, it is this experience that itself led to the development and expansion of private property rights to begin with. There are good arguments that government regulation is not as efficient as letting people sue each other under common-law rules for pollution, etc., but government regulation of air, water and ground pollution did NOT destroy the US economy (or any others), despite the arguments of polluters to the contrary. The real question is not whether we should control GHGs, but how long should we wait before we start. On this, as no one owns the climate or atmosphere, everyone gets to have an opinion. But while you’re busy with yours, don’t forget to notice that the fossil fuel companies, major users and China/India do NOT disagree that their activities create climate risks. They just want to keep imposing that risk, for free, on everyone else. The current set of rules are just what the GHG emitters want, and they don’t mind doing what they can to forestall any rule changes.

    TT

86. TokyoTom says:
    “there are simply no major criticisms of the IPCC reports or process from private industry”
    Have you read any of the work done by MicIntyre and McKitrick? They have carefully documented numerous failures with the process the IPCC uses to produce its reports. These failures are significant enough that we cannot really use the IPCC reports as the final word on any topic.

    “there are alot of reports by prominent economists that conclude that, on a cost-benefit basis, action to price carbon is warranted now”
    All I know of is the Stern report and his reports was dismantled quite exhausitively by other economists. Bjorn Lomberg also makes a pretty compelling case for adaption rather than mitigation. In other words, I don’t think it is possible to demonstrate conclusively that the cost of acting now is less than the cost of acting in the future. What you choose to believe is a matter of faith – not fact.

87. comment 4142
    TokyoTom (11 comments.) July 13th, 2008 at 11:54 pm

    The current set of rules are just what the GHG emitters want, and they don’t mind doing what they can to forestall any rule changes.

    I think that we, and I mean all of us and in absolutely everything we do, are GHG emitters. I am not aware of any ‘rules’ that apply to us. Can you list a few?

    I also think that people who by necessity spend a large fraction of their incomes for carbon, should never have to pay a penny for the carbon that is expended in transportation of flowers by way of a Boeing 747, nor for flying race horses and racing cars around the world for entertainment for the idle rich, nor for the carbon emitted by those who own multiply houses ( some up to 6 or 7 ) each having 10s of thousands of square feet, nor for …. . The list is for all practical purposes unlimited.

88. Raven, as the IPCC repors and summaries are based on ongoing developments, they are expressly not mean to be the final word on anything. I’m aware of R&R, the Fraser report and an excellent review by Goklany that is posted at Cato. There are also a number who have made the argument that mitigation is the least cost-effective approach, especially as significant warming and costs are already built in and thus unavoidable. But these are not so much disagreements with what we know as with what, if anything, we should do about it.

    I also aware that industry – as opposed to the academics you mention – virtually all agree with the IPCC reports. Exxon, for example, has explicitly said so several times:
    http://www.euractiv.com/en/climate-change/exxonmobil-top-executives-climate-change-policy/article-161664
    http://lawprofessors.typepad.com/environmental_law/files/ipcc_4th_assessment_response1.KPC.SSK%20(clean).doc

    As the the economists, I was not referring to Stern, but those who have ripped him, who strongly believe that policy action now is merited by the information that we have. More here:
    http://mises.org/Community/blogs/tokyotom/archive/2007/12/16/the-social-cost-of-ignoring-carbon.aspx
    http://mises.org/Community/blogs/tokyotom/archive/2008/06/06/bob-murphy-plays-with-dice-calls-nordhaus-reluctant-advocacy-for-a-gradualist-carbon-tax-over-eager.aspx

    I don’t think Lomborg makes a convincing case for anything. His latest proposal that governments worldwide ought to be spending 0.05% of GDP on discovering our new energy future is obvious nonsense: http://mises.org/Community/blogs/tokyotom/archive/2008/06/29/lomborg-s-brilliant-climate-plan-leave-ghg-externalities-alone-and-let-governments-spend-0-05-of-gdp-on-picking-winning-low-carb-technologies.aspx

    Sure, we will have to adapt to the climate as it changes, just like we adapt to the weather and have adapted to climate so far. This is something that largely will happen naturally, without government expenditures whatsoever. But the the wish lists that Lomborg and others have for what GOVERNMENTS should spend money on is largely disconnected with the question of whether the climate is valuable and GHG emissions ought to be priced. Changes to carbon pricing are changes that the private economy makes, and doesn’t represent government expenditure.

89. Dan, the current “rules” for GHG emissions, as I understand them, are as follows:

    – carbon emissions (C, CO2 and CH4) and N20 are completely free, to both commercial or individual emitters – though you may be liable to your neighbors or be breaking some law if they can show that carbon black (soot) that you release adversely affects them;

    – CFCs and related compounds (powerful GHGs that affect the ozone layer) are regulated under the Montreal Protocol.

    “people who by necessity spend a large fraction of their incomes for carbon, should never have to pay a penny for the carbon that is expended in ….” Sounds like you agree with a rebated carbon tax, that would entirely offset the increased costs resulting from such taxes to the poor and would shift the cost burden to the wealthier.

    Please note that on another level, allowing externalities to stand uncorrected is largely highly regressive and shifts costs to the poor and benefits to the wealthy. That’s one of the reasons why classic pollution problems were not nipped in the bud – they were too profitable to the owners of polluting firms. Closing the externality doesn’t necessarily mean that pollution completely ends, but that hidden subsidies – the transfer of costs to others – to the production of certain products are eliminated.

90. TokyoTom says:
    “But these are not so much disagreements with what we know as with what, if anything, we should do about it.”
    With all due respect but that is core of the debate today and the justification for a carbon tax disappears if there is nothing we can/should do about the problem. McKitrick has gone one step further and proposed a tax linked to actual measured warming instead of simplying picking a number. If the alarmists are wrong and the planet does not warm the tax stays low or goes away.

    I find it curious that you oppose government spending on R&D because without R&D we have zero chance of finding viable alternatives to CO2. Without some major technological breakthroughs large carbon taxes are likely to simply slow economic activity.

    “Please note that on another level, allowing externalities to stand uncorrected is largely highly regressive and shifts costs to the poor and benefits to the wealthy.”
    The trouble is the poor live mostly in over populated countries managed by corrupt governments and the rich live in democracies. There will be zero political support for massive transfers of wealth from the rich world to the poor world which means most of the externalities will be left uncorrected. This puts us in a situation where:

    1) Rich countries impose pain on themselves and poor countries emit with impunity
    2) Nobody does anything

    I could live with 1) if there was evidence that action would actually solve the problem, however, current trends suggust that the rich world will be responsible for as little as 20% of the emissions by 2050. More importantly, allowing poor countries to emit with impunity will simply make it economical to move the CO2 intensive industries to those countries.

    In other words, taxing ourselves to solve the putative CO2 problem is an exercise in futility.

    I also don’t buy the “west must show leadership” argument because the externalities you mention. i.e. the poor world will not limit their own emissions simply because the west shows “leadership” – they will want to be compenstated for the pain imposed just like a poor person in a rich country is compensated. Unfortunately, the imbalances in population ensure that the rich world will never willing or able to provide the compensation demanded.

    At the end of the day we are in a situation where the pratical mitigation strategies will accomplish nothing which means we will be forced to pay the costs of adaption anyways. Personally, I think it is better stop wasting time talking about mitigation and start planning for adaption. The only thing that may change this picture is a new source of energy which is why I think spending money on R&D is very important. You can look at it as a hail mary pass for the mitigation team – if it completes then they could win the game but it will most likely accomplish nothing so the smart money would bet on the adaptation team.

91. Raven, I`m aware of McKitrick`s T3 tax proposal. He`s also acknowledged elsewhere, like most economists, that consumpton and energy taxes are much preferable to income and capital gains taxes. Even if AGW were not a concern at all, we`d improve the economy by shifting how we tax.

    While I fing McKitrick`s proposal interesting, it doesn`t really reflect the fact that the forcing eserted by GHGs are long-lasting, with many other factors also influencing climate. On these times scales, all taxes are variable in the face of politics.

    I am strongly in favor of R&D, but I`m also opposed to have the government do it. The government doesn`t know more than the market players and can`t invest more wisely. We`d just have bureaucracy and pork. Far better for the government to change incentives and let investors, corporations and consumers act. Simply freeing up the power markets by deregulation would be very helpful, as well as allowing immediate depreciation.

    – “The trouble is the poor live mostly in over populated countries managed by corrupt governments and the rich live in democracies. There will be zero political support for massive transfers of wealth from the rich world to the poor world which means most of the externalities will be left uncorrected.”
    You are absolutely right, but I was talking about the domestic aspects of a tax, not making international transfers. On the international side, we face a huge common task to try to encourage less corruption and greater growth in the poorer nations, a problem that will be compounded by climate change. More here: http://mises.org/Community/blogs/tokyotom/archive/2008/01/21/poor-countries-need-capitalism-not-climate-change-welfare.aspx. We ought to at least eliminate import barriers for their products and drop our domestic agricultural subsidies, so these countries would have something to export to us.

    – “taxing ourselves to solve the putative CO2 problem is an exercise in futility.” WHile I share your concern I think you have the dynamics wrong. Most of the growth in GHG emissions is in CHina and India. If we got started we could easily agree with others who are sharing the burden on carrot/stick approaches to rachet China and India in on a gradual basis. And giving the poorer nations a temporary comparative advantage would certainly help them to grow and build infrastructure. They all might want compensation, but simply keeping our doors open to trading with them is a pwoerfuil incentive for them to come along.

    – “I think it is better stop wasting time talking about mitigation and start planning for adaption.” Raven, these are two different and complementary things. Adaptation is already occurring as climate zones are shifting, etc. Adapatation is simply what everyone naturally does, doesn`t need much direction by government and is going to happen no matter what mitigation policies are agreed. So there`s no reason to say we have to do one or the other. As for mitigation, who was it who said that an ounce of prevention is worth a pound of cure? Given the dynamics that you`ve pointed out, it`s extremely unlikely that we`ll over-mitigate.

    Thanks for the thoughtful comments.

    TT

92. TokyoTom says:

    On the international side, we face a huge common task to try to encourage less corruption and greater growth in the poorer nations, a problem that will be compounded by climate change. More here: http://mises.org/Community/blo…..lfare.aspx. We ought to at least eliminate import barriers for their products and drop our domestic agricultural subsidies, so these countries would have something to export to us.

    Well, carbon taxes will always be followed by carbon tariffs so you should expect import barriers to rise as carbon taxes are introduced. It is unreasonable to expect any other reaction from politicians who are accountable to voters.

    In Canada, the opposition party has tabled a carbon tax that will be a key part of the next election. The plan details are here: http://www.thegreenshift.ca/pdfs/green_shift_book_en.pdf

    The plan includes explicit provisions for carbon tariffs:

    We will build carbon pricing into our strategy for international trade, endeavouring where possible to ensure that goods from countries that are not pricing carbon will face a tariff reflective of carbon content. Since the next president of the United States, be he a Republican or Democrat, has already committed to pricing carbon, this will likely not impact our largest trading partner.

    This clause has to be in the plan because without carbon tariffs the tax has zero chance of being supported by the voters.

    Perhaps the most odious aspect of the plan is its wealth redistribution which takes money from the relatively rich west and transfer it to the relatively poor east. These kinds regional wealth redistributions are contentious issues in Canadian politics and makes the plan sound more like an exercise in political pandering than an attempt to do something about the environment. This example illustrates the huge gap between the carbon tax theory and the political reality once politicians start correcting externalities caused by the taxes.

    For what it’s worth, I agree that consumption taxes are generally better and given a choice between a carbon tax and cap & trade I would go with a carbon tax.

93. TokyoTom,

    Many of your comments are reasonable, though I do not always see it the same way. I think Raven & I are on a similar wavelength. And, I cannot add anything particularly more convincing than what Raven wrote.

    I can only say that, having studied the total situation in depth for a few weeks, the fact that the IPCC is generally “supported” by the majority of major businesses does not have as much meaning for me as it has for you. Why?

    Supporting the IPCC can actually benefit ANY smart business (green, energy, investment firms, commodities traders, the news media, etcetera). That is, there is money to be made by all — including energy companies — and most of that money will go to the relatively wealthy individuals who own or run the companies and their top employees. Who will pay? The general public of course. And, the impact will be greatest on the poorest (as usual). Consequently, there is no incentive for ANY major business group to argue against the IPCC — from a dollars and cents standpoint.

    Even countries stand to benefit monetarily. The Kyoto Protocol essentially said the 37 (or so) big CO2 producing countries will have to cut back CO2 and also make payments to the approximately 140 other countries (who do not have to cut back CO2). This is “free money” for 140 countries. What politician in those countries would not vote for and support such a treaty (rhetorically). So, the fact that so many governments supported IPCC is meaningless to me as regards a “proof” that AGW is a problem.

    And, in wealthy CO2 producing countries (like the United States), often a major political party portrays itself as a “green party” and courts the votes of that faction. Why would they speak out against the IPCC or Kyoto or similar (rhetorically).

    In summary: As a Scientist, based on what I know today, I believe that AGW and its threats have been oversold relative to what the data actually supports (I am not yet entrenched in that view). As a Manager, it seems to me that the many people, countries, groups, businesses that support the “AGW movement” all stand to gain money or power or both — paid for by the working class majority — consequently, I am not swayed by who is backing the AGW movement (FWIW, I am entrenched in that view).

    But, these are my beliefs today. They may change as I study more. If I had the magic words that could make others see my point of view in every case, I would be more wealthy than I am — so, just consider my expression of my point of view a “vote” — not an effort to convince.

94. TokyoTom,

    Raphael, I’m not sure how to respond as I’m afraid I fail to understand the point you are trying to make.

    My actual argument was a narrow one limitted to the validity of your statement, “This is hardly socialistic.” Was it important? Nope. I just dislike being told something isn’t what it is. Call it a pet peeve.

    As far as your other questions:

    Are you suggesting that you’d prefer a state and local approach to climate change rather than a national or global one?

    I wouldn’t suggest any government respond to a threat that was poorly defined.

    That any action taken by the federal government is “socialistic”?

    Nope. The Constitution defines what actions the Federal Government can and can’t take. Some actions allowed by the Constitution could be considered socialistic.

    Or a more narrow one that the federal government has no authority to regulate or tax GHG emissions?

    Two part question.
    I have never considered whether the Federal Government has the authority to regulate GHG emissions. Off the top of my head, I can not think of an argument which would deny them that authority.

    I do not believe that the Constitution gives Congress the authority to lay a sin tax on GHG emissions.

95. Raven:

    What I expect is to see is a climate deal between the major emitters that will naturally include some import tax mechanisms to help incentivize performance by other nations undertaking commitments, and to force others into the deal.

    Initially, all of the insignificant, low per capita incomes countries will be expressly excluded (as such a policy would be perverse). I hope we will also eliminate our domestic agricultural/corporate welfare policies that hamper trade flows from and growth by poorer nations.

    It may be that China and India are given some initial slack and some financing for lower-carbon technologies, in recogition that they bear little responsibility for current GHG stocks, that it is in our interest to get them away from CO2 heavy coal and that, as a practical matter, such concessions may be needed to do a deal that is in our own best interests. This dickering and the terms of any resulting deal are not primarily about wealth transfers, but are like deals between ranchers as to how to manage growing herds on a limited range, or between salmon fishermen.

    As for the Canada plan, are you referring to regional transfers within Canada? There are of course good reasons to be concerned about the actual terms of any domestic law, and whose ox is being gored for whose benefit. In the US, the Clean Air Act locked in favorable deals for Midwestern power firms and Appalachian coal. We got cleaner air, but relatively expensively, with still a significant amount of acid rain and destructive coal removal in Appalachia.

96. Allen:

    the fact that the IPCC is generally “supported” by the majority of major businesses does not have as much meaning for me as it has for you. Why? …. Consequently, there is no incentive for ANY major business group to argue against the IPCC — from a dollars and cents standpoint.

    The lack of any major complaint by business about the IPCC is a significant indication that the report isn’t grossly incorrect – and that a private do-over would yield pretty much the same conclusions.

    Sorry, but it seems to me that your conclusion that “there is no incentive for ANY major business group to argue against the IPCC” is demonstrably wrong. Fossil fuel firms, auto manufacturers, many power cos and other manufacturers have the same incentive to disagree with the science that they’ve had for the past twenty years – in order to slow political change that adversely affects their existing business models (pushing down demand and expected retruns) and market position. In fact, it is now rather noticeable and surprising that none of these firms – that know science, technology and energy systems – are arguing against the IPCC (all argue policy, while only a few snipe at the science, which they tend to do anonymously). I think it is testimony to the scientific case that the IPCC has now made, and to the fact that these firms are run by investors, managers and employees who will all inherit the future.

    – “Who will pay? The general public of course. And, the impact will be greatest on the poorest (as usual).”
    The general public (globally) is already paying for climate change; it’s in the nature of an externality. Your suggestion that the poor will pay more for energy is a good reason for doing nothing is like saying that we shouldn’t manage fish stocks, since it drives up fish prices, or regulate air ground or water pollution, since it removes the hidden subsidy of “free” pollution. Unclosed externalities result in wasteful misallocations of resources; sure they subsidize consumption of the presently “cheap” products, but at costs shifted to others. That’s not always a sufficient justification for getting the state involved in trying to “fix” the problem, but you should at least recognize the dynamic.

    Yes, as I’ve acknowledged, resource taxes (or cap and trade) tend to have a regressive impact, but this can be remedied by rebating the proceeds.

    – “This is “free money” for 140 countries. What politician in those countries would not vote for and support such a treaty (rhetorically). So, the fact that so many governments supported IPCC is meaningless to me as regards a “proof” that AGW is a problem.”

    You are right about the poor countries, but so what? We want them to grow so that they can adapt, and as a practical matter until they generated significant GHGs they are not simply unnecessary for a meaningful deal, but a hindrance. Why should anyone now waste any time or energy worrying about what targets to set for Suriname, Burkina Faso or Bhutan, or how to make them comply? That such contries support the UNFCC or Kyoto is thus, as you note, irrelevant to the scientific case. Rather, what is important is what those who would undertake burdens have to say. Which of them disagrees?

    – “As a Scientist, based on what I know today, I believe that AGW and its threats have been oversold relative to what the data actually supports (I am not yet entrenched in that view).” I’m curious, Allen: have you actually read any of the IPCC reports, statements of the national academies of science, AGU, etc., or the papres that Jim Hansen posts up at his Columbia U webpage? Is there any reason to think that our uncontrolled experiment with the earth’s energy systems is riskless or promises only benefits? By the way, my views aren’t entrenched either.

    – “the many people, countries, groups, businesses that support the “AGW movement” all stand to gain money or power or both — paid for by the working class majority — consequently, I am not swayed by who is backing the AGW movement (FWIW, I am entrenched in that view).” Was this also true of the clean air, water and land movement in the 60s and 70s? The same industries that opposed environmental cleanup (and favored shifting costs to others) are the same ones and making largely the same arguments that they did then. I wonder – did forcing them to bear the costs of their actions (resulting in a cleaner environment and changes in relative prices) diminish our collect wealth, or improve it? Beside this question, make sure you don’t forget the opposite side of the coin – do any of those who oppose changes to our current rules “stand to make money or power or both” by making protecting the current rules and their current investments? I agree with your weighing of incentives, but it’s clearly NOT a one-way street.

    TT

97. TokyoTom says:

    Initially, all of the insignificant, low per capita incomes countries will be expressly excluded (as such a policy would be perverse).

    I think a carbon tax without an import tariff is pointless because it would simply result in the outsourcing of CO2 intensive industries and would not result in any net CO2 reductions nor encourage investments in low CO2 technologies. Politicians know this which is why most carbon taxes will include taxes on developing world imports. The fact that carbon taxes will provide a convenient cover for the various tariff seeking special interests in the rich world will also make the tariffs an irresistible temptation for vote seeking politicians.

    Would you still support the idea of a carbon tax if they included carbon tariffs on poor world countries?

    The wealth redistribution issue is a lot bigger than a few regional companies because the carbon tax would affect everyone. If implemented it will further polarize the already divisive regional politics.

    Incidentally, I absolutely reject the notion that India and China bear no responsibility for the GHGs in the atmosphere. They may not have emitted the GHGs, however, they have definitely benefited the technology, capital and markets which were made possible by the access to cheap energy.

98. My actual argument was a narrow one limitted to the validity of your statement, “This is hardly socialistic.” Was it important? Nope. I just dislike being told something isn’t what it is. Call it a pet peeve.

    Raphael, sorry for being inelegant and unclear. My point was that the answers to environmental issues frequently lie in clearer and more enforceable property rights. This is just impractical to do with the atmosphere, and thus we are stuck with alternatives such as the carbon cap and rebate proposal, that Jim Hansen has adapted as a tax and rebate proposal. Yes, these are socialistic by definition, as they involve government action. But even private property rights are socialistic, as they represent rights created by legislation. So “socialistic” doesn’t really tell us too much.

    On taxes, let me note that the US Constitution provides (Section 8 – Powers of Congress):

    “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States”

    TT

99. Raven, it’s still not clear to me at some points about whether you are talking about the Canadian scene or about global issues, such as here: “The wealth redistribution issue is a lot bigger than a few regional companies because the carbon tax would affect everyone. If implemented it will further polarize the already divisive regional politics.”

    – “I think a carbon tax without an import tariff is pointless because it would simply result in the outsourcing of CO2 intensive industries and would not result in any net CO2 reductions nor encourage investments in low CO2 technologies.”

    I think I already agreed on you on this. In fact, the same phenomenon can already be seen in the unwillingness of the EU, Japan and Canada to comply with Kyoto when the US, China and India were thumbing their noses at it. However, as a practical matter, there is no need initially when seting a compliance structure to look past the major emitters.

    – “Politicians know this which is why most carbon taxes will include taxes on developing world imports. The fact that carbon taxes will provide a convenient cover for the various tariff seeking special interests in the rich world will also make the tariffs an irresistible temptation for vote seeking politicians.”

    No and yes. The chief emitters can easily agree to focus on each other and the particular countries that they want to force into a climate deal, and to exclude smaller developing nations, in a mini-GATT. I think that there is considerable domestic support for leaving the poorer nations out of any import taxes.

    I certainly oppose carbon tariffs on poor world countries, but I simply don’t think it is in the cards anyway.

    – “Incidentally, I absolutely reject the notion that India and China bear no responsibility for the GHGs in the atmosphere. They may not have emitted the GHGs, however, they have definitely benefited the technology, capital and markets which were made possible by the access to cheap energy.

    I understand your view, which it is certainly fair for you and others to argue in seeking to get/impose the best deal we can from them.

100. I was talking about Canadian politics. The regional divisions within Canada are contentious to the point where parts of the country have flirted with separating. This kind of in fighting suggest to me that a global agreement which involves significant wealth transfers to other countries simply will not happen. Without such transfers you will find that poorer countries will refuse to limit emissions.

     No and yes. The chief emitters can easily agree to focus on each other and the particular countries that they want to force into a climate deal, and to exclude smaller developing nations, in a mini-GATT. I think that there is considerable domestic support for leaving the poorer nations out of any import taxes.
     I certainly oppose carbon tariffs on poor world countries, but I simply don’t think it is in the cards anyway.

     We will see. A lot depends on who is called ‘small’. If think it is a given that China, India, Indonesia and Brazil are going to have accept their own reduction targets or face tariffs.

     I also think a lot will depend on what happens to the weather over the next 5 years. If the temperatures stay flat then we will likely see that the political will to do anything about CO2 evaporates.

101. TokyoTom,

     Per your query: I am working to add AGW related science/engineering key concepts to my science/engineering repertoire simply for intellectual satisfaction (FWIW, in addition to formal science/engineering education — for a couple decades I self taught a new science/engineering topic approximately every 2 years). To further that aim, I have been studying the IPCC (and other) reports in detail, developing my own modest computer models and analyses to better understand some key points (as does Lucia), and I frequent a cross section of sites on both sides of the issue to gather information. As I am in the initial stages of studying AGW in depth (and it is not a full time occupation), it will likely be a couple years before I am able to comment with self-confident authority (never, of course, with publicly recognized authority) — until then, I characterize my statements as preliminary, unsubstantiated opinions.

102. Allen, I wish you good luck with your endeavor.

     Here’s an interesting site that I’d recommend: http://www.columbia.edu/~jeh1.

     And have you heard of the book “Smelling Land” by your compatriot David S. Scott?

     TT

103. TokyoTom,

     On taxes, let me note that the US Constitution provides …

     I noted that in my first post on this thread. 🙂

     And I added the following:

     To which is global warming a threat: common defense or general welfare?
     How is it a threat?
     Will the tax provide a relief to the threat?

     If you can’t answer these questions, tell me why Congress has the power to levy the tax in the first place.

     The issue was briefly touched on, but was dropped after my reply to Boris on the topic: While I agree general welfare is the most likely catagory, I’m not certain the tax is for the general welfare. While I can see how global warming could be considered a threat people living in coastal regions, what about the rest? General means general, not a select group of states.

104. Raphael, sorry I didn`t see your initial reference. While I`m with you generally, sadly your argument is one that would eliminate many laws and taxes that have been in place for many decades on th ebasis of the general welfare clause, even while a carbon tax would be much closer in purpose to general welfare (as opposed to revenue raised to benefit particular groups). Note that the courts have not required that taxes actually be efficacious with respect to a purported purpose. Moreover, give the international aspect, I`m sre the feds could also approve tax schemes on the basis of the treaty power.

     `Night.

105. TokyoTom,

     While I`m with you generally, sadly your argument is one that would eliminate many laws and taxes that have been in place for many decades on th ebasis of the general welfare clause, even while a carbon tax would be much closer in purpose to general welfare (as opposed to revenue raised to benefit particular groups).

     As I mentioned, I am a conservative. I can’t say I would be disappointed. I believe in small government. 🙂
     I believe those things are an abuse of power granted to Congress.
     That being said, I only stated my belief. I have mine, you have yours. It’s one of the things that’s great about this country. We can have our own opinions.

     Note that the courts have not required that taxes actually be efficacious with respect to a purported purpose.

     Actually that’s not true. If I had actually given more thought in my initial post concerning the Constitution, I would have likely pointed out what the SCOTUS has ruled concerning the power of Congress to levy taxes. I don’t think this 1904 precedent has been reversed, though I could be wrong. When I get more time, I’ll look into it a little more.

     McCray v. United States (No. 301)

     (a) That the power of internal taxation which the Constitution confers on Congress is given to that body for the purpose of raising revenue, and that the tax on artificially colored oleomargarine is void because it is of such an onerous character as to make it manifest that the purpose of Congress in levying it was not to raise revenue, but to suppress the manufacture of the taxed article.

106. Note to self: Haste makes waste.

     Again, I am guilty of quoting the wrong portion of an opinion. 🙁
     That quote was actually a review of an argument.

     The meat of the opinion was farther down.

     That opinion is chocked so full of taxy goodness, I need to read it a few more times. I may just concede the issue, and change personal opinion. 🙂

107. Raphael, I think you may have misunderstood me. By “sadly”, I wasn’t talking about the unlikely prospect that a whole raft of taxes and poor tax rulings might be overturned, but the fact that the federal government, sanctioned by the courts, took such a wrong turn decades back.

     – “As I mentioned, I am a conservative. I can’t say I would be disappointed. I believe in small government.
     I believe those things are an abuse of power granted to Congress.”

     You might find it surprising, but I also self-identify as a small-government conservative/libertarian: that’s why I generally comment on conservative/libertarian sites like Mises and Volokh, though I’ve been booted off of RedState, Free Republic, Newsbusters and Minority Report (those guys hate people who show their own betrayal of principles). It’s just that I also accept that there are serious problems relating not merely to misuse of government at home, but also to unowed, open-access commons and to ineffective protetion of property rights in the corrupt “developing” nations.

108. After four hours of intense research, I haven’t actually changed my general opinion. 😉

     The issue of “general welfare” has only been brought up a handfull of times. In US v Butler the SCOTUS stated, “These words cannot be meaningless, else they would not have been used. The conclusion must be that they were intended to limit and define the granted power to raise and to expend money.” Unfortunately, they decided they didn’t need to define the scope of the words, “general welfare,” in that case. But it allows me to maintain my closed mind while appearing to be open minded. er.. um… I mean… 🙂

     Otherwise the SCOTUS tends to allow Congress a sweeping power to tax. While I find this disturbing on many levels, there are at least some stipulations. Like… Congress cannot lay a tax which would impair the sovereignty of the States. But the treaty you mentioned would allow the sovereignty of the Federal Governemnt to supercede that of the States. There is also stipulation concerning an undue burden on a right. But, I am fairly sure that the redistribution scheme resolves that issue.

     I have consumed my limit of “legalspeak” for the year. So, pending the SCOTUS defining the scope of “general welfare,” I’ll concede that Congress has the power to levy the tax. (Though I won’t concede that the Constituion grants them that power.) 🙂

109. TokyoTom,

     Already visit that site.

     Looked at the book table of contents. If I understand his “thrust”, then I agree. If one is serious about CO2, then switch to hydrogen and Nuclear. Then, start working much harder to bring Hydrogen Fusion power on line in the next 50 or so years (a crash program would be acceptable to me). Result in a century: “Ultra clean” virtually inexhaustible energy for everyone on the planet, no more air pollution health hazards, no more wars over energy resources, no more tearing up virgin lands looking for energy, etcetera.

     Heck, if it were up to me, I’d start moving to the “full Hydrogen cycle” tomorrow. A fraction the costs proposed for the full scope of C02 amelioration efforts will fund it all — and, incidentally, completely ameliorate the CO2 issue. Moreover, it is entirely a positive program with guaranteed benefits independent of CO2 concerns — a no brainer.

     By the way, all current “exhaustible” sources of energy will be used up in 2000 years, anyway. Then the world will be forced to the Hydrogen Cycle or perish, anyway. Why wait until then? Really — a no brainer.

110. TokyoTom,

     I’ll assume for the sake of argument that a tax (or any other response) was justified. There are several points which I find problematic.

     1. Trade agreements minimize the ability to impose tariffs. For example: NAFTA allows the free trade of electricity. I assume we’d need to renegotiate and rename “free trade” to “not quite as free trade”

     2. Based on my personal usage and motivators, the major driver of reduced demand will not be price elasticity, but rather cross price elasticity. I have yet to see a study which demostrates the cross price elasticity. Though there have been plenty of studies which blow past it by simply saying “demand for alternatives will increase.” While the study may not be required to implement the tax. I would prefer to have a tax rate set which would have the least impact to the economy.

     3. I wonder if the redistributiion of income will have an unforseen effect on the demand for alternatives. Basically, the tax requires rich folk, who can afford higher costs, to be the prime movers toward a change to alternative fuels. It seems to me, that lesser tax which impacts everyone could be more effective than a large tax which impacts only the wealthy.

     4. (not really a point here, just half a rant) Wouldn’t it be nice to see rich folk who believe in the threat of Global Warming put their money where their mouth is, like T.Boone Pickens is doing with dependacy on foreign oil? This is the problem, this is a solution, this is what I am doing, help me out and let’s get it done. Motivation of the American “can do” attitude? In the 21st century? NO NO!! Let the Governement do it!!

111. Of course all of the above is moot if Christopher Monckton’s persuasive article has any validity

     http://scienceandpublicpolicy.org/monckton/cost_and_futility_of_trading_hot_air.html

     I hope all of you find time to scan through it

112. Tony, it’s kinda funny that you apparently didn’t notice that Monckton’s piece is an argument against cap-and-trade, not taxes. I agree with substantial parts of it, and so do the others I noted in my post summarizing support for rebated carbon taxes.

113. Raphael, thanks for your further comments.

     1. Trade agreements can be renegotiated, and would probably need to be. But that’s an easy hurdle once major emitters decide to act.

     2. “I would prefer to have a tax rate set which would have the least impact to the economy.” Given the fact that carbon pricing (via tax or cap and trade) will be coordinated across the major countries, it is very unlikely (evidenced by the past 20 years) that they will be set too high, or that one nation will let others undercut its competetiveness with lower rates. They are already in fact too little and too late. I’m not sure how cross elasticity fits into that.

     3. “Basically, the tax requires rich folk, who can afford higher costs, to be the prime movers toward a change to alternative fuels. It seems to me, that lesser tax which impacts everyone could be more effective than a large tax which impacts only the wealthy.”

     The wealthy have always been the inital adapters/prime movers. The tax would in fact provide increase the attractiveness through the whole market for alternatives, while the rebate lessens the sting.

     4. “Wouldn’t it be nice to see rich folk who believe in the threat of Global Warming put their money where their mouth is, like T.Boone Pickens is doing with dependacy on foreign oil?”

     Sure would! Richard Branson and others are certainly trying to lead. It would also be nice if guys like Gore would be initial movers on new technologies and efficient homes that reduce real energy costs, rather than asking us to wear hairshirts that he won’t. I have mixed thoughts on Pickens – what is he leading, other than a drive to get the federal government to subsidize his business?

114. Allen, if you agree with DS Scott, then you ought to be able to get behind a carbon tax that will accelerate the shift in that direction.

     BTW, I have a couple more posts up on carbon taxes and ANWR/OCS if anybody’s interested.

115. Fusion may not be 50 years away:

     Fusion Report 13 June 008

116. T.Boone Pickens is doing with dependacy on foreign oil?

     Except T. Boone is not exactly doing that. What T. Boone wants is for the government to give him a lot of money.

     If it is a good idea it should be profitable without government.

117. Lucia,

     Where is the plan for dealing with AGC? Just in case the solar guys are right?

118. Why do we need a tax? all we have to do is make the alternatives cheaper. How hard can it be?

119. M. Simon–
     I don’t think anyone has proposed any plan for AGC. My plan would be to knit lots of sweaters. 🙂

120. PS. Also, tax the producers. Taxes on Saudi and Russia at source. Why not?

     If we invaded and occupied those countries it ought to be easy.

121. OK. Rebated taxes.

     You pay more than you can afford now and go broke. Later the government gives you a rebate. With which you can start the cycle all over.

     However, while the poor are homeless they will use less carbon. A win win.

     It is very important that the poor suffer to make better off people feel better. Plus let us not forget the benefit to the Chinese who emit about 6X as much CO2 per dollar of GDP as Americans do.

     People just don’t understand the benefits.

     And don’t forget the positive effect on Congress when the economy tanks.

122. If we invaded and occupied those countries it ought to be easy.

     I gotta’ say I oppose that plan! I do hope you’re just saying that for effect.

123. TokyoTom,

     Until I believe C02 (or Carbon) is a bad thing (not yet convinced), I would not tax it — that seems unfair and regressive.

     I would reallocate the government resources now spent encouraging and subsidizing other energy technologies and spent on CO2 amelioration schemes. I would reallocate them towards making Hydrogen Gas, Nuclear Fission, and Hydrogen Fusion energy sources fully successful. Over time, those technologies (if not burdened with undue restrictions and regulations) would take over from carbon-energy based on lower cost and meeting environmental goals (other than reducing CO2). This is a 100 year project, I think.

     Ultimately, the foregoing would completely solve the CO2 issue, if there is one — and many other human and environmental issues. So, maybe those people most concerned about AGW could get behind a plan like the foregoing and drop the idea of a carbon tax.

124. The trouble with Hansen and his ilk that they have little conception of stock-flow analysis, and invariably focus only on GROSS carbon emissions from burning of fossil fuels. The Garnaut Draft Report (chapters 4-5) and the Government’s Green Paper here in Australia ONLY consider reductions in gross emissions. Those emissions have recently been growing globally at over 3 percent p.a., but even so the atmospheric concentration at Mauna Loa still grows in a range of only 0.4% p.a. to 0.6% p.a. (and only 0.2% from April 2007 to April 2008).

     The airborne fraction of emissions is more variable, but only exceeds 70% in El Nino years, the correlation is perfect, see my paper at http://www.lavoisier.com.au, Fig 3. On average the uptakes by the global biosphere – which have since 1958 accounted for 57% of gross emissions, Canadell et al. 2007: Table 1 – grow at much the same rate as emissions, but starting from a lower base, hence the palpable but still very slow growth at Mauna Loa. The best policy is that of Freeman Dyson, to raise uptake growth rather than slow the emissions on which global welfare is so dependent.

     My referenced paper also shows that Australia’s NET per capita emissions of CO2 are far from being the highest in the world, unlike the gross, which are, because its per capita photosynthetic uptakes are the highest in the world (due to its much larger agricultural output). It is not the least of the serial ignorance of the manmade warmists (some would say dishonesty given the impressive academic credentials of Hansen and Garnaut and the rest of the GHG mafia, if they are so smart how can they be so ignorant?) that they NEVER measure NET effects like those discussed here.

125. Tokyotom,

     I have mixed thoughts on Pickens – what is he leading, other than a drive to get the federal government to subsidize his business?

     Did I say he was leading? I thought I said he was putting his money where his mouth is. 🙂

     Of course, with the $58 million ad campaign and interests in both wind power and natural gas fueling stations, he could be putting his mouth where his money is.

     Is he in the postition to make an awful lot of money from the plan? Yep.
     Will a major change in infrastructure require tax payer money? Depends on how fast you want the change. But the same is true for a carbon tax. Generally speaking, industry is slow to adapt to change. Businesses go under and people lose their jobs. Eventually, new business emerges to replace those lost. Incentives allow the new model businesses to emerge faster.

     Personally, I don’t like his plan. But I do like his presentation.

     The wealthy have always been the inital adapters/prime movers. The tax would in fact provide increase the attractiveness through the whole market for alternatives, while the rebate lessens the sting.

     In fact? That depends on the reaction of the wealthy. For an example, if I had 1000 low-mid income apartment units, for each $1000 increase in my costs, I could increase the rent of each unit by $1 (plus taxes for increased income) and break even. I can continue to drive my Hummer, and I don’t feel a thing.

     Given the fact that carbon pricing (via tax or cap and trade) will be coordinated across the major countries …

     Given the fact that this coordination is a later addition, I find your confidence troubling. If the coordination came first, we wouldn’t be having this conversation. 🙂

     But that’s an easy hurdle once major emitters decide to act.

     I am always concerned when politicians talk about changes to treaties which have finally began to show a net gain. As I said, generally speaking, industry is slow to adapt to change. Businesses go under and people lose their jobs. Eventually, new business emerges to replace those lost.

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