Friday, March 15, 2013

Are we at the "then they fight you" stage?

I think it's promising that climate denialists in Congress feel a need to actively fight against carbon taxes and a "fee and dividend" proposed legislation. Given that the legislation has zero shot of passing before 2017, I'm glad that the forces of status quo feel the need to fight it.

The article at the first link is good but flawed, with the incorrect and uncited statement, "Economists favor a carbon tax over cap-and-trade as more efficient and transparent". A tax gives greater certainty on costs but less on carbon emissions than cap-and-trade. It's a less efficient and less transparent way to achieve a proposed level of emissions, but more efficient and more transparent way to demonstrate the costs.

This part's good:

most new versions of the tax, including Boxer/Sanders, would include a border tariff on the carbon content of imports that is equivalent to the tax. That would create a big incentive for exporting countries like China to impose their own carbon tax so as to keep the revenue. 
Opponents clearly think the idea is gaining traction and want to stop it before it gets too far.
I'm looking forward to seeing something similar in Europe and Australia, providing the same incentive to us that we'd like to provide to China. I do think though that at least half of the revenue from an import tariff from a developing country should be sent back to exporter to help reduce their emissions.

UPDATE:  The Bunny is glad to see that Eli Rabett's Simple Plan to Save the World is catching on

Nations wishing to make major progress on decreasing greenhouse gas emissions should introduce emission taxes on all products. These taxes should be levied on imports as well as domestic goods at the point of sale, and should displace other taxes, such as VAT, sales taxes, and payroll (e.g. social security, health care) in such a way that tax revenues are constant, and distributed equitably.

These should be introduced as an Emissions Added Levy (avoiding the bad jokes). EAL would be imposed on sale for emissions added in the preceding step and inherent to the consumption of the product, as would be the case for heating oil and gasoline. Manufacturers would pay the EAL on electricity they bought, and incorporate this and the levy on emissions they created into the price of the product they sell.

Imports from countries that do not have an EAL would have the full EAL imposed at the time of import. The base rate would be generic EALs based on worst previous practices in the countries that do have EALs, which would be reduced on presenting proof that the actual emissions were lower.

All countries with EAL systems would reserve a portion (say 5%) for assisting developing countries with adaptations (why not use acclimations?) and mitigating programs.

By basing the levy on emissions rather than carbon all greenhouse gases stand on a common level, sequestration is strongly encouraged as well as such simple things as capturing methane from oil wells and garbage dumps (that gets built into the cost of disposal). The multipliers would come from CO2 equivalents on a 10 year basis.

Eli slept well and the good eco faries visited his dreams


Anonymous said...

3/15/13 7:42 Morning post on Rabett Run, got it.

Hank Roberts said...

> Anonymous Anonymous said...
> 3/15/13 7:42 Morning post
> on Rabett Run, got it.

Wrong box, Anonymous Anonymous.

Report in to the boss in the other window.

Flakmeister said...

Yes! the carbon tax on imports... I have been calling for this for a number of years...

Anonymous said...

As usual Hank you do not understand the point.

William M. Connolley said...

> the incorrect and uncited statement

I think its correct, from the economists viewpoint. Because from the Econ view, its an externalities problem; limiting emissions to a certain level doesn't really make sense, economically.

Whether you regard that as a flaw in Econ or in cap'n'trade is up to you.

Anonymous said...

There have been papers published - I think Bertraw from RFF may have been a co-author - discussing which kinds of problems are better served by cap-and-trade and which by tax: basically, the theory is that cap-and-trade makes a lot of sense for flow pollutants, especially those with threshold behavior, and taxes make sense for stock pollutants. (or, see Connolley above).

btw: why the shout out for a 10 year carbon equivalent standard? 100 year seems fairly standard, and some (e.g., Ray Pierrehumbert and Susan Solomon) would argue that even a 100 year metric is too short-sighted...


Anonymous said...

Dr. Lumpus Spookytooth, phd.

wow what a great idea, put a carbon taxes on goods sold. Hard to believe there are still idiots out there that actually think they can take better care of themselves than the government.

Anonymous said...

Department of trade war?

Anonymous said...

Dr. Lumpus Spookytooth, phd.

Hard to believe there are still idiots out there that actually think they can take better care of themselves than the government.

Lumpus are you being mean to those poor right wing conservative guys who don't think that a guy is his shack with a gun, will protect the gold old USA from the commos or the Mexicans or whoever frightens them this week?

Martin Vermeer said...

> I think its correct, from the economists viewpoint.

Yep, but it can be argued whether that is the most relevant viewpoint. The economy is sub-system of the Earth system, and its behaviour contingent on that of the surrounding system, not the other way around.

I would argue that defining the problem in terms of what an unacceptably disastrous outcome would look like (as C&T in the final analysis does) is more operational, from an Earth systems viewpoint (and more graphically obvious), than defining it as the current market worth (in marginal terms) of that future outcome. I would argue so especially against the prediction track record of the economic profession ;-)

That being said, I would sign on the dotted line for a carbon tax that works, even sort-of.