carbon tax

A follow-up

My last article made the point that in fighting climate chaos, only a refundable carbon tax, one that returns revenues directly to the population, mitigates regressivity in way that benefits those hit hardest by such a tax.

It concludes by pointing out that just about everyone who pays serious attention to the problem of climate chaos concludes that carbon taxes or cap and trade systems -- methods of putting a price on carbon -- cannot by themselves solve the problem. This post will explore in a bit more detail what additional measures can help reduce emissions.

We could institute rule-based regulations in the following areas:

Another conservative attack on motives

I’m always excited when people on the right address climate change, even if they say stupid things. At least they’re starting to think about it. On National Review, Ken Green of AEI says that Gore’s carbon tax proposal is great, but the rest of his proposals are both redundant and sucky. After listing them, he […]

The time to focus on policy is now

With the policy summary of the IPCC WGII report out, this is a good time to concentrate on policy. Any effort to lower emissions has to put a price on carbon and other greenhouse sources. As I think extensive discussion has shown, a carbon tax is the best way to price emissions, and to price the destruction of carbon sinks.

One advantage of carbon taxes (and auctioned permits as well -- close enough to a carbon tax for practical purposes) not often noted is that it they produce revenue that can be directed back to consumers. This is an important contrast to the Kyoto system, where large numbers of permits were given away to big polluters. As with any method of raising the price of carbon, ultimately the cost was passed on to consumers. But with the permit giveaways, the consumer did not recover any of those costs.

On a small scale, this is merely painful and unfair. But suppose this was done with a large-scale rise in emission prices -- one that increased the prices of consumer goods by 25 or 50 percent? Not only would this cause direct suffering, the odds are pretty good that reduced consumer demand would cause at least a recession, with a real risk of world-wide depression. You need to return some the costs to consumers, not only on moral grounds but on Keynesian ones -- to avoid a precipitous drop in overall demand.

I will add that when you talk about a drop in consumption for poor people, you are talking not just suffering but death. Even in the rich nations, there people poor enough that cutting their real income by a third or half will kill some of them. Cut the income of people in poor nations already living on a few dollars a day, and you are talking slaughter.

Some signs point to yes

I never thought it would happen, but it looks like a carbon tax might actually become a viable policy option in the U.S. In the Washington Post, Juliet Eilperin and Steven Mufson discuss growing support for a tax over a cap-and-trade system. If you read between the lines, it basically breaks down like this: economists […]

Dave Morris summary on problems with carbon trading

Dave Morris: "Problems with Carbon Trading."

An outline of his argument:

1. Buying offsets encourages complacency.
2. Carbon trading is inherently susceptible to fraud and manipulation.
3. Carbon trading encourages cheating and rewards low-cost cosmetic changes while undermining higher cost innovation.
4. Carbon trading separates authority and responsibility, undermining coherent, holistic, community-based efforts.
5. We have alternatives -- carbon taxes, and caps without trading.

Read the whole thing.

Carbon trading vs. carbon taxes on Science Friday

The question of climate change has finally moved on from is it happening? to what should we do about it?.

There has been some great discussion here at Grist on carbon trading vs. carbon taxes (e.g., here or here).

For those who want more, Bill Chameides, chief scientist of Environmental Defense, was on Science Friday to talk about carbon trading. Check out the mp3 here.

Bill basically reiterates the points he made here on Gristmill a while back. But it's still worth listening to.

Aspen, Colo., taxes its way to a healthier climate

Randy Udall charges more for a ton of carbon dioxide than anybody else in the world. Udall runs a unique, two-and-a-half-year-old program in Aspen and surrounding Pitkin County, Colo., that charges new homeowners up to $100,000 if they exceed the “energy budget” allotted to their property by the local building code. The money collected under […]