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A simple carbon tax at $X/ton and a little patience would go along way by simply making carbon-lighter solutions more competitive.

The problem with pretty much any regulation actually implemented is that politicians have been way too eager picking winners (massively subsidising specific approaches instead of letting a thousand flowers bloom) and protecting losers (assigning emissions trading credits to existing big polluters, essentially shielding the organisations that need them the most from incentives, while burying newcomers in cost and red tape), creating an opaque web of perverse incentives and an orgy for lobbyists.




The question becomes if the taxes are raised high enough to actually impact or reverse climate change, will people abide by them?

If it costs $100/day to heat your home in the winter are you going to pay that or buy black market kerosene or just chop down a tree and burn it when no government inspector is around?

There's a limit to how much can be done with taxes.


First, there's no evidence that the carbon tax would have to be so high to be effective - $7-20/ton[1], probably increasing over time. US emissions per person is the world highest at 16.5 tons -- that's several hundred dollars per year, not day.

Second, the revenue from the carbon tax should be fed back to the people by lowering other taxes. It should be net-zero on the government budget. The point is to create a clear and simple incentive across the board to switch to low-carbon behaviour, not to raise revenues.

Third, nobody promised this would be a quick fix, but nothing is at the moment. But re-jiggering the economy to give a clear incentive is a good start, and even at $7/ton, reducing carbon becomes a multi-billion dollar industry overnight.

1: http://www.carbontax.org/blog/2008/10/18/a-question-of-balan...


> US emissions per person is the world highest at 16.5 tons -- that's several hundred dollars per year, not day.

That's 16.5 tons per man, woman, and child, right? So potentially over $1,000 for a family of 4.

> Second, the revenue from the carbon tax should be fed back to the people by lowering other taxes. It should be net-zero on the government budget.

The bottom 50% of earners currently pay about 3% of Federal taxes. So if you are planning on replacing the progressive income tax with a carbon tax I think you're going to run into pretty substantial problems with regressive brackets massively increasing taxes on the lower and middle class.

Total US emissions were 6.8 billion tons. At $7/ton that's about $50 billion or 1.5% of total Federal tax receipts. Sounds like no big deal, right? But for the bottom 50% it's a $25 billion tax hike on their existing $100 billion bill -- you've just raised taxes 25% on the bottom half.

https://www.epa.gov/ghgemissions/overview-greenhouse-gases


Principle of charity, give the person a break. Obviously people are going to think about that before enacting a carbon tax. Funnel some of that money into offsetting transfers to low income households and you're all set. Don't let the perfect be the enemy of the good.


Taxes can be progressive, flat, or regressive. This is actually one of the most important qualities of a tax.

A carbon tax is decidedly not progressive. Take a look at the carbon map [1] of the 'Americans Carbon Footprint' and you will see, the problem is not the rich motoring around in their their yachts.

Now, the biggest factor in carbon footprint is the zip code you live in -- due mainly to energy use and transportation costs. So does a carbon tax vary based on the zip code of your primary residence? Seems absurd to me. So we have to start by admitting that any carbon tax we do come up with may not actually tax a large part of your carbon emissions. Which is to say, it likely would unfairly target certain products based on their carbon footprint while giving a free pass to others. While taxing some carbon might seem better than taxing no carbon, IMO a tilted carbon tax is worse than no carbon tax.

A gasoline tax approximates transport carbon footprint. It also makes electric and public transit more desirable. You can certainly also tax electric/natural gas/oil based on their footprints. This would be effective, but again, regressive.

If you take out the part where people are paying for their carbon footprint and go back to just taxing the rich, it's not really a carbon tax anymore.

It's not like people can report their carbon footprint on their 1040. The only way to tax carbon is to tax purchases at sale -- let's call it a CAT - Carbon Added Tax. Such a 'CAT' would be regressive.

Generally, if you subsidize purchases which lead to lower carbon footprints, the rich will spend more money on those qualifying items. For example, solar subsidies. This is an example of a non-regressive approach to encouraging carbon shrinkage through the tax code. SolarCity calculated that lifetime net carbon savings of the typical solar install was 150 metric tons.

[1] - http://shrinkthatfootprint.com/american-carbon-footprint


It doesn't matter whether a tax is progressive or regressive on its own. What matters is its place in the overall system of taxes and transfers. You can have a progressive wealth redistribution system based mostly on regressive taxes (sales tax, carbon tax, vice taxes) by ensuring that transfer payments and tax breaks are heavily directed towards low income residents. "Regressive" is not an end-all reason to reject a taxation scheme that has many other desirable properties, namely internalizing externalities and directing market forces towards less pollution-intensive technologies.


A simple solution could be to cut every man, woman and child a cheque for 1/nth of the carbon tax revenue. The top 50% probably use more than 50% of all the carbon (but are probably also better positioned to cut their emissions in the short term), so it should be fairly progressive, distribution-wise.


I'm sorry, but that doesn't actually change anything. You cannot make a tax non-regressive by adding a blanket subsidy. It's like shifting the curve 'mx + b' by increasing 'b'. Everyone gets the subsidy, and then there is still a regressive tax that is targeting the poor.

Not to be argumentative, but based on some brief research, the bottom 50th percentile do in fact cover close to 50% of the carbon footprint, and it's the rich, not the poor, who are in a position to cut their emissions by choosing more-expensive/lower-emitting products.

In short, these are two most disagreeable sentences.


> just chop down a tree and burn it

That's the goal, no? Burning oil releases CO2. Growing trees and burning them is carbon neutral.


Kind of - this approach works until you run out of trees, then you have a serious problem. Sub-saharan Africa is experiencing this in places http://archive.unu.edu/unupress/unupbooks/80918e/80918E0u.ht...


Plus, burning trees generates a ton of other harmful particles. It's not a problem if a few people do it during winter time for fun, but it becomes a massive healthcare issue when it generates a suffocating low-lying brown smog carpeting your whole city.


This. Taxes (and some kinds of regulation like Germany's "fell a tree, plant a tree" rules) are immensely helpful to price externalities into the market.


Chopping down and burning a tree would incur the carbon tax, so the idea would be that this would incentivise you to plant a new tree.

Perhaps planting a tree should incur a negative carbon tax.




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