As an economist I fully agree. It's not the solution but the measure that helps consumers in ranking all possible solutions. Why is flying without kerosine tax? Why do we spend a few k€ on electric car subsidies per MT less emitted. A tax would make things like this transparant. All we need is some party with the clout of the EU or US to get this thing going. There is no opting out trading with us and no opting out for local citizens. With 1/4th (?) Of global GDP on board it would be the transformative step in starting towards drawdown. All other measures are doomed to fail without it. You can't invest in anything CO2 related when you can't capture the gains. Make no mistakes: CO2 accounting and taxing will be a massive invitation for corruption, gaming and bad actors. But we don't have another option except heavy handed top down regulation.
> CO2 accounting and taxing will be a massive invitation for corruption, gaming and bad actors
That's the problem already. We've had a CO2 price for a long time - but it's meaninglessly low. I can only presume because of lobbying from those with vested interests.
There's a similar concept to a Pigovian tax for fines, I think of it as a "Pigovian fine", which is the price at which the likelihood of getting caught times the fine exceeds the cost to pay the tax directly.
So if you have a 1% chance of getting caught, the fine needs to be 101x the tax.
This is why so many e.g. banking and consumer protection fines fail to achieve their goal - the cost of adhering is more than the probability of getting caught times the fine, so it's economically rational to not pay.
Not just simple fraud, but a major hurdle is how to regulate CO2 necessary for producing consumer energy without creating a regressive tax structure. Once CO2 is converted to electricity on the grid, it's fungible and impossible to sort out luxury vs necessity.
Imho, government trying to sin-tax away CO2 is result of our failure to invest in technology solutions.
Not so hard. It's fine if any individual tax is regressive, as long is counterbalanced by UBI or other forms of per-capita welfare support. You don't need to measure precisely, as long as you get rough estimates that people pay $Y in various sin-taxes but get $X>$Y in general welfare benefits.
People are busy and stressed and don't have time to think about stuff like that. That is why the government, aka society, have to make those calls and enforce them. People need guidance to make the right decisions in an already complicated world. If we can't get people to eat right, value science, save an emergency fund, or so many things why do we keep acting surprised when they don't even know what global warming is.
Sure, if it's a marginal cost increase or if you're wealthy.
But middle-income families typically aren't going to spend 25-50% more on a comparable product to save on CO2.
There was a big push decades ago to buy American, but it largely failed because for the majority of people living paycheck to paycheck, spending 25-50% more to have an American flag sticker on your purchase wasn't worth it.
Also because there is 0 accountability that the flag sticker is honest. Sometimes the only part that's "made in USA" is the effort of applying the sticker.
My partner and I are a middle income family (though comfortable because we live cheap) and we buy based on a bunch of factors including brand loyalty and environment policy (as much as you can find out without it turning into a full time job).
We don’t just need a carbon tax. We need the public to support it unlike the French public.
So we need to redistribute the carbon tax as UBI. So people say “more carbon tax please!” Climate Justice. Contact Andrew Yang who is running for President and tell him his UBI needs to be funded with a carbon tax!
I think if you had a properly planned tax so you could say this is fair and will fix or at least significantly reduce the risk from global warming then people would be ok with it. The present ineffectual stuff doesn't really achieve much.
You are too naive to think that, in my opinion. It is also unnecessary to rely on this dream about human nature when we can just do the UBI thing which is strictly MORE incentive. Not to mention that it lets us introduce UBI’
If 10 families are in price competition for 9 houses* the price will be $1 more than the poorest family can afford. Which will probably leave the second-poorest family struggling.
If (in your justified pity for the poorest and second-poorest) you give everyone a free $1000, the equilibrium price will simply rise by $1000 leaving the same families struggling and homeless.
This is the model armchair economists use to explain reports that Bay Area employees paid 4x the national median household income can struggle to find housing.
Of course, if you instead think of Detroit, where many properties are abandoned and some change hands for as little as $500, the model is far less applicable.
*Assuming a simple model of a closed system where all houses are identical, there are no houses outside the system, no possibility of building new houses, and families are as densely packed as possible.
Bat Area employees pay so much because of gentrification, inequality and concentration of wealth.
A UBI is simply a progressive tax to counteract the usual economic forces that let the richer get richer: they can afford bigger switching costs, they can afford to take more risks, they have amassed more patents and technology like AI, loyal engineers and so on.
UBI can be adjusted to simply redistribute the money in the system back so everyone has a floor, and can also afford to take risks without worrying about access to the expectations and necessities of modern life.
They don't have to consent. That's the whole point of tariffs. They can be imposed unilaterally (As we have recently seen with the US - China shoving contest. Which, of course, had nothing to do with the environment, or carbon emissions, and everything to do with political optics.)
The purpose of carbon tarrifs is not to punish other countries.
The purpose of carbon tarrifs is to make foreign dirty-energy-intensive products less competitive, compared to less dirty-energy-intensive ones.
Because we already have a way of making domestic dirty-energy-intensive products less competitive. It works great. It's called a domestic carbon tax.
They remove the immediate complaint of "If we impose a local carbon tax on energy, foreign imports will outcompete us, because they don't have to pay it."
A tariff is generally across the board though, by product type. If one company starts being more "green" than the others in the country of origin, it doesn't generally get hit less by tariffs.
This is Tom Clancy fairy-tale nonsense. China wants a nuclear-free Korea, for the same reason that the United States wants a nuclear-free Mexico and Canada. Nuclear super-powers aren't keen on letting their neighboring satellite states limit their foreign policy, by arming them.
A carbon tax is not 'stopping trade'. It's an increase to the price of goods that are energy-intensive to manufacture, or ship.
Carbon taxes can be offset with a per-person tax credit. This makes it revenue neutral while ensuring that big consumers pay more taxes. They do it in British Columbia already [1]
You make it revenue neutral – look up fee and dividend, the method favoured by most economists. The bottom ~2/3rd of households would, on average, get more money back than the tax would cost them.
> The bottom ~2/3rd of households would, on average, get more money back than the tax would cost them.
Please correct me if I'm misunderstanding: 2/3rds of households would first have to pay up, and then they'll get more money back than they paid in? If that's true, it sounds like it would be instituting needless added complexity, with a layer added for politicians and bureaucrats to take a cut before giving it back.
The value add of the layer in complexity is that the costs of some goods but not others would go up. This would make buying and investing in renewables more favorable economically.
So the value add is to artificially add a cost to one form of energy production to make it cost more than another form? That does not sound like a "value add", but rather a simple "cost add," with government agents making the demands and meting out financial (and eventually, physical) punishment for non-compliance.
And we really want to add complexity and inconvenience to 2/3rds of households just so they can get their money back?
Burning fossil fuels has a real cost to everyone which is not priced appropriately by the free market (this is a well known economic effect known as a negative externality). This tax corrects for the artificially low costs.
That's why we need a carbon tax. To force people to.