> The authors are not kind to economists, who typically want to put a price on emissions and then let markets do the work. Economists have, the authors allege, skipped a chapter in the textbooks. They have focused on externalities, the damage done to society when carbon is emitted. But they do not think about the elasticity of demand—the extent to which prices change behaviour.
This completely misunderstands the point of setting a tax precisely at the rate of the externality. If a good is taxed at its true, global, long-term rate of externality, then the externality, the damage being done, is precisely being paid for. There is now no longer a net externality. If the tax means demand switches to a product without that externality, then good, problem solved, and if instead people still prefer that good to the alternatives, then they can just go ahead and pay for that good plus the tax that pays for the externality. If this isn't good enough for you then probably the problem is you think the price is being estimated wrong, in which case you shouldn't be complaining about there being a tax, you should complain that the rate it is set at is incorrect.
I also think the inelasticity of demand claim is mostly bogus; it's inelastic on short timescales but there is plenty of momentum to switch to electric cars and renewable energy even at undiscounted price points. Electricity generation in particular is extremely price sensitive; it's just that with cost trends that cover literal orders of magnitude the crossover point was always going to seem like a sudden event.
If a good is taxed at its true, global, long-term rate of externality, then the externality, the damage being done, is precisely being paid for.
If a little bit of CO2 pollution causes fairly quantifiable harm we can live with but a lot of CO2 pollution causes runaway global warming ending life on earth, what is it's "true, global, long-term rate of externality"? Me, with an actual degree in economics, would say there is none. Many damage effects simply can't be easily put into a simple cost function. But even if there somehow is such a rate, it seems quite likely that bureaucracies and markets "working together" can't be counted on adjust fast to be certain that price is paid.
It's not necessary to come up with a cost function. Instead, come up with a sustainable amount of CO2 emissions. Then, keep raising the carbon tax until emissions drop to that amount.
The problem is there can be a price where some people can't drive to work but other people are still quite able to afford gas and you wind-up still not meeting the goal.
As a practical matter, we need to keep using our present petroleum based system but use it's energy output to build a new economy/energy system. Raising energy prices makes people use less energy but doesn't make them use it efficiently (as mentioned, the rich can hold massive parties on their yachts while the poor are unable to get anywhere).
Of course it does. Gas prices greatly affect peoples' driving habits, for example. And their choice of car.
Fuel prices are the single biggest factor that drives new jetliner designs, for another.
> the rich can hold massive parties on their yachts
Yes, and how much does that contribute to overall CO2 emissions? 0.00001%? This is what I meant when government makes such decisions for political reasons, rather than pragmatic, efficient, or effective ones.
> Incentives matter. The most famous example in economics is the idea of the demand curve—when something gets more expensive, people buy less of it. When it gets less expensive, people buy more of it.
> Some find this bedrock principle of economics hard to accept, based on introspection. “When the price of gas goes up, I still buy gasoline,” says the skeptic. Or in its more extreme form: “You need gasoline, so people will keep buying it even when it gets more expensive.”
> You may still buy gasoline when it gets more expensive. But you will try and find ways to buy less. Not necessarily zero, less.
> Thinking about how people respond to the incentive of the higher price opens up a world of possibility beyond the cold turkey of going without. When gasoline gets more expensive, some people car pool, some people drive at slower speeds, some try and combine multiple errands into one trip. Let the price of gasoline rise enough and be expected to stay higher for a long enough period of time and some people will buy a car that gets better mileage, move closer to work or postpone or cancel that order for the pleasure boat that takes $400 to fill its tank when gasoline is $3 a gallon.
> Not everyone will do all of these things. Some people will do very few of them. But the overall effect of an increase in the price of gasoline is to discourage the purchase of gasoline.
> The problem is there can be a price where some people can't drive to work but other people are still quite able to afford gas and you wind-up still not meeting the goal.
You're not charging enough. You need to charge more.
Climate scientists have long been calculating a remaining CO2 budget (that would prevent the worst from happening if humanity didn't go over).
This gives rate of CO2 emissions as kg/s.
Economists surely can come up with some number of USD to be paid for the emission of 1 kg CO2 (by looking at some economic reference numbers) that will effectively render 10,20,...,90%,99% of all different uses of CO2 emitting processes unprofitable or economically infeasible.
Sure, you could raise prices so much that nearly every of use CO2-emitting processes wouldn't be possible. But that might result in, say, people not being able to afford to heat their houses in the winter in cold areas of the US.
I am all for alternative energy but I don't think this is an approach that would work.
This is yet another one of these problems that repeatedly remind me of what I call continuous politics:
Scenario:
A painful (unpopular with citizens/businesses) political decision needs to be made that imposes a (often times financial) burden on people/businesses.
Option A is to just push past political resistance and apply the burden (tax, regulation, ...) at once. This results in a minor/major shock to the involved systems. And it might lower acceptance of the politicians who decided it.
Option B would be to - instead of practically imposing a brutal unit step function as in A - implement a differentiable function to "go from 0 to 1". I call this continuous politics.
A physical analogy would be slowing a high velocity vehicle down to a halt because there's an insurmountable obstacle in its way. The least painful way is to simply reduce the velocity in a linear fashion.
There are of course many other variants besides a linear approach. There are probably situations for which degressive or progressive functions are better.
But the linear function is easy to implement and understand and people and businesses could plan for the future, if the numbers were laid out to them early.
Businesses are probably better than people, though. Because they are probably less susceptible to the frog-in-slowly-heating-water effect.
> I am all for alternative energy but I don't think this is an approach that would work.
I think - if implemented linearly - this approach would be the least painful. All the other "approaches" will very likely effectively carry out like shocks/catastrophes with dramatically more harm done.
If you have a probability function over externalities rather than a single value, then just take the expectation. If you have latency in the system, account for that in the probabilities.
Refusing to set a price, or using arbitrary techniques pulled out of a hat instead, doesn't make it less hard, it just means your policies are arbitrary and uninterpretable.
Any remotely sensible cost estimate where ending the world is a legitimate possibility is going to be set impressively high.
Any remotely sensible cost estimate where ending the world is a legitimate possibility is going to be set impressively high.
My point above is that one doesn't avert the end of the world by setting prices. One averts the end of the world by making plans and issuing orders, as the OP essentially argues. That is - carbon taxes are bullshit. They and every other market-based policy have been worthless and done serious harm to humanity and the environment. Many of us can see this damage around us.
Have there been any significant carbon taxes implemented, though? I have only seen very mild, half-hearted measures because politicians are reluctant to annoy their constituents and their contributors. Getting them to do carbon restriction by fiat will be even harder.
Have there been any significant carbon taxes implemented, though?
Quite a few countries have implemented carbon taxes [1], in fact. Sure, these basically token taxes. But my point is that they couldn't be anything else - a large tax would hinder the average person's ability to function while not changing a lot of behavior. Public transit in my area is close to non-existent and I have moderate efficient car but everyone couldn't suddenly acquire a very efficient car since only so many are made per year. I rent and so I have no choice about how efficient my isolation is, etc.
Changes in energy consumption require coordinated action, not individual incentives.
I don't disagree with you. Suddenly creating a big tax causes a lot of strife, but setting a tax that is too low doesn't create enough of a change in emissions.
But I think there is a solution here: implement a tax that starts low and continuously increases. Is doesn't hurt at first, but if everyone knows the tax will keep going up, that creates a strong incentive to alter your choices even before it gets high. It also gives people time to adjust gradually where necessary-some changes that would be really painful to make in a month could be completely painless if you're given 4 years.
There's a bill in the US that a lot of people are pushing for that would work like I've described: https://energyinnovationact.org/
Getting them to do carbon restriction by fiat will be even harder.
Oh, a state organized decreases in carbon consumption could look like: "here's an electric car you can trade your broken down gas car for", "here's a program that will insulate your house for free", "here's a bunch of public transit lines leading to shopping centers, recreation and work". The state doesn't have to solve these problems by applying "the stick" to the average person, despite the average HN commentors' apparent eagerness to do this.
Also, one product having a higher price does not mean it's more valuable in a global context.
Two carbon equivalent products can be vastly different in terms of how essential they are (for the life or well-being of people). Prices may not reflect that difference because of global differences in purchasing power.
> If a good is taxed at its true, global, long-term rate of externality, then the externality, the damage being done, is precisely being paid for. There is now no longer a net externality.
Why is there no longer an externality?
Let’s pick a concrete example: taxation of petrol in the UK. The externality still exists (say people in Indonesia living on the coast[1]), and more than enough fuel duty is paid to the UK Exchequer to cover the externality (from article: “Britain has had one of the highest levels of fuel duty in the rich world in recent decades, note Mr Lonergan and Ms Sawers, but drivers’ take-up of electric vehicles has been unremarkable.”).
You could make a colour of money[2] argument that there is no explicit externality tax. Or perhaps the victims of sea rise need to tax British petrol users? And I have a feeling your argument somehow ignores surpluses or market inefficiencies?
As a counter example look at Norway. To a first approximation no one in Norway is buying a new petrol car. The taxes are simply too high compared to electric cars. So obviously there exists a level where people will switch out of their own short term financial self interest, without having to make an environmental argument.
There are multiple externalities to consuming petrol/driving cars around the UK.
There's a local/national one. By consuming petrol you're generally inflicting wear and tear on existing roads and adding to the need for road-space - requiring the construction of new roads. This is the externality that UK petrol tax is supposed to pay for - road infrastructure maintenance and construction. Ok it gets all mixed up in the general UK budget but, in theory at least, the tax pays for this externality.
But the government doesn't collect petrol tax and hand the money over to distant foreign countries in order to pay for global environmental externalities. So this externality is not paid for by UK petrol consumers?
There are all sorts of complex flows of money between local and central taxation and spending.
It's not really relevant to my point which is that taxes being collected by consumers of fossil fuels in the UK are certainly NOT being sent to foreign countries to pay for the externalities of pumping CO2 in the air.
As a consumer of petrol in the UK, it's a mistake to think "I'm paying loads of petrol tax, so I'm paying for the externalities" when the money is being spent, one way or another in the UK. While the externalities are global.
I think if we were looking at this from a "pure economics" point of view, we'd say that the theory of externalities isn't wrong. But that
1. The UK just hasn't priced it high enough.
2. If the UK does not spend the money raised on ameliorating the externality worldwide, then they have not cancelled out the externality as they might claim to have.
So central government commits very heavy funding to road building and maintenance such as through the Major Road Fund, but also many maintenance schemes at different levels.
Some local governments choose to forego some of this funding in return for receiving retained business rates instead. However retained business rates is collected by central government and considered central funding.
Ultimately money is a fungible commodity. It is true there’s no direct relationship between road taxes and road maintenance, but whatever petrol taxes pay for would still need to be paid for somehow if they went away.
Because council tax and business rates get paid to an entirely different entity than road tax (local government vs state government) and you can see your council's spending breakdown
It also overlooks the fact that elasticity is not constant, it changes as the price changes. Tax high enough, and demand will become elastic, if for no other reason than the tax becomes unaffordable.
If you believe that human society cannot afford to continue relying on fossil fuels, because they are an existential threat to civilisation, then it follows that the tax on those fuels also needs to become unaffordable.
Taxing fuels and other carbon emissions at a high enough rate to actually stop people using them is politically never going to happen.
> If you believe that human society cannot afford to continue relying on fossil fuels, because they are an existential threat to civilisation, then it follows that the tax on those fuels also needs to become unaffordable.
Why bother with taxes? Just outlaw fossil fuel altogether. If you like to go around punching people in the face there is no super high tax you can pay for the privilege to "offset the externalities." You just aren't allowed to do it.
>If you believe that human society cannot afford to continue relying on fossil fuels, because they are an existential threat to civilisation, then it follows that the tax on those fuels also needs to become unaffordable.
I think if you cut out all fossil fuels society would just not work. At least not at the scale it currently does. Even so called "renewables" are really only possible because of the complex society that fossil fuels allow. The more I dig into reneweables the more I feel like once fossil fuels go away, we largely go back to the stone age.
I think the hope is that we bootstrap the renewable capable complex society on top of fossil fuels and then it can continue to function with the renewables it builds.
I know that that's the hope, but there are some very questionable assumptions it's based on. The more I dig into it the more I get the sense that while there are solutions being investigated across a wide variety of domains for how to replace fossil fuels, there isn't an integrated picture of what such an endgame looks like and what size society it will actually support.
Then there's things like sand, water tables, synthetic fertilizers, and demographics to take into account too. You're essentially in a race against time to retool the entirety of society before the effects of fossil fuels either through climate change or human conflict destabilize the society past the point of being capable of doing so.
Every society does this. We grow, change, and evolve… or perish. Our generation has an opportunity to build a sustainable and robust society. If we do succeed, that’ll be up to us.
As long as there are alternative to the fossil fuels, you just have to set the tax high enough so alternatives are cheaper.
If you redistribute the money to the population, then people with low emissions would have a low net cost, and might even come out ahead. They'll still be incentivized to go with the now-cheaper low-emissions alternatives.
In the economic model, cost of the externality should go to reverse the damage, or compensate those harmed.
This breaks down if the government taxes a good due to externality, but spends the proceeds on something else.
Raising government revenues is arguably a social good, but does not benefit or compensate those harmed. Without targeted mitigation or compensation, such policies are simply sin taxes.
I don't think this is a problem with economists, who understand this well. you can not "set a tax precisely at the rate of the externality" without finding the cost of the externality to those impacted.
Yes this is an important point that is usually overlooked in arguments about taxing externalities. e.g. GS makes off with bank from introducing carbon tax
> the problem is you think the price is being estimated wrong, in which case you shouldn't be complaining about there being a tax, you should complain that the rate it is set at is incorrect
If there is no way of setting an appropriate price and fairly deploying the money gathered, then the policy is unworkable to begin with. From what process could an appropriate price for the externalities of global warming emerge? And by what process would climate refugees receive their share of compensatory value from the tax?
In short, even if the theory checks out, it's no use unless we have a political process capable of implementing it. Otherwise it's about as useful as a policy of us all concentrating on breathing in CO2 and shitting diamonds -- a brilliant idea if we could do it.
> From what process could an appropriate price for the externalities of global warming emerge?
I can think of one process: charge a fee per ton of CO2 emissions that equals the cost of taking that CO2 back out of the atmosphere and sequestering it. Then give the money to whoever is able to do that and prove it.
That's probably too expensive right now and definitely not feasible politically, but it's something to work towards. The closer we get to that, the more incentive there will be to develop technological methods of accomplishing it.
In the meantime, we're probably best off just setting the price as high as we can get away with, and equally distributing the revenue among residents as partial compensation for the damage being done.
In a functioning democracy, wide distribution helps build political support for a higher price. It also keeps the burden from falling heavily on the poor.
Understatement of the decade. This is functionally the same as hefty, punitive fines for burning any fossil fuel at all. The simple math is that closing the carbon cycle will always take as much energy as you got from burning it plus some extra, so it's never going to be economical to put the CO2 in the atmosphere and then take it out again.
You're only closing the carbon cycle if you turn ambient CO2 back into fuel. If you bury the CO2, that's an open cycle and just you have the cost of concentrating CO2 and pumping it underground. In basalt formations it will turn into rock in a year or two.
According to David Mackay, the theoretical minimum cost of concentrating the CO2 is 0.55kWh/kg.[1] The least carbon-intensive fuel is methane, which releases 0.18 kg/kWh, or for comparison, 5.55kWh/kg.[2] So the theoretical limit is that concentrating the CO2 will take a tenth as much energy as we get from burning the fuel. Of course we won't be maximally efficient but we have some room.
Possibly cheaper methods include turning the CO2 into biochar, or accelerating rock weathering with something like olivine sand beaches. In these cases, the energy mainly comes from sunlight and waves.
I don't think it follows that there is no way of setting an appropriate price. No policy will be perfect, but a carbon tax is a really effective way to reduce emissions efficiently. You don't even need to figure out the right price all at once-you can start low and keep increasing the tax until you get your desired rate of emissions reductions. In fact, to really get to net zero emissions requires an ever-increasing tax, in my opinion.
In any case, we shouldn't let the perfect be the enemy of the good. I don't know of any policy that I would consider to be as effective and efficient as a carbon tax.
I agree, and I think that what you said about the rate being incorrect is right. Pigovian taxes are great in models but extraordinarily difficult to implement. Measuring externalities, especially of something like carbon production, is a monumental task that economists in my opinion have been failing at. Another commenter linked a great analysis on how economists are drastically underestimating the economic effect of climate change (assuming 90% of GDP won’t be affected because its indoors!).
On the second point I somewhat disagree. The current inelasticity of demand is extremely important as climate change will become uncontrollable at longer timeframes. The current trend is not enough and not fast enough. I agree with the authors that Pigovian subsidies for renewables worldwide are necessary as soon as possible.
On this, I've read a critic of Nordhaus (in French) that said basically the same thing. AKA: Nordhaus willfully ignore in his research two major facts: you cannot operate machines with famished workers, and people need to be able to move around to produce value. The impact on GDP will be much higher, especially if agriculture is hit by climate change.
It'd be nice to see a refutation of his arguments, or at least a recognition of them. As it stands I've just seen two ad hominems in a row and not much else.
I’m not fundamentally opposed to pigovian taxes, they are the best option in many cases. For climate change, definitely not the best option. I personally advocate for cap and trade.
I think the place where this model breaks down, and perhaps the source of most of the apparently ideological conflict around it, is that the abstraction of the externality tax doesn’t cash out to reality well enough.
Modeling an externality in dollar terms seems like a fine and good thing to do, but the system in practice only works if those dollars are actually allocated to mitigating the literal, physical externalities.
Eg. a good situation would be like Acme corp is poisoning the water supply, they are taxed for the actual, continuous cost of cleaning that water supply such that the water supply is no longer dirty or some other actual solution that addresses the concrete problem with the water. This can be a literal tax or it can be a de facto “tax” in the sense they have to switch to a more expensive process that doesn’t poison the water supply. In any case, the externality has been addressed and we can talk about it in dollar terms since dollars are moving, but we can also talk about in concrete outcome and activity terms because that is also happening.
In practice it seems to me that the scenario is almost never like this. The externality tax, precisely correct or not, approximately never actually later gets allocated to mitigating the externality. Acme pays its pollution tax, and then… nothing. The military gets an extra tank or the tax is allocated to local teachers and police or a stadium project, but the water supply is still polluted.
It’s a super difficult problem because in reality it’s never just one concrete externality that can be legibly solved, it’s a morass of factors that resist measurement and has a very long tail, but it seems basically like we’re not even trying, and regardless of how hard the problem is this misallocation is a serious issue, according to me.
My favorite world is one where we, by and large, substantially address the concrete externalities using the taxes that are ostensibly for that purpose. I think we do that more than zero, but not nearly enough.
I think this fact causes numerous irresolvable conflicts on the local level, because when someone’s family is drinking cancer water what they want is to not be drinking cancer water anymore. And when some smartass retorts that the pollution externality has been efficiently priced in so it’s fine, it not only doesn’t seem fine to the family, it feels like a callous and disingenuous runaround ignoring the fact that they are still drinking cancer water and will be for the foreseeable future.
If this disconnect were somehow addressed correctly on a systemic level, I think there would be a lot less frustration all around.
I get what you’re saying, but I’m almost 100% sure that all you would achieve is spurring the development of new and inventive forms of tax evasion. Not to mention, the companies you intend to tax have a huge amount of political sway, and would likely try to put loopholes and exceptions for themselves and special penalties for others in order to weaponize the tax code to attack their competitors. I’m fairly certain that the end result would be no reduction in emissions whatsoever, but the formation of a number of new monopolies along with the price gouging and stagnation that comes with them.
Now of course, none of that implies that I have a better idea, currently. Except for maybe the replacement of winner-take-all capitalism with something better.
> And that is without counting the returns on the investment. British officials reckon that three-quarters of the total cost of the transition to net zero will be offset by benefits such as more efficient transport, and that the state may need to spend only 0.4% of gdp a year over three decades.
That also omits by far the largest return on investment, which is frequently omitted: Preventing the costs of climate change.
People who criticize actions to prevent climate change often talk about the economic impact of those actions. The economic impact of not preventing climate change - in addition to the impact on human life - is usually far greater. The question is not, 'how much does this change cost?', but 'what are the outcomes of our various options?'.
>People who criticize actions to prevent climate change often talk about the economic impact of those actions. The economic impact of not preventing climate change - in addition to the impact on human life - is usually far greater.
I think public discourse avoids this topic because the benefits and costs of climate policy are not uniform. There are there are nations, groups, and individuals for which climate policy is a simply negative. Talking about net benefit risks bringing up this topic, which is largely unsolved. proactive climate policy has clear winners and losers.
While net zero carbon may be relatively cheap and have net benefit for Brittan, for some poor developing countries, avoiding cheap carbon energy means more people in poverty with all the downsides that come along with that.
> There are there are nations, groups, and individuals for which climate policy is a simply negative. Talking about net benefit risks bringing up this topic, which is largely unsolved. proactive climate policy has clear winners and losers.
What basis do you have for these claims?
If FUD is the basis for stopping us, we should never do anything; we never operate in certainty, and we never operate in a situation where people can't create FUD. Climate change is possibly the most studied issue in the history of the world; we don't need to know more. How much longer will you try to delay action?
I didn't even say it wasn't a net positive. Just that there will be winners and losers. This is how strong the dogma is around the topic.
This is the economic consensus and clear as daylight.
Climate policy will indisputably hamper the economies of petrostates.
It will indisputably hamper growth in developing nations, where filthy coal is the cheapest source electricity. It will indisputably put workers in the fossil fuel industry out of jobs, some of whom will not retrain or recover.
>FUD
Like any policy, some people are harmed and some benefit. This is simply the reality of the world we live in. Rational people can accept this and debate it on it's own merits, and move on.
Fear, uncertainty and doubt is a personal choice when presented with inconvenient facts. The irrational response is denial, thinking that every single person and interest will benefit.
> Climate policy will indisputably hamper the economies of petrostates. It will indisputably hamper growth in developing nations, where filthy coal is the cheapest source electricity. It will indisputably put workers in the fossil fuel industry out of jobs, some of whom will not retrain or recover.
That only looks at the cost side, not the benefit side. If we only look at the costs, all policies are bad ideas.
> Fear, uncertainty and doubt is a personal choice
Lots of talk about taxing this or repaying that but in Meadows's
taxonomy of leverage points these amount to changes between level 10
and 7.
What the article is kinda saying is that these "extreme positive
incentives for change" (EPICs) that are labelled political/structural
instruments lie outside monetary economics and so hint towards level 5
and 4 changes, to system rules and to self-organisational motives. I
still don't get, if so, how? And if so, why not apply both?
But ultimately changing system goals away from consumerism might be
the gift everyone wants. I know many bored people who want to feel
like they're part of big change, what Alexis De Tocqueville called
"restive fervour" in early America - in British parlance being "up for
it".
If economists exacerbate climate problems it is by the tepidity of
their vision. I think we have forgotten as a society truly grand
ambition. The Panama canal. The Hoover Dam. The dykes of
Nederlands. US post-war Apollo Project. The Channel Tunnel. Imagine
human action at scale, not as ungrateful entitled protest, but
coordinated and purposeful action in the face of climate change. What
would that look like? If we can't even imagine it then we're truly
lost.
In the shadow of the pandemic and Russo-Ukraine war I think we'll have
an opportunity, and to avoid unrest maybe a necessity, for bold,
crazy-ass projects whose ROI can just be written off to posterity -
what William James called the "Moral Equivalent of War", not as mere
National Service, but as Global Service. Literally pay people salaries
to fight climate change.
Of course that would require a strategy backed up by good science.
But realising that monetary economics and "markets" isn't the only way
out would be a good step. The Economist article hints and plays with
that, and then backs off.
> what William James called the "Moral Equivalent of War", not as mere National Service, but as Global Service. Literally pay people salaries to fight climate change.
I see what you’re going for with this, and I imagine I could be persuaded to a more workable version of this. What’s hanging me up is - how do you avoid these salaried people being captured by incentives to sustain their salary rather than be incentivized to ultimately solve the problem?
We’ve tried this with the war on drugs, war on terror, war on homelessness... haven’t we? Is your suggestion different somehow?
> We've tried this with the war on drugs, war on terror, war on
homelessness... haven’t we? Is your suggestion different somehow?
No, it's ill formed and to be honest you're probably the first person
to take it seriously enough to return a comment that isn't ridicule or
outrage.
Self-fulfilling capture, and indeed malevolent hijacking seem
unavoidable pitfalls of such projects, you're right. But I notice the
other wars on abstract nouns you mention are against human weaknesses
(drugs/exploitation, terror/wrath, homelessness/inequity). And these
always get twisted; wars on poverty become wars against the poor; wars
on drugs become wars on addicts; wars on terror become wars of
terror.
Is climate maybe different if it's an "external" threat? The danger is
that becomes a "war on nature" which is how we got into this fine
mess. So no easy answers.
However James is canny in reminding us that war is a (the) strong
organising principle for humans and there may be a way to twist that
into benevolence.
I like the “leverage/hack human psychodynamics to achieve positive group outcomes” angle. Guess I should check out some William James.
Wondering if maybe it’s less paying tsars and bureaus to solve climate change, and more about paying individual people as a direct incentive to reduce their own carbon output. Dunno that that helps as far as businesses or foreign nations go, though.
Music, art, books, comedy, pets, food, land, clothing, shelter... provided it’s all locally produced, I suppose.
Are you going after something in particular? Seriously not trying to be facetious - I just don’t understand where you’re headed with this glib? rhetorical? question.
I think there’s a question of what fossil-fuel dependent comforts you’re willing to give up. But I assure you it’s entirely possible to live and have all of those goods, today, fossil-fuel free.
>But I assure you it’s entirely possible to live and have all of those goods, today, fossil-fuel free
Well I'd be curious to hear how. Even the apple in your pantry requires significant fossil fuel input.
Fertilizer: Fossil fuel based - the Haber-Bosch process is now directly responsible for sustaining 40% of the Earth’s population and is reliant on natural gas.
That's to say nothing of the transport involved in, for example, buying Avocado year round from your grocer.
That's just food though. Plastics are in literally everything. The amount of plastics, glues etc just in the pair of shoes you wear every day is unreal.
Sorry to play the man and not the ball, and please don't take this as
as personal ad-hominem, but what you are doing is rationalised
catastrophising [1]
Your fallacy is: Because all things are X and some X are bad, all X
are equally bad.
Your game is: Whatever you think of as a humane activity, I can find a
reason why it's destroying the planet so you may as well not bother -
just continue destroying the planet as you are.
Fact is, everything you do will kill you. Every step you take wears
out your body. Every bite of food and breath of oxygen takes you
further down the road to death.
What will you do, stay in bed frozen in fear?
There are a billion things to do in life that have less environmental
impact than flying around the world to go a jet-ski racing and tyre
burning party. Reading a good book [2] :) on a beach would hurt less.
>Whatever you think of as a humane activity, I can find a reason why it's destroying the planet so you may as well not bother - just continue destroying the planet as you are
yes that's correct, there is nothing you can personally do that will make a measurable difference to making the planet a better place. You're wasting your time. Even collective action is probably doomed. There are just too many humans on the planet.
In 1500, the world population was 460million. That is probably a level that the planet can indefinitely sustain. We're at 8billion now and we're fatally addicted to fossil fuels. Buying local and taking a bus to work are not going to save the planet.
>A lot of hard work, non vehicular labor, local sourcing, and luck, providence, perseverance, and serendipity.
none of this will make any difference.
>How do you suppose humans did it prior to the invention of the coal mine and oil drill?
well, we didn't use fossil fuels, and there were far fewer of us on the planet. With 8billion fossil fuel addicted people, half of whom are yet to be raised from poverty, riding your bike will make you feel better but wont make any difference.
Any article that uses Norway as a positive example needs to also mention that that country is a large exporter of oil. How much of the incentives of e-cars come from oil profit?
Norway actively took a bet that long term, oil lying under their shelf might not appreciate in value quite as much as most would expect and opted for faster extraction than others. They might have had a certain hunch that scarcity might not be the only possible end game for oil?
Not the worst use, for sure, but instead of incrementally improving the climate situation Norway is making it worse until suddenly much better, when everything is converted.
No. Norway is taking an existing economic function with huge negative externalities and using its profits to move toward a sustainable future. Profits that otherwise would not be spent in such a manner. They’re far faster and move with more precision on this topic than nearly every other major O&G producing country.
I think the best way to kill carbon emissions are with a revenue neutral 'vat' style tax. Give the money you took for co2 back on the income tax, and people will spend it decarbonizing in an attempt to dodge the tax.
Having said that, I have zero faith that we will ever do anything substantial to stop climate change while the billionaire class funds grover norquist style hit men to terrify conservatives at the mere mention of the T-word.
I dont think anyone is going to go for a new tax especially if it hits the middle class and poor. Even if one political administration implemented it, the next would revoke it. Carbon neutral technologies just need to be able to compete on price and appeal. Tesla has proven its possible in transportation and other car companies are following suit. Need a couple of high profile competitive examples in other industries, especially power. They also need really good lobbyists.
Tesla succeeded, in large part, because of government subsidies and some policies that are essentially carbon taxes with extra steps.
Some people would say that as an insult, but I both think it's true and a good thing.
Putting a price on carbon has been a winning strategy everywhere it's been used. People just have had to hide it, because it's too easy to scare people with lies about taxes, so we get the exact same thing, but slightly less efficiently implemented.
The problem is that carbon intensive technologies do not pay for the damage they're doing to the environment. The tax I suggested was revenue neutral, which means the average poor person would get back as much in income taxes on their paycheck as they paid in carbon taxes. Technically, this doesn't 'hit' anyone and it benefits those willing to change. I think you're right though that this is politically infeasible simply due to short-sightedness and cowardice.
Ontario has the carbon tax setup. 90% is revenue neutral. You get a standard amount on your tax return every year, if you happened to pollute little (not spending much on gaz) then you're net positive. If you're average, you get back what you spent. If you're a big polluter, then you spent more on tax than what you got back.
Issue is that most people don't understand those taxes. I tried to explain to a few friend that the increased in gas cost was offset by the carbon tax return, but they just don't understand it. They see the gas being more expensive as "bad" and they think they lost money. They don't understand likely because they don't do their own tax return.
The solution is quite easy. Implement the carbon dividend first, then charge taxes.
When you give people money and then tell them that money comes from carbon taxes they will understand that.
If you introduce a new tax and then tell them you are going to give it back they won't understand it at all, they won't even trust you to implement the dividend.
> Give the money you took for co2 back on the income tax, and people will spend it decarbonizing in an attempt to dodge the tax
Even better, preempt this by funding decarbonising programmes first, with the threat of a tax in some fixed time period. People will decarbonise without the publicity hit of "new taxes".
> The authors argue that getting people to make the big leaps needed to decarbonise, such as buying an electric car or installing a domestic heat pump, instead requires “extreme positive incentives for change” (epics).
By saying there will be a government programme funding/giving a tax credit/interest free loan/whatever other incentive to retrofit your house with more efficient heating or better insulate it or upgrade to a more efficient vehicle? I really think it's the opposite, those kinds of things are popular with voters.
There are microeconomic concepts I learned in college that make decarbonization nearly impossible. First the FREE RIDER principle. Since CO2 (and methane) affects temperature globally, every nation (and individual) is incentivized to free ride off the decarbonization expenses of others. Second, the PRISONER'S DILEMMA. Most political systems have two main parties competing for power. Although both parties broadly agree that climate change is bad, policies that kick the can down the road are electorally advantageous (less taxes now always beats a better future). Thus the NASH EQUILIBRIUM is for political parties to always promise to undo any costly changes the other party is proposing.
>Most political systems have two main parties competing for power
I disagree. While this is true for some (US, UK), it's not true for other democracies (Spain, Germany), and even less true for more authoritarian systems (Russia, China). Some countries have political systems that are actually able to make long term decisions.
>Although both parties broadly agree that climate change is bad
True in some places, but not in others, such as Russia, Brazil, or (most importantly) the US.
While I agree that decarbonization is really hard, and in part due to the reasons you listed, they are also not as universal as you paint them out to be.
Agree -- here in California where we only have one relevant political party the California Energy commission has been able to impose energy efficiency requirements for appliances and buildings that have had a huge positive impact on our energy usage per capita. We've also had EPICS like the tax credit and ability to drive in the carpool lane for hybrids and later electric cars.
At a US national level we have partisan trench warfare exacerbated by a Senate dominated by small states and supermajoritarian voting rules. It's not entirely untrue that the the continued existence of the US Senate is incompatible with a future habitable planet.
Positive incentives are when you receive money as opposed to negative incentives such as fines where you have to pay money. So this is unlikely to cause a political party to lose elections, people like to receive money.
What is most fair? Every person on the planets gets the same portion of the remaining global carbon budget. Or, it is divided proportional to current wealth. A carbon tax is the latter.
As a counter argument to the piece in the Economist, this article by Steve Keen (University College London professor) explains the gross errors made by economists in their modeling of climate damages, how those errors arose and their implications.
TL;DR: Nobel prize-winning economist, William Nordhaus, willfully or negligently underestimated climate damages.
I rant to an annoying degree (sorry everyone) about the fundamental pro-business cultural bias of economics-the-profession, and how this has failed the human race to a frightening degree. Considering economics-the-profession is usually the first source of academic approval/opinion on government policy (because science sure as shit isn't.
What makes it most annoying is that "externalities" is largely a bolt-on. And even worse, Economics-the-culture is averse to things they can't measure in some way (even though I'd say their measurements of EVERYTHING they do rely is is pretty bad).
How does Economics price the "externality" of global warming? The lost value of displaced and dead people, maybe a broad stroke. Extinct species and habitat loss? How does one nihilistically price if we head outside of phytoplankton's ability to create oxygen?
At best, a vast underestimate, especially given the pro-business bias.
To me the shining failure of modern economics environmentally is the inability to enact a carbon tax in the last 30 years, a very basic and effective mechanism. Instead, easily arbitraged and gamed carbon markets.
Secondarily, what is the economic value of any wetland or natural habitat? Vague tourism at best. The best economic use of a habitat is to drain it and pave it. Economics cannot measure how diversity of the species web is critical to our long term survival, because it can't even see one month into the future.
> To me the shining failure of modern economics environmentally is the inability to enact a carbon tax in the last 30 years
Every single economist has been shouting for a carbon tax for around this time frame. It's a political problem, not an econ one. There are many valid complaints about academic econ. I think you're right that many of them stem from a pro-business cultural bias, but it really doesn't seem like you know enough economics to have much of an opinion on them. Claiming that externalities are a bolt on when they're taught in every single econ 101 class is certainly puzzling.
Your 3300 economists finally issued a joint statement in 2019. Oh thanks, we're already at 1C warming. Way to be in front of things. It's only been, what 30 years of mainstream science?
And yet still carbon taxes are opposed by every conservative think tank with staff economist (flunkies?) carrying the water.
And that 3300 statement, did it come out of the CLC? With major oil producers cosigning? Strange how the oil companies, possibly the strongest lobby in congress, can't get carbon taxes through. Almost like they really don't support it.
I guess you guys have done everything possible, after all you signed a petition.
Can't wait for the not-really-Nobel prize to actually reward economics that involve actual climate solutions. Oh look! Another old white man doing price theory math. That will save us.
Is carbon tax really effective? Ultimately effective in this context means "removes the least valuable carbon emissions". I don't think a carbon tax can accomplish that. We need political decisions to make that distinction. The market does not cut it in this case.
Shouldn’t that be a positive? Remove the least valuable carbon intensive emissions? We need to drive a transition to a sustainable economy. Knocking off the lowest hanging fruit first seems like a decent strategy to help jump start more competitive technologies.
Yes absolutely, but I think carbon tax cannot achieve that. Because on a global scale (and in fact national as well) we have so large discrepancies in income.
Food production is not the lowest hanging fruit. Neither is infrastructure construction in less wealthy nations. But in terms of spending power those budget posts can't compete with the demand for leisure travel and meat in the richer world.
And thus the robed priests of capitalism retreat to their temples, converse, and release smoke signals to the faithful.
Stay the path. Ignore those who question our word. We are all knowing. Beseech thy statue of Malcolm Gladwell.
And yet, they actually know nothing. They cannot price the exigent threats to human civilization. They cannot price the risk to collapse of biodiversity chains from mass extinctions. They cannot price the value of wilderness.
They can price slaughtering natives to gain access to natural resources. They can price the slave trade. They can price the value of a human life (it's not much). They can price paving a wetland to build some 1+5 apartments.
And yet they are the #1 academic study that influences policy. Ok, PERHAPS international relations/political "science" is #1, although that is REALLY not a science.
Articles paywalled. But the irony of an economist trying to explain why they aren't wrong using the failed quasi science that is economics is lulzy as hell.
Economics isn't a science it's a collection of hypotheticals which rarely maintains consistency in results. To place such weight on these hypotheticals as we do, well we reap what we sow as they say.
This is just a strawman. No one is claiming economics is a science with ground truth. That being said, people on the aggregate do generally act rationally, and they absolutely respond to incentives, which is pretty much all you need for economics to be useful.
Actually mate they try pass economics of as a science so regularly they use it to influence policy. Which if the title of this article is correct. It's been part of the reason our environmental policiea globally have been so woeful ("you can't do that you'll ruin the economy"). It's the case here in aus and most of the western world, your telling yourself porky pies if you think it's not happening. Economics places be all and end all weight on growth and dollars. When for the most of us that results in detrimental outcomes. For example as I write this I'm currently in a motel because my house is flooded out by a 1 in 100 year flood, the 2nd time this month....
> Actually mate they try pass economics of as a science so regularly they use it to influence policy.
I don't see how economics influencing policy means people think econ is a physical science. What I do know is that "you can't do that you'll ruin the economy" is not something economists ever say. That's something politicians say. Economists widely support policy that may have negative short term effects in order to achieve long term gains, but these policies aren't politically viable, so they are ignored.
The idea that climate change is in some way caused by economics is misguided. Climate change is caused by human nature. People are extremely unwilling to make sacrifices when they aren't sure they'll see the results. That's why our environmental policies have been so woeful, not because economists object.
Agree 100%.
Economic theory is more moral philosophy and religion than science. To begin with, its fundamental motivation rests on utilitarianism. But then it also fails to accomplish that goal because it values the utility of a rich person buying something expensive more than it values ten poor persons buying something essential. That's also why a carbon tax does not work.
I just disable javascript via ublock whenever I hit that sort of thing. 90% of the time things are hidden client side and that stops it. The other 10% I have to decide if i really want to go find an archive link to use.
My own raw and personal opinion, after having read books from Green New Deal, Great Reset promoters like "Covid-19: The Great Reset", by Klaus Schwab (head of World Economic Forum) and Thierry Malleret or Value(s): Building a Better World for All by Mark Carney (former head of UK central bank) I read the "environmental policies" as nothing really environmental, by points:
- the western world is in decline, mostly for self-inflicted damage, since the actual situation is irrecoverable, the game is lost, a new global war like WWI or WWII can't be done, then overturn the table creating a new society forcing others who still depend on western tech to follow is a way to "reset" the game;
- to do so an excuse is needed and seen the actual climate changes and level of pollution it's easy to choose that as an excuse, a true fact, depicted as solvable in a way that do not really solve anything but sound credible to public eyes;
- since the French Revolution the world instead of being led by classic aristocracy (witch means by who detain the military power) is led by economy so by economist.
Why the green new deal is not green in the sense of spring grass green but more in the sense of dollar-green and stereotypical toxic waste spills from rusty barrels? Because all publicized today, from the ONU New Urban Agenda to the Green Deal itself is partially and marginally about the environment and much more about a Chinese-like society, smart cities, drone delivery of industrial ultra-processed food, no travels except for very few, only public transportation, ... just read the classic https://www.forbes.com/sites/worldeconomicforum/2016/11/10/s... and try to see what emerge.
EVs? it's clear and clearly stated here and there that they can't be like actual cars, only few will get EVs like actual cars, most will get "glorified golf carts" [1] most others will live in "smart cities" designed like SK Goshiwon or JP Capsule Hotels, depending on public services because they'll can't afford the price of a "new" real car but "fun and be distracting enough" to keep those mass of population calm. Heat pumps? Ok, for new homes they are effective to reduce night/no/not-enough p.v. production time for heating a house or producing hot water, with p.v. productions they are needed mostly only to cool a home, without modern home + p.v. are just ways to consume less electricity at a significant price and peoples aren't much pushed for environmental reasons but for artificially skyrocketed prices by speculation of the same people who publicly sell the Green New Deal.
To be clear:
- politically I'm on the left side of the spectrum, the REAL left side
- I'm an environmentalist concerned by actual climate change
- I've built my new well-insulated home, with domestic p.v.
- I do not own an e.v. simply because it's not green at all, and economically it's still more expensive than modern EU diesel, in the future when diesel here will be a 4 euros per liter than will be cheap and I hope it can be integrated in the house micro-grid so I'll buy an e.v.
Just remember a thing: economist like those who drive our countries these days are the new generation of the same who have laid the foundations of devastating II half of 1800 wars and WWI and WWII. How "environmentally concerned" they can be?
This completely misunderstands the point of setting a tax precisely at the rate of the externality. If a good is taxed at its true, global, long-term rate of externality, then the externality, the damage being done, is precisely being paid for. There is now no longer a net externality. If the tax means demand switches to a product without that externality, then good, problem solved, and if instead people still prefer that good to the alternatives, then they can just go ahead and pay for that good plus the tax that pays for the externality. If this isn't good enough for you then probably the problem is you think the price is being estimated wrong, in which case you shouldn't be complaining about there being a tax, you should complain that the rate it is set at is incorrect.
I also think the inelasticity of demand claim is mostly bogus; it's inelastic on short timescales but there is plenty of momentum to switch to electric cars and renewable energy even at undiscounted price points. Electricity generation in particular is extremely price sensitive; it's just that with cost trends that cover literal orders of magnitude the crossover point was always going to seem like a sudden event.