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44 Comments

  1. if the refund is delivered thru the tax return system, it also encourages people to lodge tax returns, and acts as an automatic penalty on those who do not lodge tax returns. This is a huge bonus compliance effect which Australia discovered during the GFC by issuing the stimulus handout thru the tax system to those who had actually lodged a return

    1. The original proposal is to have the Fee and Dividend system administered by the IRS for several reasons. Firstly, IRS already has most of the bureaucratic infrastructure and institutional know-how, so there will be least expansion of government. Secondly, the idea is for the fees to be collected, and dividends divided, without the stream passing through the General Fund. IRS can do either, but is also best equipped to shunt the circuit.

      As BT Hathaway notes, a carbon fee and dividend will by itself be regressive. I think the CCL’s philosophy is “Keep the fee and dividend flat; regressive inequities can be redressed elsewhere in the tax code.”

      Nothing is completely non-negotiable. If it happens at all, Fee and Dividend will not be enacted without a substantial and informed political debate. Politics is the art of the possible.

    2. According to The Conservative Case For Climate Dividends (Rod has the link above) Social Security would distribute the dividends. If you have a Social Security Number, you automatically get a check.

      And although the carbon fee alone would be regressive, the combination of fee and dividend would be quite progressive. I believe they estimate 70% of households would come out ahead.

  2. How is something like that going to be sold to the Congress when many Republican party members do not even acknowledge that global warming is a reality?

    Here’s another slant on it. I have talked with a few hard core Republicans on this issue. Many Republicans are not Spring Chickens, including those with whom I spoke. They acknowledged that global warming may be a man made phenomenon. They also noted that it will take a number of years before the effects are fully felt. These Republicans told me with a smile that they figured they would be dead before the full effects are felt.

    There will be no US carbon tax in the near future.

  3. Unfortunately, any Republican who dared to place a tax on something that most of its electorate doesn’t even believe is even a problem would probably be out of office, IMO.

    I think there would be a much better chance of at least some– bipartisan– support in Congress if it were simply mandated that a growing % of electricity and liquid transportation fuels come from– carbon neutral resources– over the next 30 years. This could be done by the Federal government or by individual States, or by both. Utilities and fuels that fail to meet the government standard would be slapped with a 100% sin tax.

    We already know how to convert garbage and sewage into syngas, syngas into methanol, and methanol into gasoline. And a lot more carbon neutral gasoline could be made if hydrogen produced from nuclear and renewable resources were added to the mix.

    If all gasoline sold in the US or within a State were required to contain at least 5% gasoline derived from carbon neutral sources, new energy jobs would be created in practically every community in America.

    1. @Marcel F. Williams

      Disagree. I think far too many observers/pundits took the wrong lesson away from George H. W. Bush’s experience of allowing a tax hike after pledging “Read my lips: No New Taxes” during his campaign.

      It wasn’t a visceral abhorrence of taxes that did him in; it was the hay made of his breaking what seemed to have been a direct, solid pledge and not just a campaign promise.

      http://www.history.com/topics/us-presidents/george-bush/videos/read-my-lips

      It is far less intrusive for the government to levy a fee on fuel than to establish quotas, rules and enforcement mechanisms for the nebulous concept of “carbon-neutral” fuels.

      If there is a CO2 fee, it should be applied to all fuels – including wood, methanol and ethanol – that are sold for use as a fuel.

  4. Im glad you posted this. I have been thinking about it a lot lately. 3-4 years ago Id support this kind of thing without question. I wouldn’t have used this good a argument either. Now I dont know, I need to read more I think. Ive seen some of those articles you mentioned and have been intrigued.

    The reason im still somewhat torn here is my extreme advocacy for Nuclear Power AND inexpensive energy, and my extreme dislike for expensive energy and wasteful, contrary, and (dare I say) “fake environmentalism.” (how well can this possibly work, what are the real risks with carbon pollution and feedbacks, what are the resource costs and risks as well as human costs, what are the benefits in terms of new and better technology). I just dont know.

    1. Funding a UBI with a carbon tax might defeat itself by being successful. If fossil fuels get replaced with nuclear, the UBI loses its funding. I am giving serious thought to funding UBI with debt – which winds up being inflation. More head scratching is required.

      1. There are many other things that need costs/benefits internalising that could fund the UBI.

        No 1 being the scarcity value derived from natural resources. Principally that from valuable locations.

    2. Rather than intending to make some energy sources more expensive, the fee-and-dividend simply fixes the broken energy market. Currently, environmental costs of using fossil fuels are externalized, making them artificially cheap, yet the full costs are definitely paid by society further down the line.

  5. The tax on so-called ‘carbon’ — both the initial dollop and its inevitable ratchety rise (nuke folks know what kind of ratchet I speak of) is a decisive blow to end the industrial revolution while it is still in progress. Let us consider the “whod’a thunkits”.

    Thunkit: When the magic smoke clears it will actually be a tax on CO2, which is (practically speaking) energy consumed by proxy across every strata of economy and society. It is the most clever scam yet devised by human kind, a way to tax regardless of assets, currency valuation or economy. It is literally a tax burden on civilization itself. As it ratchets every decision that leads us back to dark ages will be rewarded. Every expenditure of energy that might encourage problem solving or maintain today’s life style would diminish then cease.

    The nuclear energy industry will go to bed confident that the morning paper will bring the headline they have long craved, a declaration that nuclear is the essential choice for base load energy and that carbon tax will make nuclear more “comparable” in cost to gas. Morning arrives and they are thumbing through the paper in vain, as when someone scans for their letter to the editor that had been silently discarded. This is actually two thunkits delivered at once.

    Thunkit: Betrayed again by faux-environmentalists whose irrational fear of radiation exceeds any commitment to the environment… who comprise not only a lion’s share of beloved Democrats but also the rogue GOP faction that is fronting the carbon tax. Ever notice that when these people are listing sources of energy nuclear is usually mentioned last, if at all? It goes a whole lot deeper than that.

    Thunkit: Has nuclear actually become more “comparable” to gas? I put it in quotes because nothing has become cheaper, it’s just that gas now has a monkey on its back. Just like nuclear has. That’s only fair, right? Does that change everything?

    Nuclear now has two monkeys. Despite your valiant efforts no nuclear plant has yet been constructed solely with nuclear energy. Since gas plants may be erected with the casual abandon of Wal-Marts, yet nuclear requires deep foundations, massive concrete and steel, thousands of warm bodies to do paperwork and real work and a thousand other fossil energy-intensive things… the construction of a nuclear plant (“comparably”) belches an Earth-imperiling amount of carbon (oops, CO2).

    So yes, nuclear just got more expensive (to build) by an amount wholly disproportionate to its ultimate value. If you voted for that carbon tax, you just shot yourself in the foot.

    Thunkit: Nuclear under a carbon tax, in addition to easing of regulations, would require ‘subsidy’ on a scale exceeding the grossly over-inflated MWh/$ ratio of solar and wind. Is that likely? Would anyone care to place bets?

    Perhaps people imagine that the building of nuclear power plants could be done by people and machines wearing magical jewels that exempt them from carbon tax because they’re helping to save the Earth. Sort of like the faux-engineers today that claim that a hundred intermittent energy sources equals one continuous source. The jewel keeps them from being laughed out of the room.

    Only incidentally: CO2 rise has not been accompanied by a rise in temperature that is directly comparable. CO2 rise follows, not leads, temperature rise in paleoclimate. Past surface temperature records have been subject to deliberate tampering to claim successive “hottest year” by tiny margins. There is nothing as tragic as when people acting on a noble impulse are deceived. Forgive the crazy talk.

    Prohibition drove everyone to drink.
    A carbon tax would hasten us back to Medieval times.
    Collecting spider webs to pack wounds with penicillin.
    Hidden within my hyperbole is truth.

  6. Rod,

    I realize that everyone who understands climate change is essentially desperate to do *something* to feel as though they’ve made an impact on emissions. Certainly the carbon tax described above, meets the psychological need, but I would be very careful about using the words “elegant simplicity” to describe anything designed to curtail consumption across the entire economy.

    For instance, this flat redistribution approach is horribly regressive in impact. If at the time the tax goes into effect, you already live in a high efficiency high-rise, a block or two from public transport (the very definition of a rich urbanite), then voila, book a couple more dinner reservations from your dividend. Your carbon footprint was already quite small.

    But if you are a rural farm worker (feeding into the system through fuel taxes left and right) running around doing odd jobs just to pay the rent, where’s the equity in that? Since none of the carbon dollars get put into infrastructure investment, how does that rural worker ever get the leg up they need to switch to electric transport–if such a thing is even feasible? Marginal areas have already faced decline and collapse, carbon taxes will tend to empty out these areas even further. Is that what we want? I don’t know for sure, but forcing people out of livelihoods is neither elegant or simple.

    Also, in terms of the economy (setting aside the heat equilibrium of the atmosphere for a moment), a carbon tax is really a tax on *productivity*. Every dollar per ton puts a tiny but cumulatively important drag on the productive capacity of everything around us. And it is always difficult to predict exactly how that will play out over time in terms of employment, real wages, competitiveness, and most importantly our capacity to rapidly build, deploy and maintain the alternative energy systems we need to put in place.

    Not to mention the fact that from what I have read, it is not until $100 per ton that economists predict any significant impact on consumption. And it seems we are a very long way from building the political will to raise fees that far or even higher.

  7. Alternate idea: $40/ton carbon tax, all to go into research and implementation of carbon negative technologies. 5 year timeline to mandate carbon neutrality. At the end of the 5 years, all industries are to be carbon neutral, either by nature of their technology, or to employ technologies/pay companies that employ technologies that capture and use or store carbon at the same rate carbon is released in said industry. Each ton of CO2 over the limit will be levied an $80/ton tax, which will be used to capture and store CO2.

    1. This will be fair to all technology. If fossil fuel with CCS turns out to be cheaper, good, if not, it will be priced out by alternatives.

      Also, all other subsidies are removed.

  8. A tax has the advantages you mention but perhaps as importantly, it would make international negotiations SO much easier. The current negotiations over caps are producing winners and losers. It’s a tug-of-war and nobody wants to come home with a bad deal. Poorer countries want to increase their shares to be able to grow while richer countries doesn’t want to give away shares. But what if we could just negotiate over a floor on national carbon taxes? You essentially pay money to yourself, so it would take away most of the drama. Also, most governments will be happy to hike the tax next round, as they get more money in their coffers.

    Speaking of which, as a foreigner, I don’t really understand your need to distribute the money. You do have an enormous public debt, don’t you? And you could use the money to reduce other taxes that makes more damage to the economy than a carbon tax. A carbon tax would help to internalize costs of AGW, congestion and particle pollution. Reducing some labor related tax would be great – such taxes are much worse. But you do what you have to do.

    1. Thanks Jeppen.

      So-called “Cross-border adjustments” are a requisite part of Fee and Dividend. Countries with effectively similar carbon emissions control structure would get effectively free-trade, those that did not would see an import duty proportionate to the difference and emissions content of the imported goods.

      Likewise, emissions-dense US exports e.g. steel that had already effectively paid their carbon tax, would get some kind of break when exported to markets without.

      And should any of you Scandahoovians DARE to actually undercut us on industrial emissions density, well I, I (sputter. gasp. apoplectic outrage…)

      Joke. I doubt that one would ever amount to much. By far our largest trading partners are Canada, Mexico, and China, with whom — all else being equal — negotiating comparable Fee and Dividend rates should be relatively straightforward .

      1. Interesting idea, to be sure, but I’m not sure I like it. It would push countries to get carbon taxes of their own, which is good. Import duties simply does a lot of damage, so I’d try to minimize that. Perhaps it’s worth it for a small group of goods.

        Considering Sweden’s 50% hydro, 40% nuclear and 10% wind, I think we have a fair shot at undercutting emission density. 🙂 But we do import coal for steel production and of course, most transport is oil based. We have a carbon tax, but with a lot of exemptions.

  9. This is exactly the same proposal that Jim Hansen spoke of when he came to Australia in March 2010. In fact I attended a meeting with him and Malcolm Turnbull our current Prime Minister at which Jim described the concept.
    In principle I am keen because for the brief period we actually had a carbon tax in place it worked well. It was brought undone by the same divisiveness that the US system is experiencing. All democracies crave real leadership that has intellectual depth and a sound moral compass – we get neither.

    I share a number of the misgivings others have expressed however in trying to comprehend how it would work in practice. Let’s assume that people have no social motivation to reduce carbon consumption.

    1. Therefore the dividend is paid on a per capita basis.

    For the more well healed, who it is assumed use more carbon per capita, they are compensated to a lesser degree – they make a loss. They will be motivated to reduce carbon consumption.
    For people on lower incomes they receive a dividend which is greater than the incremental increase in their costs which occurred as a result of a price on carbon – they make a profit on the deal.
    Note also that the carbon price steadily ramps up so that those items with more embodied or emitted carbon become differentially more expensive and the cost gap continues to widen.

    It assumes therefore that public transport use increases because its cost differential compared to private car use improves. Less electricity is used and building thermal efficiency is improved.

    There will be people left stranded without options such as those living in small communities where public service delivery does not respond – rural dwellers may get hit proportionally harder than urban dwellers.

    I don’t think it’s a good idea to give agriculture any special treatment. When one realises that a day off the red meat saves about the same in carbon emissions as a day of zero carbon electricity, “free riders” need to be included in the scheme. In Australia our rural politicians will create strong opposition and not without some justification.

    2. Regarding the issue of cheaper low carbon alternatives I think one has to have “faith” in economic theory and look at a carbon abatement costs graph. I can’t post an image here but I suggest you search for a typical example. All the stuff on the left of a graph will be taken up first and this will accelerate as the horizontal abatement cost line steadily rises.
    3. Regarding R&D expenditure – It seems a proportion could be syphoned off. I’m thinking here about changes in industrial processes such as steel or cement production – would need delicate handling. I am also thinking that the electricity market would need to be re-designed. We still haven’t worked out what consumers are actually buying – is it power or its 24/7 availability or both? Power only markets create a big disincentive to generation investment
    4. Border adjustments – tariffs if you like are an essential element otherwise the scheme fails due to carbon leakage. This has significant complexity in an age of internet shopping. Maybe you have boarder adjustments for large scale materials such as imported steel, cement, motor vehicles, aircraft, white goods and the like. Internet imports get a credit card impost depending on the source nation – its complex.
    5. Concerns about the mopping up of excess liquidity to non worthwhile expenditure is a risk – remember when women going to work were meant to improve the household standard of living? – instead we just got more expensive housing, larger mortgages and expensive child care.

    There is an Australian offshoot pushing this agenda – it’s called the Citizens Climate Lobby. I went to their AGM in Canberra a couple of months ago. Its worth keeping up with this idea because it could just blossom.

    1. Regarding your 1.

      For the truly rich (on a percent of income basis) a carbon tax is essentially a rounding error. And there are so few who fall into the top tier that their carbon consumption revenues will not contribute in any significant way to the rebate pool.

      Many in the next tier of income already have access to higher efficiency homes, cars, and in many cases, urban public transport. They too will not contribute significantly to the rebate pool.

      It is only the middle and lower tiers of the population who will contribute the bulk of the funds, and at that point you are just pushing money around at random while increasing the cost of every product and service. For instance, does someone in their 80s now residing in assisted living need a carbon rebate? The facility can raise its rent I suppose to help offset some of their increased fuel costs, but does that accomplish anything? The same will occur with lower income residents. Rents will rise, along with food and clothing costs and the poor will fall further behind. Not to mention the net loss to national productivity as we try to force ourselves onto lower capacity energy systems.

      I don’t think those promoting these proposals have any idea how the real economic world works. From a carbon budget perspective, of course we need to do something, but let us not cover over the very serious economic impacts which will result. We already have major problems with inequality and essentially class warfare in the US, carbon taxes will exacerbate these problems further still.

      1. @BT Hathaway

        I have no idea where you are getting your assumptions.

        Do you honestly believe that the moderately well to do – which in America is a large segment of the population – live in “energy efficient” homes and ride public transportation? Have you ever been to a sporting event at a suburban high school and taken a look at the cars in the parking lot?

        How about biking through suburban neighborhoods and noticing the large, landscaped yards, the SUVs, minivans, luxury cars, boats, RVs, decked out P/U trucks, etc in the driveways or in local storage yards near the suburbs?

        I just came back from a terrific family outing. The number of large pleasure boats out on the Gulf was pretty darned impressive for Feb 12. Those people can certainly afford a moderate price hike in gasoline prices and other energy prices.

        The key to carbon taxes is to make them reflect the actual cost of using hydrocarbon fuels. It will not halt the use of those fuels, which would be a bad thing in many ways. It will, however, send better pricing signals to encourage decision makers who make large volume fuel purchases to choose cleaner, lower emitting fuels – like uranium, thorium and plutonium.

        1. Rod,

          It is ever so easy to decry the “stuff” and lose track of the bigger picture. From the perspective of building new nuclear, what are all of those things…a tax base and potential electricity demand.

          So if with a carbon tax you do indeed manage to shrink the economic pie of America, then how do you plan to fund the projects you want to build?

          Carbon taxes make nuclear more expensive to accomplish at every stage, and a smaller tax base means fewer dollars floating around for subsidies of large infrastructure projects like a nuclear power plant.

          Just think about it. Nuclear is already enormously expensive to build, and what’s your proposal, to tax every input (concrete, steel, diesel, commuting costs for workers, on and on) and give that money as a rebate to the American public. How does that make sense in the near term?

          A carbon tax is the definition of cutting off the nose to spite the face. Maybe it will feel good to “do something” at first, but the added costs, the shrinking of productivity, the diminishing tax base, etc. just make it harder to build the future we actually need.

          1. @BT Hathaway

            You have misunderstood me, perhaps because you don’t know me very well. I am one of those suburbanites. I celebrate the culture of “work hard, play hard” found in many communities around this great country. My wife and I raised our family in the suburbs of Charleston, Annapolis, and Tampa Bay. My daughters are raising theirs in comfortable homes with family sized cars in the driveway/two or three-car garages.

            They (and we) enjoy the sports, recreation, travel, restaurant dining, and other energy intensive family activities I was describing. I know that our way of life has a cost that is not being paid and I am willing to pay my share.

            It MIGHT mean that we put away slightly less for a while; I cannot see how the level of cost increases suggested will alter our near term behavior. It might alter our long term choices when it comes time to replace cars, air conditioners, refrigerators, boats etc.

            The refun payments will be welcome, but probably recycled right back into the economy. People who are wealthy enough to fly around in private jets or take multiple trips every year may notice a larger impact on their spending, but probably won’t. It will be lost in the normal fluctuations of energy prices driven by very large and powerful players as they attempt to steer the balance between supply and demand in their favor.

            The material input costs of nuclear plant construction are a VERY minor part of the cost. FAR more of the cost comes in the form of engineering time during regulatory reviews, construction crews waiting their turn as other parts of the project run into unforeseen delays, interest on borrowed money, high manufacuring costs due to carrying overhead on low volume production, etc.

            If energy costs were a big deal, the construction costs at Vogtle and Summer should have dropped substantially from expected due to the massive drop in natural gas prices compared to those in effect when the contracts were signed in 2007. Instead, we all know what has actually happened to the costs at those projects.

  10. This post is excellent. James Hansen–to whom Robert Parker refers above–has said that two things are essential for stopping climate change: demonstration of Gen 4 nuclear and a carbon tax. Rod’s post touches on both.

  11. Have always felt that the Carbon Tax like the Cap and Trade were nothing more that a redistribution scheme with the added baggage of the “distributors.” In the 90’s the NPP executives loved the idea as it meant more business for them and hopped on the bandwagon, even lobbying for it’s implementation. However, seem the green movement has basically put them out of business in the USA.

    I recently read an article that sheds a different light on the so called “Social Cost of Carbon. Well worth reading.
    https://rosebyanyothernameblog.wordpress.com/2017/01/20/the-economic-cost-of-the-social-cost-of-carbon/

    1. @Rich

      Guilty as charged. Carbon Fee and Dividend will have the effect of redistributing resources among the people. (It amuses me that this plan is variously lampooned for both being regressive and redistributionist.)

      Unlike CAP and Trade, however, there will not be any Al Gore-like efforts for incredibly wealthy people to get in the game as yet another trading [gambling] opportunity where they can capture even more wealth by becoming the “house” that skims crumbs from every transaction.

      Instead, the funds will pass through the Social Security Administration, an agency of the federal government that has been collecting and redistributing funds – successfully and with stubborn popularity – since the Great Depression.

  12. Fee and dividend is an excellent proposition as it pushes all levers of emission reduction, from efficiency to low carbon technologies.
    It will also expose high emission renewables such as biofuels.
    Finally it will force the gas funded faux environmental groups to loose all credibility by lining up with coal interests in opposition to fee and dividend, as they shamefully did in the Washington state carbon tax initiative.

  13. This carbon tax plan is good but would be even better if it were more palatable to conservatives and better for the economy.

    So, which would conservatives prefer: a tax that started at $40 or one that started at, say, $12 and then increased annually by $6? And which would be less of a jolt to the economy?

    electricity.

    1. Why don’t we start by slashing nuclear regulatory costs by a factor of 10, and approving plants in 12 months or less instead of 40+ months?  I don’t see how that could go wrong.

      Nuke plants are big, valuable assets (especially when their costs go way down and they make money again).  Companies will keep them up as long as they’re making money.  Raising carbon fees only works if they push revenue up faster than regulatory creep raises costs.  That is a losing game.

  14. Two main changes to the Climate Leadership Council’s tax plan would get more conservative support, and yet remain true to the original plan’s vision.

    1) The $40 tax on CO2 would be phased in over three years, so that the price of gasoline, for example, would rise just 1 cent a month.

    2) Two thirds of the revenue would be used to lower the corporate income tax and thus spur the economy. One third would provide dividends to low- and middle-income households. Most households would still get all or most of their money back.

    This seems to me a reasonable compromise to get an effective plan that might actually be enacted.

    1. ‘ Spurring the economy ‘ is sabotaging the very purpose of a carbon tax – to the extent that it’s a carbon based economy. Tax carbon then reduce corporate taxes for airlines and oil companies, you’re just making more work for accountants. The tax is supposed to stimulate those parts of the economy that don’t make much CO2.

      1. John ONeill, I hadn’t thought about it, but you’re probably right–a carbon/corporate tax shift might temporarily increase CO2 emissions. But as the carbon tax increased and rippled through the economy, carbon intensity would at some point fall faster than economic growth.

    2. @huon

      Your suggested use of the proceeds of the CO2 tax would eliminate all of its attraction for me. There is NO WAY I would support lowering the corporate tax rate as a way to “spur the economy.”

      Corporations are already sitting on large piles of cash instead of investing them, largely because they have not seen much increase in demand for their products. If demand rises, corporations invest in improved production facilities. If tax rates drop and demand is flat or falling, they simply return more money to investors.

      Even though I am a member of the “investor class” (to a modest degree), I would prefer the long term benefits of growing prosperity to a short term payback.

      1. Rod,

        Thanks for your very helpful comment. Although I favor a tax shift, in the end I will support any halfway reasonable carbon tax, including the CLC’s version.

        Now, would most of the benefits of a corporate tax cut flow to the fat cats? I recommend an opinion piece by Greg Mankiw (a CLC member) entitled, “The Problem With the Corporate Tax,” NYT, June 1, 2008. Here are a couple of excerpts:

        “…a cut in the corporate tax rate, to 25 percent from 35 percent…is perhaps the best simple recipe for promoting long-run growth in American living standards.”

        “In a 2006 study, the economist William C. Randolph of the Congressional Budget Office estimated who wins and who loses from this tax. He concluded that ‘domestic labor bears slightly more that 70 percent of the burden.”

        So, counterintuitively, most of the money from cutting the corporate income tax would likely flow into paychecks of the hardworking men and women of America.

        If this is so, I hope you will find a carbon-corporate tax swap to be at least halfway sensible, and, in a pinch, give it your support.

        1. @huon

          I’m a Times subscriber, so their links work fine for me.

          Mankiw’s column is conventional economist logic designed to convince the rest of us that our interests are aligned with large, multinational corporations and the wealthy people who own and run them.

          I don’t accept that logic.

          Read the following quote carefully and think hard about who pays and then about how much they pay. Think about the biggest beneficiaries if the logic is accepted.

          If you own corporate equities, if you work for a corporation or if you buy goods and services from a corporation, you pay part of the corporate income tax.

          Note: I’m not anti-corporation or anti-enterprise. I don’t even begrudge earned wealth.

          1. From an efficiency POV, the revenue from a CO2 tax would be best used to reduce taxes on wealth creation. Be they income, capital or transaction taxes.

            However, from a political POV, where the public do not understand what a deadweight loss is, a dividend may make more sense.

            Point being a tax on C02 is better than none. How its spent is a separate issue.

  15. The commenters who fear that the corbon fee will kill the economy should remember thte 40$ per ton CO2 is about 18 $ per barrel of oil. But the important difference is that the proceeds are recycled back into the domestic economy. Ultimately, fossil fuel consumptioreduction will pre tax prices, so even better for the consumer.

    1. Last sentence should read:
      Ultimately, fossil fuel consumption reduction will depress pre tax prices, so even better for the consumer.

  16. If William Happer gets the post of science advisor, the chances for a carbon fee go from slim to zero.
    https://www.propublica.org/article/a-physicist-and-possible-adviser-to-trump-describes-his-love-of-science-co2

    In the case of climate, I think that any dispassionate weighing of the facts would give you a negative cost of carbon, you know, that more CO2 is good for the world. I’ve always maintained that. I can explain many reasons for it.

    Oh dear, he must be about the only scientist with that view.

    On nuclear power:
    Certainly in the long run people still hope that we’ll get better ways to do nuclear fission and nuclear fusion for energy. There’s potentially enormous amounts of energy locked up in the deuterium in the oceans, and there’s a lot of uranium and thorium. It hasn’t been all that successful in either case. In the case of fission energy, there have been these accidents and alarm over what do you do with the waste.
    Singular focus on accidents and waste without putting the problem in any context is straight from the anti-nuclear playbook. Like all members of the Trump administration, he seems to be fully owned by the fossil fuel industry. Drill, baby drill!

    1. @RRMeyer

      Thank you for posting the link to Revkin’s skillfully conducted interview. Out of context, your selected quotes are indeed kind of discouraging, but if you read the complete transcript of the interview, you might find reasons for more hope.

      Revkin describes Happer as one of “two brilliant and pugnacious scientists” that have been mentioned as being considered for the job of science advisor.

      His views are certainly original and he sounds pretty dismissive about nuclear energy, but he expresses an openness towards new information and innovation that might be advantageous. He is certainly correct in pointing out that the scary predictions from models about global temperature trends have not been very accurate. On the other hand, he clearly states that there are many real problems associated with continued dependence on combustion to power our society and industries.

      1. It appears he would be perfectly fine with nat gas and “clean” coal. Without ccs, of course, why waste all that essential plant food. I agree with him on the importance of good teachers. You never forget what you learn early in life. Anti nukes know this of course and have used childhood indoctrination with devastating effekt.

        1. @RRMeyer

          As many of my favorite nuclear innovators have repeated, we can make nuclear power cheaper than coal. When we aggressively put cost as a primary attribute along with safety, it is achievable. It isn’t achievable with a “cost is no object” approach that accepts and even encourages additional layers of requirements in the name of increasing “safety.”

          Right, Jack D. or Bob H.?

  17. Resources can only be efficiently allocated when costs are internalised.

    Even if you think CO2 has nothing to do with climate change, burning fossil fuels releases other compounds that are harmful to human health.

    In any market based economy, the cost of that harm needs to be compensated, else it shrinks our stock of wealth and welfare.

    End of.

  18. Indeed, the co-benefits of a carbon tax are so great that implementing one would probably be worthwhile even if climate change were not a problem.

    The IMF has a working paper (2014) entitled, “How Much Carbon Pricing is in Countries’ Own Interests? The Critical Role of Co-Benefits.” Here’s some of the abstract:

    “This paper calculates, for the top twenty emitting countries, how much pricing of carbon dioxide (CO2) emissions is in their own national interests due to domestic co-benefits (leaving aside the global climate benefits). On average, nationally efficient prices are substantial, $57.5 per ton of CO2 (for year 2010), reflecting primarily health co-benefits from reduced air pollution at coal plants and, in some cases, reductions in automobile externalities…. [The price for the US is $36.] Importantly, the efficiency case for pricing carbon’s co-benefits hinges on (i) weak prospects for internalizing other externalities… and (ii) productive use of carbon pricing revenues.

    https://www.imf.org/external/pubs/ft/wp/2014/wp14174.pdf

    This paper should be very helpful in making the case for a carbon tax to the public and, especially, to legislators.

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