I think this sums it all up "but is controversial because it imposes costs on consumers."
A carbon tax is a way for all of us (people) to deal with the problem, while the corporations that created and caused it get a 'get out of jail free' card.
When an airline creates carbon emissions, they're doing it because the passengers want to go somewhere. When a car maker creates carbon emissions, they're doing it because people are buying cars.
It seems eminently reasonable that end consumers will and should end up paying.
If you impose a carbon tax, utilities that today create electricity from fossil fuels will have additional incentives that end customers feel to switch to non-carbon sources. It will also provide some small amount of back-pressure against the "no nukes" and "herp, derp, no cancer-causing windmills"
Corporations don't burn coal for fun, they satisfy demand created by people like you and me while trying to maximize profits. Without a carbon tax, corporations that manage to successfully externalize that cost have a huge competitive advantage.
Companies don't pay taxes for fun, either. What I think that comment is referring to is the fact that corporations have a history of being really good at weaseling their way out of paying taxes, and the bigger companies are the best at it.
A carbon tax, in particular, looks like it would be very easy for a multinational to escape. It's reason #{xyz} to move your facility across the border and out of American jurisdiction.
If we can't get them to pay taxes already, won't a carbon tax simply be yet another tax which is disproportionately paid by small businesses and individuals, and not the actual biggest polluters, while driving more manufacturing jobs overseas to countries which don't have such laws?
I guess the solution here is to have customs duties based on emissions taxes paid in the originating country. This is not only needed to prevent corporations from moving their business elsewhere, but also to compete with existing/new corporations in foreign countries.
That's actually part of Nordhaus' recommended carbon pricing policy. (Nordhaus wrote the book on carbon pricing and won a Nobel prize in economics for it).
The idea is that carbon-priced countries get together and form an internal free trade agreement, and tariff carbon-intensive goods from outsiders.
Because of the political complexity of implementing this, Canada has gone a different way to keep businesses from being uncompetitive against foreign non-carbon-taxed businesses.
Canada uses "output-based allocation" where a relatively green business in an industry is used as a baseline. That is set as a target - create X unit of product with Y units of carbon emissions, and your carbon emissions are untaxed. Every carbon emission over Y is taxed.
In this way, a comparatively green business within a dirty industry can still compete with foreigners, but for a dirty business, the marginal value of going green is just as high as if there was no exemptions at all.
It's not ideal. It's bureaucratic, tedious, economically suboptimal, and politically complicated since it seems unfair. But it's a good intermediate solution until Nordhaus' full dream could be realized.
The money is rebated directly to citizens in federally-regulated provinces.
Conservatives hate it all anyways because their carbon plan is "no."
You can't base duties just on emissions taxes paid. (Setting aside practical record-keeping concerns,) If factory A pays no emissions taxes paid because they're based in a country without carbon taxes and factory B pays no emissions taxes because they're in a country with no carbon taxes but also are using carbon-free energy sources and factory C is located in a country with carbon taxes and pays those taxes, should we charge B the same as A in duties? Should A pay more than C by the exact amount of the carbon taxes? If C implements an energy efficiency program to cut its consumption in half, should A now pay less? How could B "prove it"? How do we control such that A can't represent itself as B?
At some point, these other countries are sovereign entities, and it's going to be difficult to dig into the on-the-ground facts at each factory and step along the supply chain to determine emissions.
If company X in country Y wants to trade with the US, they could require that country Y provides full transparency in carbon emissions, where the measurements from space could be used as a checksum.
Neat tech. (For those curious, it seems like we are capable to measure CO2 increase or decrease to an uncertainty of approximately 0.3% [of CO2, meaning ~1ppm overall]. That's impressive.)
Even if the last "embargo uncooperative countries" strategy were possible, I think you'd find that all of their domestic production would be carbon-intensive and their exports would all be "carbon neutral".
Well, we could require that countries (trade partners) pay tax on their emissions as opposed to companies. How these countries tax their companies internally could be an internal affair entirely. And this also solves the bookkeeping at the border.
Well, if the countries don't want to implement a carbon tax of their own, products from their country will be more expensive, regardless of how carbon neutral they are. That should put pressure on them to get with the times and implement the tax.
Polluting industries don't get a 'get out of jail free' card - they just die if people don't want to buy their then-expensive products anymore. So if you like they will pay the ultimate price instead.
We need to just introduce that damn tax already. We should have introduced it thirty years ago after the Rio summit! The longer we wait the harder the transition will become.
Nothing moves in Congress right now because Mitch McConnell is only interested in confirming judges as fast as possible. And he has been explicit in being non-cooperative with Democrats.
That's pretty much what got introduced in Canada this spring. Well, it's a rebate rather than a tax reduction.
But there's massive opposition.
There seem to be two main arguments:
1. The tax is too small to make any real difference, so we might as well scrap it. (I don't understand this one either, and it's only true for current levels, the tax is supposed to increase every year.)
2. China and the States aren't anything, so anything we do is meaningless and just disadvantages us. (The answer to this argument is Nobel prize winning Bill Nordhaus's carbon club proposal)
It looks like the carbon tax opposing conservatives are going to win the election in October. It'll be a shameful time to be a Canadian. We have the highest CO2 emissions per capita and most of the country won't be doing anything about it.
The article actually explores this very fact — that small nudge legislation becomes much more popular without proportionally dealing with the problem. This inevitably leads to higher long term costs
Well, this shows why democracies can't fix climate change. In Canada's case, there won't be a free lunch, as many people need to heat their homes much of the year.
If the tax becomes large enough to make a real difference to how people live, then there would be enough public support to scrap it, or at the very least freeze any increases. That means it'll only work if technology advances fast enough that we can lower our emissions enough to meet climate goals without compromising quality of life. But that would be a reduction of over 10% a year, every year. Yeah, that's what "limiting to 2C" would actually mean. http://www.climatecodered.org/2014/01/radical-emissions-redu...
Trudeau has also supported the oil industry at every turn. The extraction and burning of the remaining oil in Canada is itself more than Canada's fair share of global emissions to limit heating to 2C. https://www.nationalobserver.com/2015/07/08/news/tar-sands-v...
As for the carbon club, existing agreements like NAFTA stand in the way of creating a carbon-pricing trade bloc. The most plausible place for it to start would be the EU after the UK leaves, but even then, I doubt there will be any politicians fighting for it - for similar reasons as for Canada.
In BC, it was a somewhat slightly to the right of centre party that introduced North America’s first carbon tax. It was designed to return all tax revenues in the form of income tax reductions. The tax was really popular and has achieved substantially good results.
BC’s tax was gradually introduced, starting at a low rate. Also, the government of the time gave rural and low income people a large credit right away. I was poor at the time on account of being a startup founder (LoL) and I recall getting hundreds of dollars in the mail very soon after the tax launched.
I wish I had your optimism. I'm almost certain that even a revenue-neutral bill would be presented as a tax increase in the right-wing media.
And, of course, even something that is revenue-neutral overall will have some winners and losers: SUV owners will pay more than those commuting with public transport. Poorly isolated single-family homes in the south relying on air conditioning through the summer will be more expensive compared to flats in northern brick houses, etc.
You don't have to guess, that's happening right now in Canada. A conservative leadership candidate (Michael Chong) was practically laughed off the stage in a leadership race for pushing a carbon-taxes-fund-income-tax-cut platform. Centrist provincial governments are falling like dominoes to conservatives who promise to fight against the federal carbon tax and have functionally no plans to fight climate change.
And this is liberal, polite, progressive Canada, doing a case-study in how Conservatives fight against even the most conservative of carbon pricing policies.
> SUV owners will pay more than those commuting with public transport. Poorly [insulated] single-family homes in the south relying on air conditioning through the summer will be more expensive compared to flats in northern brick houses, etc.
Those all sound like excellent outcomes in terms of linking behavior to carbon emissions via a price-signaling mechanism.
Logically, it's impossible to simultaneously incentivize people to emit less and not have the current high emitters feel some incentive to change.
(Edit: removed one extraneous negation in the last sentence.)
>Poorly isolated single-family homes in the south relying on air conditioning through the summer will be more expensive compared to flats in northern brick houses, etc.
In general it takes more energy to live in colder climates than warmer ones.
So a better comparison would probably be a large house up north vs a small apartment down south.
The idea is that people on the lower end of the economic spectrum are compensated with the taxes on the higher end/businesses which are emitting the most.
Money is probably the most persuasive tool we have as a society to change behaviour. Yes engineering is vital but it works with economics not in isolation.
I think the issue is who pays. If it ends up as consumer tax only it will take awhile before change is reflected. A business tax would accurate change.
In researching what we can do about climate change, the most convincing proposed policy solution I've seen comes from the Citizen's Climate Lobby -- a Carbon Fee and Dividend (https://citizensclimatelobby.org/basics-carbon-fee-dividend/), which I learned about while reading "Being the Change" by Dr. Peter Kalmus.
Basically, it's a plan for a carbon tax along with a rebate program (similar to UBI in my opinion) so that the least well off financially don't get crushed by things like higher gas prices.
In debates about politics I have often heard that environmental problems are transversal, independent on the left-right spectrum, that the environment and ecology can be defended from the left or from the right... and from an ideal, abstract, theoretical point, that's true, how could one deny that? There is no reason why a conservative should want to destroy the planet - in fact, the very word "conservative" is pretty much against that.
However, in practice, I am still yet to see a right-wing party that gives a damn about the environment. Be it at the European level, national level, regional level or even at the city level. Go to any random city in my region, read the platform of left-wing parties, and you will typically see bike lanes, bus lanes, pedestrianization, etc. Read the platform of right-wing parties, and you will see more asphalt, more lanes, more parking spaces. City-level elections are supposed to be much more about the candidate, and less about the party, but they still spontaneously group like that.
It shouldn't be like that, and maybe in some other countries it's not like that, I'm not claiming this is universal. But in my country, it certainly is like that.
Conservatives USED to be about conservation back when the wealthy typically still used the outdoors, specifically hunting, fishing, and hiking for recreation. New forms of recreation, new methods of transportation, and an urbanization of the financial elite have pretty much eliminated that aspect.
We shall see. A lot can change between now and then. The SNC affair will fade over the summer and the truth is the economy is doing very well - that typically drives election results.
They put up a petition on the website I built to get Vanguard, the largest mutual fund manager, to support the Carbon Fee and Dividend. There are over 500,000 shares of vanguard already supporting, with a goal of 1m. If you have Vanguard shares, want to support this to move it forward? https://www.yourstake.org/ask/vanguard-vanguard-endorse-a-na...
100% of the carbon tax comes back as dividends to individuals. We can keep spending that money on carbon intensive products and can consume the same mix of products.
But because we can now spend the money on other things instead, we might find that it's worth buying the electric car instead of the gas car.
People won't be forced into rapidly giving up their current patterns of life and work. It also avoids objections from conservatives about creating more governmental regulations, subsidies, complicated carbon credits, and interest groups. And like the very popular Social Security it's simple to explain.
For concreteness, you would get $300 per month. That would equal the increase in prices you'd see at the gas pump, your electric bill, and in products. Change nothing and nothing in your life changes. Replace these higher priced carbon intensive products with better alternatives and you have extra money you can spend on other stuff.
>you would get $300 per month. That would equal the increase in prices you'd see at the gas pump, your electric bill, and in products.
That doesn’t make sense though. What’s the incentive to switch to a lower carbon tax if you get all of the tax rebated to you at the end of the month? If you don’t get it all back, then it’s not equal to the price increases.
It's both carrot and stick. The average person breaks even. The green person comes out ahead. The wasteful person is in the red, and has a strong incentive to be greener.
Now, a fun wrinkle is that on average, most of us are below average. Sorry, joke. What I mean is that the median output is below the average output. That's because it's not a linear curve, but a slope where the byper-wealthy have disproportionate weight. So because the median is below the average, it's also a progressive scheme in that the majority of participants will be at break-even or better.
Eventually companies will start making greener products, which will also be cheaper... so you’ll be able to spend the same amount of money on more (cheeper greener) stuff...
(If everyone does this, the carbon dividend would of course decrease, but by then the goal will have been reached.)
This is happening in Ontario right now as we speak.
The Ontario government is fighting against the federal revenue-neutral carbon tax and has instituted a small grab-bag of subsidies for businesses doing green refits.
So in essence, they're taking a neutral system that put money to taxpayers and turned it into a subsidy on corporations that pollute, and claiming it as a populist victory. And the public ate it up.
I've heard nonsense like "I recycle and don't litter, why should I have to pay a carbon tax" as if those things are related.
It should also be noted that the federal carbon tax is a tax-and-rebate scheme. Ie you get taxed on the carbon and the revenues get refunded to the consumers. If you make a lower-carbon choice, you keep your money. If you don't, nothing really changed. It's also slightly progressive, since lower-income folks will actually come out ahead by a bit without making any changes.
Warning: strong political opinions below.
What we're seeing is really a replay of the ACA reaction in the US. Obamacare was a rejigged Romneycare, which was a rejigged Heritage Foundation plan which was a reaction to the Clinton's healthcare plans. It was a conservative, market-friendly approach to solving an issue... until it was actually implemented. Then we found out it was just a talking point meant that was never meant to be acted upon, a mere cover that allowed conservatives to pretend they were interested solving an issue.
Likewise, the tax-and-rebate scheme is basically most conservative and market-friendly approach to tackling climate change that actually produces results. But now that it's actually been implemented, the Ford/Kenney/potential-Scheer governments are reacting by repealing it and replacing it with nothing that produces results. Because they don't have the guts to say simply "No, we don't believe in this and we're not going to do anything about it"
After Carbon tax, company gets $20 tax. Price becomes $120. Government says to consumer, here's $20. Consumer and company see no difference. Government cost goes up to maintain the scheme.
This is why people say the carbon tax/price must go towards non carbon ressearch/products.
Let's further say that there exists another company that can produce the same widget with fewer emissions, but it costs $110 base price + $0 carbon tax to do so. Now the green company actually has a viable product, and consumers are incentivized to switch to it.
>> "I recycle and don't litter, why should I have to pay a carbon tax" as if those things are related.
The recycling part is as least a little related. The recycling of metal requires less energy than the creation of new metal from ore, especially for steel (cars) and a aluminum (cans). So recycling metal does contribute to the reduction of carbon emissions.
This won't be popular with the HN crowd, but taxing activities that we want to reduce/minimize doesn't work. Cigarette taxes didn't work in any meaningful way (see https://www.nber.org/papers/w18326.pdf)
Carbon taxes work by encouraging a switch to alternatives and by encouraging efficiencies. When there aren't alternatives, many would just choose to pay higher prices. That's what your study found.
Luckily most carbon intensive activities have alternatives.
I don't think the comparison to cigarette taxes is completely fair. Cigarettes are relatively inelastic w.r.t. price as they are addictive, and have no real competing product.
Electricity and power generated from carbon emitting sources on the other hand have a much more elastic demand curve. E.g. if your energy bill is cheaper with renewables, no one would choose to go with fossil fuels. Likewise with electric vehicles. If the cost of tanking up an EV is significantly lower than an internal combustion vehicle, people will switch for purely economic reasons.
You can look at the lack of a carbon tax as an incentive on fossil fuels which socializes the externalities.
Hardly. I suggest reading the paper. Here's the conclusion:
> To summarize, our analysis of the association between cigarette taxes and adult cigarette use suggests that adult smoking is largely unaffected by taxes. At best, cigarette tax increases may have a small negative association with cigarette consumption, although it is difficult to distinguish the effect from zero, and in practical terms implies that it will take very large tax increases, for example, on the order of 100%, to reduce smoking by 5%. This finding raises questions about claims that, at the current time, tax (price) increases on cigarettes will have an important beneficial health impact through reduced smoking. It may be that in a time (2010) when the median federal and state cigarette tax is approximately $2.40 per pack, further increases in cigarette taxes will have little effect because the pool of smokers is becoming increasingly concentrated with those with strong preferences for smoking. Alternatively, as cigarette taxes and prices continue to rise, smokers are taking other steps to thwart the impact of the price increase such as switching brands and increasing purchases on the black market. Notably, we rule out border crossing as an important explanation of the small tax elasticities.
The pool of carbon emitters is not concentrated with those with strong preferences for emitting carbon. Cigarette taxes were already high at the time of the study. Anyone serious about carbon tax to counter global warming says that the tax needs to be very high.
If we get to the point that most people are carbon neutral, carbon taxes are high, and would need to be far higher for a 5% reduction in emissions from people with strong preferences for carbon emitting activities, great!
Cigarette taxes work once they get high enough. See New Zealand and Australia, for the very very high price of cigarettes (currently $25-30 a pack). It is absolutely having a positive effect on the rate of smokers quitting (it probably helps that the resulting tax is substantially invested in the health sector for quitters to get support).
"The weight of evidence is that the excise tax
increases continue to be the single most effective tool for reducing tobacco consumption and prevalence"
The latest IPCC report says we have just 11 years to halve global emissions or we'll be seeing massive destruction to civilization. This is what is spawning organizations like Extinction Rebellion, which forced the UK government to declare a climate emergency. A tax now seems like too weak a measure. Greta Thunberg and Extinction Rebellion and others are talking about 15% reductions annually in industrialized countries. Any other proposal accepts doom or millions of unnecessary deaths as options.
An under-represented argument for a carbon tax is the fact that it would encourage companies to innovate, both with respect to efficiency as well as using renewable energy.
I predict that industries in countries that adopt a carbon tax earlier will end up with a competitive advantage.
I'll go further with the example of the U.S. car industry in the 60s, when the evidence was clear that consumers preferred safe, reliable, affordable, efficient cars -- from increasing sales for Volkswagen and Toyota, and most of all from the success of Unsafe at Any Speed.
I doubt anyone then would have predicted that two of the U.S. big three would declare bankruptcy and that Toyota, then manufacturer of podunk little cars, would become the #1 manufacturer, but it happened.
Had U.S. regulations met consumer demand, U.S. manufacturers may have innovated what consumers wanted instead of more chrome, tail fins, size, etc. Regulation came eventually, but too late for the industry to avoid bankruptcies, unemployment, and so on.
In fact, regulation didn't stifle innovation but directed it. Engineers can innovate around safety and efficiency as much as on speed and tail fins. I'd rather have 100,000 mile warranties and electric cars than more chrome, which U.S. market forces created.
Today, regarding the environment, the governments that regulate to reflect citizen demand for clean air, land, and water will create markets and companies that beat ones that don't. I hope current U.S. policy doesn't bankrupt more future U.S. markets and companies.
So market driven. So incentive-based. So flat. So American.
America loves to do things via tax code, which is why the US tax code is famously so complicated, but that time is gone. The answer isn't a new tax to nudge the market. The answer is not an incentive to please stop polluting. We don't need 10% reductions here and there. We need massive reductions everywhere, preferably with active capture that pushes carbon emissions into negative territory. We cannot afford to fund green energy by taxing non-green energy. Coal cannot fund solar. Coal has to stop. We need rules to say that burning coal is now illegal. We need rules that mandate solar+wind as a fixed percentage of energy generation. We need massive rewrites to the rules that limit the deployment of new nuclear technologies. The opportunity for politically-friendly market-based (ie American) approaches has passed. It is time for governments to pass absolute rules forbidding some behaviors and mandating others. If that offends political sensibilities, those political sensibilities need to be set aside.
(1) Burning more than 100kg of coal per year is illegal.
(2) All new houses must include 10m2 of solar panels per resident.
(3) Windmills are, by law, not "an eyesore". No more complaining about them spoiling your retirement view.
(4) Those who cannot articulate the difference between a millisievert and a microsievert, between fission and fusion, are not allowed anywhere near the planning meeting for any new power plant.
Not to mention the thousands of little things (drunk driving, slavery, universal suffrage, speed limits etc) that were overturned relatively successfully without any market-based approaches. There is a right-wing philosophy that all government actions are inherently inefficient, but the reality is that laws work. It is possible to ban a behavior on day one and see it substantially reduced on day two.
CFCs in the atmosphere are still dropping. (The news was that the rate at which CFCs disappear has slowed down a bit, and some are pointing at China for that.) I'd say the policy was pretty effective.
I don't think China deserves the benefit of the doubt on this topic.
"From the Korean and Japanese data, we used our models to show that emissions of CFC-11 from north eastern China had increased by around 7,000 tons per year after 2013, particularly in or around the provinces of Shandong and Hebei," said Luke Western, a University of Bristol atmospheric modeler. "We didn't find evidence of increasing emissions from Japan, the Korean peninsula or any other country to which our networks are sensitive."
There are substitutes for CFCs and leaded gas. The switch was trivial for the majority of the population.
Drunk driving is still not solved, and Uber/Lyft have done more to reduce drunk driving in huge parts of the US with poor public transportation than harsher penalties.
Laws outright banning things don’t work when a huge chunk of the population will do it anyway. See, prohibition, the war on drugs, etc.
Incentivize alternatives, don’t ban without a replacement. Otherwise it will just disrupt and get overturned a few years later.
Market based approaches work. The only way you’ll ever see wide spread support for them is if they are uniformly applied to companies based in other countries doing business in the US. Anything that puts solely US based companies at a competitive disadvantage is going to be met with opposition.
The same way they created income tax. Not every law must be popular.
How about this: The top US tax rate in the 50s was over 90%. That's a good number for the upper bracket of a progressive carbon tax. In short, large companies are no longer allowed to make profits while emitting carbon. They can continue to operate, but as investment vehicles they will be dead.
Yep, but the effective rate was similar to today because of so many deductions.
Also, what is a “large company”? I would rather Tesla makes a profit despite it emitting carbon and some small coal power not be allowed to profit just because it only employs 300 people.
Just tax carbon output, don’t create all of these half-baked rules trying to punish companies for being large rather than trying to solve the solution of CO2 output.
Mandating the use of specific technology is uhh, not a great plan over the long run. What happens when photovoltaic is no longer the best way to improve the energy efficiency of roofs? Directly heating water for domestic use is already arguably better than photovoltaic.
Perfection cannot be the enemy of the good. A standard tactic to oppose any new regulation is to show how it might not be perfect in certain circumstances. That draws out the debate. Draw debate out long enough and the proposed law dies. If solar+wind+nuclear is no longer the best approach in ten years, we can cross that bridge when we come to it.
The motivation behind using incentives instead of a ban is that there is a desire to lessen the pain of switching away from fossil fuels. Most people on HN could withstand maybe even an 8x increase in the cost of food, transportation and consumer goods without losing anything beyond the superficial (after all in SV the most expensive thing is rent on houses that have already been built). It would be virtually impossible to ruin HN-ers by banning carbon. However, there are people who are very sensitive to prices. They are hurt by trade wars and government interventions into the market's fairly efficient serivce of their basic needs. They are... the poor and lower middle class.
Yawn, this idea of legislating process instead of taxing/punishing outcomes is so much worse because they always backfire when they meet people with incentives.
>(1) Burning more than 100kg of coal per year is illegal.
No problem, we’ll just burn bunker fuel instead, or 1000kg of wood. Too bad you didn’t just limit carbon instead.
>(2) All new houses must include 10m2 of solar panels per resident.
Nice, a tax on the poor to force a rollout of an energy source with no baseload story that won’t work on a huge chunk of homes due to location and/or orientation. Solution here is to obviously pick the cheapest possible thing that qualifies as a solar panel. Too bad you didn’t incentivize energy generation.
>(3) Windmills are, by law, not "an eyesore". No more complaining about them spoiling your retirement view.
This is a joke right? Legislating speech around the appearance of a pervasive man-made object? That’s as dumb as “CO2 is, by law, not ‘a problem’. No more complaining about it risking our future.” The best way to get people to talk about how ugly they are is to ban talking about how ugly they are.
>(4) Those who cannot articulate the difference between a millisievert and a microsievert, between fission and fusion, are not allowed anywhere near the planning meeting for any new power plant.
This sounds good on paper, but it’s the politicians that hold the ropes here and they are ignorant and listen to the populace. This is why things like the green new deal exclude nuclear energy and effectively accept fossil fuels as base-load by doing so. Politicians cater to their base, not what is right for society or what is logical.
You can nudge all you want I will never pay any unless I am forced to, which would at least make the criminal cough...cough Nature of the alliance between the fake environmentalists and the state even more obvious.
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[ 3.7 ms ] story [ 154 ms ] threadA carbon tax is a way for all of us (people) to deal with the problem, while the corporations that created and caused it get a 'get out of jail free' card.
Not necessarily. It could make it easier for them to be outcompeted by competitors that don't rely as heavily on petroleum usage
Either reduce your polluting ways or lose business to a company that does.
It seems eminently reasonable that end consumers will and should end up paying.
If you impose a carbon tax, utilities that today create electricity from fossil fuels will have additional incentives that end customers feel to switch to non-carbon sources. It will also provide some small amount of back-pressure against the "no nukes" and "herp, derp, no cancer-causing windmills"
Either way, I care much more about fixing the problem than assigning blame.
A carbon tax, in particular, looks like it would be very easy for a multinational to escape. It's reason #{xyz} to move your facility across the border and out of American jurisdiction.
If we can't get them to pay taxes already, won't a carbon tax simply be yet another tax which is disproportionately paid by small businesses and individuals, and not the actual biggest polluters, while driving more manufacturing jobs overseas to countries which don't have such laws?
The idea is that carbon-priced countries get together and form an internal free trade agreement, and tariff carbon-intensive goods from outsiders.
Because of the political complexity of implementing this, Canada has gone a different way to keep businesses from being uncompetitive against foreign non-carbon-taxed businesses.
Canada uses "output-based allocation" where a relatively green business in an industry is used as a baseline. That is set as a target - create X unit of product with Y units of carbon emissions, and your carbon emissions are untaxed. Every carbon emission over Y is taxed.
In this way, a comparatively green business within a dirty industry can still compete with foreigners, but for a dirty business, the marginal value of going green is just as high as if there was no exemptions at all.
It's not ideal. It's bureaucratic, tedious, economically suboptimal, and politically complicated since it seems unfair. But it's a good intermediate solution until Nordhaus' full dream could be realized.
The money is rebated directly to citizens in federally-regulated provinces.
Conservatives hate it all anyways because their carbon plan is "no."
At some point, these other countries are sovereign entities, and it's going to be difficult to dig into the on-the-ground facts at each factory and step along the supply chain to determine emissions.
https://climate.nasa.gov/climate_resources/99/graphic-measur...
If company X in country Y wants to trade with the US, they could require that country Y provides full transparency in carbon emissions, where the measurements from space could be used as a checksum.
Even if the last "embargo uncooperative countries" strategy were possible, I think you'd find that all of their domestic production would be carbon-intensive and their exports would all be "carbon neutral".
https://energyinnovationact.org/
1) In the absence of this pairing it just looks like a government-growing cash grab to a segment of the population.
2) People who aren't even convinced of the dangers of AGW can still support it.
But there's massive opposition.
There seem to be two main arguments:
1. The tax is too small to make any real difference, so we might as well scrap it. (I don't understand this one either, and it's only true for current levels, the tax is supposed to increase every year.)
2. China and the States aren't anything, so anything we do is meaningless and just disadvantages us. (The answer to this argument is Nobel prize winning Bill Nordhaus's carbon club proposal)
It looks like the carbon tax opposing conservatives are going to win the election in October. It'll be a shameful time to be a Canadian. We have the highest CO2 emissions per capita and most of the country won't be doing anything about it.
If the tax becomes large enough to make a real difference to how people live, then there would be enough public support to scrap it, or at the very least freeze any increases. That means it'll only work if technology advances fast enough that we can lower our emissions enough to meet climate goals without compromising quality of life. But that would be a reduction of over 10% a year, every year. Yeah, that's what "limiting to 2C" would actually mean. http://www.climatecodered.org/2014/01/radical-emissions-redu...
Trudeau has also supported the oil industry at every turn. The extraction and burning of the remaining oil in Canada is itself more than Canada's fair share of global emissions to limit heating to 2C. https://www.nationalobserver.com/2015/07/08/news/tar-sands-v...
As for the carbon club, existing agreements like NAFTA stand in the way of creating a carbon-pricing trade bloc. The most plausible place for it to start would be the EU after the UK leaves, but even then, I doubt there will be any politicians fighting for it - for similar reasons as for Canada.
BC’s tax was gradually introduced, starting at a low rate. Also, the government of the time gave rural and low income people a large credit right away. I was poor at the time on account of being a startup founder (LoL) and I recall getting hundreds of dollars in the mail very soon after the tax launched.
And, of course, even something that is revenue-neutral overall will have some winners and losers: SUV owners will pay more than those commuting with public transport. Poorly isolated single-family homes in the south relying on air conditioning through the summer will be more expensive compared to flats in northern brick houses, etc.
And this is liberal, polite, progressive Canada, doing a case-study in how Conservatives fight against even the most conservative of carbon pricing policies.
Those all sound like excellent outcomes in terms of linking behavior to carbon emissions via a price-signaling mechanism.
Logically, it's impossible to simultaneously incentivize people to emit less and not have the current high emitters feel some incentive to change.
(Edit: removed one extraneous negation in the last sentence.)
In general it takes more energy to live in colder climates than warmer ones.
So a better comparison would probably be a large house up north vs a small apartment down south.
https://www.amazon.com/Nudge-Improving-Decisions-Health-Happ...
Carbon tax is just money. More money doesn't solve global warming. In fact I would say money is the reason we have global warming in the first place.
There's a pretty strong argument that overall we're subsidizing fossil fuel consumption more than we're taxing it.
Basically, it's a plan for a carbon tax along with a rebate program (similar to UBI in my opinion) so that the least well off financially don't get crushed by things like higher gas prices.
You'd think everybody could get behind it, right? I got $300 on my tax rebate as an advance for this year's carbon pricing.
Of course the conservatives hate it, because their carbon plan is "no."
And they're on track to win in November.
However, in practice, I am still yet to see a right-wing party that gives a damn about the environment. Be it at the European level, national level, regional level or even at the city level. Go to any random city in my region, read the platform of left-wing parties, and you will typically see bike lanes, bus lanes, pedestrianization, etc. Read the platform of right-wing parties, and you will see more asphalt, more lanes, more parking spaces. City-level elections are supposed to be much more about the candidate, and less about the party, but they still spontaneously group like that.
It shouldn't be like that, and maybe in some other countries it's not like that, I'm not claiming this is universal. But in my country, it certainly is like that.
But because we can now spend the money on other things instead, we might find that it's worth buying the electric car instead of the gas car.
People won't be forced into rapidly giving up their current patterns of life and work. It also avoids objections from conservatives about creating more governmental regulations, subsidies, complicated carbon credits, and interest groups. And like the very popular Social Security it's simple to explain.
For concreteness, you would get $300 per month. That would equal the increase in prices you'd see at the gas pump, your electric bill, and in products. Change nothing and nothing in your life changes. Replace these higher priced carbon intensive products with better alternatives and you have extra money you can spend on other stuff.
That doesn’t make sense though. What’s the incentive to switch to a lower carbon tax if you get all of the tax rebated to you at the end of the month? If you don’t get it all back, then it’s not equal to the price increases.
Now, a fun wrinkle is that on average, most of us are below average. Sorry, joke. What I mean is that the median output is below the average output. That's because it's not a linear curve, but a slope where the byper-wealthy have disproportionate weight. So because the median is below the average, it's also a progressive scheme in that the majority of participants will be at break-even or better.
(If everyone does this, the carbon dividend would of course decrease, but by then the goal will have been reached.)
The Ontario government is fighting against the federal revenue-neutral carbon tax and has instituted a small grab-bag of subsidies for businesses doing green refits.
So in essence, they're taking a neutral system that put money to taxpayers and turned it into a subsidy on corporations that pollute, and claiming it as a populist victory. And the public ate it up.
I've heard nonsense like "I recycle and don't litter, why should I have to pay a carbon tax" as if those things are related.
Warning: strong political opinions below.
What we're seeing is really a replay of the ACA reaction in the US. Obamacare was a rejigged Romneycare, which was a rejigged Heritage Foundation plan which was a reaction to the Clinton's healthcare plans. It was a conservative, market-friendly approach to solving an issue... until it was actually implemented. Then we found out it was just a talking point meant that was never meant to be acted upon, a mere cover that allowed conservatives to pretend they were interested solving an issue.
Likewise, the tax-and-rebate scheme is basically most conservative and market-friendly approach to tackling climate change that actually produces results. But now that it's actually been implemented, the Ford/Kenney/potential-Scheer governments are reacting by repealing it and replacing it with nothing that produces results. Because they don't have the guts to say simply "No, we don't believe in this and we're not going to do anything about it"
After Carbon tax, company gets $20 tax. Price becomes $120. Government says to consumer, here's $20. Consumer and company see no difference. Government cost goes up to maintain the scheme.
This is why people say the carbon tax/price must go towards non carbon ressearch/products.
The recycling part is as least a little related. The recycling of metal requires less energy than the creation of new metal from ore, especially for steel (cars) and a aluminum (cans). So recycling metal does contribute to the reduction of carbon emissions.
Luckily most carbon intensive activities have alternatives.
Electricity and power generated from carbon emitting sources on the other hand have a much more elastic demand curve. E.g. if your energy bill is cheaper with renewables, no one would choose to go with fossil fuels. Likewise with electric vehicles. If the cost of tanking up an EV is significantly lower than an internal combustion vehicle, people will switch for purely economic reasons.
You can look at the lack of a carbon tax as an incentive on fossil fuels which socializes the externalities.
> To summarize, our analysis of the association between cigarette taxes and adult cigarette use suggests that adult smoking is largely unaffected by taxes. At best, cigarette tax increases may have a small negative association with cigarette consumption, although it is difficult to distinguish the effect from zero, and in practical terms implies that it will take very large tax increases, for example, on the order of 100%, to reduce smoking by 5%. This finding raises questions about claims that, at the current time, tax (price) increases on cigarettes will have an important beneficial health impact through reduced smoking. It may be that in a time (2010) when the median federal and state cigarette tax is approximately $2.40 per pack, further increases in cigarette taxes will have little effect because the pool of smokers is becoming increasingly concentrated with those with strong preferences for smoking. Alternatively, as cigarette taxes and prices continue to rise, smokers are taking other steps to thwart the impact of the price increase such as switching brands and increasing purchases on the black market. Notably, we rule out border crossing as an important explanation of the small tax elasticities.
The pool of carbon emitters is not concentrated with those with strong preferences for emitting carbon. Cigarette taxes were already high at the time of the study. Anyone serious about carbon tax to counter global warming says that the tax needs to be very high.
If we get to the point that most people are carbon neutral, carbon taxes are high, and would need to be far higher for a 5% reduction in emissions from people with strong preferences for carbon emitting activities, great!
"The weight of evidence is that the excise tax increases continue to be the single most effective tool for reducing tobacco consumption and prevalence"
https://www.health.govt.nz/system/files/documents/pages/eval...
I predict that industries in countries that adopt a carbon tax earlier will end up with a competitive advantage.
I doubt anyone then would have predicted that two of the U.S. big three would declare bankruptcy and that Toyota, then manufacturer of podunk little cars, would become the #1 manufacturer, but it happened.
Had U.S. regulations met consumer demand, U.S. manufacturers may have innovated what consumers wanted instead of more chrome, tail fins, size, etc. Regulation came eventually, but too late for the industry to avoid bankruptcies, unemployment, and so on.
In fact, regulation didn't stifle innovation but directed it. Engineers can innovate around safety and efficiency as much as on speed and tail fins. I'd rather have 100,000 mile warranties and electric cars than more chrome, which U.S. market forces created.
Today, regarding the environment, the governments that regulate to reflect citizen demand for clean air, land, and water will create markets and companies that beat ones that don't. I hope current U.S. policy doesn't bankrupt more future U.S. markets and companies.
America loves to do things via tax code, which is why the US tax code is famously so complicated, but that time is gone. The answer isn't a new tax to nudge the market. The answer is not an incentive to please stop polluting. We don't need 10% reductions here and there. We need massive reductions everywhere, preferably with active capture that pushes carbon emissions into negative territory. We cannot afford to fund green energy by taxing non-green energy. Coal cannot fund solar. Coal has to stop. We need rules to say that burning coal is now illegal. We need rules that mandate solar+wind as a fixed percentage of energy generation. We need massive rewrites to the rules that limit the deployment of new nuclear technologies. The opportunity for politically-friendly market-based (ie American) approaches has passed. It is time for governments to pass absolute rules forbidding some behaviors and mandating others. If that offends political sensibilities, those political sensibilities need to be set aside.
(1) Burning more than 100kg of coal per year is illegal.
(2) All new houses must include 10m2 of solar panels per resident.
(3) Windmills are, by law, not "an eyesore". No more complaining about them spoiling your retirement view.
(4) Those who cannot articulate the difference between a millisievert and a microsievert, between fission and fusion, are not allowed anywhere near the planning meeting for any new power plant.
For a concrete alternative with incentives: https://citizensclimatelobby.org/basics-carbon-fee-dividend/
A massive $600 billion dollar per year incentive based nudge.
https://en.wikipedia.org/wiki/Tetraethyllead : EPA mandated reductions of lead in gasoline worked.
Not to mention the thousands of little things (drunk driving, slavery, universal suffrage, speed limits etc) that were overturned relatively successfully without any market-based approaches. There is a right-wing philosophy that all government actions are inherently inefficient, but the reality is that laws work. It is possible to ban a behavior on day one and see it substantially reduced on day two.
"From the Korean and Japanese data, we used our models to show that emissions of CFC-11 from north eastern China had increased by around 7,000 tons per year after 2013, particularly in or around the provinces of Shandong and Hebei," said Luke Western, a University of Bristol atmospheric modeler. "We didn't find evidence of increasing emissions from Japan, the Korean peninsula or any other country to which our networks are sensitive."
https://www.cnn.com/2019/05/22/health/china-cfc-pollution-en...
Drunk driving is still not solved, and Uber/Lyft have done more to reduce drunk driving in huge parts of the US with poor public transportation than harsher penalties.
Laws outright banning things don’t work when a huge chunk of the population will do it anyway. See, prohibition, the war on drugs, etc.
Incentivize alternatives, don’t ban without a replacement. Otherwise it will just disrupt and get overturned a few years later.
How about this: The top US tax rate in the 50s was over 90%. That's a good number for the upper bracket of a progressive carbon tax. In short, large companies are no longer allowed to make profits while emitting carbon. They can continue to operate, but as investment vehicles they will be dead.
Yep, but the effective rate was similar to today because of so many deductions.
Also, what is a “large company”? I would rather Tesla makes a profit despite it emitting carbon and some small coal power not be allowed to profit just because it only employs 300 people.
Just tax carbon output, don’t create all of these half-baked rules trying to punish companies for being large rather than trying to solve the solution of CO2 output.
Perfection cannot be the enemy of the good. A standard tactic to oppose any new regulation is to show how it might not be perfect in certain circumstances. That draws out the debate. Draw debate out long enough and the proposed law dies. If solar+wind+nuclear is no longer the best approach in ten years, we can cross that bridge when we come to it.
>(1) Burning more than 100kg of coal per year is illegal.
No problem, we’ll just burn bunker fuel instead, or 1000kg of wood. Too bad you didn’t just limit carbon instead.
>(2) All new houses must include 10m2 of solar panels per resident.
Nice, a tax on the poor to force a rollout of an energy source with no baseload story that won’t work on a huge chunk of homes due to location and/or orientation. Solution here is to obviously pick the cheapest possible thing that qualifies as a solar panel. Too bad you didn’t incentivize energy generation.
>(3) Windmills are, by law, not "an eyesore". No more complaining about them spoiling your retirement view.
This is a joke right? Legislating speech around the appearance of a pervasive man-made object? That’s as dumb as “CO2 is, by law, not ‘a problem’. No more complaining about it risking our future.” The best way to get people to talk about how ugly they are is to ban talking about how ugly they are.
>(4) Those who cannot articulate the difference between a millisievert and a microsievert, between fission and fusion, are not allowed anywhere near the planning meeting for any new power plant.
This sounds good on paper, but it’s the politicians that hold the ropes here and they are ignorant and listen to the populace. This is why things like the green new deal exclude nuclear energy and effectively accept fossil fuels as base-load by doing so. Politicians cater to their base, not what is right for society or what is logical.
This is true for all democracies.
I am not sure rules is what holding nuclear back. Here is an interesting comment https://www.youtube.com/watch?v=2SXxJWUv-x4&t=77m59s
Then, once a lot of carbon producing machines are out of use, introduce a carbon tax to help push the remaining ones out?