"starting in 2024 all shipping vessels going in and out of Europe will need to buy enough permits to cover 40% of their emissions, by 2026 it’ll be 100%."
If we (the US) do the same, presumably we'd need a scheme to split the obligations from the permits, otherwise shipping companies will be subject to double (or more) taxation.
Of course any system like this will be gamed - maybe the long-haul cargo ships from China will unload outside of the EU, but close to Europe (Turkey? UK?), re-load the cargo on another ship and pay for the much smaller amount of emissions on that final journey.
It'll be interesting to see how it's gamed, but that doesn't mean we shouldn't try - you will get things like this: https://www.youtube.com/watch?v=oP1Oq3JLNbc but they can be corrected for later.
One solution would be to switch the tax to a tariff on goods that can be avoided if you prove reduced carbon travel. So if your goods are from China, you get the 100% whatever it is, but if you can show that they travelled from China on whatever is considered acceptable, it drops to 20% or 0% or similar.
Good, yes tax things we need more? Where is this money going? Are we funding research for hydrogen powered freight? 1st world taxation almost always affects the bottom rung of the planet while building endless coffers of money for the wealthy.
Saw an article the other day that stated roughly 40% of shipping is moving fossil fuels around the globe, so using less fossil fuels has a double bonus
That's a big takeaway I got from the book Electrify by Saul Griffith (a really good read). The book only really looks at US carbon emissions, but a substantial chunk of emissions comes from refining and transporting petroleum projects -- these are emissions that occur just to prepare gasoline to be burned! Switching to electric cars (or just fewer cars) has the same double bonus as you mentioned in that there's less tailpipe emissions and less petro processing and transportation emissions as well.
For what it's worth, marine shipping is the single most fuel efficient way of moving anything anywhere. A large cargo ship can move a ton of cargo up to 1000 miles on a single gallon of fuel. [1]
Second is freight trains, at about 500 miles per gallon per ton. [2]
[edit] #3 is freight trucks at about 134 miles per gallon per ton [3] and pulling up the rear is air transport at at somewhere around 1/10th of trains.
My understanding is that shipping is fuel efficient but not emissions efficient because that hasn't been required by the flag countries popularly used to register vehicles so you're basically seeing things like a half century-old design from an emissions control perspective. Since that industry is so cost sensitive something like this makes sense for closing that loophole.
I agree, but it seems like they're charging them for carbon, not for other emissions? If you want to cut down on carbon, taxing air freight seems like the way to go.
My concern is they're likely to redirect marine cargo to other modes which is going to be worse from a carbon intensity perspective.
Agreed, but I would think this should be a “do both” situation since that'd preserve the status quo keeping air cargo more expensive and tell everyone that they need to make capital investments or change how they work to be less carbon intensive.
Hopefully the tax will lead to different consumption patterns.
Once you stop flying the single most impactful change is stop buying stuff. Never mind energy, food, local travels.
For "stuff" the majority of emissions is in production (mining), but relentlessly moving matter across the world because fossil fuels are mostly untaxed is also a major factor
Ready your own link, the top 16 ships produce more particulate emissions (sulfur and nitrogen oxides especially), because of low regulations and cost pressures driving the use of low quality fuels (bunker fuel).
That's already the case, actually! A lot of the European waters have had quite strict limitations on the fuel's NOx and SOx contents for over 15 years already - and shipping was pretty much the last remaining industry allowed to use such high-pollutant fuel.
European waters - the ships burn the nasty shit in international waters and switch to clean fuel when approaching the countries. There needs to be some way to get them to burn the clean fuel all the time - perhaps by climate concerned nations removing naval protection from boats that aren't burning clean.
> Emission control areas (ECAs), or sulfur emission control areas (SECAs), are sea areas in which stricter controls were established to minimize airborne emissions from ships as defined by Annex VI[1] of the 1997 MARPOL Protocol.
> The emissions specifically include SOx, NOx, ODSs and VOCs[2] and the regulations came into effect in May 2005.[3][4] Annex VI contains provisions for two sets of emission and fuel quality requirements regarding SOx and PM, or NOx, a global requirement and more stringent controls in special emission control areas (ECA).[5] The regulations stems from concerns about "local and global air pollution and environmental problems" in regard to the shipping industry's contribution. In January 2020, a revised more stringent Annex VI was enforced in the emission control areas with significantly lowered emission limits.[2]
The original factoid hit the headlines because all that work was done and so people had the data to do comparisions. It was slow but steady work to improve the environment and somehow it got turned into "environmentalists are stupid, EVs are stupid, anyone to the left of Kanye is stupid, if they really believed in climate change they'd do X".
exactly, this is the kind of essential detail that gets glossed over by climate zealotry, and also one of the reasons why we direly need to shift the conversation away from CO₂ (a gas that is essential to life on earth) to pollution (shit that kills millions of people right now).
CO₂ and climate change is a diversionary tactic implicitly endorsed by the fossil fuel industry to focus us on an amorphous, far-future issue to grind away progress on pollution reduction now. and it's working, as evidenced by the fever-pitched focus on climate change rather than pollution, particularly by the neoliberal news outlets (npr, nyt, bbc, etc.).
It's still not nearly as efficient of not moving things in the first place. Perhaps if shipping has to pay for it's carbon emissions then it'll shift the economic balance more towards local economies.
Wrong, the most carbon efficient transport mode is not to ship at all. Taxing transport creates the opportunity for local manufacturing to become profitable
It is beyond me how this snail pace of changing the economy to be more sustainable can be interpreted as break neck speed. What was break neck speed was maybe the corona response, which was a good thing and could be happening on climate front more…
I couldn't disagree more. The response to corona decimated the economy and many businesses. The first priority for life on this planet is to have a decent quality of life. Not being able to afford food or other essentials is hardly a noble objective.
What if the downsides of decarbonisation outweigh the supposed benefits? Is this even possible in your list of possible outcomes? We have some experience of central state power steering large parts of the economy for The Greater Good.
Very true! The New Deal eased the tensions and permitted a pretty fast recovery, while building most infrastructure modern US depends on, hopefully it will have the same effect.
There’s also a lot of proof of the downsides of not controlling companies: pollution, greed, child labor, unsustainable low wages, etc. Companies don’t care about the population, they’re just there to make money. If we don’t set boundaries the world will be a very ugly place.
Well we are all going to die from climate change anyways. Some extra corona deaths and working economy seem like a win/win If you are a climate doomer.
I had a good life. I am worried about my children and also trying to think about the billions of people that will see their quality of life significantly degraded.
Geopolitical instability due to scarcer resources is certainly going to have a massive negative impact on everyone's life.
Just look at how a "small war" in Ukraine is already having real life consequences all around the world.
Now, imagine the effects of food and water insecurity across the world. Even Russia was not stupid enough to fully block supplies of wheat leaving Ukraine.
And this is only one aspect of how climate change might impact you.
Yes, people are dying because of lots of causes, that's the unfortunate truth, but it seems to me that some people do believe that a large part of us will die because of climate change. Hence my question.
I believe that to be false, a large part of us (as a species) will not die because of climate change (as past climate change events can attest to).
Maybe not a large part of the humans living now, but the next generation won't have it easy. I don't think that it's prudent to look at past events for two reasons: Population size and in-/dependence. There are a lot more humans now, than in the past. The year 0 is estimated to have had a population of about 170 to 400 million and about half for every 1000 years before that. It is a lot easier for smaller independent populations to move to a new place and start over, especially when most of them are hunter-gatherers or simple farmers. Their lives didn't change that much.
What will a population of 8 billion interconnected and dependent people do? They can't all move to a new place, they can't all farm for themselves. Just the war in Ukraine caused significant food insecurity due to higher grain prices and lower export numbers in some poorer countries. Now imagine such problems on a global scale.
That was in response to the impact of corona approach on the economy, where millions died and still people think economy is more important.
But yes, in my opinion global warming is going to cause a lot of hurt. Countries will become unlivable (some islands will be gone in a few decades, the Netherlands will be mostly under water, dikes can not be heightened limitless, certain areas of India will soon be too hot for normal live), food production will be uncertain due to changing weather and drought, mass migration of people to more livable areas will follow, causing wars.
We’re already complaining about the amount of asylum seekers, the country is too small for all these people, how do you think it’s going to be with many more people on the move?
Many of the current conflicts going on in the world already are water wars in disguise, or are about dealing with degrading environments, like in the Sahel zone. Also large-scale refugee movements are about people trying to escape from places where supply for land suitable for agriculture is not increasing. This is on top of ecosystems actively degrading because of multiple other reasons as well. There are always going to be populations somewhere that manage to insulate themselves from these problems, but things will become rougher for many of us.
> Do people believe that they’re going to actually die because of global warming?
Climate change can be obdserved and measured. (Nitpick, but the 80's term "global warming" is used less often these days since it's confusing for some people, because climate change can have vastly different effects in different areas, not just simply "warming")
We already know that heatwaves are killing people and droughts are affecting the entire food chain, again, killing people for years already. [1]
You might take the position that these very real deaths are not caused by climate change (disagreeing with scientific consensus), that they are merely a fluke in the climate history of our planet, but then you'd have to, at least for yourself, define an "evidence threshold" which, when presented, would make you go "ok, now it's undeniably man-made climate change that is killing these people", because the slow graduality of the process makes it hard to intuitively see cause and effect.
2 degrees c average change in the next 28 years will cause people to die.
Looking at the droughts, floods, heat waves, polar vortexes, hurricane occurrences, fires (California and Siberia) - people have died over the last years in events occurring more often than they should.
Harvests and famine have some correlation to Syria and Ukraine wars and proxy wars over the last decade.
People already have died because of global warming. Do you truly believe no additional marginal people have died due to intensified wildfire or hurricanes in recent decades?
15 years ago the show The Newsroom (another aaron sorkin flick) made the Toby Ruins Everything joke about how "the first person to die due to catastrophic failure of the planet has already been born", you know, supposed to be a bit hyperbolic and funny but yeah, dead on, the only part of that that hasn't come to pass since then is the "storms that blot out the sun and create permanent darkness" bit/joke. Massive wildfires in numbers and scale far too big to keep under control? Intense hurricanes and 100 year floods at yearly intervals? Tropical diseases that start to break loose and spread out of control? Anybody hear any of those lately?
Honestly that was a bit of a mis-statement even then. The first person to die due to catastrophic failure of the climate was actually probably born in the 70s or 80s most likely.
And the party is really just getting started, this is nothing, there is around a 10-year latency so we are just seeing the impact of 2012-era carbon levels right now. It'll be another 10 years before we see the impact of the current decade of continued emissions growth. Things are going to continue to get a lot worse and fires/hurricanes/etc are only going to intensify.
Which is of course why it's important to actually get things fixed, because, as bad as things are, they will get worse unless the necessary system upgrades and repair work is performed... everyone has had that talk with management before. Some companies choose to change, some don't. Unfortunately there's nobody hiring on Mars or Europa at present...
I wasn't clear. I was questioning the overly simplistic "no life at all" as if some environmental changes are made the reduction in quality of life will be significant
Because of corona many people now have no life at all (i.e., they’re dead), and many more would have died if not for all the measures, so not sure how the statement was overly simplistic.
Same goes for the environment, if we don’t act, the environmental changes will have life ending impact for a significant number of people. Maybe not directly, but there will be food shortage, and wars. It is in the interest of everyone that we try to limit the impact of global warming as much as possible.
Look at any recent studies about the projected cost of climate change in the decades to come or read a bit about the geopolitical consequences of what 2 degrees means.
The consequences of the response to Corona will seem like a nice a problem to have in comparison.
And contrary to a bad economic cycle, once the CO2 is in the atmosphere, there is no fixing it at a meaningful scale.
Underwater when sea level rises less than a foot a century? Get serious. Cold kills way more than heat. Death from extreme weather has been largely mitigated by industrialization and modern technology. Increased food production from more CO2 has helped reduce starvation.
Please, show me one genuine climate refugee right now.
That's a function of growing population in poor areas to live (flood plains, dessert). Changing CO2 concentration to deal with this is about the least effective way I can imagine to help these areas.
There are a number of pacific islands such as the Marshall islands, Kiribati and a number of others. Majuro (the main island of the Marshall islands had a population of 20 thousand in 2012, but is currently only 6' above sea level. 1' of sea level rise removes the majority of the land, and already significant number of climate refugees from these islands who have resettled to other areas.
To be fair, there's limited shipbuilding capacity in the world, with a few dozen very large shipyards capable of producing a few dozens ships a year. And they're busy as is. Also given the shear scale of those yards, it's not like you can just build new ones on demand. Those things are huge, they span the size of a medium city, and require an entire economy of skilled people around them.
So even if we were to replace all of the world's fleet to be more energy efficient (which would almost by definition mean larger/longer ships, since they benefit from hydrodynamic efficiencies), it would take a lonnng time to replace the world's cargo fleet.
> if we were to replace all of the world's fleet to be more energy efficient (which would almost by definition mean larger/longer ships, since they benefit from hydrodynamic efficiencies)
The hydrodynamic efficiencies are a small part of the problem, there are many other things that can be done. You don't need to scrap a perfectly good hull, you can simply choose to run slower, burn higher-quality fuels, or strap on an oxidation catalyst (DOC) to cut CO, particulate filter (DPF) to reduce particulate emissions, or add selective catalytic reduction (SCR) to reduce NOx emissions.
But until regulation and the market catch up, old ships will choose to run too fast, to burn whatever's cheapest, and to vent their exhaust directly into the atmosphere.
I mean, if we wanted to decarbonize at break neck speeds - nuclear power and geoengineering are right there. Instead we are working with a very narrow band of acceptable solutions.
Gen III+ or earlier nuclear is a way of slowly solving 10% of the problem. It's not fast and it's limited by an irreplaceable critical mineral the overuse of which would delay full deployment of Gen IV in many scenarios.
It's not yet clear that Gen IV is faster or less limited by other critical minerals.
Dedicating your shipyards to building offshore wind cranes gets more carbon off the plate sooner than adapting it to build reactor vessels even if you only use the crane for a few years. Building more heavy casting is slow.
Every other step of the supply chain is even slower and more prone to overruns than the glacial pace of reactor construction.
Geoengineering is the last ditch emergency button. Once we hit it we can't unhit it and it might break other things.
Not sure the governments’ response to Covid should be an example for “this is how things should be done”. After all there are so many bank accounts that a liberal premier can block.
The german covid response was fast for an inert and badly prepared government apparatus. I was still impressed and they were just about in time, but what had to happen was still known well in advance. Everything that had to happen was known way before the virus was a thing, the button just had to be pressed.
Everyone praising this will wonder why the cost of everything has gone up once it’s implemented.
Meanwhile India and China continue to build many coal fired power plants each year
> Everyone praising this will wonder why the cost of everything has gone up once it’s implemented
People are not a bunch of idiots. Climate change is very real. Using other sources of energy requires investments. It is mandatory. All those are facts, as far as I know.
If your only arguments are "it will hurt the economy" and "people won't understand", you didn't take the measure of the problem and are part of it. That's very short-sighted, and tends to prove you don't really know what you are talking about.
> Asia’s richest man, coal magnate Gautam Adani, made his vast fortune betting on coal as an energy hungry India grew swiftly after its economy was liberalized in the 1990s
> He's now set his sights on becoming the world's biggest renewable energy player, by 2030, adroitly aligning his investments with the government’s own priorities.
> As India grapples with climate change, the Adani Group, whose operations also span ports, power, farming and defense manufacturing, plans to invest $70 billion in solar, wind and other green energy projects over the next decade.
Then you should be happy as this policy will directly interfere with India's and China's exports to Europe, resulting in less demand for coal power and also less money for them to build coal plants.
It's mostly a disincentive. At least a chunk of the money goes to member countries to help transition away from fossil fuel use.
There are a variety of rules and mechanisms to ensure the money that is distributed gets spent that way. How effective those rules end up being in real life I'm unsure.
The fundamental problem with carbon markets is that there is literally no supply. In a properly functioning carbon market these carbon emitters would be buying units of "tons of carbon removed from the atmosphere". Just paying the cleanup costs of the pollution they are emitting. Very simple. The problem: nobody has any large scale carbon capture projects to buy from.
What should be happening is that carbon capture projects should be selling their services on the market and these emitters should be buying them at market prices. This would create a carbon capture economy and encourage people to find more efficient ways to do it, since a more efficient solution would produce a superior product on the marketplace and capture more sales. But all current carbon capture technology is small scale and outrageously expensive so it would crush the fossil fuel industry. But without an incentive like this the carbon capture tech will develop very slowly as it has done over the past 30 years since there is little to no demand for it.
The worst part is that even if we did decide to zero out our emissions and take the massive economic hit, it would still not account for the two centuries of CO2 buildup already in the atmosphere.
> But without an incentive like this the carbon capture tech will develop very slowly
I don't think that's a big issue. If the tech was economically viable it wouldn't be hard to lobby for such regulation. The positive net effect is easy to prove and argue for.
I think what's stopping carbon capture has more to do with the expected efficacy of it. I mean, when you have ~400 ppm CO2 in the air it's a bit like reassembling a broken glass. Sure, you can improve every process with engineering, but there are also physical boundary conditions that look pretty bleak for most forms of CC.
> even if we did decide to zero out our emissions and take the massive economic hit, it would still not account for the two centuries of CO2 buildup already in the atmosphere.
Perhaps one step at a time? We are absolutely nowhere near zero emissions, we don't even have a plan. Our entire civilization runs on hydrocarbons today. Nothing against CC research per se, but it doesn't look like a basket where we should put many eggs in.
There is a bit of a chicken and egg problem with the tech that it won't become economically viable until it is out of the lab and being used at scale, but it will never get out of the lab until it is economically viable.
I'm a big believer in the power of markets to solve problems like this, but getting the market started is almost impossible because of the very high level of short and medium term pain associated with it. You might argue for a gradual or partial opening, but that gets forever bogged down in arguments/lawsuits over who should be included and who gets a pass and thus never really gets started.
The fatal flaw with this line of reasoning is that carbon capture is guaranteed (by entropy) to be energy negative. We aren't in an either or of zero out emissions or carbon capture. We need to zero out emissions *and* carbon capture. Large scale carbon capture is only viable with large excess amounts of renewable power.
Seems like a reasonable solution would be to make a market for a subset of emissions and increase it slowly over time. For example, you could require 0.1% be purchased in carbon markets in scale that number up over time as the carbon Market place grows and costs go down. It seems strictly better than a flat tax that goes into the general fund.
It’s like a tax paid up in advance. The government can create carbon credits out of thin air, they sell them to you, you get to emit without breaking the law / getting fined. The government decides how many to create, and sets the price that way because the market decides how much being able to emit carbon is worth. The incentive is not to have to pay for them. Reduce your emissions, improve your bottom line. Simple as that.
This isn’t an offset scheme but you can buy some kinds of offset credits and use them like the basic emissions credits as essentially a license to emit. But I think there’s some rethinking of offsets as a whole concept going on, a realisation that they’re actually not producing real results and just enabling emitters to keep going longer and more cheaply. If the claimed offset is not realised, then this is a massive net loss because of the lost time spent propping up emissions. So your offset efficacy has to be really high to be tenable, but while estimates vary, the harder we look at them, the closer to 0% effective they appear to be.
Luckily folks are starting to realize that's not the case. [1]
> Centre for European Reform figures show that by the end of last year, the economy was 5% - or £31 billion - smaller than it would have been if the UK had stayed in the EU. [2]
This will increase carbon emissions. Shipping is the slowest, cheapest, least carbon intensive mode of transport per ton. Adding a tax to the greenest available option is as silly as tax on wind turbines.
Well you could dodge the tax by switching to sailing ships or the like, in fact I encourage companies to find ways to dodge those evil government tax men by switching to non-polluting forms of transportation. Stick it to big government!
Yup - or higher load factors, or electric drive, or higher efficiency engines, or some synthetic fuel produced in a low emission way… all of which the tax provides a nice incentive for :-)
I like the framing ;-) Maybe it could work for climate change deniers: “Tired of THE MAN intruding on your personal freedom to pollute? Regain your independence with solar, electric transport, good insulation, and a low impact diet. Freedommmmm!”
It’s adding a tax to the fuel type for the category, not the category as a whole. The tax will increase the commercial incentive for cleaner shipping which will reduce emissions.
The tax isn’t remotely large enough to result in freight migrating to air. And trucking within the eu is already subject to a carbon tax.
Two effects here: First the substitution effect because the price gap narrows between other modes of transport which are less carbon efficient. Second, effect of switching to more efficient ocean cargo. The latter is quite small because fuel has been about 50% of the cost of ocean freight for a long time. The incentive for carbon efficiency has always existed for ocean freight.
It's linked in the post and the author makes the point at the end that it's too early to determine how this action should be judged...
"In a decade Europe is either going to look like a genius on how to get tough things done or it’s going to be an economic madhouse, falling behind other parts of the world."
A system where emitters can ignore the actual cost of their externalities and push them down onto society at large to handle (through taxes) is broken.
This should also result in more funding around anything green tech related, when you actually have to pay the full price of the currently-used alternatives.
Ideally, there'd be a market with buyers (capturers) and sellers (emitters) (with a negative price, so cash flows from seller to buyer, obviously) for carbon emissions where the price depends on the actual underlying cost of capture, but that will hopefully come in the future, when carbon capture is commercially viable.
Carbon capture is so costly and energy intensive, that this likely won't come close to covering the cost. It is absolutely a step in the right direction, but carbon capture is unlikely to end up commercially viable.
There are definitely examples of where CCS is commercially viable [1], but implementation is lagging, and the technology is very unlikely to scale to capture the amounts that we are releasing. It would generally make better sense to keep the C in the geosphere than to first pump it up, burn and capture it again.
It's harder to police not emitting carbon, after all right now I'm not emitting five billion tons a second of carbon.
I also lack the ability to emit that much, but that's not a major issue. In general it's hard to pay for someone NOT doing something without it being scammed.
>> Ideally, there'd be a market with buyers (capturers) and sellers (emitters) (with a negative price, so cash flows from seller to buyer, obviously) for carbon emissions where the price depends on the actual underlying cost of capture, but that will hopefully come in the future, when carbon capture is commercially viable
These carbon permits (also called EUAs) are tradeable as futures and are highly liquid on the ICE exchange. There are even a bunch of ETFs, KRBN being the biggest and highest volume.
I agree. Europe is kicking ass on the climate change front lately. They are definitely not doing enough but when I compare their actions to the actions other super powers, I can appreciate their efforts.
Could anyone have a claim that reducing carbon is a negative externality for them? For example, warmer temps could benefit farmers in certain regions. Are they compensated by this scheme? Are we assuming that alleged warmer temperatures are bad for everyone? How is that decided?
Right, and who do you think will pay for this new tax? It's definitely not the importers and exporters - it's the end customers, because everything will go up in price. They're not going to absorb those fees.
The only ones making money here is the EU governments imposing this.
That’s the point - they have to pay the costs themselves, so if it turns out something isn’t important enough to be shipped at the ‘real price’ (including these externalities) then customers won’t pay for it. Instead of now, where everyone pays for it, and the real price is obfuscated.
Yes, the customers pay the tax, but the exporters and importers have to factor in the decreased demand (or margin) as the price has increased. And how they invest in the future.
And it goes to upstream businesses, if exporter Y has a lower tax basis, then they will pay rates approaching current exporter X.
Carbon tax supporters often advocates to redistribute the tax revenues equally to all citizen. That's how Canada does it.
It still penalizes polluters and raise the prices of the products emitting the most CO2 but it is a blank or positive operation for 80% of the population (and negative for the ~20% richest that are the polluting the most).
Look up carbon fee with dividends for more details.
Well, alternatively, everyone else in the world is paying for me to have cheap imported goods, especially the people I poorer countries who will suffer the worst from climate change. It seems fairer that I should bear the cost.
> Right, and who do you think will pay for this new tax?
Consumers, of course, but not indirectly, with such a diluted notion of responsibility as it is now (by paying for externalities through general taxes). It will be priced into the products, as it should be.
This way products that are "greener" will be cheaper and people will have an incentive to buy them.
I have no problem with companies profiting off of the products they sell, or end customers paying for the actual cost of the product. It's just that a market without externalities having a price tag isn't a well-designed "free market".
The price going up for such forms of shipping is the point.
So if a competitor figures out how to do the shipping cheaper due to it outputting less co2 (like trains running on electricity or just less polluting ships) those should over time win on the marketplace and shift the shipping industry to less pollution options.
edit: And the government can redistribute the carbon taxes to the part of the population this will hit the hardest easily by lowering VAT, income taxes at the lower end of progression or just direct subsidies.
> edit: And the government can redistribute the carbon taxes to the part of the population this will hit the hardest easily by lowering VAT, income taxes at the lower end of progression or just direct subsidies.
In reality governments will create laws which will distribute those money to friendly companies. You can forget right now that it will go back to poor people.
Wouldn't the importer/exporter with less emissions have a competitive advantage? I think it's understood that citizens are paying a new tax to incentivize emission reduction by the companies.
1. It's pretty much a closed system. "EU governments", as much as "governments" is villainized, remain just an entity in the loop. That money is not going straight in the pocket of politicians. It's going in the budget. More revenue on this front means less to pull from somewhere else. Brocken as the electoral system is, all politicians still have a very big incentive if they want to keep their jobs to keep taxation low as they can. If anything by redistributing that money to people the most impacted, or by using it to sponsor incentive programs to reduce local carbon footprint.
2. Yep, prices for transported goods will surge, which is the intended consequence. If the general price of imported goods raises, then locally manufactured goods become more competitive. This gives an incentive for customers to select products built more closely to their place. It also gives a financial incentive for shipping companies to invest in cleaner transportation if they want to keep business.
3. Overall, yes this is scary, but think about it at a systemic level. This creates opportunities for local businesses and employers to sell more. This lowers the incentive to keep exploiting low-paid populations across the globe, potentially shifting the balance on their side to make social progress. And this reduces the carbon footprint, which we freaking desperately need.
> Overall, yes this is scary, but think about it at a systemic level.
On systemic level this and similar policies are only creating simple onboarding ramp for right wing governments. Look at those stupid liberals how they are making everything more expensive for you! We will cancel it! Vote for us!
Left wing can redistribute, which is quite a left wing thing to do. In practice this does not happen. I remember the outcries when VAT was increased in France in 2014. 3 years later, no-one seriously contending for the elections had a program to roll this back, left or right.
Oh and, by the way: the initial plan was made by a *right-wing president*, to raise it by 1.6%, AND THEN carried on by a leftist but only by .4%.
So, I have at least one example for the exact opposite to what you are saying. I don't buy in your argument
> Absurdly short sighted.
I love how status quo and let's burn the planet is not short-sighted in your world view. That's probably the first somewhat courageous and potentially impactful measure I see on the topic, the systemic view says it may work, why not trying it?
> I love how status quo and let's burn the planet is not short-sighted in your world view.
Because when things starts to be cancelled do you think that we right wing governments will stop at one law? Decades of green policies will go down the toilet. So yeah slowly turning status quo is better than having a massive rebound.
Fundamentally, mainstream economics does not agree with your point of view. The bedrock of modern economic theory is clear on this: all prices are set by supply and demand.
Consumers pay the full tax burden only in the instance wherein demand is perfectly inelastic. Realistically, the more suppliers try to raise prices, the more consumers will shift to substitutes or demand less.
Ergo these taxes tend to fall on both consumers and suppliers, with the balance depending on the type of good and the market surrounding it.
good, if true then when they price their wares appropriately accounting for all thebpollution the free market will crush them with cleaner, cheaper, local alternatives or people will just not buy the product. i thought capitalists loved this free market stuff, or is it just the cheap oil from imperialism they love...
> A system where emitters can ignore the actual cost of their externalities and push them down onto society at large to handle (through taxes) is broken.
I'm not sure if you are being sarcastic. This announcement is for shipping companies to currently be rolled into the current Cap and Trade policy framework.
There's no alternative to diesel for shipping vessels at the moment so the only thing this does is increasing prices for EU consumers and businesses.
It's like what triggered the Yellow Vests protests in France: a tax on diesel when people have no alternative. It seems that nothing was learnt from that.
A constructive approach would be to invest in developing alternatives then you can tax away to hasten change.
Article says that Europe will look either like a genius or a madhouse depending how this goes... well, track record isn't too good.
Government creating thinly traded markets that gatekeep essential services is always a bad idea. It funnels huge fees to wall street and creates opportunities for financial manipulation. It is Clinton-era neoliberal grift. I thought the fiasco of energy de-regulation made people a bit more realistic about inserting Wall Street into the middle of everything, but apparently there are still true believers in market solutions to what are major energy infrastructure issues, not consumer choice issues, or how-do-I-run-a-business-efficiently issues.
As always, demand-side engineering to incentivize hard supply side problems only serves to make things more expensive and enrich bad actors. If you don't believe that, then understand that many industries battle with high energy prices and are already doing their best to be more efficient. Your carbon tax is not going to be the difference maker. If you want to shift to a different form of energy, then build a power plant which provides the energy you want and take a power plant that you don't like offline. Do this one plant at a time until all have been changed. Same for shipping -- you don't like existing shipping tech, then create a replacement. Oh, that's too hard? Then why do you think the free market will solve a hard problem you can't? Don't go this roundabout way where you think you are incentivizing end users to pool their money together and build their own privately funded energy breakthrough.
By refusing to directly provision the replacement, what the government is doing is washing its hands and shifting the burden of hard R&D onto the private sector, which cannot bear this burden very well. So all it does is make stuff more expensive at a time when we are fighting inflation globally, and Europe is rapidly de-industrializing because of high fossil fuel prices.
> It funnels huge fees to wall street and creates opportunities for financial manipulation. It is Clinton-era neoliberal grift. I thought the fiasco of energy de-regulation made people a bit more realistic about inserting Wall Street into the middle of everything[...]
Not saying you're wrong, but how does Wall Street capitalize from this? It looks more like a government money grab to me (if you want the cynical take), since the implementation is quite literally a tax.
That said, totally agree it's also an energy infrastructure problem – that governments have been incredibly stupid and naive with the last couple of decades.
Wall street can make money by charging financial service fees for:
- market making
- organizing sales of credits
- organizing purchase of credits
- selling hedging and insurance products so firms have some guarantees to support long term planning
That's in the "honest grift" category, then all sorts of nonsense can happen under the category of market manipulation, such as Enron style buying up credits to cause a price spike, or denying credits to competitors, etc.
> That said, totally agree it's also an energy infrastructure problem – that governments have been incredibly stupid and naive with the last couple of decades.
Exactly. Build more power plants, connect them to the grid, take older plants offline. No need to yell at people or tax basic human needs like transportation or electrical usage. For ships, the government can fund research on alternate fuels for ships, and the private sector can be brought in with research prizes and grants, etc. But the idea that a shipper -- which doesn't even build any ships -- is going to somehow innovate to create new shipbuilding designs and get into the business of building non-fossil fuel consuming ships -- doesn't make a lot of sense. All that will happen is that shipping becomes more expensive, which has terrible negative externalities. Only the strongest market fundamentalists want to leave basic R&D and long term investment to the magic of the free market.
That's the thing. We don't need R&D breakthroughs. We have infrastructure solutions today - they are just not cost effective for the suppliers because the free-market cost of carbon is $0.
Of course a carbon tax won't invent fusion - but I think it would be madness to make the case that people or industries don't adjust their consumption to adapt to taxes.
Keep in mind we have 30 years of data that shows cap and trade programs achieve their objectives and are pretty stinking cost effective.
Prove it. If you say it's a solved problem, then go ahead and deploy the replacement. What should power ships if not fossil fuels? Sail? Batteries? Hydrogen? Go ahead and tell me the replacement and then deploy it at scale. If it needs some money to be cost effective, then subsidize it so that it's cost effective and deploy the replacement. No wall street needed. No trading needed. Just deploy the replacement and subsidize it as needed.
> Of course a carbon tax won't invent fusion - but I think it would be madness to make the case that people or industries don't adjust their consumption to adapt to taxes.
Yes, but we do not want industries to use less energy, which is all that cap and trade will accomplish. What we need is replacement energy.
>Keep in mind we have 30 years of data that shows cap and trade programs achieve their objectives and are pretty stinking cost effective.
No we don't. You are conflating the reduction of energy usage (which creates global famine and de-industrialization) with the deployment of a replacement. We do not have 30 years of data that cap and trade is effective at solving the problem of transforming our energy infrastructure, cap and trade is only effective at reducing usage. And it does not follow that reducing usage of fossil fuels will, by a type of inevitability, cause replacements to appear that are powered by market magic. It will just mean less shipping, which again means famine and de-industrialization.
If you build more nuclear or renewable, that takes pressure off of the oil and gas markets. With cheaper oil and gas, it would start making sense to switch shipping from bunker fuel (literally the dregs of the fuel process) to a fuel source that is a little less polluting.
Coal is dying in the US - not because of government R&D or political efforts (perhaps in spite of them) - but because of the prevalence of cheap natural gas and industry's ability to adapt when presented with a price incentive.
The whole point of cap and trade is that it's easier for some sectors to adapt than others, and it's easier to just have them sort it out amongst themselves.
The article says: "But the breakneck speed at which they’re trying to transition to renewable energy led directly to this year’s natural gas fiasco."
I'm pretty sure that Russian invading Ukraine made a big difference to the natural gas situation this year. Am I missing something or is the article talking about something I don't understand?
Europe chose to deprioritize building natural gas capacity in the form of LNG ships and ports in favor of wind and solar. This order of priorities made them increasingly dependent on Russia's natural gas coming from two pipelines, Nord Stream 1 and 2.
So as many across the western world predicted, Russia used (and continues to use) that dependency as leverage to get leniency on their actions in Ukraine.
Natural gas will continue to be a critical bridge fuel to get to a world that is majority powered by renewables. Impossible to do without it.
Europe gambled Russia wouldn't do something like this and they lost. That loss caused the price of European nat gas to spike 2000% at one point and it's still up 800% today.
You are right, the article mostly wrong in my eyes. The article might be referring to Germany's closure of several nuclear plants, which to some extent have been replaced by coal and gas (but perhaps more correctly: extended the life of coal and gas plants, awaiting an ever accelerating renewable rollout).
Let’s ask this question: how much is carbon worth? And can a reduction in carbon be precisely correlated to a reduction in global temperature? If a ship emits slightly less carbon, can that impact be measured? If it can’t be measured, how can it fairly be priced?
It's one thing if the selling of the credits will be used to subsidize clean energy or to reduce the burden of the good purchased by lowering taxes. However, if the money is going towards growing other social programs, it may just make life more expensive for the average European.
> or to reduce the burden of the good purchased by lowering taxes
Why would you want this? You want prices on shipped goods that emit carbon to be high so the average European will be less likely to buy them and choose cheaper (greener) alternatives.
The goal isn’t “punish the company that emits” it’s “punish the individual who chooses to create emissions through their purchases”.
The goal is to punish companies that pollute not the people who consume the goods. In making polluting goods more expensive, you open up space for competition that uses fewer pollutants to offer similar goods at lower prices.
> In making polluting goods more expensive, you open up space for competition that uses fewer pollutants to offer similar goods at lower prices.
I think we’re in agreement. I’d just say that if you make a good more expensive but then immediately reimburse the consumer for that extra expense then you are not really making that good more expensive. A good system should make sure that a polluting good is expensive and that consumers feel that expense.
Expensive is relative. If there is an alternative good of cheaper price, then the original good is expensive.
For instance, if a grocer charges $0.10 per plastic bag to the consumer, but $0 to the consumer for paper bags, the consumer is likely to consume the paper bag. That extra $0.10 can then be used to lower the cost of other things because the company's profits are slightly higher. The rebate to the consumer from those paying for plastic is negligible because it's not perceived to be in direct relation to the immediate purchase (the cheaper cost of the paper bag is, however).
What does the consumer do with the extra money? They consume more of the cheaper product which is hopefully more environmentally sustainable.
Shipping is 1.7% of global emissions while aviation 1.9%.
The immoral aspect is that jet fuel at the moment is literally tax free pretty much anywhere in the world. Not because of private jets but to prop up airlines from going insolvent. Not every 'fairness' discussion has to be a 'eat the rich' polarization.
If we are looking at % of emissions then all of this is a distraction, arguably the best bang for buck is to get energy storage + renewables and reduce energy from coal production. If we are looking at it from a social fairness aspect than jet fuel should absolute be taxed.
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[ 2.6 ms ] story [ 205 ms ] threadIf we (the US) do the same, presumably we'd need a scheme to split the obligations from the permits, otherwise shipping companies will be subject to double (or more) taxation.
Of course any system like this will be gamed - maybe the long-haul cargo ships from China will unload outside of the EU, but close to Europe (Turkey? UK?), re-load the cargo on another ship and pay for the much smaller amount of emissions on that final journey.
One solution would be to switch the tax to a tariff on goods that can be avoided if you prove reduced carbon travel. So if your goods are from China, you get the 100% whatever it is, but if you can show that they travelled from China on whatever is considered acceptable, it drops to 20% or 0% or similar.
Second is freight trains, at about 500 miles per gallon per ton. [2]
[edit] #3 is freight trucks at about 134 miles per gallon per ton [3] and pulling up the rear is air transport at at somewhere around 1/10th of trains.
[1] https://www.extension.iastate.edu/grain/topics/EstimatesofTo...
[2] https://www.aar.org/article/freight-rail-moving-miles-ahead-...
[3] https://www.csx.com/index.cfm/about-us/the-csx-advantage/fue...
My concern is they're likely to redirect marine cargo to other modes which is going to be worse from a carbon intensity perspective.
Once you stop flying the single most impactful change is stop buying stuff. Never mind energy, food, local travels.
For "stuff" the majority of emissions is in production (mining), but relentlessly moving matter across the world because fossil fuels are mostly untaxed is also a major factor
https://www.lngtransfer.com/news/the-16-biggest-ships-produc...
Ready your own link, the top 16 ships produce more particulate emissions (sulfur and nitrogen oxides especially), because of low regulations and cost pressures driving the use of low quality fuels (bunker fuel).
And agree that EU's regulation would also benefit from taking a more holistic view on pollution than my (erroneous) zealotting on CO2 alone.
https://en.wikipedia.org/wiki/Emission_control_area
> Emission control areas (ECAs), or sulfur emission control areas (SECAs), are sea areas in which stricter controls were established to minimize airborne emissions from ships as defined by Annex VI[1] of the 1997 MARPOL Protocol.
> The emissions specifically include SOx, NOx, ODSs and VOCs[2] and the regulations came into effect in May 2005.[3][4] Annex VI contains provisions for two sets of emission and fuel quality requirements regarding SOx and PM, or NOx, a global requirement and more stringent controls in special emission control areas (ECA).[5] The regulations stems from concerns about "local and global air pollution and environmental problems" in regard to the shipping industry's contribution. In January 2020, a revised more stringent Annex VI was enforced in the emission control areas with significantly lowered emission limits.[2]
The original factoid hit the headlines because all that work was done and so people had the data to do comparisions. It was slow but steady work to improve the environment and somehow it got turned into "environmentalists are stupid, EVs are stupid, anyone to the left of Kanye is stupid, if they really believed in climate change they'd do X".
https://www.imo.org/en/OurWork/Environment/Pages/Sulphur-oxi...
CO₂ and climate change is a diversionary tactic implicitly endorsed by the fossil fuel industry to focus us on an amorphous, far-future issue to grind away progress on pollution reduction now. and it's working, as evidenced by the fever-pitched focus on climate change rather than pollution, particularly by the neoliberal news outlets (npr, nyt, bbc, etc.).
Sulfur comes from low quality fuel, but nitrogen and particulate emissions depend a lot on the engine too.
Yes. Unfortunately, you can't have a decent quality of life without a quality environment to live in.
"Why should I recycle this can if X person has a private jet"
The answer is because they are both wrong but you only have control over one.
Geopolitical instability due to scarcer resources is certainly going to have a massive negative impact on everyone's life.
Just look at how a "small war" in Ukraine is already having real life consequences all around the world.
Now, imagine the effects of food and water insecurity across the world. Even Russia was not stupid enough to fully block supplies of wheat leaving Ukraine.
And this is only one aspect of how climate change might impact you.
I believe that to be false, a large part of us (as a species) will not die because of climate change (as past climate change events can attest to).
What will a population of 8 billion interconnected and dependent people do? They can't all move to a new place, they can't all farm for themselves. Just the war in Ukraine caused significant food insecurity due to higher grain prices and lower export numbers in some poorer countries. Now imagine such problems on a global scale.
But yes, in my opinion global warming is going to cause a lot of hurt. Countries will become unlivable (some islands will be gone in a few decades, the Netherlands will be mostly under water, dikes can not be heightened limitless, certain areas of India will soon be too hot for normal live), food production will be uncertain due to changing weather and drought, mass migration of people to more livable areas will follow, causing wars.
We’re already complaining about the amount of asylum seekers, the country is too small for all these people, how do you think it’s going to be with many more people on the move?
Climate change can be obdserved and measured. (Nitpick, but the 80's term "global warming" is used less often these days since it's confusing for some people, because climate change can have vastly different effects in different areas, not just simply "warming")
We already know that heatwaves are killing people and droughts are affecting the entire food chain, again, killing people for years already. [1]
You might take the position that these very real deaths are not caused by climate change (disagreeing with scientific consensus), that they are merely a fluke in the climate history of our planet, but then you'd have to, at least for yourself, define an "evidence threshold" which, when presented, would make you go "ok, now it's undeniably man-made climate change that is killing these people", because the slow graduality of the process makes it hard to intuitively see cause and effect.
[1] https://www.who.int/europe/news/item/07-11-2022-statement---...
Looking at the droughts, floods, heat waves, polar vortexes, hurricane occurrences, fires (California and Siberia) - people have died over the last years in events occurring more often than they should.
Harvests and famine have some correlation to Syria and Ukraine wars and proxy wars over the last decade.
15 years ago the show The Newsroom (another aaron sorkin flick) made the Toby Ruins Everything joke about how "the first person to die due to catastrophic failure of the planet has already been born", you know, supposed to be a bit hyperbolic and funny but yeah, dead on, the only part of that that hasn't come to pass since then is the "storms that blot out the sun and create permanent darkness" bit/joke. Massive wildfires in numbers and scale far too big to keep under control? Intense hurricanes and 100 year floods at yearly intervals? Tropical diseases that start to break loose and spread out of control? Anybody hear any of those lately?
https://www.youtube.com/watch?v=Uc1vrO6iL0U
Honestly that was a bit of a mis-statement even then. The first person to die due to catastrophic failure of the climate was actually probably born in the 70s or 80s most likely.
And the party is really just getting started, this is nothing, there is around a 10-year latency so we are just seeing the impact of 2012-era carbon levels right now. It'll be another 10 years before we see the impact of the current decade of continued emissions growth. Things are going to continue to get a lot worse and fires/hurricanes/etc are only going to intensify.
Which is of course why it's important to actually get things fixed, because, as bad as things are, they will get worse unless the necessary system upgrades and repair work is performed... everyone has had that talk with management before. Some companies choose to change, some don't. Unfortunately there's nobody hiring on Mars or Europa at present...
* “What was break neck speed was maybe the corona response, which was a good thing”
* “I couldn't disagree more. … The first priority for life on this planet is to have a decent quality of life.“
* “You can’t have quality of life if you have no life at all.”
Same goes for the environment, if we don’t act, the environmental changes will have life ending impact for a significant number of people. Maybe not directly, but there will be food shortage, and wars. It is in the interest of everyone that we try to limit the impact of global warming as much as possible.
The consequences of the response to Corona will seem like a nice a problem to have in comparison.
And contrary to a bad economic cycle, once the CO2 is in the atmosphere, there is no fixing it at a meaningful scale.
The costs of curtailing natural gas right now will be evident in real death toll this winter though.
Please, show me one genuine climate refugee right now.
https://storymaps.arcgis.com/stories/065d18218b654c798ae9f36...
> Over the past decade, weather-related events triggered an average of 21.5 million new displacements each year
Fixed that for you.
So even if we were to replace all of the world's fleet to be more energy efficient (which would almost by definition mean larger/longer ships, since they benefit from hydrodynamic efficiencies), it would take a lonnng time to replace the world's cargo fleet.
The hydrodynamic efficiencies are a small part of the problem, there are many other things that can be done. You don't need to scrap a perfectly good hull, you can simply choose to run slower, burn higher-quality fuels, or strap on an oxidation catalyst (DOC) to cut CO, particulate filter (DPF) to reduce particulate emissions, or add selective catalytic reduction (SCR) to reduce NOx emissions.
But until regulation and the market catch up, old ships will choose to run too fast, to burn whatever's cheapest, and to vent their exhaust directly into the atmosphere.
https://www.cma-cgm.com/news/2749/world-premiere-launching-o... and
https://www.cma-cgm.com/news/3379/world-premiere-bunkering-o... and
https://en.wikipedia.org/wiki/CMA_CGM_Jacques_Saad%C3%A9 and
https://en.wikipedia.org/wiki/Jacques_Saad%C3%A9-class_conta... ?
Because I've been curious after I've seen them coming into or leaving port while walking along the river.
Like: "Huh? LNG Powered? What does that even mean? Where would they store it?"
Several times. Business as usual now, it seems.
As is https://en.wikipedia.org/wiki/Slow_steaming
It's not yet clear that Gen IV is faster or less limited by other critical minerals.
Dedicating your shipyards to building offshore wind cranes gets more carbon off the plate sooner than adapting it to build reactor vessels even if you only use the crane for a few years. Building more heavy casting is slow.
Every other step of the supply chain is even slower and more prone to overruns than the glacial pace of reactor construction.
Geoengineering is the last ditch emergency button. Once we hit it we can't unhit it and it might break other things.
People are not a bunch of idiots. Climate change is very real. Using other sources of energy requires investments. It is mandatory. All those are facts, as far as I know.
If your only arguments are "it will hurt the economy" and "people won't understand", you didn't take the measure of the problem and are part of it. That's very short-sighted, and tends to prove you don't really know what you are talking about.
Is that your argument? Because someone else is polluting we should?
Indian coal magnate Gautam Adani goes green
> Asia’s richest man, coal magnate Gautam Adani, made his vast fortune betting on coal as an energy hungry India grew swiftly after its economy was liberalized in the 1990s
> He's now set his sights on becoming the world's biggest renewable energy player, by 2030, adroitly aligning his investments with the government’s own priorities.
> As India grapples with climate change, the Adani Group, whose operations also span ports, power, farming and defense manufacturing, plans to invest $70 billion in solar, wind and other green energy projects over the next decade.
https://www.independent.co.uk/news/gautam-adani-ap-narendra-...
Is it purely a disincentive or does it somehow work to offset the emissions?
There are a variety of rules and mechanisms to ensure the money that is distributed gets spent that way. How effective those rules end up being in real life I'm unsure.
The World Wildlife Fund is one of many publications that's skeptical of the efficacy of how the money is spent: https://www.wwf.eu/?8275441/ETS-revenues-report-2022
The fundamental problem with carbon markets is that there is literally no supply. In a properly functioning carbon market these carbon emitters would be buying units of "tons of carbon removed from the atmosphere". Just paying the cleanup costs of the pollution they are emitting. Very simple. The problem: nobody has any large scale carbon capture projects to buy from.
What should be happening is that carbon capture projects should be selling their services on the market and these emitters should be buying them at market prices. This would create a carbon capture economy and encourage people to find more efficient ways to do it, since a more efficient solution would produce a superior product on the marketplace and capture more sales. But all current carbon capture technology is small scale and outrageously expensive so it would crush the fossil fuel industry. But without an incentive like this the carbon capture tech will develop very slowly as it has done over the past 30 years since there is little to no demand for it.
The worst part is that even if we did decide to zero out our emissions and take the massive economic hit, it would still not account for the two centuries of CO2 buildup already in the atmosphere.
I don't think that's a big issue. If the tech was economically viable it wouldn't be hard to lobby for such regulation. The positive net effect is easy to prove and argue for.
I think what's stopping carbon capture has more to do with the expected efficacy of it. I mean, when you have ~400 ppm CO2 in the air it's a bit like reassembling a broken glass. Sure, you can improve every process with engineering, but there are also physical boundary conditions that look pretty bleak for most forms of CC.
> even if we did decide to zero out our emissions and take the massive economic hit, it would still not account for the two centuries of CO2 buildup already in the atmosphere.
Perhaps one step at a time? We are absolutely nowhere near zero emissions, we don't even have a plan. Our entire civilization runs on hydrocarbons today. Nothing against CC research per se, but it doesn't look like a basket where we should put many eggs in.
I'm a big believer in the power of markets to solve problems like this, but getting the market started is almost impossible because of the very high level of short and medium term pain associated with it. You might argue for a gradual or partial opening, but that gets forever bogged down in arguments/lawsuits over who should be included and who gets a pass and thus never really gets started.
This isn’t an offset scheme but you can buy some kinds of offset credits and use them like the basic emissions credits as essentially a license to emit. But I think there’s some rethinking of offsets as a whole concept going on, a realisation that they’re actually not producing real results and just enabling emitters to keep going longer and more cheaply. If the claimed offset is not realised, then this is a massive net loss because of the lost time spent propping up emissions. So your offset efficacy has to be really high to be tenable, but while estimates vary, the harder we look at them, the closer to 0% effective they appear to be.
> Centre for European Reform figures show that by the end of last year, the economy was 5% - or £31 billion - smaller than it would have been if the UK had stayed in the EU. [2]
[1] https://www.cnbc.com/2022/11/23/brits-are-starting-to-think-...
[2] https://www.itv.com/news/2022-06-09/brexit-cost-the-uk-billi...
Really makes one think if it is indeed suicide...
I like the framing ;-) Maybe it could work for climate change deniers: “Tired of THE MAN intruding on your personal freedom to pollute? Regain your independence with solar, electric transport, good insulation, and a low impact diet. Freedommmmm!”
The tax isn’t remotely large enough to result in freight migrating to air. And trucking within the eu is already subject to a carbon tax.
https://www.reuters.com/business/cop/eu-strikes-deal-make-sh...
"In a decade Europe is either going to look like a genius on how to get tough things done or it’s going to be an economic madhouse, falling behind other parts of the world."
A system where emitters can ignore the actual cost of their externalities and push them down onto society at large to handle (through taxes) is broken.
This should also result in more funding around anything green tech related, when you actually have to pay the full price of the currently-used alternatives.
Ideally, there'd be a market with buyers (capturers) and sellers (emitters) (with a negative price, so cash flows from seller to buyer, obviously) for carbon emissions where the price depends on the actual underlying cost of capture, but that will hopefully come in the future, when carbon capture is commercially viable.
[1] https://research.chalmers.se/en/publication/531680
Not emitting carbon is always going to be more effective than emitting then capturing carbon.
But most of green tech is a load of green washing (https://youtu.be/Zk11vI-7czE warning long video).
By most I mean non-nuclear, non hydro-electric.
Fact is that battery tech isn't up to task of high capacity highly reusable energy storage.
I also lack the ability to emit that much, but that's not a major issue. In general it's hard to pay for someone NOT doing something without it being scammed.
Sure it will be passed to consumer but there aren't any good alternatives tbh.
Or just don't do anything and pray you aren't destroyed by climate change.
These carbon permits (also called EUAs) are tradeable as futures and are highly liquid on the ICE exchange. There are even a bunch of ETFs, KRBN being the biggest and highest volume.
The cheap leather industry comes to mind.
Really excited to see how the CBAM (https://en.wikipedia.org/wiki/Carbon_Border_Adjustment_Mecha...) will pan out.
The only ones making money here is the EU governments imposing this.
And it goes to upstream businesses, if exporter Y has a lower tax basis, then they will pay rates approaching current exporter X.
It still penalizes polluters and raise the prices of the products emitting the most CO2 but it is a blank or positive operation for 80% of the population (and negative for the ~20% richest that are the polluting the most).
Look up carbon fee with dividends for more details.
Consumers, of course, but not indirectly, with such a diluted notion of responsibility as it is now (by paying for externalities through general taxes). It will be priced into the products, as it should be.
This way products that are "greener" will be cheaper and people will have an incentive to buy them.
I have no problem with companies profiting off of the products they sell, or end customers paying for the actual cost of the product. It's just that a market without externalities having a price tag isn't a well-designed "free market".
So if a competitor figures out how to do the shipping cheaper due to it outputting less co2 (like trains running on electricity or just less polluting ships) those should over time win on the marketplace and shift the shipping industry to less pollution options.
edit: And the government can redistribute the carbon taxes to the part of the population this will hit the hardest easily by lowering VAT, income taxes at the lower end of progression or just direct subsidies.
In reality governments will create laws which will distribute those money to friendly companies. You can forget right now that it will go back to poor people.
2. Yep, prices for transported goods will surge, which is the intended consequence. If the general price of imported goods raises, then locally manufactured goods become more competitive. This gives an incentive for customers to select products built more closely to their place. It also gives a financial incentive for shipping companies to invest in cleaner transportation if they want to keep business.
3. Overall, yes this is scary, but think about it at a systemic level. This creates opportunities for local businesses and employers to sell more. This lowers the incentive to keep exploiting low-paid populations across the globe, potentially shifting the balance on their side to make social progress. And this reduces the carbon footprint, which we freaking desperately need.
On systemic level this and similar policies are only creating simple onboarding ramp for right wing governments. Look at those stupid liberals how they are making everything more expensive for you! We will cancel it! Vote for us!
Absurdly short sighted.
Left wing can redistribute, which is quite a left wing thing to do. In practice this does not happen. I remember the outcries when VAT was increased in France in 2014. 3 years later, no-one seriously contending for the elections had a program to roll this back, left or right.
Oh and, by the way: the initial plan was made by a *right-wing president*, to raise it by 1.6%, AND THEN carried on by a leftist but only by .4%.
So, I have at least one example for the exact opposite to what you are saying. I don't buy in your argument
> Absurdly short sighted.
I love how status quo and let's burn the planet is not short-sighted in your world view. That's probably the first somewhat courageous and potentially impactful measure I see on the topic, the systemic view says it may work, why not trying it?
Because when things starts to be cancelled do you think that we right wing governments will stop at one law? Decades of green policies will go down the toilet. So yeah slowly turning status quo is better than having a massive rebound.
Fundamentally, mainstream economics does not agree with your point of view. The bedrock of modern economic theory is clear on this: all prices are set by supply and demand.
Consumers pay the full tax burden only in the instance wherein demand is perfectly inelastic. Realistically, the more suppliers try to raise prices, the more consumers will shift to substitutes or demand less.
Ergo these taxes tend to fall on both consumers and suppliers, with the balance depending on the type of good and the market surrounding it.
I'm not sure if you are being sarcastic. This announcement is for shipping companies to currently be rolled into the current Cap and Trade policy framework.
It's like what triggered the Yellow Vests protests in France: a tax on diesel when people have no alternative. It seems that nothing was learnt from that.
A constructive approach would be to invest in developing alternatives then you can tax away to hasten change.
Article says that Europe will look either like a genius or a madhouse depending how this goes... well, track record isn't too good.
It's clearly not as good as a true carbon tax, but it is much more politically palatable (it's ostensibly leveraged on companies, not consumers).
Rolling more industries into the cap and trade markets will only make the markets more robust.
As always, demand-side engineering to incentivize hard supply side problems only serves to make things more expensive and enrich bad actors. If you don't believe that, then understand that many industries battle with high energy prices and are already doing their best to be more efficient. Your carbon tax is not going to be the difference maker. If you want to shift to a different form of energy, then build a power plant which provides the energy you want and take a power plant that you don't like offline. Do this one plant at a time until all have been changed. Same for shipping -- you don't like existing shipping tech, then create a replacement. Oh, that's too hard? Then why do you think the free market will solve a hard problem you can't? Don't go this roundabout way where you think you are incentivizing end users to pool their money together and build their own privately funded energy breakthrough.
By refusing to directly provision the replacement, what the government is doing is washing its hands and shifting the burden of hard R&D onto the private sector, which cannot bear this burden very well. So all it does is make stuff more expensive at a time when we are fighting inflation globally, and Europe is rapidly de-industrializing because of high fossil fuel prices.
Not saying you're wrong, but how does Wall Street capitalize from this? It looks more like a government money grab to me (if you want the cynical take), since the implementation is quite literally a tax.
That said, totally agree it's also an energy infrastructure problem – that governments have been incredibly stupid and naive with the last couple of decades.
- market making
- organizing sales of credits
- organizing purchase of credits
- selling hedging and insurance products so firms have some guarantees to support long term planning
That's in the "honest grift" category, then all sorts of nonsense can happen under the category of market manipulation, such as Enron style buying up credits to cause a price spike, or denying credits to competitors, etc.
> That said, totally agree it's also an energy infrastructure problem – that governments have been incredibly stupid and naive with the last couple of decades.
Exactly. Build more power plants, connect them to the grid, take older plants offline. No need to yell at people or tax basic human needs like transportation or electrical usage. For ships, the government can fund research on alternate fuels for ships, and the private sector can be brought in with research prizes and grants, etc. But the idea that a shipper -- which doesn't even build any ships -- is going to somehow innovate to create new shipbuilding designs and get into the business of building non-fossil fuel consuming ships -- doesn't make a lot of sense. All that will happen is that shipping becomes more expensive, which has terrible negative externalities. Only the strongest market fundamentalists want to leave basic R&D and long term investment to the magic of the free market.
Of course a carbon tax won't invent fusion - but I think it would be madness to make the case that people or industries don't adjust their consumption to adapt to taxes.
Keep in mind we have 30 years of data that shows cap and trade programs achieve their objectives and are pretty stinking cost effective.
Prove it. If you say it's a solved problem, then go ahead and deploy the replacement. What should power ships if not fossil fuels? Sail? Batteries? Hydrogen? Go ahead and tell me the replacement and then deploy it at scale. If it needs some money to be cost effective, then subsidize it so that it's cost effective and deploy the replacement. No wall street needed. No trading needed. Just deploy the replacement and subsidize it as needed.
> Of course a carbon tax won't invent fusion - but I think it would be madness to make the case that people or industries don't adjust their consumption to adapt to taxes.
Yes, but we do not want industries to use less energy, which is all that cap and trade will accomplish. What we need is replacement energy.
>Keep in mind we have 30 years of data that shows cap and trade programs achieve their objectives and are pretty stinking cost effective.
No we don't. You are conflating the reduction of energy usage (which creates global famine and de-industrialization) with the deployment of a replacement. We do not have 30 years of data that cap and trade is effective at solving the problem of transforming our energy infrastructure, cap and trade is only effective at reducing usage. And it does not follow that reducing usage of fossil fuels will, by a type of inevitability, cause replacements to appear that are powered by market magic. It will just mean less shipping, which again means famine and de-industrialization.
Coal is dying in the US - not because of government R&D or political efforts (perhaps in spite of them) - but because of the prevalence of cheap natural gas and industry's ability to adapt when presented with a price incentive.
The whole point of cap and trade is that it's easier for some sectors to adapt than others, and it's easier to just have them sort it out amongst themselves.
But what doesn't happen, is that cap and trade doesn't result in building more nuclear.
I'm pretty sure that Russian invading Ukraine made a big difference to the natural gas situation this year. Am I missing something or is the article talking about something I don't understand?
So as many across the western world predicted, Russia used (and continues to use) that dependency as leverage to get leniency on their actions in Ukraine.
Natural gas will continue to be a critical bridge fuel to get to a world that is majority powered by renewables. Impossible to do without it.
Europe gambled Russia wouldn't do something like this and they lost. That loss caused the price of European nat gas to spike 2000% at one point and it's still up 800% today.
I wish I could say that Russia made a decision that contributed as well but that's like the frog blaming the scorpion.
It's one thing if the selling of the credits will be used to subsidize clean energy or to reduce the burden of the good purchased by lowering taxes. However, if the money is going towards growing other social programs, it may just make life more expensive for the average European.
Why would you want this? You want prices on shipped goods that emit carbon to be high so the average European will be less likely to buy them and choose cheaper (greener) alternatives.
The goal isn’t “punish the company that emits” it’s “punish the individual who chooses to create emissions through their purchases”.
I think we’re in agreement. I’d just say that if you make a good more expensive but then immediately reimburse the consumer for that extra expense then you are not really making that good more expensive. A good system should make sure that a polluting good is expensive and that consumers feel that expense.
For instance, if a grocer charges $0.10 per plastic bag to the consumer, but $0 to the consumer for paper bags, the consumer is likely to consume the paper bag. That extra $0.10 can then be used to lower the cost of other things because the company's profits are slightly higher. The rebate to the consumer from those paying for plastic is negligible because it's not perceived to be in direct relation to the immediate purchase (the cheaper cost of the paper bag is, however).
What does the consumer do with the extra money? They consume more of the cheaper product which is hopefully more environmentally sustainable.
[0] https://bitluxtravel.com/eu-proposes-to-exempt-private-jets-...
https://ourworldindata.org/ghg-emissions-by-sector
Shipping is 1.7% of global emissions while aviation 1.9%.
The immoral aspect is that jet fuel at the moment is literally tax free pretty much anywhere in the world. Not because of private jets but to prop up airlines from going insolvent. Not every 'fairness' discussion has to be a 'eat the rich' polarization.
If we are looking at % of emissions then all of this is a distraction, arguably the best bang for buck is to get energy storage + renewables and reduce energy from coal production. If we are looking at it from a social fairness aspect than jet fuel should absolute be taxed.