Why conservatives should love a carbon tax

. . . and why some of them do. – Ed Dolan

Ed Dolan has a provocative post entitled Why Conservatives Should Love a Carbon Tax — and Why Some of Them Do.  I reproduce the post below here in full, with Ed Dolan’s permission.

Why Conservatives Should Love a Carbon Tax — and Why Some of Them Do

Ed Dolan

Last Week the White House released a long-anticipated Climate Action Plan. Conservatives have been swift to attack it as a “backdoor energy tax.” The critics could not be more wrong. A carbon tax, or energy tax of any kind, is the one big piece that is missing from the President’s plan.

Despite the criticism, though, some prominent conservatives see a better way of turning the issue of energy taxes to their advantage. Among those who support a carbon tax are Gregory Mankiw, Harvard professor and former Chairman of the President’s Council of Economic Advisers under George W. Bush; George P. Schultz, Treasury Secretary under Richard Nixon and Secretary of State under Ronald Regan; and  David Frum, former special assistant to George W. Bush.

Here are some of the reasons why conservatives, even the climate skeptics among them, should love a carbon tax.

A carbon tax would improve tax efficiency

Although conservatives don’t like taxes, they reluctantly agree that the government does need revenue. In recent years, their budget plans have called for a reduction in federal spending to a range of 18 to 20 percent of GDP. To fund even that level of spending without large deficits—which they also dislike—would require a lot of tax revenue. Where should it come from?

There is rare unanimity among economists in answering that question: Revenue should come from broad based taxes that have the lowest possible marginal rates and the fewest possible exemptions, deductions, and preferences. The current U.S. tax system is about as far from that ideal as you could get. As a result, it produces maximum distortions of business and consumer decisions while producing a minimum of revenue.

The corporate income tax is Exhibit A for these defects. Since Japan cut its rate last year, the United States has the world’s highest marginal tax rate on corporate income. However, the U.S. corporate tax has so many exemptions and deductions that many of the largest companies pay no tax at all, and the tax as a whole produces only a trickle of revenue. The corporate income tax today brings in revenue equal to just 2.7 percent of GDP, down from 6 percent in the 1950s. Because other countries have fewer loopholes, they get more revenue from their corporate taxes even though their rates are lower. Yet despite raising so little revenue, the corporate income tax distorts business decisions in major ways. To name just a few, it encourages financing with debt rather than equity, encourages moving operations offshore, and discourages repatriation of profits. Even companies that pay no tax to the government suffer, since tax avoidance requires them to use business practices that they would not otherwise choose. In many cases, the corporate tax subjects income to double taxation, once when it is earned by a company and again when distributed as dividends.

A carbon tax, by contrast, is much more broadly based, since economic activity of every sort depends to some degree on carbon-based energy. Even a low rate of tax would raise a large amount of revenue. Introducing a carbon tax and using the proceeds to reduce rates on other taxes would maintain revenue neutrality while reducing tax distortions to business decisions.

recent study from MIT gives some estimates, using a large-scale model of the economy. The study explores the effects of a tax of $20 per ton of CO2, beginning in 2013 and rising at a rate of 4 percent per year. (As a rough rule of thumb, each $1 per ton of CO2 is equivalent to about one cent per gallon of gasoline.) Such a tax would generate enough revenue to cut the corporate tax rate by 2.23 percentage points by 2015. The result would be net gains to the economy of $2.7 billion, when the economic burden of the carbon tax is balanced against the reduced burden of the corporate tax. The efficiency gains would be nearly as large if the carbon tax revenue were used instead to reduce personal income or payroll tax rates.

A carbon tax would make the economy more resilient

Although some on the political right continue to maintain that the whole idea of climate change is a hoax, many mainstream conservatives take a more considered view. For example, in a recent Washington Post op-ed,  Rep. Lamar Smith (R-Texas), Chairman of the House Committee on Science, Space and Technology, writes that “climate change is an issue that needs to be discussed thoughtfully and objectively.”

As climate scientist Judith Curry points out in recent Congressional testimony, any thoughtful and objective discussion must acknowledge that many uncertainties remain in climate science. Not on basic points like the heat-trapping properties of CO2, where there is broad scientific consensus, but rather, on the times, places, and forms in which climate risks are likely to manifest themselves—whether as droughts, floods, coastal storms or something completely unanticipated. Those “deep uncertainties” make it impossible to calculate a single, optimal response to climate change.

As a result, climate scientists and economists, along with Curry, increasingly recognize that the proper response to climate risks is to promote resilience through policies that enable our economic and social system to cope with shocks and adapt to unexpected changes.

A carbon tax is an ideal way to encourage such resilience because it capitalizes on the inherent flexibility of the market. Even if we cannot calculate the optimal value of the tax—estimates range from a few dollars per ton to as high as three-hundred dollars—even a small tax will begin to exert steady pressure for change across a broad front. A carbon tax would give equal encouragement to development of low-carbon alternative energy sources and to energy conservation. It would not only spur the search for winners, it would winnow out losers before they become politically entrenched. (Corn-based ethanol is a case in point.) The result would be a more diverse and efficient energy mix.

Beyond environmental considerations, using a carbon tax to foster a more resilient energy economy would have other benefits.

For one thing, a carbon tax would make the U.S. economy more resilient to geopolitical shocks. Greater energy efficiency and a more diverse domestic energy base would make the country less vulnerable than it now is to political events in the often unstable and unfriendly countries that supply much of our imported energy.

At the same time, a carbon tax would make the economy more competitive in international trade. That proposition might draw raised eyebrows from the “affordable energy” crowd, but it is a fact. There is little evidence that low domestic energy prices are either a necessary or a sufficient condition for strong export performance. Consider that export superstar Germany has among the highest energy prices in the world, while the list of countries with the lowest energy prices is littered with import-dependent basket-cases like Egypt and Pakistan. To be competitive, a country has to be ready to react to changes in the global economy—booms or busts in trading partners, changes in global commodity prices, and technological changes. An efficient tax system with low marginal rates plus a diverse energy mix would enhance the flexibility needed to meet trade challenges.

A carbon tax is better than the regulatory alternative

In contrast to the flexibility and resilience of market-based environmental policies like a carbon tax, command-and-control regulations are inherently rigid and brittle. Fuel economy standards for motor vehicles are a case in point. As I explained in an earlier post, regulatory standards lock in government-favored technologies while discouraging the exploration of innovative ways of achieving fuel efficiency. Worse, they actually provide perverse incentives to waste energy. Existing fuel economy standards encourage production of fuel-efficient cars, but once you own one, its low operating costs give you an incentive to drive more miles. The standards also encourage people to delay junking old cars since the new, regulation-compliant models cost more. In contrast, a carbon tax provides an incentive both to buy new, fuel-efficient cars and to drive existing cars fewer miles.

Unfortunately, conservative resistance to carbon taxes has the unintended consequence of encouraging greater reliance on regulation. That is very much evident in the new climate action plan. The plan contains not a word about a carbon tax, presumably because introducing one would require Congressional action. Instead, the plan consists entirely of measures that the administration can implement on its own authority. Most of the items proposed are subsidies for selected technologies (for example, solar panels for federally supported housing) and command-and-control efficiency standards (for power plants and heavy trucks). Yes, some of the ideas in the plan are good ones, but those would rise to the top under the market-based incentives provided by a carbon tax. The bad ideas in the plan would never see the light of day.

The bottom line

Putting all of this together, a carbon tax is a natural for conservatives. Conservatives know the tax system is broken; a carbon tax could be a key element in comprehensive tax reform that aims to broaden the base and lower marginal rates without increasing the deficit. A carbon tax would enhance the resilience that the economy needs to respond not just to environmental risks, but also to geopolitical and trade shocks. Finally, support for a carbon tax would help counter the impression that conservatives don’t care about the environment, a key turnoff for younger and more educated voters.

Prominent conservatives like Gregory Mankiw, George Schultz, and David Frum know this. Why aren’t more jumping on the bandwagon?

JC comment:  Some compelling arguments; your thoughts?

340 responses to “Why conservatives should love a carbon tax

  1. What … complete … nonsense.

    • My impression was that Judith was interested in hearing some in-depth critiques of the ideas, not blanket dismissal.

      I could be wrong about that, though.

    • Peter Lang

      rational people should oppose a carbon tax. ‘Progressives’ should too. here’s why:

      • Carbon pricing cannot succeed unless it is global.

      • Global carbon pricing is unlikely to be achieved.

      • Therefore, carbon pricing in individual nation states (e.g. Australia, USA, California) or regions (e.g. Europe) will not succeed.

      • The Australian carbon pricing scheme, if continued, would be high cost and provide little to no benefit.

      • The Australian carbon pricing scheme is bad policy and should be repealed as soon as possible.

    • Peter Lang

      Carbon pricing cannot succeed unless it is global:

      Analyses by Professor William Nordhaus, a long time advocate of carbon pricing and world authority on estimating the costs and benefits of climate change, greenhouse gas mitigation policies and the optimal carbon price, shows that carbon pricing must be global or it will not succeed. Nordhaus (2008), p198, http://nordhaus.econ.yale.edu/Balance_2nd_proofs.pdf says:

      “Complete participation is important because the cost function for abatement appears to be highly convex. We preliminarily estimate that a participation rate of 50 percent instead of 100 percent will impose a cost penalty on abatement of 250 percent.”

      In other words, if only 50% of emissions are included in the global carbon pricing scheme, the cost penalty for the participants would be 250%. The 50% participation could be achieved by, for example, 100% of countries participating in the scheme but only 50% of the emissions in total from within the countries are included, or 50% of countries participate and 100% of the emissions within those countries are included in the scheme (i.e. taxed or traded).

      The explanation for the convex abatement cost penalty curve is as follows. With a high level of participation the least cost abatement options are used first. However, if there is less participation, some low cost options are not available, so higher cost options have to be used to achieve the same emissions reductions. Figure 1 shows the ratio by which the abatement cost would increase for less than full participation. For example, at 50% participation, the cost penalty would be a factor of 3.5 (i.e. 250%) higher than with full participation (ref. Chapter VI, pp116-122).

      In reality, the cost penalty for the participants would be worse than this because with less than full participation there would be leakage of emissions from the participants to the non participants.

      The abatement costs are likely to be higher than Nordhaus has estimated because it seems the compliance cost of carbon monitoring, reporting, policing and disputation has not been included. The compliance cost would escalate as smaller and smaller emissions sources are included.

      Given the above, what level of participation could realistically be achieved and what would be the compliance cost? Given the cost penalty for the participants, what is the likelihood of a global agreement to price carbon being implemented, let alone maintained for centuries?

      Nordhaus explains that the assumptions used for the cost-benefit analyses, which are used to justify global carbon pricing, are academic; they are unrealistic for the real world. He says, p68:

      We should provide a word of caution about the optimal case. It is not presented in the belief that an environmental czar will suddenly appear to promulgate infallible canons of policy that will be religiously followed by all. Rather, the optimal policy is a benchmark to determine how efficient or inefficient alternative approaches may be. This is the best possible policy path for emissions reductions, given the economic, technological, and geophysical constraints that we have estimated.

      In other words, the assumptions that underpin the economic analyses used to justify carbon pricing are academic; they are appropriate for an academic exercise but they are unrealistic, impracticable and highly unlikely to be achieved in the real world. Here are some of the assumptions used in the economic analyses:

      • Negligible leakage (of emissions between countries, between industries and between emissions sources)

      • All GHG emission sources are included (all countries and all GHG emissions in each country)

      • Negligible compliance cost

      • Negligible fraud

      • An optimal carbon price

      • The whole world implements the optimal carbon price in unison

      • The whole world acts in unison to increase the optimal carbon price periodically

      • The whole world continues to maintain the carbon price at the optimal level for all of this century (and thereafter).

      If these assumptions are not met, the estimated benefits of carbon pricing would not be achieved.

    • Peter Lang

      The Australian carbon pricing scheme, an ETS from 2015, would cost $10 for every $1 of projected benefits to 2050. But there would be no benefit unless it is part of a global carbon pricing system with very high partisipation. So, there would be no benefit.
      See more here: http://jennifermarohasy.com/2012/06/what-the-carbon-tax-and-ets-will-really-cost-peter-lang/

    • Peter, you say that “a carbon tax would not succeed unless it is global.” That’s true if your aim is to reduce emissions in the hope of limiting global warming. But Dolan is arguing the case as a tax reform which would reduce the distortions both from the existing tax structure and alternative means of reducing emissions, and so benefit the economy. I think that his argument has some merit.

      Where I strongly disagree with him is when he argues the case on the basis that “To fund even that level of spending without large deficits … would require a lot of tax revenue.” The deficit arises from uncontrolled discretionary spending rather than limited tax revenue. The best option would be to wind back spending, particularly that which feeds an “entitlement culture.” You can do that and still make beneficial reforms to the tax system.

    • Faustino,

      But Dolan is arguing the case as a tax reform which would reduce the distortions both from the existing tax structure and alternative means of reducing emissions, and so benefit the economy. I think that his argument has some merit.

      I am not an economist and you are a top level economist having provided economic policy advice to UK andAustralian Federal and state governments at the highest level, including to Prime Ministers, Queensland State Premier and Federal and state Treasuries. So I accept your statement “I think that his argument has some merit.” I also accept it because I was peripherally involved in the world leading work on carbon pricing by Australian Bureau of Agricultural and Resource Economics (ABARE) in the early 1990’s and followed the development of the Emissions Trading Scheme by Peter Shergold, Head of prime Minister and Cabinet under Prime Minister John Howard (Conservative) in 2006-07.

      Having said that, I suggest we know a great deal more now than we did back then about the practicalities of implementing such schemes. (Richard Tol’s article is relevant on this: http://www.voxeu.org/article/global-climate-talks-if-17th-you-don-t-succeed )

      I also point out the fundamental difference between taxes on money transaction and on GHG emissionsWwe cannot measure GHG emissions precisely and accurately enough to tax them or trade them. I believe this is a fundamental issue that has not been properly considered.

      Furthermore, why should we believe adding a carbon price would reduce distortions? If it was to reduce distortions it would be essential that it covers all emissions from all twenty-three Kyoto Greenhouse gasses in all countries. Otherwise it would just produce more distortions.

      I agree with you that fixing the entitlement culture needs to be address directly, not by complicating it by adding new taxes.

    • Peter @12.17: in the context of the US economy, replacing a plethora of anti-emissions schemes with an across the board carbon tax could reduce distortions; and Dolan advocated using the CT revenue to get rid of other distortionary taxes. It would not necessarily be optimal policy, but it could well be an improvement.

      And I’m long retired, I hope that my views have merit but I’m not an authority on tax!

    • Peter Lang

      Faustino,

      I understand the argument and what is being advocated. But I suspect, for many reasons, it is theoretical and impracticable. The tax would be implemented. But the benefits would not be realised. And the tax will be subject to political manipulation forever, just as they are everywhere. The EU carbon trading scheme is in total turmoil as is the Australian carbonb tax and ETS. It will always be so. It would inevitably be manipulated to meet the political needs of the time. For example, the Irish Prime Minister admitted a while ago he was raising their carbon tax to help pay off their GFC debts.

      As you know, but non-Aussie readers would not, when the Howard-Costello (conservative) government implemented the Goods and Services Tax (GST) in Australia they reduced income tax rates and removed a plethora of inefficient taxes. They also agreed with the states that they would be given all the GST revenue and they agreed to remove a plethora of their inefficient taxes. However, the states reneged on most of what they’d undertaken to do. And, importantly, the GST is a good, efficient tax for many reasons. A carbon tax most certainly is not.

      As you often comment on Climate Etc., theory is great, but often cannot be implemented in practice.

      Carbon pricing is fundamentally bad policy in my opinion. We should do everything we can to reduce the cost of energy, not artificially raise it. If they need to fix the tax system, then focus on fixing it, not on papering over the cracks by adding another complication, another distorting tax.

    • No, I think you are right.

      I generally dismiss blanket dismissals as, well . . complete nonsense.

    • David Springer

      @KELLERMFK

      I’ll second the blanket dismissal and suggest actually polling some conservatives to see what they think about it.

      Start with me. I vote no. It’s a bad idea at least because of the massive disruption. Imagine how many suburban commuters barely able to pay mortgage now would be driven over the edge of solvency. So we make an exemption and commuting is a deductable expense. But then there’d be ten pages of qualifications so it couldn’t be gamed. And it could still be gamed.

      Near as I can tell I can make a list of justifiable exemptions like that until the cows come home. Heating would be another one. People living in the north would be unfairly burdened by home heating. There goes property values down for the north. So we exempt home heating. And we of course would have to exempt home cooling to not distort property values in exceedingly hot climates. But maybe we only exempt high efficiency furnaces… oh wait, we already do that.

      The idea is naive. No conservatives shouldn’t love it and few if any will. This is such a crock of BS I wonder if Dolan is using Poe’s Law to prank us.

      If you want to know how real successful fiscal conservatism works the hugely successful model is the State of Texas and the man with the plan is Governor Rick Perry.

    • Well, at least you give reasons for your dismissal rather than just blanket dismissal.

      Yes. It wouldn’t be perfect. There would be problems. In the real world, that’s how it works.

      The question is whether those problems you describe would outweigh the potential benefits as described in the post. It would be interesting to see some numbers rather than argument by assertion.

    • I’m a progressive liberal and I support a carbon tax, although I think it should be revenue neutral.

      I have learned that progressive liberals should not ever say something like, ‘even conservatives would like this.’ We don’t know them well enough to guess. As a lukewarmer I correspond with many conservatives and I find them intelligent, well-informed and articulate. But their bedrock assumptions of how things should work and how things do work are sufficiently different to my own that I would not venture to be prescriptive about what they should like or not like.

      The points raised in the article are germane. The US tax system is broke and a carbon tax is efficient. What would conservatives themselves propose?

    • “I have learned that progressive liberals should not ever say something like, ‘even conservatives would like this.’ We don’t know them well enough to guess.”

      I hate it when the rare progressive with a sense of humility shows up. It’s so much more fun making fun of the preening type who are absolutely positive about…well…everything.

    • Tom Fuller,

      A conservative would ask first, propose to do what? Conservatives, with extremely rare exception, do not accept that AGW is C with anywhere near enough certainty to justify any mitigation policy. We would say, when the science demonstrates the risk is sufficiently high, with sufficient certainty, then get back to us.

      To the extent Ross McKitrick and George Schultz come out in favor of revenue neutral fuels taxes, I think they are doing it with a fatalist view that unless something is proposed, the progressive will eventually get their way. And the result will be much worse.

      ThIs conservative would say keep the government out of the climate business.

    • Peter Lang

      Tom Fuller,

      What would conservatives themselves propose?

      If we want to decarbonise the global economy, we need to approach it in an economically rational way. Subsidising renewable energy and pricing GHG emissions are not rational. Renewable energy is an enormous waste of money and can achieve virtually nothing in GHG emissions reductions. And GHG emissions pricing will not achieve anything significant because it would have to be a global scheme to succeed and that wont happen.

      There is a better way. It is economically rational, therefore it can succeed.

      To understand what has to be achieved, start with the Kaya Identity. Professor Richard Tol, in his new book ‘Climate Economics’ says:

      the Kaya identity has that emissions equal the number of people times per capita income times energy intensity (energy use per unit of economic activity) times carbon intensity (emissions per unit of energy use).

      and

      global carbon dioxide emissions between 1970 and 2008 CO2 emissions rose by 2.1% per year. Why? The Kaya identity allows us to interpret past trends. Population growth was 1.5% per year over the same period. Emissions per capita thus rose by 0.6% per year. Per capita income rose by 1.5% per year, again slightly slower than the emissions growth rate. Total income thus rose by 3.0% per year, much faster than emissions. This is primarily because the energy intensity of production fell by 0.9% per year. The carbon intensity of the energy system also fell, but only by 0.01% per year.

      Holding all terms except ‘carbon intensity of the energy system’ constant, ‘carbon intensity of the energy system’ needs to increase from -0.01% pa to -4% pa to cut global GHG emissions to 55% by 2050 and 84% by 2100. So, without changing the other inputs to the Kaya Identity, -4% is the rate of change of ‘carbon intensity of the energy system’ the world needs to achieve if we want to achieve the global emissions reduction targets being advocated. That is the rate required if we immediately change to that rate (impossible); the required rate is higher if it is implemented over a long period (which will have to be the case).

      Roger Pielke Jr. showed that the rate of ‘decarbonisation of the global economy’ has been slowing during the two decades we’ve been trying to increase it (by government interventions and UN climate conferences). The decarbonisation rate slowed from -2% pa in 1991 to -0.7% pa in 2009 (Figure 2 here: http://rogerpielkejr.blogspot.com.au/2010/07/decelerating-decarbonization-of-global.html)

      There is a better way, but it is not by more market interventions like renewable energy subsidies and carbon pricing. These types of policies, which depend on government intervention, have virtually no chance of succeeding – as Richard Tol explains here: http://www.voxeu.org/article/global-climate-talks-if-17th-you-don-t-succeed

      So, what is the better way? It is to remove the impediments that are blocking progress. Electricity and transport are the two largest users of fossil fuels.

      Using the projected cost and emissions information for 2020 from the Australian Government’s 2012 ‘Australian Energy Technology Assessment’ (AETA) report http://www.bree.gov.au/documents/publications/aeta/Australian_Energy_Technology_Assessment.pdf, I calculate the cost of near zero emissions electricity generation would be half the cost of fossil fuel generated electricity when there are 200 GW of small nuclear power plants (like the ‘mPower’ http://www.efcog.org/library/council_meeting/12SAECMtg/presentations/GS_Meeting/Day-1/B&W%20mPower%20Overview%20-%20EFCOG%202012-Ferrara.pdf) in operation world wide.

      It would be interesting to estimate how fast the world would decarbonise its economy if technologies like this are available for all countries and as increasing competition continually improves the technologies and reduces the cost of electricity?

      Electricity is one important source of emissions that needs to be reduced. The second most important source is transport fuels. There are many possible options (biomass is probably not one of them). US Navy Research calculated the cost of producing jet fuel from seawater on board nuclear powered aircraft carriers. John Morgan extended that to calculate the cost if the processing plant is on land: “Zero emissions synfuel from seawater” http://bravenewclimate.com/2013/01/16/zero-emission-synfuel-from-seawater/. This would be even cheaper with cheap electricity and hydrogen supplied by high temperature reactors (e.g. China’s new HTR http://www.world-nuclear.org/info/Nuclear-Fuel-Cycle/Power-Reactors/Small-Nuclear-Power-Reactors/#.UXB3naIcbSg) instead of by electrolysis. [There are many options. Progress will happen faster if we remove the impediments retarding it.]

      How fast could the world decarbonise its economy if technology like this was available for all countries?

      How can we make them available? The answer is to remove the impediments that are retarding progress.

    • Peter Lang

      Alternative to carbon pricing – Reduce existing market distortions

      It seems to me we should be considering three alternative policies: ‘No GHG Emissions Controls’, ‘International Treaty’ or ‘Reduce Existing Market Distortions’.

      1. ‘No Controls’ – adaptation but no policies to mitigate global GHG emissions. This is the baseline policy against which the other policies are compared. .

      2. ‘International Treaty’ – Legally binding international agreement(s) to global GHG emissions reductions (which may include targets and time tables, carbon pricing, regulations, penalties for breeches, transfer of money from rich to poor, taxation);

      3. ‘Reduce Existing Market Distortions’ – No legally binding international agreement. Each nation state acts in its own best interest. Global emissions reductions are achieved by removing the impediments that are preventing the world from having low-emissions energy cheaper than fossil fuel energy. Developed countries develop the technologies and sell them to developing countries in commercial transactions. The process would be facilitated by freer trade and removal of the restrictive regulations and licensing processes that are retarding the development of better technologies.

      It seems little or no analysis has been applied to the third option: “Reduce existing market distortions’. There may be significant advantages of that option, such as: avoid the need for bureaucracy, world government and the compliance cost of measuring, monitoring and reporting emissions (for all GHGs) and disputation.

      Consider one example. Nuclear power, if cheap enough and available to all economies, could potentially replace most fossil fuels for electricity generation world wide by around say 2060. Cheap electricity could also displace some gas for heat and some oil for land transport. Cheap, low-emissions electricity could, potentially, cut emissions from fossil fuels by 50% by around 2060.

      There are some forty small nuclear power plant designs in various stages of development from concept through to in-production described here: http://www.world-nuclear.org/info/Nuclear-Fuel-Cycle/Power-Reactors/Small-Nuclear-Power-Reactors/#.UWqx8KIcbSg . But progress in innovation and diffusion is being retarded because of impediments to licensing and to economic production and operation.

      The US Nuclear Regulatory Commission (NRC) is, in effect, the de facto world regulator of nuclear designs. NRC takes about 5 to 10 years to get a new design through its processes, it costs about $1 billion per design and they can manage about only three designs through their process at a time. This is a huge impediment to progress. No other technology or industry is constrained to such an extent in its development by government licensing of designs. In stark contrast, the passenger aircraft industry has about 1000 fatalities per year compared with near zero for nuclear, yet the regulation of aircraft designs is nowhere near as constraining as it is for nuclear power designs. These are examples of the sorts of impediments to low-cost, low-emissions electricity that we could remove if we are serious. I’d hope that the options of removing impediments to low-cost, low-emissions electricity is seriously analysed before we advocate pricing carbon.

      The US Department of Energy last year selected one small reactor as the first that will go through the licensing process. The scheduled date for this design to be ‘commercialised’ is 2022. The details of the plant and claimed benefits, schedule and costs are here: http://www.efcog.org/library/council_meeting/12SAECMtg/presentations/GS_Meeting/Day-1/B&W%20mPower%20Overview%20-%20EFCOG%202012-Ferrara.pdf

      Based on the projected costs in Australia (http://www.bree.gov.au/documents/publications/aeta/Australian_Energy_Technology_Assessment.pdf ) and assuming a 10% cost reduction per doubling of capacity, the cost of electricity from small modular nuclear plants like the ‘mPower’ would be equivalent to that from new coal plants when 2.5 GW are in operation world wide; and half the cost of electricity from new coal plants in Australia when 200 GW are in operation world wide. There are many other alternatives designs wanting to compete, such as this from China nearing ready to be sold to small economies: http://www.uxc.com/smr/uxc_SMRDetail.aspx?key=HTR-PM

      With low emissions nuclear power producing electricity at even 10% below, let alone half the cost of, fossil fuels, it seems there would be no need for carbon pricing.

      To achieve this we need to remove the impediments to progress we’ve built up over the past half century or so.

      As an example of how much the costs of nuclear power have been increased thanks to intervention, regulatory ratcheting had increased the cost of nuclear power by a factor of four up to up to 1990 according to Professor Bernard Cohen (1990) http://www.phyast.pitt.edu/~blc/book/chapter9.html. I expect regulatory ratcheting and the licensing process has probably doubled it again in the 23 years since 1990. So there is great potential to reduce the cost of electricity from nuclear power over the coming decades, and that is before we even start to consider the potentially up to 100 times more efficient breeder reactors. All we need to do to gain these benefits is: get rational.

      To head of the inevitable comments about safety of nuclear power, nuclear causes the least fatalities per TWh of electricity supplied of any electricity technology: http://nextbigfuture.com/2012/06/deaths-by-energy-source-in-forbes.html. It will only get better as development and competition ramp up.

      This is just one example illustrating why we must properly analyse the third alternative, ‘Reduce existing market distortions’ before advocating government’s intervene to impose a carbon price.

    • It would be good if “progressives” would learn to run the government before trying to run the climate.

    • Peter Lang,

      I do not see the conflict between your options 1 and 3. Option 3 is the natural result of option 1.

      How is “no controls” different from “reducing existing market distortions?” Both involve getting the government out of the way and allowing the free market to function. The primary difference being that point 3 concedes the need to decarbonize the global economy.

      Which raises the more important point that, once you agree that “decarbonization” is a proper goal of government policy, you have surrendered the field in the CAGW debate. To paraphrase Winston Churchill “We have established what the policy should be. Now we are just haggling over the price.”

      This reaction is in fact the response progressives hope for when they write the “why conservatives should be progressives” style of argument that is the primary post on this thread.

    • Peter @ 7.57: “reducing existing market distortions” is always a good idea, whatever the issue. Such distortions typically arise (a) to favour vested interests, (b) from ignorance of how markets and business work, and failure to grasp when market outcomes would be superior (c) from misguided attempts to achieve a particular policy outcome, e.g. not understanding the impact of regulations, (d) from failure to modernise regulations when circumstances and technology change.

      Part of the problem is in the “entitlement culture” to which I alluded above, when governments attain and maintain power by making a bargain with certain parts of society to support them through taxing more productive parts of society, and thereby gain votes. (I’m not arguing against all redistributive policies here, but I think they have been carried to excess in almost all developed countries, with detrimental outcomes.) Cue my lead letter in The Australian today:

      “Henry Ergas (“Super Kevin is the I of the storm”, 1/7) and Greg Melleuish (“People’s wish is to hail Caesar”, 1/7) expose our crisis of governance. We have a Prime Minister who is all about self-aggrandisement and who seeks to reinforce his position by pandering to the worst side of the electorate – the tendency to expect government to look after us, when increased self-reliance is essential for the well-being of individuals and society.

      “Kevin Rudd and Australia are not alone in pursuing this deluded path. There are few leaders who recognise the state has over-reached and should reduce its intrusion into people’s lives rather than constantly expanding it. Those of us who recognise this must do what we can to turn the tide.”

      This also pertains to my earlier comment, that spending cuts are a necessary and positive response to the deficits in the US and many other countries.

    • Peter Lang

      GaryM,

      I do not see the conflict between your options 1 and 3. Option 3 is the natural result of option 1.

      How is “no controls” different from “reducing existing market distortions?”

      Sorry I missed your comment earlier.

      The short answer to your question is:

      Option 1 is ‘business as usual’. It is the baseline against which other options are compared. For decision analysis we need a baseline to compare other options against. Nordhaus gives us numbers for this option. That’s a start.

      Option 2 – is the option advocated by the CAGW Doomsayers/Alarmnists, IPCC, and the orthodoxy.

      Option3 – is what I am advocating. IMO it is a viable option to achieve what the CAGW doomsayers say they want (i.e. to cut global GHG emissions) while giving the world safer, cleaner, cheaper, more reliable, near-infinite energy supply. Making the change would save millions of avoidable fatalities per year world wide. It is a ‘No Regrets’ policy. There is no need for international policy intervention. Once USA removes the impediments to low cost nuclear, the rest will just happen. [I realise getting the USA to act is an issue, but the blocks are social and political not technical, so they could be overcome if the 'Progressive' and eco-NGOs genuinely wanted to cut GHG emissions and save lives.]

    • Conservatives have generally favored gas taxes for its benefits that a general carbon tax doesn’t have: Gas taxes in the US are earmarked for roads and transportation- in a sense they are user fees paid for by the people who use the roads the most. Every vehicle uses gas, so you actually cannot avoid the tax. If you were able to avoid it with an alternative fuel, you would have an increase in some other tax because roads must be paid for. States and the feds are already trying to figure out how to charge hybrids and electric cars so they cannot avoid the user fee.
      A carbon tax has a couple of serious problems. Not all energy comes from carbon- a factory next to a nuclear power plant would presumably pay less for energy than it’s competitor served by coal and enjoy a tax reduction paid for by it’s competitor- an unfair advantage. A carbon tax in lieu of payroll taxes wouldn’t work because you have to fund Social Security etc somehow, so avoiding the carbon tax just means an increase in your payroll tax at some later time. The rich, who can afford to be early adopters, would then be the only ones who benefit- payroll taxes would go up once enough people bought the stuff necessary to avoid the carbon taxes. A refundable carbon tax is just a wealth transfer from the burbs to the cities.
      Finally, be careful what you wish for. People in the US are complacent with the idea of playing around with wind and solar even though they don’t replace carbon because we aren’t noticeably paying for it. Once we are tasked with paying for carbon, they will insist on alternatives that work. See France and Sweden.
      On a funny note: the president’s best line in his climate speech was the silly crack: “we don’t need a meeting of the flat earth society.” There is a Flat Earth Society, it believes in CAGW- Go Team!: http://www.salon.com/2013/06/25/flat_earth_society_believes_in_climate_change/

    • David Springer | July 1, 2013 at 1:13 pm |

      You’ve got it backwards. Disruption?

      Everywhere that replaces other taxes with carbon taxes, 70% of taxpayers come out net ahead because the money of theirs that had been redistributed by the old taxes to Free Riders stays in their pockets instead so much more that the additional fee on carbon is more than offset.

      20% of taxpayers come out about par, requiring changes to their use that shift toward higher efficiency and less waste, not higher long term cost. After the cost of changing their behavior, they’re in the same situation as the 70% who no longer support Free Riders, except they’re getting higher RoI on what they do because they waste less.

      Only 10% of taxpayers — the true Free Riders — pay more. There’s the 90% who benefit from conservative sanity being restored to the Market; there’s 10% of Free Riders who now pay their fair share according to conservative principles. Confidence in Capitalism is restored among the dissatisfied who look on at all the subsidy and corruption of the fossil world and grumble and harbor hard feelings.

      Sure, some conservatives say they object to this. Hypocrites who have abandoned conservative principles for corporate greed or out of corpulent credulousness, they don’t have a logical leg to stand on. They certainly don’t have a principled leg to stand on.

      And the silly argument that goes roughly, “our politicians are too corrupt to do this right, so leave it alone,” the patent cowardice and surrender in the face of a challenge, the willingness to submit to corruption, the reek that floats up from that despairing cry tell us all we need know of it.

      It’s not the carbon tax case that is out of line with conservative principles; it is the cheap energy subsidy argument that is a defilement and abandonment of what fiscal conservatives and capitalists, minarchists and republicans believe.

    • BartR “After the cost of changing their behavior, they’re in the same situation as the 70% who no longer support Free Riders, except they’re getting higher RoI on what they do because they waste less.”

      Can you point us to a proposal for a carbon tax that simultaneously abolishes welfare (ie ends redistribution of tax money to “free riders?”) The only actual carbon tax proposals from progressives I’ve seen have specifically included caveats that exempt (by refund or some other mechanism) the poor from the carbon tax. In other words, they want redistributive carbon taxes that inequitably distribute the cost both regionally and across income lines. You would agree it is not “hypocrisy” to reject such a proposal?

    • David Springer

      No Bart it’s very disruptive and you countered not a single one of my examples. Take the homeowner in the suburbs who works in a city has a large carbon footprint because he commutes. A carbon tax would raise his monthly expenses. For a fair number of people who live paycheck to paycheck this would result in a mortgage default. The very mortgage encouraged by tax exemption for home mortgage interest. This effectively makes home ownership more costly in the suburbs the end result of which is lowered property values. While one might argue that it would be more fair in the long run it is certainly disruptive in the shorter term.

      By making fuel taxes low and mortgage interest deductable the federal government encouraged the growth of suburbs. A carbon tax pulls the rug out from under the very suburbs that federal policy purposely created. Schit like that is what makes people mad enough to think about using the second amendment as a policy tool.

    • David Springer | July 2, 2013 at 5:32 pm |

      The answer was there, for all your points. You merely failed to process.

      For every ‘bankrupt’ pushed over your alarmist ledge, seven are saved from bankruptcy, and two are made more efficient, so become better investments with better RoI.

      JeffN | July 2, 2013 at 1:09 pm |

      The example you seek is the British Columbia revenue neutral carbon tax.

      There’s no ‘poverty exemption’. There’s a fee without a means test, and a dividend, mainly per capita.

      Sure, there are progressives who press for the corruption of this system to something more like the Australian case, but then it’s hypocritical to throw the baby out because the bathwater ON THE FAR SIDE OF THE PLANET FROM CIVILIZATION has been touched by a progressive.

      Ed Dolan makes good sense. McKitrick’s endorsed it (for all that McKitrick’s nuttier than pecan pie about Economics). The conservative Citizens Climate Coalition endorses it. It’s flat out the way Capitalism is meant to be done.

      What do you have against Capitalism? Are you one of those America-haters?

  2. I would support such a tax, if it was instituted as a replacement and not a new tax.

    but then that is not how it will be.

    • Mayor of Venus

      Indeed, we already have a “carbon” tax….taxes added to gasoline which we pay at the pump. So replace income taxes with more such consumption taxes. Income taxes make criminals of us all, and the IRS must keep records of everything we do. When filing my tax return one year, I commented to them that our county has a much easier system….I am sent a bill for property taxes, and I send back a check for the exact amount billed. Or not, if I object, there is an appeal process. But by eliminating the income tax, millions of tax preparers will be out of work, and the economy sent back into recession!

  3. Citing David Frum as a conservative is not likely to be persuasive if the intent of the article is to persuade conservatives.

    • My impression was that Judith was interested in hearing thoughts in response to the ideas, not comments on the person offering the ideas.

      I could be wrong about that, though.

    • Since the closing statement is an argument from authority, seems fair game.

    • Who the hell made you comment referee?

  4. I agree with the idea of building in ‘resilience’. At some point the benign weather we have enjoyed for many decades may become as extreme as in the past. The worst extremes seemed to be on the cusp of the change from a warm regime to a cold one and vice versa. The 1200′s and 1600′s and to a lesser degree the 1800′s are examples.

    If we have in recent decades built too low, not strong enough, not shielded enough, not robust enough, our infrastructure will crumble as soon as the weather becomes out of the ordinary-the ordinary in this case being benign.
    tonyb

    • > I agree with the idea of building in ‘resilience’.

      Next time Richard Tol tries to promote a way to simplify carbon taxation, he should insert the word “resilience” to win more votes. I’ll advise him to mention that our lack of resilience may kill our future, poor elders, too.

    • Hi willard

      I don’t know if the New Statesman is on your reading list but this report by them was referenced on the radio this morning.
      http://www.newstatesman.com/politics/2013/06/secret-cuts-part-three-bedroom-tax

      I saw my MP about this some 3 months ago and I would say she found it embarrassing. My reading would be that the Govt didn’t think through the consquences fully before implementing it
      tonyb.

    • Thanks for this.

      Here was George, a while ago:

      Two years ago I proposed something similar. Nearly 8 million homes in England, I found, had two or more spare bedrooms. But only 11% of this under-occupation was in public or social housing. The rapid growth in half-empty homes, according to the government “is entirely due to a large increase within the owner-occupied sector”.

      Because of the desperate shortage of housing, especially for larger families, I suggested a bedroom tax for owner-occupiers. It was a much gentler measure than next week’s tax, as it would apply only to those with at least two spare rooms and would affect only those most able to pay.

      The response was an explosion of fury in the rightwing press and blogosphere: the places where the current bedroom tax finds its only supporters. In the Telegraph, Ed West remarked that my idea was “far closer to fascism than the ethno-centric populism of the European radical Right … The state has no business in people’s bedrooms – ever.” I am still waiting for Ed to denounce the state’s intrusion into the bedrooms of the poor.

      http://www.guardian.co.uk/commentisfree/2013/mar/25/property-theft-bedroom-tax-rich

      If only hate could heat us.

    • Willard

      It is an unpleasant tax with lots of (presumably) un-thought of, but life changing, consequences.
      tonyb

    • Willard

      That was a good article, he is a very good writer. I thought one of the commenters had it spot on;

      ‘The problem with pessimism is it does not win, conservatism tends to do best when led by optimists like Eisenhower or Reagan or here Macmillan or Thatcher. Similarly the left needs optimists like Blair or Clinton or JFK to win, not pessimistic socialists.’

      We can do doom and gloom for a while but not for too long, hence the need for an optimistic upbeat message for anyone who hopes to win the next election (or the climate debate. )

      But along the way we have to fight nonsenses like the ill thought out ‘bedroom tax’ which saves tuppence whilst disrupting lives.

      I am a founder (and only) member of the ‘plague on all your parties, party.’

      tonyb

  5. Brian G Valentine

    want carbon tax = total misanthropy

  6. The reasoning is sound, as far as it goes; but it doesn’t go very far. Who has to pay a carbon tax? If only some persons (corporate or natural), why? If everyone, how does it differ from an increase in existing excise taxes on the final consumer of fuels — plus maybe the producers of animal products and a few other things? In terms of compliance and admin cost, intrusiveness and potential for harassment and abuse, is it all that much better than top-down regulation? That really depends on the regulations, not the broad brush concepts, doesn’t it? Is introducing additional complexity into the tax system worth the benefit, just when people have begun to appreciate how unwieldy our tax system is? Is this another one of these highly focused taxes that paralyzes economic innovation because it demands a particular form of business organization (sorry for the obscurity but explaining the tax policy issue in full would be lengthy).
    I don’t claim to know the answers to these questions; but those are the questions conservatives (like me, yes) ask. Dolan is right to think that conservatives prefer to internalize negative externalities, as a general philosophical matter; but the devil is in the details.

    • Toby,

      How could a carbon tax structure be any more intrusive, complex, adiminstratively costly, and a tool for harrassment than the current income tax system?

      I could envision it functioning much like a sales tax.

    • Toby White

      If it functions like a sales tax, why not simply broaden and increase existing federal fuel taxes? That would be a moderately regressive system, but no worse than most sales taxes. Slap some moderate new federal excise taxes on land development, poultry and livestock producers, plus a few other things, and you’ve captured (unless I’ve forgotten something) essentially all major anthropogenic greenhouse gas generation. If that’s the program, I concede your point — its mostly just a rebranded sales tax.

    • I agree. There is more than one way to to implement it.

  7. Anyone who has a job and is not afraid of losing it probably doesn’t care if the economy is hamstrung by Leftist jiggery-pokery–e.g., government bureaucrats really don’t care — even supposed conservative bureaucrats like Graham and McCain.

  8. The US government absolutely needs additional sources of revenue if its citizens wish to continue to provide the benefits already authorized for its senior citizens by the government. A carbon tax in theory could be an effective means to help eliminate the budgetary imbalance.

    In the real world however there are several practical issues that people tend to like to ignore.
    1. The percentage of revenues currently being promised to senior citizens in medical care and other benefits will take an increasing large percentage of the nation’s tax revenues and will dwarf other expenditures in 20 years.

    2. A pure across the board carbon tax impacts lower income workers to a much higher degree than it does higher income individuals. The “solution” to this issue are proposals to give rebates to lower income segments of the population. That “solution” drastically reduces the benefits of the increased revenues and also drastically reduces the reduction in consumption associated with the tax. The solution makes the carbon tax ineffective in either raising revenue of decreasing consumption.

    • Rob,

      Rather than a rebate, combine a carbon tax with a flat income tax scheme.

      With the possible exception of charitable donations, eliminate all deductions and replace with personal deductions. Start at 2x the poverty level (i.e. ~ $11,000). Married couple would have $44,000 in deductions before having to pay any tax. Grant another $5,000 for each dependant child. A family of 4 would have to earn more than $50,000 a year before paying taxes.

      Put that to the people and watch who fights it. It won’t be your average citizen.

    • Rob Starkey

      timg56- “Progressives” usually are strongly against a pure carbon tax because it hits the lower income segments harder. Your idea would not change that so I greatly doubt it would be widely accepted.

    • Rob,

      Then that would show “progressives” to be bankrupt morally. (Not to mention intellecually challenged.)

      A flat tax, if done right, is by far the fairest method and also the one to impact the middle and lower income classes the least.

      As for a carbon tax, I believe it to be true most of the time that the higher one’s income and standard of living, the higher their energy usage. Any additional costs a low income family might encounter in carbon taxes would be more than offset by the savings through a flat tax.

    • Rob Starkey

      Timing

      I won’t get into what different individuals consider moral since it is dependent on one’s personal perspective.

      A flat tax sounds simple and it is, but unfortunately it also has large disadvantages. A pure flat tax also eliminates the ability of government to stimulate areas of the economy via tax incentives. A strong case can be made as an example that the home interest expense deduction in the US has lead to much more robust expansion of the US economy as people bought homes that they would not have been able to afford otherwise and then also further spent on home refurbishment etc. A flat tax also does not force the wealthy to pay a larger percentage of their incomes in taxes which can contribute to class warfare. That is one of the reasons a graduated income tax was initially introduced.

      People need to 1st acknowledge that we must balance our budget in “x” years, and then determine the best method to achieve that goal. US politicians generally avoid these types of honest discussions.

    • Rob,

    • Rob,

      People who would fight a flat tax on the grounds it isn’t progressive are people who care more about their politics and policies than they do people. If the option of not having to pay any tax until you earned over $50,000 were put to people, with the knowledge your tax return was so easy you could complete it in a half hour, and the added bonus of knowing the rich would not have loopholes and deduction advantages unavailable to most people, how do you thik it would go over?

    • Rob,

      Some of the “disadvantages” you point out I see as advantages.

      “A pure flat tax also eliminates the ability of government to stimulate areas of the economy via tax incentives.” – This is a good thing. What expertise do a group consisting mostly of lawyers have with economics? I’ll tell you. It consists of understanding the benefits that come along with applying tax incentives – campaign contributions. If the government wants to stimulate the economy it can lower interest rates and act competently enough in its primary mission to provide a sense of stability and confidence in companies and investors.

      “A strong case can be made as an example that the home interest expense deduction in the US has lead to much more robust expansion of the US economy as people bought homes that they would not have been able to afford otherwise and then also further spent on home refurbishment etc.”

      I have to admit that when I quit being a consultant and went off per diem, the first thing I did was buy a home for the tax benefits. However it was not a question of the deduction making home ownership more affordable. I didn’t have much in the way of other deductions. One could argue that incentivizing people to buy homes who can’t really afford it is not a good idea. Sure it will create robust growth. Right up to the point people start defaulting. I seem to recall something like that happening before. Home ownership is a pretty strong desire for most people in this country. You don’t need to stimulate it. People are going to want to buy one as soon as they can afford it. Again, offering low interest rates is a better means than offering a tax break. A couple who doesn’t have to pay taxes on their first $50,000 is far more likely to be able to save for a down payment and meet monthly mortgage payments.

      “A flat tax also does not force the wealthy to pay a larger percentage of their incomes in taxes which can contribute to class warfare.”

      The problem with this argument is we have a graduated tax rate and still are seeing class warfare. I am arguing that benefits of a flat tax make it harder for the wealthy to exempt or shelter income from taxation. What does it matter if you assign a rate of 33%, 39%, 50% or 75% if the effective rate the rich pay gets reduced to 10 – 12%? And who says you can’t have a two tiered flat rate? Just as you can include credits making less than double the poverty income level. Right now we have a code so extensive that even the IRS doesn’t know what’s in it. It is a system meant to be manipulated and gamed, with the wealthy (whether corporations, individuals or organizations) best suited to doing so. Proponents of progressive tax structures either don’t get the inherent unfairness of that, or are among those gaming the system.

    • David Springer

      That too is naive. Productivity must rise. Everything else is simply rearranging the deck chairs. Big productivity increases come from transformative technologies that reduce the cost of production of goods and services.

  9. Lance Wallace

    Not one word about how this would affect global warming. Is this because a calculation would show how trivial the effect would be? The EPA regulations on GHG calculated that they would reduce global warming by 0.006-0.015 degrees C by the year 2100. (Federal Register, 2010). This is not even measurable by present-day instruments. The carbon tax would need to be instituted concurrently and worldwide to prevent parasitical behavior by nonsignatories like China, India, Russia, Canada…

    Then there is public resistance to consider. This looks like (indeed is) taxing the air we breathe (especially the air plants breathe). Julia Gillard provides one recent example of the fate befalling politicians instituting a carbon tax.

    Then too, maybe CO2 doesn’t cause global warming. 17 years of stagnant temperatures while CO2 continued its exponential rise is not strong evidence for its power.

    • Yes, the effect, even according to the AGW consensus would be trivial. In reality it wouldn’t affect CO2 emission at all (maybe increase it) and the impact on the atmospheric CO2 levels would be zero. It would just cause more corruption and misery. Much ado about NOTHING.

    • Rob Starkey

      By 2050 if a carbon tax was implemented by the US CO2 concentrations might be at 440 ppm instead of being at 441 ppm. Does that make much difference on the climate?

    • Lance,

      It doesn’t have to have anything to do with global warming. Think of it being a method for restructuring the current tax system.

      Rather than taxing how much income one makes, you tax the amount of energy they use. Most people would not be willing to reduce their income in order to reduce their tax burden. However give someone the choice of reducing it by becoming more energy efficient (or conservative) and you will find those willing to do so.

    • Why not tax energy then?

    • timg56

      So a retired person at home most of the day using energy to keep warm and on a fixed income will pay the greatest amount of taxes, whilst those earning an income in an office using communal energy will pay the least. Is that how it will work?
      tonyb

    • Peter Lang

      timg56,

      I can’t believe you are arguing to increase the cost of energy. Energy is one of the two (or three) fundamental inputs to everything we have. (the two fundamental inputs are energy and human ingenuity).

      Cheap energy is the most basic ingredient to improving human wellbeing. We should do nothing that increases the cost of energy. We should do all we can to reduce the cost of energy.

      [I do accept we should internalise external costs to the amount it is net beneficial to do so; but we have no agreement as to whether CO2 emissions are a net benefit or cost, and certainly no way of quantifying the exterrnality.]

      If we want to cut global GHG emissions the is an economically rational way to do it. Carbon pricing is not required and will not succeed (see my comments near the top of this thread)

    • I am not a tax expert so I am not offering detailed plans for how a carbon tax would work. I simply am saying it might possibly be preferable than our (meaning US) tax code. Whether or not it is would be in the details.

      Peter,

      it is not that simplistic. I firmly believe in low cost energy. Depending on how it is structured and implemented, a carbon tax might drive down the price of energy.

      Please note that I am not arguing for a carbon tax. I am only pointing out that under the circumstances Ed Dolan is presenting, ie as a replacement to existing tax structures, we should at least explore the benefits and disadvantages of such a tax and how it might be implemented.

  10. “A carbon tax would…”

    The only thing a (carbon) tax is guaranteed to do is take money out of one person’s pocket and put it in someone else’s.

    The piece is fluff for the weak-minded.

    Andrew

    • David Springer

      +10^80

      Ten to the eightieth is the consensus estimate of the number of baryons in the observable universe. Large numbers start to get silly so I’m limiting my plus ones to something both appropriate and reasonable. ;-)

    • Keeping it simple +1

    • k scott denison

      +1… there are two parts to every discussion on government funding: raising revenue, spending revenue.

      Perhaps we should focus on the latter first.

  11. Yes, the tax system is broken, but to fix it, we don’t start with adding a new tax, especially one that has real potential of inflicting even more damage to the economy. Ultimately, carbon taxes raise the cost of everything since pretty much everything we consume carries some carbon footprint with it.

    The tax code does need a complete overhall, and, IMO, three things need to occur for any meaningful changes to take place – 1) a flat/fair tax eliminating virtually all loopholes, deductions, credits, etc. 2) term limits, and 3) a balanced budget amendment which would likely be more symbolic than effecitve, but it needs to get on the books.

    I also think Mr. Dolan slightly twisted the meaning of uncertainty. From Dr. Curry’s testimony: “I will state that there are major uncertainties in many of the key observational data sets, particularly before 1980. There are also major uncertainties in climate models, particularly with regards to the treatments of clouds and the multidecadal ocean oscillations.

    Somehow, this got turned into “As climate scientist Judith Curry points out in recent Congressional testimony, any thoughtful and objective discussion must acknowledge that many uncertainties remain in climate science. Not on basic points like the heat-trapping properties of CO2, where there is broad scientific consensus, but rather, on the times, places, and forms in which climate risks are likely to manifest themselves—whether as droughts, floods, coastal storms or something completely unanticipated. Those “deep uncertainties” make it impossible to calculate a single, optimal response to climate change”.

    I think the larger point is that given the large uncertainties around how much impact does additional Co2 actually have on climate, it is prudent to study this problem a while longer before implementing new regulations or imposing a carbon tax.

    • Mike Jonas

      Thank you, Barnes, you have saved me a bit of effort. I agree with everything you say. Ed Dolan’s essay is naive, distorted and mischievous.

      If the tax system is broken, what should the government do – (a) leave it all in place and add a big new regressive tax, or (b) fix it? Thinking that (a) will help anyone is just naive.

      As Ed Dolan says, we need a thoughtful and objective discussion, acknowledging the uncertainties. But then he goes on to ignore all the real uncertainties, such as whether CO2 measureably increases the global temperature, and argues for a new tax on the basis that certain minor uncertainties will be resolved in favour of CAGW. That’s an absurd distortion. That the new tax targets one particular part of the energy sector is another distortion. Why not tax wind power and solar power too, if they are as economically viable as their supporters claim and if a tax on energy is as beneficial as Ed Dolan claims?

      One of the interesting things about the CO2 tax debate in Australia is that the Business Council of Australia is in favour of carbon taxes, and are particularly in favour of [CO2] emissions trading. How can this be, in a country where 2/3 of listed companies are in mining & energy? Simple. The BCA is dominated by the financial companies (banks etc) and while others pay those taxes, they themselves can make money from them. That’s mischievous, and I am quite sure that economic blogger Ed Dolan is being mischievous too. Americans might like to note his blog address: http://dolanecon.blogspot.com.au/

    • Barnes, Mike, agreed.

  12. Serf’s have sayings from way-back like ‘don’t kill the goose that
    lays the golden egg,’ and ‘ yer can’t git blood out uv a stone.’

    Taxing energy sources taxes productivity and shrinks the economy.
    A tax on carbon further shrinks the economy by market distortion, transference ter less efficient intermittant energy sources that
    further tax productivity and growth, seems ter me and ‘ yer can’t
    git blood ….. ‘ A Serf.

  13. “Not on basic points like the heat-trapping properties of CO2, where there is broad scientific consensus, but rather, on the times, places, and forms in which climate risks are likely to manifest themselves—whether as droughts, floods, coastal storms or something completely unanticipated. Those “deep uncertainties” make it impossible to calculate a single, optimal response to climate change.”

    As usual, assumes facts that are not yet in evidence.

  14. Matthew R Marler

    Why Conservatives Should Love a Carbon Tax — and Why Some of Them Do.

    Why restrict consumption taxes to carbon in fuels? I think that in general conservatives prefer consumption taxes to production and earnings taxes. I’d certainly like to see a CO2 tax substitute for taxes on interest and dividend income, and other sources of income. I think the resistance here is to an additional tax on a necessary component of production, which was what Pres. Clinton proposed.

    • I’d certainly like to see a CO2 tax substitute for taxes on interest and dividend income, and other sources of income.

      Just curious as to why. Not that I have a particular problem with a carbon tax, but the evidence I’ve seen (and I’ve looked a bit) shows no correlation one way or the other (within reasonable boundaries) between raising or lowering taxes on interest and dividend income and economic metrics such as GDP. So I’m wondering if you have such information or you have other reasons.

    • Josh,

      Ignoring the fact that interest and dividend income is taxed twice, by eliminating such a tax there is an incentive to invest more.

    • tim -

      [1] Ignoring the fact that interest and dividend income is taxed twice, [2] by eliminating such a tax there is an incentive to invest more.

      I numbered your points. The first might be a question of “fairness” – not something really susceptible to a more empirical analysis. The 2nd is can be analyzed emperically. The analysis I’ve seen is that (within certain limits) rates of taxation on interest and dividend income do not track with economic measures such as growth in GDP. I’ve looked a bit – and might be able to find those links for what seemed to me to be very thorough analysis. If you have something that shows otherwise, I’d like to read it.

      I know there is a certain seat-of-the-pants logic to what you stated as a certain fact. I’m too much of a skeptic to just accept seat-of-the-pants logic.

    • Matthew R Marler

      Joshua: I know there is a certain seat-of-the-pants logic to what you stated as a certain fact. I’m too much of a skeptic to just accept seat-of-the-pants logic.

      As a skeptic, do you accept that increasing taxes will promote growth? If not, what other taxes would you reduce in order to offset the tax from the carbon content of fuel?

    • From one of the links in the text:

      Gilbert Metcalf, a professor of economics at Tufts, has shown how revenue from a carbon tax could be used to reduce payroll taxes in a way that would leave the distribution of total tax burden approximately unchanged. He proposes a tax of $15 per metric ton of carbon dioxide, together with a rebate of the federal payroll tax on the first $3,660 of earnings for each worker.

      http://www.nytimes.com/2007/09/16/business/16view.html

      Professor Metcalf might be a better person to ask your question, MattStat. Tufts is not very far from NYC.

    • Josh,

      What Larry Summers says.

      Thanks Mosher.

    • Matt -

      As a skeptic, do you accept that increasing taxes will promote growth? If not, what other taxes would you reduce in order to offset the tax from the carbon content of fuel

      I think that it’s very hard to establish whether increasing (or lowering) taxes (within a reasonable range) will either promote or retard growth. I think that while no one likes taxes, very few people are willing to give up the services they pay for (that seems pretty obvious to me). Thus, I think that what we have is pretty much what we’re going to get. We’ve had it for a while, with some tinkering around the edges (with no obvious impact on the macro-level), so we may as well settle in for that rather than dreaming of that tax-free, unbounded growth Shangri-La.

      Thus – I think it makes sense to look at trade-offs. The trade-offs discussed in the article seem pretty reasonable to me. Springer raises some interesting speculation about counterfactuals. I think it would be interesting to read smart and knowledgeable people open-mindedly exchange views about those counterfactuals and others. Fun stuff. What seems rather pointless for me is for “skeptics” to reject those ideas merely because they’re trying to confirm the biases they have which are rooted in rigid ideological biases.

    • mosher -

      I’ll look at that paper, thanks.

      Meanwhile, you might find this interesting – related (on capital gains taxes and revenue):

      http://usbudget.blogspot.com/2010/11/do-capital-gains-tax-cuts-increase.html

    • Joshua @ 9.51: you say that “I think that while no one likes taxes, very few people are willing to give up the services they pay for.” When people pay for services directly, that is obviously true. When services are provided by government from taxation, there is a disconnect. Many people receive services without paying for them, and of course tend to favour continuance of that. Many resent being taxed to fund others. Many would prefer to have a greater choice of which services they buy, in what quantity and from which suppliers. For example, I don’t know the split in public/private provision of school education in the US, but in Australia many who pay taxation which funds their children to go to state schools would rather they went to private schools. A very high proportion choose private schools, particularly at secondary level, even though this means that they are paying twice.

      If the US government tackled the deficit by reducing the services it provides (and therefore the revenue it requires) and making room for private sector providers, who unlike government providers would be subject to competitive pressures to respond appropriately to consumer demand, there could be many benefits.

    • dennis adams

      Joshua per your capital gains issue.
      In 1996 the max capital gains rate was 29% and tax revenues from capital gains to the IRS was about $66 Billion. After being lowered to 21% in 1997 the tax revenue by 2000 was $127 Billion. Now, how much did the lowering of the capital gains rate influence the bull market during those years or is the increase in tax revenue simply a result of the bull market in stocks. Who knows.

    • Faustino -

      If the US government tackled the deficit by reducing the services it provides (and therefore the revenue it requires) and making room for private sector providers, who unlike government providers would be subject to competitive pressures to respond appropriately to consumer demand, there could be many benefits.

      While I get the logic of why that would be true theoretically, the problem is when it gets applied to rigidly.

      To use your examples of schools, there is a common belief among many in this country that private sector schools would bring more efficient returns on the money invested. The problem is that in the areas where that philosophy has been implemented, the reality brings different results than what was theorized.

      I don’t think there really is a cut off. There is a clear pattern in study after study. In theory, everyone wants to pay less in taxes; but when people are asked which government-provided services they’d want to give up so they could pay less in taxes, they hold on to the services. And many of those services, like schools, would (arguably) either not attract private investment = (like building our road system, or our railroad system) without subsidization, or wouldn’t necessarily bring a better return on investment even if they did.

      The problem, as I see it, at least on the one side, is that so many folks are so busy demonizing government, and unrealistically applying rigid ideologically based on a binary mentality and thinking that if we only did things differently it would be Shangri-La, that we can’t get down to an open, good faith discussion of where the trade-offs can appropriately be made.

      Part of that demonizing is the “many people receive services without paying for them” demonizing. First, that number is very frequently overstated. We saw that blow up in the Republicans’ faces during the election, when the Republicans ignored the relatively high percentage of taxes (although not federal income taxes) with the whole “moocher” line of attack. It backfired because most of those moochers actually do pay taxes, and incredibly high percentages of them are working poor, elderly, the disabled, and the working poor.

      The problem of substance, IMO, is not that there is a large number of people who are receiving services they don’t pay for an are unwilling to give them up. And IMO – as long as people see that as being the main obstacle, we won’t get very far because they are focusing on a relatively small entity as being that main problem. There is a basic logic problem there.

    • Who knows.

      Exactly. That’s why I object to overly-confident statements being made by those who self-describe as “skeptics.”

      There are many variables that are impossible to control. We don’t have a lab where we can tweak one variable and then watch what happens. Seems to me like the data are pretty inconclusive and that it is irrationally reductionist to think that one variable will have such a clear cause-and-effect impact one way or the other on such a vastly complex economic machine.

      Sounds a bit like climate change, doesn’t it? That’s why I think that at it’s roots, climate change “skepticism” is an interesting phenomenon. It is rooted in true skepticism. The problem for me (since I can’t judge the science) is that I see “skeptic” after “skeptic” completely fail at upholding the principles of skepticism when they step outside of the climate debate junior high school lunchroom climate debate food fight.

      It means that I can’t trust them to be true skeptics. So I can’t trust them any more than I can trust “realists” who also display the attributes of “motivate reasoning,” and who are similarly closed off to examining their own biases.

    • Faustino,
      +15.5732 :)

    • Joshua @ 10.47: in terms of “good faith discussion,” I obviously know more about Australia than the US. In terms of taking all taxes and government benefits into account, I think that recent figures here shown that more than half of the population were net beneficiaries. The Gillard government adopted many “class warfare” policies which handicapped those who create the bulk of wealth and fund those transfers. This approach is not sustainable: it leads to reduced economic growth, less capacity to fund government programs and transfers, and a divided society.

      Re schools, whatever the returns on money invested, a high proportion of parents (? > 30 %) pay for non-government secondary education because they rate it more highly than state education. The latter has had lots of extra money poured into it in the last six years, but all indicators are that standards are falling; money is not the issue, and that “investment” has had no obvious return.

      (Two of my kids went to top private schools, the ones we thought were best for them, on the basis of scholarships. The third got a part-scholarship, but we decided to send her to the best state school (where she gained competitive entry), partly because of financial constraints, more because we thought that she would do better in that school.

    • Matthew R Marler

      Willard(@nevaudit) Tufts is not very far from NYC.

      It’s considerably nearer to Boston than NYC fwiw.

      I like his ideas, but I do not see an immediately revenue-neutral proposal in the Congress now.

  15. While I see that a carbon tax has less loopholes and remedies part of a broken system in that way while driving better climate behavior as a side effect, I don’t think his revenue-neutral idea of just replacing other taxes with it is of much use. It needs to generate revenue to help with (a) building resilience, (b) funding green technologies for energy efficiency, (c) funding renewable and cleaner energy production, (d) allowing green industries to compete on the world market, (e) paying for climate-related losses (food, health, infrastructure, water, etc. issues). Climate change is expensive, whether or not some of it is prevented, so the revenue would come in handy. A revenue-neutral carbon tax doesn’t pay for anything new, just business as usual.

    • Jim D,

      You do a good job of demonstrating why many people will never accept a carbon tax. Your b, c, d, and e are all losers.

      Why do we need to fund “green” technologies when a carbon tax would already provide incentive for people and companies to become more efficient?

      Why fund renewable energy sources when we are already past the point for wind generation to have become competative and so far solar has proven to be a dead end? As for clean energy, define clean.

      Why support a source of energy that on its own is incapable of competing on the world market? If there is a market, people will step forward on their own to exploit it. As a nation we’ve spent the last several decades trying to make markets more free, not add tariffs and subsidies to products.

      How are you doing to differentiate between normal climate related losses and those having to do with “climate change”? Maybe create a National Climate Court?

    • I am also in with a priority of resilience and damage control/recovery as uses, but I would be concerned with foreign industries taking over key new markets resulting in a lot of importing going on to reduce the carbon footprint. And I also realize that renewable energy and fuel efficiency are not there yet in terms of where they can get to with more research and financial encouragement. These might be relatively small investments plus some subsidizing to bring costs down faster.
      For climate-related disasters, obviously it is not case by case. Things like increased forest fires, floods, droughts, storms cost money to replace infrastructure and lost production. There could be a general disaster fund that the carbon tax would subsidize, and especially as its needs go up in the future it would cushion the impact.

    • Jim D,

      Weather events, whether it be flooding, drought, forest fires, tornados or hurricanes, will always be a part of life. That the global warming crowd has latched on to the extreme weather meme is a sign they are desparate. To date there is no evidence that these events are occuring any more often or with greater intensity.

      Basically you are advocating a system where anytine something bad happens to you, the government will come along and make you whole. Sorry, but not with my tax dollars. You want to live in Florida, build to withstand a hurricane and get insurance. Same if you live in tornado alley. You want to live in the great outdoors, among the pine trees, recognize that fire is part of the natural landscape and plan accordingly.

      I repeat, arguing for a carbon tax for the reasons you list is a none starter. It involves either the government picking winners and losers or picking up the tab for events that have always occured and will continue to occur and removing individual responsibility from the equation.

    • timg56, either the government or your insurance company or both will pick up the tab. You don’t get to choose. It depends where you live. There may be some third world countries where no one picks up the tab, but they could benefit from charities. This would be the libertarian system.

    • Jim D,

      RE who picks up the tab.

      Sometimes the government picks up the tab, at least with regard to infrastructure damage. I believe what they mostly do is offer low interest loans when it comes to personal loss. We don’t need some new program financed out of a carbon tax to do this nor is using this as justification for a carbon tax valid.

      As for insurance, sure, but one pays premiums for this. And you do often get to choose. Just as today people have a choice where they live. Some may have more choice than others, but when you get right down to it nearly everyone is free to move somewhere else.

      But this is, as willard might say, pointing to a squirrel across the street. Has nothing to do with the issue of why do we need funds to pay for climate damage as a result of global warming. Or more importantly, on what basis can one claim that climate damage is greater now than what it has been historically.

    • timg56, you seem to distinguish between accepting costs to build infrastructure for resilience and not accepting damage costs for failed infrastructure, or failing to build it early enough. For example, we may need more dams or reservoirs to help against droughts, but before these are built there may be crop failures. Yes, grey areas abound, so who pays the farmers then? I don’t think your idea of a climate court works because of these grey areas. It is all or nothing when it comes to damage from weather, climate, earthquakes, you name it. No point in politicizing compensation when you don’t have to.

    • timg56, good responses.

    • Jim,

      You are making several mistaken assumptions about what I am saying.

      First off I have no idea for a climate court. It was a retorical means of highlighting my question to you on how to distinguish between regular weather events and those resulting from “climate change”. A question you haven’t answered.

      Secondly, I make no such distinction with regard to infrastructure. If we accept that infrastructure development and maintenance is a responsibility of government, then I do not see where any distinction would exist, other than choosing the most cost effective approach. I am of the opinion that paying for resiliency up front is better than picking up the tab after something has failed. But I’ll admit to some bias. As a submarine sailor I knew that the resiliency Electric Boat built into my sub could very well mean the difference between life or death. And having spent 10 years working at commercial nuclear power plants (whose resilience is unmatched by any other industry) I saw first hand the degree of safety resiliency provides.

      As for your point about dams, drought and farmers:

      1) There are very few opportunities for new dams and reservoirs in the US, except possibly for micro dams.

      2) Droughts happen. All the time. No evidence that they are increasing in frequency or intensity.

      3) Farmers are fully aware of #2 above. Which is why they are far more interested in having reasonably accurate predictions of medium term (i.e. 6 months to a year out) regional weather, not in GCMs modeling possible climate 50 and 100 years out. Until they get that, they will do what they’ve always done – pay for crop insurance.

    • Faustino,

      Thanks. You made my day.

    • timg56, I think we agree that early resilience is better than late, and late is better than never. Regarding droughts, yes, the farmers can cover themselves, but someone still has to replace the agriculture lost possibly via imports. It costs everyone in this way. It would be good if the government had funds to subsidize this kind of thing, especially if it does become more common. Similarly a solution may be needed for chronic water shortages. For example, in the high plains, the ancient aquifers are draining out in a few more decades, and tapping these was a big reason for no successive dust bowls in that region. If dams and reservoirs don’t work, more ambitious water diversion/storage projects may be needed.

    • Jim,

      We are getting pretty far afield from a carbon tax.

      Coming up with a list of items for which having a big pot of money to spend would be nice is not a difficult task. (Other than perhaps being endless.)

      Re: replacing ag output lost to draught. It isn’t a problem. At least not for the US. Agricultural production is something we do really well. And if, for the sake of argument, we pretend it might become a problem, simply ending the diversion of grain crops into ethanol production would take care of the problem.

      Also, the operative word in your one sentence is “if”. If draught becomes more common. Unfortunate there are a lot of ifs out there. Which ones should we worry about? Without evidence draughts are increasing, this becomes an “if” we can disregard.

      Re: water shortages. How does a carbon tax address this issue? Also, agriculture is not the sole demand on water. In many parts of the country dry ag is utilized. There are various means to address the issue of water usage in agriculture. Why bring this up at all?

      One of the ironic things about global warming / climate change and a point I’ve tried making several times, is that it serves primarily to distract us from real problems. Water is one of those. Reducing CO2 will do nothing to address water. (If nothing else, this shows what a fool Peter Glieck is. Instead of sticking to his area of expertise, an area worthy of attention, he jumps for the bright lights and big money of climate change. Tell me that AGW doesn’t have aspects of religious fervor. )

    • timg56, it would be a shame if climate change led to unsolvable problems in the US for water and food production or damage prevention. I would hope money can solve these, but perhaps large areas just have to go to wasteland. It comes down to sustainability and its cost in areas (coastal ones too), but, yes, the cheaper option may be abandonment. And yes, I may be using an extreme example of the choices to be made.

    • Jim,

      What is causing you to be so pessimistic about agricultural production? You must not bother keeping track of what is actually occuring.

      Yields may average 156 bushels of corn an acre this year, the third-highest ever, lifting output to a record 13.62 billion bushels, said Bill Gary, the president of Commodity Information Systems in Oklahoma City. Normal or below-average Midwest temperatures are expected over the next 15 days, said Commodity Weather Group.

      The USDA estimates global output will climb to a record 962.6 million metric tons in the 2013-2014 crop year, up from 855.7 million a year earlier.

      Supply in the U.S. will remain at a “comfortable level,” even if planting ends up around 94 million acres, less than the 97.282 million farmers predicted in March, analysts at Morgan Stanley including Bennett Meier wrote in a report Wednesday.

      Bottom line is we are producing more food and doing it with less land under production. Scenarios of food shortages are nothing more than extrapolations of model outputs, with a good deal of literary license thrown in. And if you still want to believe such a crisis is a real possibility, I’d recommend focusing your resources on reducing loss due to spoilage. More than half the food produced worldwide is lost to spoilage. We could eliminate all CO2 emissions in the US and it would do nothing to improve world food supply.

    • timg56, the pessimism is about the water supply. A transient warming climate has land warming faster than the ocean, and summer relative humidities dropping, cloudiness decreasing as another positive feedback, soil getting drier. Extended hotter summers are not good if they are drier. This needs more study, but I think it is a real danger for the parts that are already water-challenged in drought years.

    • Jim,

      It is hard to keep track when you bounce back and forth between food supplies and water shortages.

      On the needs more research. I’m with you on that. The question I’d ask is where have the research dollars been going to date? The impression I get is that a big chuck goes to GCM’s. The research needed for what you are pointing out appears to belong with regional climate. Is it possible we are spending our money stuying the wrong area of climate?

      And I hate to beat the poor horse again, but all of the conditions you describe are model outputs. They are basically hypotheses of what might happen.

    • timg56, I am sure you realize that food and water are connected. Yes regional climate change remains uncertain, but can only be improved with more reliable GCMs as a basis. The difficulty with assessing reliability is verifying climate change in GCMs because we have had only a fraction of the climate change so far. It may be that some of the GCMs are already going to verify well in regions over the next few decades, but we don’t know which ones yet. We need to check the sea-ice in the AR5 runs, because that seems to have been a weakness in previous GCMs that may impact the distribution of warming and consequent circulation changes that matter so much for regional climate.

  16. Can someone please explain why liberals seem to feel so qualified to pronounce what conservatives like?

  17. Matthew R Marler

    A carbon tax is better than the regulatory alternative

    That’s a pretty poor argument,

    The regulatory alternative is bad — so scrap it.

    • Yes, sort of like suggesting jumping off a bridge as an alternative to slow poisoning. Both take you to a place you shouldn’t want to be.

    • Of course.
      With a new carbon tax, we get the carbon tax and all the old regulatory alternative too.
      I never heard any proponent of the new carbon tax advocating scrapping the old regulations and subsidies.
      They want to add a tax on top of it all. That’s the most probable way it will be done.

    • Well, you have now heard of one who recommends the carbon tax in place of, not in addition to, the regulations and subsidies. I have tried to be consistent about this. Sorry if that didn’t come across clearly enough.

    • MattStat,

      I sense some reluctance in that remark:

      > The regulatory alternative is bad — so scrap it.

      that seems to have anticipated Ed Dolan:

      Although conservatives don’t like taxes, they reluctantly agree that the government does need revenue.

      A government does need revenues. If a carbon tax is the lesser of evil, it is the lesser of evil. Some might even argue that we need some evil, or else the world would be a very dull place.

      An analogous reluctance seems to appear with AGW as the best explanation we got. We should put Dan Kahan on the case.

    • Matthew R Marler

      willard(@nevaudit): A government does need revenues.

      It does not follow that the government needs more revenues than it has now. The least evil alternative now regarding CO2 is to scrap the regulations. Even if the costs are uncertain, the benefits are certainly very small — the CO2 regs are essentially a futile gesture, approximately as religious in nature as Medieval/Renaissance indulgences.

    • > It does not follow that the government needs more revenues than it has now.

      Nobody argued otherwise. My point is that if you’re to scrap a revenue-generating scheme, you better produce another one, or else you’ll see what a non-resilient system looks like.

    • Even if the costs are uncertain, the benefits are certainly very small

      Hmmm. Reduction in deaths due to particulate matter = certainly very small?

    • willard, I’ve argued in posts above that there are benefits in reduced taxation rather than maintenance of deficit-funded government-provide services.

    • > There are benefits in reduced taxation rather than maintenance of deficit-funded government-provided services.

      Sure, and one could also argue that we should all be rich and healthy instead of poor and dying from the cold.

      It might be very tough to speak of economic resilience without any public entities to bail out speculative delinquents from time to time or finance an occasional Occupy-Your-Favorite-Oil-Producer.

      Keynes and Hayek might not have the conceptual means to foresee how quasi-algorithmic profiteering from public institutions private endeavours could become.

      Why maintain social nets when you can make a buck selling them?

    • willard @ 11.52, it’s not either-or. I grew up in a poor father-less family, and know what it’s like to be cold and hungry. I’ve also had severe accident trauma and long periods of ill-health, and years when I did unpaid voluntary work and lived frugally. I’m not writing from a “fat-cat” position or bias, nor arguing against safety nets.

      My experience of life suggests that self-reliance is a great contributor to well-being, many policies – however well-intentioned – act to increase dependence and diminish self-reliance: they often promote an entitlement mentality. Funding such policies through deficits is doubly harmful.

    • Peter Lang

      Faustino,

      +1000.5

    • Faustino,

      I second Peter’s endorsement.

    • Josh,

      As I understand it, most particulate pollution from coal fired power plants is in the form of sulpher and nitrious oxides. How does stopping “coal pollution”, whatever that term means, going to help with reducing particulates?

    • Faustino,

      The concept of “entitlement mentality promotion” might deserve due diligence. For instance:

      The RSLC received $150,000 each from Exxon Mobil, the world’s largest company by market value, and Wellpoint, the second-biggest U.S. health insurer. Wellpoint has given $400,245 to the RSLC so far this year.
      Lorillard Tobacco Co. gave $100,245 to the RSLC last month.

      http://go.bloomberg.com/political-capital/2013-06-21/exxon-wellpoint-help-republican-group-raise-2-million/

      Sounds like Exxon, Wellpoint, and Lorillard are entitled to promote something.

      Framing fiscal rights in psychological terms, however well-intentioned, can be harmful too.

      This is not Sparta.

    • David Springer

      The government doesn’t really need more funds. The Social Security and Medicare Trust Funds are underfunded. People lose sight of that a trust fund is not a government the same as a bank account is not a bank. Write that down.

  18. The thing that rightens me, is that the USA will succeed in imposing a carbon tax. If that happens, we here is Canada will be under enormous pressure to do the same thing. The last thing we need in Canada is another tax on energy. Cheap energy is what makes our economy grow. God forbid we ever impose a carbon tax.

  19. A Modest Proposal: Since we exhale CO2, any carbon tax should rightly be extended to exhaling. If you are unable to pay your tax there’s no problem because you could inhale all you want. You only need to hold off on exhaling until you got your refund check back from your government healthcare claim to pay for your breathing tax. In this case, you could tell the IRS (also controlling health care distribution) that you’re going to hold your breath waiting for their check.

  20. Steven Mosher

    “Unfortunately, conservative resistance to carbon taxes has the unintended consequence of encouraging greater reliance on regulation. That is very much evident in the new climate action plan. ”

    +1

    • Rob Starkey

      Unfortunately the resistance to a carbon tax is often wrongly characterized.

      My understanding of the conservative position is that no new taxes should be imposed unless or until these new taxes are a part of an overall plan to achieve a long term sustainable balanced US budget. Does that seem unreasonable to anyone?

    • Rob, unreasonable only if it implies that reduced spending should not be part of achieving a balanced budget.

    • How does a carbon tax immunize you against new regulation?
      You’ll end up with both.

    • Not quite. +0.2 … maybe. Resisting taxation is much easier than resisting regulation because it’s more visible at the individual level. Regulation is a step or two removed from the tax-payers and thus easier to impose on them. Damage occurs where there’s the least back pressure to counteract it. And blaming conservatives is a red-herring dog-whistle sleight-of-hand misdirection of the argument.

    • Curious George

      Off topic .. Steven, please provide a link to a NSF contract that you mentioned in an open thread yesterday, thank you.

    • “Unfortunately, [democracy] has the unintended consequence of encouraging greater reliance [by progressive politicians who care nothing about the Constitution] on regulation. That is very much evident in the new climate action plan.”

      There. that’s better.

    • Peter Lang

      +1.5

    • Matthew R Marler

      Steven Mosher:

      “Unfortunately, conservative resistance to carbon taxes has the unintended consequence of encouraging greater reliance on regulation. That is very much evident in the new climate action plan. ”

      Are you sure it’s just conservatives? As I mentioned, I have not seen anyone propose a carbon tax with an offset in some other tax, and I think that the resistance to increased taxation includes most swing voters as well as conservatives. “I have not seen” is weak evidence, so can anyone refer me to a revenue neutral bill with carbon taxes that has been introduced in either House of Congress, as opposed to academic and think tank proposals?

    • I don’t know of a federal revenue-neutral carbon tax bill but there is one in the draft/study stage for a Washington State ballot initiative. Here is a link: http://www.sos.wa.gov/_assets/elections/initiatives/BallotTitleLetter_447.pdf

  21. One thing I do not get from Ed Dolan’s post is a sense of how heavily the companies that produce fossil fuels are taxed now As a start, consider Exxon Mobil’s 2012 annual report at

    http://ir.exxonmobil.com/phoenix.zhtml?c=115024&p=irol-reportsannual

    It lists, in billions of dollars, sales taxes 32, income taxes, 31, other taxes and duties, 36, and net income 45. The government take is already more than twice the net income, and you want more? Oink, oink.

    • Prof Rutledge, Then consider that Exxon is considered a midget in the world of nationalized oil companies and imagine how much money is being siphoned off to those governments.

      Companies no longer compete, it’s the nation-states that compete at this level.

      If those nations start investing in renewable and alternative energy with their spoils … well, good for them, I think :-/

    • Somehow, all these taxes do not seem to be included in their estimated first-quarter results:

      The Corporation distributed $7.6 billion to shareholders in the first quarter through dividends and share purchases to reduce shares outstanding.

      http://www.exxonmobil.com/Corporate/Files/news_release_earnings_1q13.pdf

      ***

      Another interesting fiscal bit:

      Exxon (and other oil companies) don’t have to pay eight cents a barrel into the federal Oil Spill Liability Trust Fund for tar sands oil. That’s because tar sands oil gets an exemption from the tax because it’s not “conventional oil.”

      http://www.dailykos.com/story/2013/04/26/1205000/-ExxonMobil-rakes-in-9-5-billion-profit-on-which-it-will-pay-a-13-percent-tax-rate-if-that

    • Matthew R Marler

      willard(@nevaudit), your responses to Dave Rutledge are incidental to his point: he showed how some taxes already go to govt from the fuel trade, and you show how much a big company has left over. The main point remains: governments get more money from the fuel purchasers than the oil companies get. What’s more, governments get that money even in the years when the oil companies lose money and pay no dividends.

    • David Springer

      @marler

      If willard was student he’d be on the short bus.

  22. The vast bulk of the atmosphere is composed of N2 and O2, non-radiative non-GHGs. They are unable to dispose of sensible heat except through evaporative loss from the top of the atmosphere. Only GHGs, notably H2O, can radiate energy to space. Hence, in their absence, the atmosphere would heat until it could “boil” away enough mass to counterbalance solar irradiation.

    Hence GHGs are cooling agents which preserve atmospheric mass. The Warmist (and Luke-warmist) positions are 180° wrong. As usual.

  23. This reminds me of that joke about the explorers who were captured by a tribe and were forced to chose death or “bungi”…
    Except I couldn’t find the punch line for this one.

  24. The very name ‘Carbon tax’ is a non-starter. If one wants to replace the corporate income tax with an energy tax, equally applied, then we can discuss 1) The regressive nature of such a tax (as we can already see with high gasoline taxes–middle class commuters are hit hardest). 2) How such a tax will, at the end of the day, suppress any serious energy innovation because it will raise the barrier to entry for new technologies. We can already see where the carbon tax revenues would go by examining the current federal ‘investments’ in failed green energy initiatives. A carbon tax is simply another means to punish winners and subsidize losers.

    There are other arguments as well, but this is a start.

  25. Conservative hate taxes on CO2 because they know the disastrous economic that will follow. They understand that the tax is a war against the poor. The following link is to a essay that should stimulate everyones thinking and analysis.

    http://nationalreview.com/articles/315369/green-war-poor-robert-zubrin

  26. I keep getting an invitation from the GWPF to a talk at the House of Lords to be given by Ross Mckitrick on the subject of a fair way to tax carbon emissions.

    http://us4.campaign-archive1.com/?u=c920274f2a364603849bbb505&id=35bb60fc2f&e=80c8fea495

    tonyb

    • Why link the tax to the tropical troposphere temperature and not the land temperature over Canada for example (he’s Canadian)? Surely that has more relevance to those paying it. Anyway a good excuse to post this link on Canada. Carbon tax would be a non-starter under the current oil regime.
      http://www.foreignpolicy.com/articles/2013/06/24/oh_canada

    • jimD

      You will have to ask Ross that question but I think he has been floating this idea for some time. If he linked the tax to UK climate we would all be getting a rebate for the last decade.

      I generally pay little attention to the GWPF propaganda but I have had this email four or five times. Perhaps they are trying to drum up numbers.

      If Ross was giving it at the Met office I might go but not this one all the way to London.
      tonyb

    • Britain is too small an area, so the temperature is too noisy. You might link it to a 30-year running average in that case, which should be somewhat smoother.

    • David L. Hagen

      Jim D
      It’s because GCMs project a hot spot in the tropical troposphere temperature due to anthropogenic contributions to global warming.
      Thus tie the tax to observed warming where the models most predict it.

      See McKitrick’s earlier T3 Tax.
      And his current:
      An Evidence-Based Approach To Pricing CO2 Emissions

      “If the climate models are correct, the carbon tax will rise significantly as CO2 levels rise; but if the temperatures remain stagnant or low, then the tax and its economic cost will remain low too,” said Professor McKitrick. “Either way we get the right outcome, and the market will reward industries and investors who make the most objective use of available science in forming long term plans.”

      “The temperature-based procedure that McKitrick outlines in his paper would provide a strong incentive for more thorough and objective analysis of possible future developments in the climate system. It thus offers a blueprint for an evidence-based low-cost emissions policy that would also promote the cause of better understanding,” Professor David Henderson writes in the foreword to the GWPF paper.

      (thegwpf.org server may be down)

  27. We already have a carbon tax – it’s called “gasoline” tax. In Europe it is very high (more than 100% ). How much carbon emissions has it prevented? How many “renewable” fuels has it caused to come into existence? How many other regulations were dropped due to the fuel tax?

    “Carbon” tax is the fashion word of the day for justifying new taxation.
    It has nothing to do with carbon or climate or conservatives.

    what kellermfk said:
    “What … complete … nonsense”

  28. Well, since you folks asked.
    1. Man-caused-climate catastrophe is unproven speculation and merits no particular response until such time as cause-and-effect can be proven by hard-nosed science, as opposed to “consensus” drivel trotted out by elitists. The climate is highly chaotic and non-linear and it is the height of arrogance to use improper models in an attempt to hood-wink the populace.
    2. We do not need more taxes. We need smaller government, less spending, fewer bureaucrats, fewer mind-numbing regulations and lower taxes . Carbon taxes are nothing more than more than a contrivance to feed the maw of an ever expanding leach sucking the life out of the middle class.

    And yes I am a conservative and stand by my opening statement.
    “What … complete … nonsense.”

    • Rob Starkey

      keller

      Part of the nonsense is “conservatives” claiming that they want a balanced budget but then failing to acknowledge that the US currently spends close to 40% more than it generates in revenues AND not being willing to support the cuts in spending necessary to balance that budget. Are willing to support cutting social security, medicade benefits, medicare reimbursement etc etc etc.

      Conservatives often fail the test

    • Well, I’m a conservative and I acknowledge what you say 100%. Of course cuts are necessary, and you didn’t even mention defense. And you certainly didn’t mention Bunny Inspectors and a lot of other stupid regulatory spending that can and should get cut too. The problem with being “willing” to make cuts to balance the budget is that the average American refuses to think about it, and so it can’t get anywhere politically. Paul Ryan has been trying to get people to deal with reality and so everyone hates him.

      All spending programs should have a twilight date, and vanish after ten years or whatever unless they can get Congress to renew them.

      You didn’t pose the reverse question. Are liberals willing to increase taxes by 40% to balance the budget? On the middle class, mind you; only that will produce the money that’s needed. Do you know one single major Democratic politician who has been willing to risk his political career and go out on a limb and suggest a budget that will actually balance that 40%, as Paul Ryan has done?

    • Rob Starkey

      mike

      I did not mention the other areas of the economy only because I was highlighting the areas of the budget to have the most cost growth in the next 2 decades. I agree that both major political parties in the US are disfunctional and are more into blaming the other and trying to make the other party look bad than actually solving problems. Both parties seem very willing to cut the spending the other party believes to be important.

    • Rob

      Looking at the US from a UK perspective I would say that, like us, you are wildly overspending each year and the annual deficit has to then be added to your eye watering national debt which threatens to destabilise the economies of the world.

      Fracking might help save you as your energy is so cheap. However it must be tempting for Obama to use green taxes as a way of increasing revenue . Would green taxes be generally accepted because they would be perceived as the ‘right’ thing to do and consequently two birds could be killed with one stone, that of raising taxes AND to be seen to be doing something to curb carbon ‘pollution.’
      tonyb

    • Rob Starkey

      Tony
      Very few people seem to understand the details of the US budgetary situation. Because of the US Fed’s actions over the last 5 years, the overall current US debt is in reality less of a problem than is the debt that will be accumulated over the next 15 to 20 years. The US has been able to re-finance the existing debt and actually owns the vast majority of its own debt. Because the situation which has allowed the US to do this is not sustainable, it is very important that the US achieve a balanced budget over the next 10 years (roughly). The problem (imo) is that people (government employees as well as the average individual) now believe that we can spend more than we generate in perpetuity.
      The key is what I describe as the budget being fundamentally balanced. Annual revenues need to equal expected annual expenses including all entitlement programs. It is really a simple concept but if you study the numbers we are currently in the easy time to balance our budget. In 10 years it gets much more difficult under the currently planned stream of entitlement expenses. The nations of the EU are fundamentally much worse off, but personally I am concerned with the US.

      The reality is that the west’s aging population will get far fewer benefits than they thought they would be getting. Many individuals thought they were “owed” certain benefits, but will end up being greatly disappointed.

    • Mike -

      Well, I’m a conservative and I acknowledge what you say 100%.

      Just one second there, bud. Did you clear that with Gary?

    • By the way, in case anyone doubts my claim about Bunny Inspectors, here’s the latest installment in the continuing saga:
      http://bobmccarty.com/wp-content/uploads/2013/06/USDA-Rabbit-Disaster-Plan.pdf

    • You might be interested to see this: The Speech That Rocked Virginia | E.W. Jackson for Lieutenant Governor

      http://www.jacksonforlg.com/ the-speech-that-rocked- virginia/

  29. Instead of stringing it out if people actually wrote a check at the end of the year for all of the taxes that are a part of the goods and services they consume and pay for the privilege of working for a living, more folks would question if all of that money couldn’t be better spent by themselves on something else and vote accordingly. Some people think deductions that employers take out of their paychecks actually go to the employer — believe it! Supposedly there is a fight on to squash the medical device tax that was put into place to help fund Obamacare. It’s like passing a law that a free sack lunch will be provided to everyone and then pass a tax on paper bags to pay for it.

    • I agree. It would be nice if people could see what was being taken – and what it was being spent on – more directly rather than it being done effectively by stealth.

  30. I agree with the first comment – nonsense. If the corporate tax is a bad idea, scrap it. If regulations are a bad idea, don’t do them. If the current tax is twisted crazy, flatten it.

    Where in the world is the author coming from, to think that he can “replace” this bad idea with that one. What would happen instead is that we’d end with both bad ideas.

  31. “Introducing a carbon tax and using the proceeds to reduce rates on other taxes would maintain revenue neutrality while reducing tax distortions to business decisions.”

    The “using the proceeds to reduce rates on other taxes” part is very naive. I doubt that any taxes will be reduced, and instead we’ll see the huge carbon tax revenues used to distort the energy market in favor of solar, wind, etc.

  32. A carbon tax is a poll tax in disguise. As to how well it would work would depend on the details, it may end up with as many flaws as the existing system.

    • David Springer

      A poll tax is designed to keep poor people from voting. How does a carbon tax keep poor people from voting?

  33. Chief Hydrologist

    It seems a fabulous idea if you want to tax production, send industry overseas, encourage imports and add to the cost of everything in the economy. A broad based tax usually applies to consumption at the level of the consumer and not at the level of production. You could do that – exempt such things as food and medicines – and apply a broad based tax at say 15%. It has both inflation and consumer demand implications – but people get used to it and aggregate demand is unchanged. Unless you are running a humungous deficit from borrowed funds and use the revenue to reduce the deficit.

    Double taxing dividends seems crazy. But the essential problem is the disjunct between US taxation and spending. Optimal government taxation and spending is about 25% of GDP – according to both Keynes and Hayek.

    • Chief, You are saying a carbon tax will be very bad for us.

      On this, I do agree with you.

      you said: if you want to tax production, send industry overseas, encourage imports and add to the cost of everything in the economy

      This does need to be stopped.

  34. “Not on basic points like the heat-trapping properties of CO2, where there is broad scientific consensus, ”

    ? A “broad scientific consensus” on the ability of carbon dioxide to trap heat?? Sheesh.

    It can’t. That’s not consensus, that is fact, a science fact.

    Carbon dioxide cannot trap heat.

    And it makes no difference if everyone in the world didn’t believe it..

  35. No time to write now. But when I get back I’ll write:
    Why ‘Progressives’ Should Oppose a Carbon Tax – and why Some of Them Do

  36. George Schultz is the only of the three named as conservatives in the primary post that actually is. Mankiw is a Keynesian. Not that that means anything to most commenters here, but that is not a conservative economic position. Frum is a darling of the left because he is a Republican who loves to join in criticizing actual conservatives.

    All together now – “Republican” is not the same as “conservative.”

    Schultz joins Ross McKitrick in the fantasy realm of those who think that with progressives running the government, any tax could actually be revenue neutral. (And conservatives have not rin the U.S. government during my lifetime. Even Ronald Reagan had to deal with the Tip O’Neill House.) Schultz in particular should have learned after advising the hapless Bushes, and Mitt Romney, that even Republican progressives can’t be trusted not to expand government.

    But for all those (progressives) who think everyone should be able to define themselves, and chafe at we who reject the conservative label being applied to those who support progressive policies, I have decided to cede your point.

    I have now decided to self identify as a progressive.

    Now, as a proud progressive, it saddens me to admit that progressivism is a horrible mistake. We progressives have to turn our backs on our history of institutionalized racism, and stop trying to seize control of the government and wreck the economy. I have grown more mature in my progressive views and decided that they were all wrong all along. I implore my fellow progressives to join me in moving toward a more realistic view of science, and of the proper place of government in society. In other words, the wholesale rejection of CAGW.

    As a progressive, everything I just wrote should carry extra weight and no one should question my progressive bona fides. I urge my fellow progressives to follow me into the light, to abandon our unrelenting tribalism, to learn how to actually engage in critical thinking, and to reject the false choice between the economic systems of John Maynard Keynes and Benito Mussolini.

    Progressives of the world unite! We have nothing to lose but our blinders.

    • +1oooooooooooooo (points not $) Gary M fer the most sensible
      comment from a progressive I’ve heard in a loooooooooong time.
      Bts

    • Nobody is a conservative unless they’ve gotten Gary’s approval first. You think you’re a conservative? Not so fast, bud. Not unless Gary says you are. (And btw, don’t even bother asking him if you’re to the left of Attila).

      You gotta admit, the elitism is quite impressive.

    • Why do you hate the environment Gary M?

    • Wagathon,

      I am a slavish follower of the group think, I mean consensus, of the day.

    • GaryM

      Beth has actually awarded you more points than is legally permitted, so reluctantly must be disqualified. But in so doing I am pleased to award you the maximum legal amount of 5 points.

      tonyb

    • Peter Lang

      Well. …. Now Beth is in sever trouble.

      What is the appropriate punishment?

      Is it in bushels of wheat, or perhaps carbon (in the cubic crystal form, of course, and measured in carats)?

    • Peter, Jest don’t throw me inter the briar patch
      Serf.

    • tony,

      who died and left you in charge. We don’t need someone to establish a “legal” limit to point awarding. Obviously you are a member of the leftist elitism class who knows what is the best number for point awarding and plan to ensure live long employment devising continuously evolving regulations to deal with the matter.

      (I don’t do smiley faces and I am joking here.)

    • GaryM: I wonder whether anyone involved in this comment stream has ever read Friedrich Hayek’s essay, “Why I am Not a Conservative” You can find it on line here: http://www.cato.org/sites/cato.org/files/articles/hayek-why-i-am-not-conservative.pdf

    • Ed Dolan,

      Hayek is great on economics/politics, as far as articulating why a free market is so vastly superior to the alternatives. But his paper on why he is not a “conservative” uses the liberal/progressive definition of the term. And by his definition, I am not a conservative either.

      “As has often been acknowledged by conservative writers, one of the fundamental traits of the conservative attitude is a fear of change, a timid distrust of the new as such,[5] while the liberal position is based on courage and confidence, on a preparedness to let change run its course even if we cannot predict where it will lead.”

      Frankly, I don’t know a single conservative writer (even in about 1960 when he wrote this) who admitted fear of change and timid distrust of the new. What Hayek was referring to was social issues, not economic ones. But he, as most libertarians, mis-characterizes conservative thought on those issues as well.

      “In the last resort, the conservative position rests on the belief that in any society there are recognizably superior persons whose inherited standards and values and position ought to be protected and who should have a greater influence on public affairs than others.”

      Sheer and utter nonsense. But definitely the liberaltarian mindset. Like their fellow progressives on social issues, they really do not understand the beliefs, let alone the arguments of conservatives. But that’s OK, Hayek was an economist, not a theologian or moral philosopher.

      What a conservative recognizes is that there are certain objective principles, regardless of what society you are in, that should govern human conduct. Superior principles, not superior people. Elitism is progressive/libertarian mind set.

      So for free explaining why the free market works, Hayek is the guy. On economics, Friedman is better. And on social issues, Hayek leaves a lot to be desired.

    • GaryM | July 1, 2013 at 7:31 pm |

      McKitrick’s been pro Carbon Tax since the mid 1990′s.

      You don’t think he might’ve noticed if he weren’t a conservative, by now?

    • BartR,

      I never said McKIttrick is not a conservative, though I am not familiar with his stance on non-climate issues. But I read what he wrote when he proposed a carbon based tax (a concept that you have been mutilating beyond recognition ever since).

      And he did not “favor” a carbon tax. What I recall is that he figured that IF we are going to be stuck with one any way, then it should at least be tied in some way to the risk of AGW being C. So he said such a tax should be tied to the rise (or lack thereof) in temperature of the troposphere. (Note that he did not limit it to surface temps alone.) His point was that the tax could well be zero of the troposphere continued not to warm according to model forecasts.

    • GaryM | July 3, 2013 at 2:12 am |

      You very much don’t know what you’re talking about.

      Firstly, Ross McKitrick didn’t originate a single idea in his PhD thesis. It was a survey of prior and current thought about carbon tax from numerous other mainly conservative economics thinkers. McKitrick barely grasped most of their work, but mashed enough together to scrape a thesis defense.

      So I haven’t been mutilating his ideas. He can’t claim the ideas to be his. The ideas he’s had about carbon taxes since his thesis are ludicrous in the extreme. Wagering on climate outcomes in any year to determine the level of the carbon tax? With lags and natural variability, that roulette scheme would be punitively arbitrary, pointless and insanely destabilizing. I’ve mutilated the ideas of others before him, better thinkers well worth reading.

      They’re listed in the bibliography of his paper. It’s well worth digging them up to trace the provenance of double dividend thought.

      Secondly, Ross McKitrick’s well known in his native country among a small group of policy wonks, as a pro-Christian conservative lobbyist with the government and industry’s ear on matters ranging widely, from defunding health care to defunding science to defunding education — in a books-bad-burning-good sense, he’s so conservative the ground turns blue where his feet touch it. The Fraser Institute’s a good starting point for reading up on some views loosely aligned with McKitrick’s, as he’s one of their distinguished directors.

      It’s hard to forget the time McKitrick wrote a letter to the editor of his local newspaper, complaining about all the regulations against smog, claiming he had scientific proof smog was harmless. No, he was being serious. Really. How can you get more ‘conservative’ than that?

      Third, McKitrick clearly favors a carbon tax, and not merely out of resignation that such a thing is inevitable. His belief a carbon tax is less distortionate than the truly awful taxes it should replace is correct. McKitrick began in the 1990′s not believing CO2 even existed, apparently. He came around to accept that air was real, CO2 happened when coal, oil or books were burned, and eventually he even acknowledged that CO2 leads to global warming, if his later writings are to be believed. He merely doesn’t think there’s anything that can be done about it, and it’s probably the Lord’s Will anyway.

      So while I can understand you not entirely following McKitrick’s logic, I must ask you desist from mocking his religious beliefs.

  37. As some others have said, having a screwed-up income tax is no logical reason to impose a carbon tax. Just simplify the income tax and skip the carbon tax. This entire piece was just an attempt to justify something that conservatives don’t want for a country that doesn’t need it. Pretty lame, overall.

  38. In Europe, they introduced the world’s first carbon(sic) tax in 1990.

    http://www.sbs.com.au/news/article/1492651/Factbox-Carbon-taxes-around-the-world

    This was to stop extreme events like one in 500 year floods.

    http://www.dailymail.co.uk/news/article-2336817/Cruise-liner-carrying-120-British-pensioners-marooned-floods-Austria-authorities-consider-emergency-airlift.html

    As Germany has just experienced a one in 500 year flood, it would seem 25 years of global carbon(sic) taxes are NOT working.

    Where are the climate KPI’s for a carbon(sic) tax?

    When will analysis of climate impact from a carbon (sic) tax be available?

    Tax payers deserve to know so they can prepare for stabile weather.

    After all, government without measurable outcomes is just another form of anarchy.

  39. Handjiive,

    Where are the climate KPI’s for a carbon(sic) tax?

    When will analysis of climate impact from a carbon (sic) tax be available?

    Tax payers deserve to know so they can prepare for stabile weather.

    After all, government without measurable outcomes is just another form of anarchy.

    Well said. I’d add:

    We get what we measure;
    If we don’t measure, we don’t get

  40. I propose a new post.

    Why Progressives Should Hate President Obama’s War on Coal.

    “West Virginia Democratic Sen. Joe Manchin, in an interview last week with Fox News, called the president’s plan a ‘war on America.’

    ‘It’s just ridiculous. … I should not have to be sitting here as a U.S. senator, fighting my own president and fighting my own government,’ he told Fox News. ‘I will continue to reach out, but I need a partner here. I don’t need an adversary.’”

    http://www.foxnews.com/politics/2013/07/01/republicans-use-war-on-coal-charge-to-tarnish-dems-ahead-elections/

    “The Climate Action Plan ‘amplif[ies] the administration’s continuing war on coal and coal-fired power,’ said Sen. Heidi Heitkamp (D., N.D.) in a news release.”

    The Democrats war on the war on coal. Coming soon to a theater near you.

  41. What ultimately is the purpose of a carbon tax to raise increasing amounts of revenue or to curb carbon emissions?. In the UK increasingly penal rates of taxation on fuel and larger cars encouraged people to move to smaller more fuel efficient cars. You would think govt would be pleased, not a bit of it. They are now trying to find the $4bn in lost revenues from other sources and have stopped raising taxes on fuel and trying to find ways to OPEC to reduce the oil price so people use more fuel and raise revenues again. Why because taxes on motorists raise $75bn a year which fund the $40bn worth of subsidies given to public transport. The problem of any environmental tax is their proponents base their revenues on current levels of pollution and spend the lot, giving no regard for declining revenues if the policy works.

    • Epicycles git compluhcated.

    • CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution, CO2 is not Pollution!

      CO2 makes green things grow, CO2 makes green things grow, CO2 makes green things grow, CO2 makes green things grow, CO2 makes green things grow, CO2 makes green things grow, CO2 makes green things grow, CO2 makes green things grow, CO2 makes green things grow, CO2 makes green things grow, CO2 makes green things grow, CO2 makes green things grow,

      Temperature and sea level is will inside the bounds of the past ten thousand years, Temperature and sea level is will inside the bounds of the past ten thousand years, Temperature and sea level is will inside the bounds of the past ten thousand years, Temperature and sea level is will inside the bounds of the past ten thousand years, Temperature and sea level is will inside the bounds of the past ten thousand years, Temperature and sea level is will inside the bounds of the past ten thousand years, Temperature and sea level is will inside the bounds of the past ten thousand years,

  42. Why progressives should love free markets.
    Why progressives should love the negative income tax.
    Why progressives should love small government.
    Why progressives should love coal.
    Why progressives should love nuclear power.
    Why progressives should love natural gas and fracking.
    Why progressives should vote for libertarians.

    Lots to write!

  43. The print media and the airwaves are full of liberal Republicans and Democrats opining on what conservatives should think. And the reason they are doing that is because the vast majority of conservatives don’t think that way.

    We are currently paying 18.4 cents a gallon in federal taxes on gasoline. Depending on how much and how far you drive, do the math for every time you fill up. You are paying a lot of money to the feds to use a fossil fuel. IN most states, you are also paying state taxes for the privilege of buying gasoline. In California we are paying 72 cents a gallon total in government taxes on gasoline. I believe that covers my responsibility for my vehicle emitting CO2 into the atmosphere. Every time I put 20 gallons in my F-150, which is approximately once a week, the authorities collect over $14 dollars from me. The total on an annual basis comes to roughly $750 dollars. That’s a lot of money where I come from. Many people in California pay much more than that, especially those who have more than one vehicle.

    A carbon tax is also a regressive tax in that it hurts the poor disproportionately. Most of us could absorb a carbon tax, but the poor cannot so easily. The poor will become poorer because of a carbon tax. The government will become richer.

    Re the conservatives mentioned early in the piece, George Schulz bears some responsibility for the creation of the IPCC. Michael Oppenheimer wrote an interesting piece some years back about how they had duped Schultz and other Reagan administration officials into helping create the IPCC.

    David Frum is beyond help. To suggest as this author does that he is a “conservative” tends to blur distinctions and make the term virtually meaningless. There is room for alternative views in the Republican Party, just don’t call those views conservative when they aren’t.

    • 18 cents a gallon is cheap. If you are going to x
      complain about that then you will complain about anything.

    • pottereaton

      Is $750 a year cheap if you make, say, $75k a year before local, state and federal taxes? Soon the only middle-class people left in California will be those who cheat on their taxes. Of course, you can’t cheat on gasoline taxes, since you pay at the pump.

      I will be leaving within five years. The state is dying due to ignorance, arrogance, over-bearing regulation, political correctness and political corruption.

    • There are Europeans on here that will look at the average US price that converts to near 90 cents per liter these days, and drool. They are paying twice as much and not earning any more either. Consequently, they mostly live closer to work and drive smaller cars or have usable public transport systems.

    • potter,

      The 18 cent federal tax is cheap. That California adds another 72 cents is not. And I think your math is off. You are paying a dollar in state and federal taxes for every gallon.

      If state taxes on gasoline are dedicated to the transportation system, then I find little to object to. So long as the revenue goes into maintaining and improving the roads and related infrastructure. Use it for other purposes and I’ll fight it.

      The alternative is to establish tolls. The new Tacoma Narrows bridge costs $4.25 to cross. That’s over $1,000 a year for anyone who commutes to work over it. They have also added a toll to the new 520 bridge across Lake Washington and are talking about tolling I-90 as well. What they are not talking about is reducing the state gas tax.

      It probably doesn’t help that WASHDoT is a poster child for incompetent government agency at work.

    • Jim,

      Living closer to work is not a result of high gas taxes. There are other factors which contribute far more to higher population densities in Europe, the biggest being less area.

    • timg56, I believe they have had opportunities for suburban sprawl in more open countries like France and Germany, but that never became practical.

  44. Judith Curry,

    If the US business tax code to broken, fix it. If the tax is too high and the exceptions too liberal, reduce the tax, make it a flat tax: imports, exports whatever.

    Adding yet another tax scheme like a carbon tax to overcome a failed business tax doesn’t make sense. Fix what is broken.

    Government doesn’t seem to discontinue what is failed or outmoded, it just adds another layer. Conservatives may agree with the above.

    • RiHoo8,

      Adding yet another tax scheme like a carbon tax to overcome a failed business tax doesn’t make sense.

      Adding a carbon tax is far more complicated than adding or changing business taxes. Business and personal taxes are levied on money transactions (sales, income, etc). We do not have to make major changes to the financial systems to add or change taxes that are levied on other money transactions.

      Pricing carbon is entirely different. We do not have a system to measure GHG emissions (of the twenty-three Kyoto greenhouse gases) at the level or precision and accuracy that is needed for trade and for taxing.

      If carbon pricing is implemented, it will inevitably be expanded over time to include all GHG emissions in all countries. That is the inevitable path if we go down the carbon pricing route. When fully implemented every kg of GHG emitted by man’s activities will have to be measured, reported, and taxed or traded. Who has thought through how that will be done? Who has thought through how the emissions will be measured from every cow, sheep and goat in Eritrea, Ethiopia, Mogadishu and Somalia, for example?

      There will be disputes between countries, between businesses and between IRS and the businesses about how much emissions they produced and how much tax they owe.

      Commercial transactions including taxing and trading a commodity, depend on accurate measurements of the commodity being transacted. We have no way of measuring GHG emissions, with sufficient precision and accuracy, for commercial transactions [What is happening now in EU, Australia and other places is on the largest and easiest emitters to monitor; this gives no indication of what will happens as the system is expanded to included smaller and smaller emissions sources and all twenty-three Kyoto greenhouse gasses).

      If we start down the carbon pricing route, we are in big trouble. It has not been thought through where this will lead. And, there is absolutely no need for it at all see ‘Alternative to carbon pricing‘: http://judithcurry.com/2013/07/01/why-conservatives-should-love-a-carbon-tax/#comment-339553

  45. Chief Hydrologist

    ‘It would make sense to address the issues of optimal government size and optimal taxation jointly, but in practice, they are mostly treated separately in public policy debates. For example, the Henry tax review did not address the size of government, taking the expenditure side of the budget and its likely future growth as given. As Brennan and Buchanan note, ‘the policy stance that emerges from the conventional treatment, and that is now taken for granted in virtually all professional discussion of tax policy, leads inexorably to broader tax bases and correspondingly larger potential tax revenues.’ An important contribution that classical liberals can make to public policy debates is to tie the issue of optimal taxation more closely to the issue of the optimal size of government, stressing that the latter issue is the conceptually prior and more important one…

    Studies along these lines for the United States and New Zealand find that the economic growth-maximising size of government is likely to be somewhere in the range of 19% to 23% of GDP.31 If these estimates are accurate, then most developed country governments have exceeded their optimal size. If governments were concerned mainly with revenue-maximisation, they would choose the tax structure that maximises the size of the economy and thus the tax base. Smaller government as a share of the economy could yield bigger government in an absolute sense through increased revenue, although as noted previously, the induced expansion in the size of government from greater tax efficiency may have ambiguous implications for overall economic efficiency and well-being.’ http://cis.org.au/images/stories/policy-monographs/pm-117.pdf

    The government take of course does an impact on economic performance. As does the nature of the tax. As well as the idea of a optimal size of government being the classic liberal position – it is economically rational aiming at the efficient use of public resources to provide necessary services in an optimal economic growth framework. In no sense do classic liberals advocate no government. Hayek is sufficient proof of that.

    Carbon taxing is another red herring – one mooted for other purposes that seem quite impossible. A pointless tax in other words – especially at $15/ton. A carbon tax is a tax on production. It is the least rational of taxes – penalizing as it does productive capacity across the economy, sending production offshore and encouraging imports.

    It is not intended to be an efficient, broad based tax – what economists mean by this is taxes on consumption rather than production. By all means institute a broad based consumption tax – if that’s what you want. But this is another sham, fraud and chimera from the pissant left.

  46. Dear Prof. Curry,
    re. a theory befind “the madness of crowds”
    This is relevant to the current topic, but also highly interesting in the Climate area generally. If it is old news to you, I apologise.
    An enlightening theoretical analysis of groupthink…
    http://www.princeton.edu/~rbenabou/papers/Review%20of%20Economic%20Studies-2013-Benabou-429-62.pdf

    • Richard, thanks for the link, interesting article

    • Careful there, Judith:

      This article investigates collective denial and willful blindness in groups, organizations, and markets.

      We know how upset you get when the “d” word is used – because you think it refers to those who deny the holocaust rather than refers more generally to those who deny reality.

    • Chief Hydrologist

      Careful Joshua – you are revealing your tribal proclivities.

      It is a characteristic of groupthink to demonize outsiders.

      ‘Groups often frame outsiders in a negative light, seeing them as less intelligent, less able and even bad or evil in some way. This is typically done when other groups are viewed as being competitors of some kind.

      The criticism may just be of other groups. It may also be of the typical person in the other groups and perhaps even of specific key people within their organization.

      The trivialization and demonizing of others is often done in a ritualistic way, using the same words and following established and repeating patterns and sequences. It may include name-calling and implications of lower intelligence or other ability. Personal characteristics get simplified and stereotyped. Comparative words may well be used, framing others as less than those in one’s own group.’

      http://changingminds.org/explanations/groups/demonizing_others.htm

      Of course I use the words space cadets – but this is merely shorthand for cult of AGW groupthink space cadets. Descriptive rather than pejorative. Pissant progressive? Well the typical pissant progressive is a scum of the Earth, intellectually dishonest, morally corrupt, neo-socialist dimwit. This also is purely descriptive and is not intended to be pejorative or judgmental in any sense.

  47. This is about as wrong as it can get. If what the government needs is a tax with “lowest possible marginal rates and the fewest possible exemptions, deductions, and preferences” then the carbon tax is exactly not the case in the long term. Why? Because I am not taxed as long as I don’t produce CO2. So not only it distorts economy but once the economy adapts to it, the government ends up with no tax money again.

  48. David L. Hagen

    Like a Value Added Tax (VAT) or Goods and Services Tax (GST), a revenue neutral carbon tax with a corresponding reduction in income tax would encourage jobs, reducing unemployment. It would be a major benefit over rigid insensitive bureaucratic EPA regulations. Replacing mandated ethanol with a carbon tax would provide a major reduction in food prices and especially benefit the extreme poor internationally. US Congress’ mandated ethanol currently is starving some 192,000/year extreme poor who cannot afford the consequently escalated corn prices.
    However, a carbon tax would also be regressive, harming the US poor the most.

    Better yet would be to use the carbon tax to fund R&D into replacement fuels per recommendations of the Copenhagen Consensus.

  49. Chief Hydrologist

    Goods and services taxes are paid by consumers. Business is able to offset anything they pay in GST against GST that they collect from consumers. Thus is does not distort the production base. Higher production costs – from whatever cause – results in a loss of productivity with all that implies.

    Now you may accept that because the world is going to hell in a hand basket next week otherwise – but you should understand beforehand.

    • Chief,

      Goods and services taxes are paid by consumers. Business is able to offset anything they pay in GST against GST that they collect from consumers. Thus is does not distort the production base. Higher production costs – from whatever cause – results in a loss of productivity with all that implies.

      Spot on. Very important to recognise this. Not many do.

      We’d do best to simplify the tax system rather than make it worse. It seems to me the main taxes should be:

      - income tax
      - company tax
      - Consumption taxes e.g.Good and Services Tax (also called Value Added tax)
      - land taxes and rates

      Get rid of as many of the others as possible

  50. David L. Hagen

    As noted above, a carbon tax is on production. Far better would be a broad tax on consumption. That would address improving international competitiveness and exports and reducing the high labor costs due to taxing manufacturing. This would strongly encouraging exports and address the critical problem the USA has with its balance of payments.
    James Hamilton notes:

    Last year the U.S. spent $568 billion more on imported goods and services than we sold to other countries, with petroleum imports accounting for more than 80% of the total current account deficit, . . .
    historical U.S. oil imports . . .a cumulative wealth transfer since 1973 from the U.S. to oil-producing countries of some $10.3 trillion when valued in 2011 dollars. That comes to almost $33,000 from every person in America or $131,000 for a family of four. And much of that transfer has gone to support causes and regimes that are in fundamental opposition to America’s goals and values.

    That is far more devastating to our economy and values than any “anthropogenic global warming” (aka “climate change” by equivocation). Thus the urgent need to develop replacement fuels, NOT “control climate”.

    • David L Hagen,

      As noted above, a carbon tax is on production. Far better would be a broad tax on consumption.

      True, but totally impracticable. Think through the accounting system for the embodied GHG emissions, and it has to be applied in every country that you import from.

    • Also: the US imports OIL, but the carbon tax would fall mainly on US produced CARBON. (also on oil, but mainly on carbon).

      The “urgent need” is for replacement OIL, not CARBON.

  51. Governments have to levy taxes to run the country. Income tax seems to be fairist provided it increases with income. Other things could be taxed like food, clothing, enegy. However tax should not discriminaate one product over another, unless there is universal agreement that a particular product is bad, like cigarettes. When tax’s purpose is to discourage a particular form of enegy, like a tax on fossil fuel, it has to be clear to everyone thst it is absolutely necessary to avod disasterous climzte change in, say 1oo year”s time. It is not good enough to quote scientists, particularly when other sciantists disagree. Eventually if the problem gets steadily worse then politics force some action, particularly if the problem is seen to be not just regional.

  52. Peter Lang,

    You say “carbon pricing cannot succeed unless it is global”

    So if everyone implements CP except , say, the Easter Islands, the scheme will fail? Well that’s what you’ve said. You need to be a little more precise in your remarks.

    What you really mean, is that the greater the extent of its implementation, the greater will be the success. Is it not?

    • Peter Lang

      Read thre links and you’ll understand.

      From the links: The abatement cost penalty increases as participation rate decreases as follows [Participation rate; Abatement cost penalty for participants]:
      100%; 0%
      80%; 1.5
      60%; 2.5
      50%; 3.5

      The EU ETS covers just 45% of emissions. If EU can only include 45% of emissions, think about how difficult it would be to get the whole world to include close to 100% of emissions, which is what would be required to get the necessary commitment to make a global carbon pricing succeed and sustainable over the long term.

      By the way, rationalists have known for over two decades that it is not viable: http://www.voxeu.org/article/global-climate-talks-if-17th-you-don-t-succeed.

      If The world can’t agree to free trade agreements (like the Doha round of FTA negotiations), where virtually everyone is a major winner, how can we expect to get global agreement to carbon pricing since it will increase the cost of energy and make everyone a loser, at least for most of this century and quite likely forever.

    • Peter Lang

      Correction to typo in first line of table. The table should read:

      [Participation rate; Abatement cost penalty for participants]:
      100%; 1.0
      80%; 1.5
      60%; 2.5
      50%; 3.5

    • tempterrain

      Peter,

      I think your figures do show that the more countries which are involved in the scheme the more successful it will be. So we aren’t in disagreement on that point.

      So how do the participants in the scheme protect themselves against the foot draggers? They will need to reach a critical mass and the inclusion of the USA is obviously very important for that. There will be formed what might be termed a ‘carbon tax club’. So it could work like this: Members of the club , who pay their taxes will be allowed to export to other members as normal. Non members, who don’t have any carbon tax included in their export price will find that it will be added on by the importing country to prevent unfair competition.

      So they might well then decide to join the club. That way they at least keep the carbon tax for themselves rather than see it collected by someone else.

    • Peter Lang

      The GHG emissions tax club will not get implemented and the few that try will fail. read the links in my comment above and you will understand.

      Emissions pricing is the wrong approach to cutting global GHG emisisons. Read this and you may understand the economically rational alternative approach: http://judithcurry.com/2013/07/01/why-conservatives-should-love-a-carbon-tax/#comment-339549

    • tempterrain

      So you have to resort to comments like read: http://someobscure and irrelevantlink.org and then “you might understand” ?

      They aren’t the most convincing of arguments, if I may say so.

      Debate should be about intelligent reasonable argument with maybe some wit and invective rhetoric added just occasionally.

      You really need to lift your game. Peter

    • Peter Lang

      Tempterrain,

      You rally are a halfwit. You didn’t even read the links which are to the word authority on the subject.

      That’s why I rarely read anything you say, let alone respond.

    • Marlowe Johnson

      “So how do the participants in the scheme protect themselves against the foot draggers?”

      That’s easy. It’s called Border Tax Adjustments.

  53. I suggest we might add to the title “and why socialists should hate one”.

    That’s because the tax is regressive. Bluntly, this means the poorest will have to decide whether to eat or heat in the winter months. They’ll have to cut their carbon emissions, but the wealthy can afford to pay extra so they won’t have to.

    So why is it called a socialist tax?

    • Peter Lang

      It’s a socialist tax because the proponents of it are socialists, ‘Progressives’, Left ideologues; i.e. the same people who are the CAGW doomsayers/extremists.

    • Marlowe Johnson

      greg mankiw is a socialist? who knew?

    • Chief Hydrologist

      I think we have established that pissant progressives don’t care if old codgers die.

    • Peter Lang

      I think they want it. They are the age of entitlement and feel entitled to the wealth we have generated for the world. :)

    • Chief Hydrologist | July 2, 2013 at 1:54 am said: ”I think we have established that pissant progressives don’t care if old codgers die”

      Hi Chief, I’m back; you can stop worrying about me – I’m here to point out when you are molesting the truth – as for example: you are into carbon sequestration; to pretend that carbon is bad and you are not…?!.

    • tempterrain,

      Conservatives already hate the idea of a carbon tax, because it is not justified by the “science.” It is called a progressive (not a socialist) tax because its primary purpose is to let the government control the energy economy.

      But it is good to see that you don’t buy into the nonsense about a “revenue neutral” tax. A carbon tax would hit the poor the hardest. Just another reason it’s a really stupid idea.

    • tempterrain

      And it’s never occurred to you all that socialists would, reluctantly, accept that a carbon tax is necessary to help reduce CO2 emissions even though their favoured tax might be a tax on wealth or an increased tax on high income groups?

    • It never occurred to me that progressives/socialists would not want BOTH types of taxes. Because they do. And they push for enactment of both all the time. After all, just as the government can always print more money, the economy can always support more taxes. If push comes to shove, the government can just print more money, give it to the tax payers, take it back in taxes and thus pay the tax payers the benefits the government promised them.

      That way no one ever has to actually produce anything of value, because we will all be rich in fiat currency.

      No wonder these guys can’t get the climate right.

  54. “Although conservatives don’t like taxes, they reluctantly agree that the government does need revenue.”
    As has been demonstrated over last 4 years, the government apparently doesn’t need revenue, as it has spent a trillion dollars each of these years over it’s revenue.

    If the government actually needed revenue, it would spend less money than
    it gets from taxes.
    And it seems if make the foolish mistake of giving the government more money, it would spend even more money than they are not getting.
    So what we should do is first outlaw the IRS as the rogue government agency it is.
    And abolition income taxes.
    This *might* reduce government spending.
    But we should experiment to see if it actually would.
    But once it has been established that government does actually need revenue, and therefore it will not spend more revenue than it receives,
    Then one could start some other kind tax system other than taxing income.
    But if the plan is to add another system of tax on top of income tax, this obviously makes taxation more complicated and expensive. Compared with simply increasing income tax [or reducing exemptions on income tax. By reducing exemptions, one also make tax code less complicated and reducesthe tendency of IRS becoming excessively corrupt [crazy, criminal, despotic, lying, etc].

    • tempterrain

      gbailke,

      I think you, and Ed Dolan, too may be making the mistake of thinking that taxes are somehow related to government spending. You’re both assuming the same micro-economic priniciples that apply to you and I apply to governement too.

      Governments use taxation primarily as a control over the spending power of individuals and companies. To a lesser extent it is also about establishing social policy and redistribution of wealth. Money in (or raised) doesn’t have to equal money out (or spent) as no doubt you will have already noticed.

    • “I think you, and Ed Dolan, too may be making the mistake of thinking that taxes are somehow related to government spending. You’re both assuming the same micro-economic principles that apply to you and I apply to government too.”

      Nope.
      My point is that government spending *should be* related to tax revenue- but obviously, since the government is spending a trillion dollar more than it’s yearly revenue it’s a demonstration of it not happening.

      Other than some need of the State to control people, why not simply forgo the ritual of any kind of federal income tax?

      If. It’s actually not for revenue generation?

      I want to get some idea of what kind of calamity you suppose could happen if government is no longer controlling people with a income taxes.

      I am guessing it is a horrible thing.

      In contrast, I have a good idea of what happens when citizens don’t control their government spending- as there is world full of examples.

    • tempterrain

      But why do you think that “government spending *should be* related to tax revenue” ?

      It just ‘common sense’ that it “should”, right? If you look at what happened in the thirties, ‘common sense’ led a Great Depression. People were going hungry at the same time as agricultural workers who could have grown food for them to eat were losing their jobs. Farmers were ploughing crops back into the ground because those who needed them had lost their jobs and didn’t have the money to pay for them.

      The system had broken down and this led many people to conclude that capitalism had failed and Marx was right. Well he was in a way, but modern day capitalism which originated in the wartime economy of the 40′s is very different from the 19th century capitalism he analysed. Its obviously not without its problems, but there is really no alternative, except possibly an Eastern European style Soviet based economy. And that’s what you’ll end up with if you try to turn the clock back to the 30′s.

    • tempterrain

      Just to continue with this line of thought: Once you start thinking in macroeconomic terms, it becomes quite apparent that the introduction of any particular new tax , including a carbon tax, isn’t about raising revenue. Total Taxation is one variable in an equation which includes Government Borrowing, Private Borrowing, Government Spending and Private spending.

      Governments can’t directly affect private borrowing and spending. That’s largely dependent on market and public sentiment and levels of confidence. So when the private sector spend and borrow less it means that Governements have to spend and borrow more to keep the economy working.

      A trillion dollar economy means a trillion dollars worth of total spending on a trillion dollars worth of production. Any less and you ‘ll have unused resources leading to unemployment and empty factories. Any more will lead to inflation in price levels.

    • gbaikie | July 2, 2013 at 4:46 am | “Although conservatives don’t like taxes, they reluctantly agree that the government does need revenue.”

      As has been demonstrated over last 4 years, the government apparently doesn’t need revenue, as it has spent a trillion dollars each of these years over it’s revenue.
      If the government actually needed revenue, it would spend less money than it gets from taxes.
      And it seems if make the foolish mistake of giving the government more money, it would spend even more money than they are not getting.
      So what we should do is first outlaw the IRS as the rogue government agency it is.
      And abolition income taxes.
      This *might* reduce government spending.
      But we should experiment to see if it actually would.

      The goverment does not spend taxes collected on income – it goes direct to pay the interest on goverment borrowing from the banking cartel, who privately own the Federal Reserve, who, are allowed by goverment to create money out of nothing.

      This money they lend to goverment at interest and this interest payment is collected by the private company the IRS, the collection arm of the banking cartel’s private company the Federal Reserve. Registered in Peurto Rico I think.

      The goverment spends from borrowings from the bwanking cartel, which banking cartel has been given the franchise to issue notes for the money they create out of nothing which they buy from the goverment at pennies whatever denomination.

      This is a scam created by the banking cartel, organised by the Rothchild’s in the City of London (which is an independent ‘country’ not within the UK), which created the Federal Reserve Bank for itself and fellow cronies in the cartel in 1913. You lost the war of independence..

      Welcome to reality.

      If you are paying taxes to the IRS you are paying money towards the interest they are charging your goverment for borrowing money the banking cartel’s private company the Federal Reserve has created out of thin air, by fractional reserve on holdings of other people’s money and even on ious, as in loans for business and mortgages. Like any ponzi scheme, this is divied out to banks outside the cartel in order to keep them from blabbing. Banks make money out of nothing.

      You can’t put 10,000 dollars into your account and call it 100,000..
      ..and then lend it out at interest, and then create the booms and busts which means you end up with interest paid on the loans and get to possess the property and lands put up as guarantee – see the Wizard of Oz.

      Simple to calculate, the banks times these “incomes” by ten, so, for example, an iou for a loan from a bank for 100,000 becomes 1,000,000, by the tweak of a pen, or now a stroke of the keyboard or a swipe of a finger over a screen..

      It is a while since I looked into this, but iirc the wording on the IRS form states voluntary contribution and tax on income is still against the constitution, taxing labour is serfdom.. Tax was collected on profits after expenses on trade, on buying a commodity in one place and selling it at a profit in another. Again iirc, the bwanking cartel has it arranged that companies employing people have to agree to collect the IRS tax before paying the rest due to their employees.

      You’ll find discussions on this, here for instance: http://www.dailypaul.com/30395/where-is-it-stated-that-irs-is-private-company

      From which a couple of posts:

      Ron Paul believes
      Submitted by J.Malone-TN on Mon, 01/28/2008 – 02:22. Permalink
      the Truth… that the FED and the IRS are non-governmental agencies. He has stated that there is no law to pay taxes, it’s illegal and unconstitutional. It is an organization owned by a banking cartel. He also states that it’s been put into peoples minds that it’s a gov agency and the law to pay taxes because they (the IRS) use force to intimidate the American into submission to pay.
      Joe
      …….

      EXACTLY WHAT KIND OF TAXES ARE YOU REFERRING TO?
      Submitted by SableArms on Mon, 01/28/2008 – 01:51. Permalink
      Excise, import, income? Direct apportioned, direct unapportioned? If you are referring to a direct unapportioned tax like the federal income tax, the Congress of the United States of America has never had any such authority per the ORIGINAL CONSTITUTION ratified in 1789. And the 16th amendment DID NOT state anything different to change the original law.

      And some links there which I haven’t checked out.

      But once it has been established that government does actually need revenue, and therefore it will not spend more revenue than it receives,
      Then one could start some other kind tax system other than taxing income.
      But if the plan is to add another system of tax on top of income tax,..

      First you’ll have to find out what the goverment spends money on from the borrowing it makes from the banking cartel, and again iirc, this doesn’t include expenditure of such things as infrastructure, schools, roads and so on which is by individual state and paid for by, forgotten the term, “in common” taxes, from such things as sales tax on gas and goods, which kind of tax is iirc allowed by the constitution to be collected – but really not sure. You’ll have to check the details yourself.

    • gbaikie | July 2, 2013 at 4:46 am |

      A p.s. on the IRS – http://www.fourwinds10.net/siterun_data/government/banking_and_taxation_irs_and_insurance/social_security/news.php?q=1304698536

      “Here it is in a nutshell. The IRS is a private, debt collection agency for the private banking system known as the Federal Reserve Bank. The IRS is not a government agency. I repeat, the IRS is not a government agency. Never has been, never will be.

      The IRS is formerly the Bureau of Internal Revenue (BIR) situated in and with authority only in the Philippine Islands (Trust Fund # 61), and moved into Puerto Rico (Trust Fund # 62). In the 1950’s, with the stroke of the pen, the BIR was transformed into the current notorious IRS and brought onto the 50 united States. This was done without any Congressional authority whatsoever. There is no Congressional authority for the IRS to exist and operate in the 50 states recorded anywhere in any law-books. Again, keep in mind, that the IRS is the “Private, debt collection agency for the private banking system known as the Federal Reserve Banks”.

      Consider this fact. When an IRS agent wants to seize property from a Citizen in a County, they must first contact the Sheriff of the County and request assistance in the seizure. This is simply because the IRS agent has no authority to seize any property at all. So the IRS agent bamboozles the Sheriff into committing the crime for the IRS. When the Sheriff seizes property from a Citizen under the non-authority of the IRS agent, the Sheriff has committed a Second Degree Felony, Conversion of Property.

      A second degree felony is incredibly serious. However, both the IRS agent and the Sheriff count on the abysmal ignorance of the Citizen who has no idea what their Lawful Rights are. Bear this point in mind, if the IRS agent has no authority to seize any property at all, then they cannot delegate or confer to the Sheriff what they themselves do not have. In addition, the Sheriff has no idea that he has engaged in a serious crime. Here is where the maxim applies, “Ignorance of the law, is no excuse for violating the law.” Both the IRS agent and the Sheriff should be arrested and charged with Conversion of property, a second degree felony.

      Tyranny is defined as: Dominance through threat of punishment and violence, oppressive rule, abusive government, cruelty and injustice. What better definition than this fits the abusive IRS.”

    • Somebody call Willie Nelson. He was framed!

  55. Ed Dolan,

    I am totally unconvinced by your arguments.

    Your argument for a C Tax looks to me like the case of an ideologically chosen fix looking for a problem it claims it can fix.

    Revenue should come from broad based taxes that have the lowest possible marginal rates and the fewest possible exemptions, deductions, and preferences.

    Why is C tax good for that? Why does it have few exemptions (EU ETS covers on 45% of emissions)? Why is C tax inherently better than income tax, company tax and GST? How do you get broad base when so many GHG emissions are not included? How do you measure emissions? What will be the ultimate compliance cost of measuring, monitoring, reporting, disputation and ongoing upgrading of the systems and legacy data? How do you overcome the issue of taxing production of emissions rather than the embodied emissions in all products and services including those imported? There are many important issues with C tax that are not addressed. Especially, Dolan has not explained why a C tax is preferable to fixing the tax system.

    A carbon tax would make the economy more resilient.

    Why would a C tax make the economy more resilient than fixing the tax system. There are many, many critical issues with C tax you have not addressed or acknowledged

    … climate scientists and economists, along with Curry, increasingly recognize that the proper response to climate risks is to promote resilience through policies that enable our economic and social system to cope with shocks and adapt to unexpected changes.

    Why C tax? Why not fix the tax system?

    A carbon tax is an ideal way to encourage such resilience because it capitalizes on the inherent flexibility of the market.

    Why is a C Tax better than fixing the tax system?

    It would not only spur the search for winners, it would winnow out losers before they become politically entrenched.

    Not true in practice. The ‘winner picking’ by special interest groups, NGOs bureaucrats, technocrats, politicians, etc. continues as is being clearly demonstrated in EU and Australia. Look at the targets and subsidies for renewable energy as clear evidence of that. There is no way that C tax will reduce them; in fact it probably encourages more to be wasted on renewable energy and government selected ‘energy efficiency’ schemes.

    Beyond environmental considerations, using a carbon tax to foster a more resilient energy economy would have other benefits.

    Solution looking for a problem. If you want to make the economy more resilient, remove the masses of impediments that are preventing the free market from operating. For as start remove e all the mandating and subsidies for renewable energy and remove all the impediments thwarting progress on low-cost nuclear power.

    At the same time, a carbon tax would make the economy more competitive in international trade. That proposition might draw raised eyebrows from the “affordable energy” crowd, but it is a fact.

    Whose fact? How can increasing the cost of energy and, therefore, the costs of production throughout the economy make the economy more competitive internationally?

    A carbon tax is better than the regulatory alternative

    I agree. But regulation is not the alternative I am advocating. I am advocating deregulation – i.e. removal of the many regulatory and licensing impediments that are preventing the US, and ultimately the world, from having cheap, low-emissions energy (e.g. nuclear) – see two comments near top of thread @ July 1, 2013 at 7:53 pm: http://judithcurry.com/2013/07/01/why-conservatives-should-love-a-carbon-tax/#comment-339549 and @ July 1, 2013 at 7:57 pm http://judithcurry.com/2013/07/01/why-conservatives-should-love-a-carbon-tax/#comment-339553

    Putting all of this together, a carbon tax is a natural for conservatives.

    Let the conservatives argue the case, not the ‘Progressives’.

    Conservatives know the tax system is broken; a carbon tax could be a key element in comprehensive tax reform that aims to broaden the base and lower marginal rates without increasing the deficit.

    Fix the tax system by focusing on fixing the tax system and expenditure commitments, not by doing deals with the irrational ‘Progressives’ who are clearly just trying to negotiate another dodgy deal to proper up ever increasing expenditures.

    A carbon tax would enhance the resilience that the economy needs to respond not just to environmental risks, but also to geopolitical and trade shocks.

    That assertion is entirely unconvincing. I think it is wrong. The whole argument comes across to me as the case of an ideologically selected solution trying to find a problem to apply their solution to.

    • Peter Lang: [I tried to post the first part of this comment earlier, but I don't think it appeared. Please excuse me if points 1-4 are repeats of what you have already read. Point 5 is new.]

      Peter: Please send me a note (http://www.emailmeform.com/builder/form/521669) when you write your post on progressives and the carbon tax. As you can probably guess, I was planning a follow-up “Why Progressives Should Love a Carbon Tax–and Why Some Do.” However, I am well aware that many progressives do not, and I would like to address some of their arguments. I am looking forward to your presentation of those views.

      You make quite a few points earlier in the comment stream, which I would like to address very briefly here, and hopefully, at more length in more future posts. Here are three issues you raise:

      (1) On the point that a carbon tax can only work if it is global: Yes, from the point of view of efficiency, Nordhaus is definitely right, a world-wide carbon tax would be best. However, I would argue that there is an ethical case for one country alone–even one individual alone–not to harm others through pollution. By analogy, if I am walking through a storm-damaged town and I see a crowd of people looting an electronics store, their actions do not ethically entitle me to grab my share of the TVs and laptops.

      (2) With regard to Nordhaus’ point that the calculations of an optimal pollution tax are “purely academic.” Yes, I agree. As I said in my post, we do not know whether the optimal tax is $2, $20, or $200 a ton. However, the point I would like to make is that we are not stuck with the static convex cost curve that goes into the cost-benefit model. Even a small tax will begin to apply pressure that ignites a market-driven process of innovation that bends the cost curve by discovering new technologies and new ways of conservation.

      (3) Several times, you make the point that what we most need to do is remove impediments to the operation of a free market in energy. I heartily agree, but I think we have a little different understanding of what a “free market” means in this context. Many economists, myself included, think that property rights are the essential foundation of a free market. Those who think that way view pollution of any kind, including greenhouse gas emissions, as a violation of property rights, in effect, a form of trespass. That being the case, public policies that protect property from environmental trespass are not impediments to the operation of a free market, but rather, an essential condition for it. Yes, even those of us who view the matter this way dispute how best to protect environmental property rights. Some think it should be done through a reformed system of tort law, some through taxes, some through cap and trade, some through command-and-control regulation. My own view is that balancing the legal, ethical, and practical considerations, a carbon tax is the way to go.

      (4) Let me make it clear that when I write about “carbon taxes,” I am using a popular shorthand for taxes that would reflect all environmental harms from energy production and consumption. That includes greenhouse gasses other than CO2, it includes harms from local and regional pollutants like SO2 and NOX, and it includes whatever environmental harms are associated with nuclear power. With that caveat, I have nothing against nuclear power, an I certainly hope that you are right that new nuclear technologies are potentially cleaner, cheaper, and safer.

      (5) You ask, “Why is a C Tax better than fixing the tax system?” I must have done a poor job of expressing myself clearly. I am advocating a carbon tax not as a substitute for fixing the tax system, but as *part* of a broader fix of the tax system. A carbon tax could help by making it possible to lower rates on some of the other bad taxes, but it is not the whole fix. If you read my blog regularly, you will see I often sound off on tax reform–eliminating the corporate tax, taxing income and dividends at ordinary income rates, eliminating personal deductions for housing and charitable contributions, decoupling health insurance from employment, etc.

    • Peter Lang

      Ed Dolan,

      Thank you for your reply to my comments. I’ll respond below to your five points. But first let me say that your comments have not reduced at all my sense that your advocacy of carbon pricing is based on an ideological agenda and not rational analysis. I find nothing in your comments to persuade me that C tax is justified. Thje impression I have is that you have a solution you want to implement and you are trying to make up justification for it.

      (1) … However, I would argue that there is an ethical case for one country alone–even one individual alone–not to harm others through pollution.

      When the argument reverts to a claim for the moral high ground I want to know whose morals? To me, it is reprehensible to argue for carbon pricing given it will raise the cost of energy, cause poverty to be prolonged, impact negatively on human wellbeing, life expectancy, health, education, law and order, governance, disputes, etc. Those claiming carbon pricing is the moral high ground do so without considering the negative consequences of raising the cost of energy.

      (2) … With regard to Nordhaus’ point that the calculations of an optimal pollution tax are “purely academic.” Yes, I agree. As I said in my post, we do not know whether the optimal tax is $2, $20, or $200 a ton. However, the point I would like to make is that we are not stuck with the static convex cost curve that goes into the cost-benefit model. Even a small tax will begin to apply pressure that ignites a market-driven process of innovation that bends the cost curve by discovering new technologies and new ways of conservation.

      The convex cost curve is inevitable – the cost penalty to achieve a given reduction in climate damages (or reduction in global emissions or CO2 concentration or temperature or climate changes or however we specify the global goal of the carbon price), increases as the participation rate decreases.

      A small tax has little effect and the compliance cost is high relative to the net benefit (if any).

      Carbon pricing is not a real ‘market mechanism’. It is Technocrats’ market and would always be manipulated for political ends, as has been happening in EU and Australia since the start of each scheme. It would always be so. It imposes additional costs on business, industry, and the whole economy and, therefore, is detrimental to human well being.

      (3) … Many economists, myself included, think that property rights are the essential foundation of a free market. Those who think that way view pollution of any kind, including greenhouse gas emissions, as a violation of property rights, in effect, a form of trespass.

      I agree externalities should be internalised to the extent it is economically beneficial to do so. However, it needs to be done in a properly balanced way across all pollutants and all industries. There are far more important pollutants to internalise than GHG emissions. These should be done first. The case has not been made that a C tax is necessary or net beneficial. The fact that the CAGW doomsayers are focused on GHG emissions as opposed to arguing for a balanced approach to all pollutants, suggests the argument is ideological rather than rational. [By the way, I do not agree with calling CO2 a pollutant; it is an intentionally emotive term designed to create an negative image that is inappropriate for CO2, IMO).

      (3) … Those who think that way view pollution of any kind, including greenhouse gas emissions, as a violation of property rights, in effect, a form of trespass. That being the case, public policies that protect property from environmental trespass are not impediments to the operation of a free market, but rather, an essential condition for it. Yes, even those of us who view the matter this way dispute how best to protect environmental property rights. Some think it should be done through a reformed system of tort law, some through taxes, some through cap and trade, some through command-and-control regulation. My own view is that balancing the legal, ethical, and practical considerations, a carbon tax is the way to go.

      I see this as biased. There are far more important issues about property rights world wide that CO 2 emissions. This strikes me as another example of you have the solution you want based on an ideological agenda and now are trying to find arguments to justify that solution.

      (4) Let me make it clear that when I write about “carbon taxes,” I am using a popular shorthand for taxes that would reflect all environmental harms from energy production and consumption. That includes greenhouse gasses other than CO2, it includes harms from local and regional pollutants like SO2 and NOX, and it includes whatever environmental harms are associated with nuclear power.

      I don’t understand this point. How can a C tax apply to nuclear power? If I understand your point as being that the C tax is to apply to all externalities in correct proportion, then the tax would be a far higher on renewable energy than on nuclear. This demostrates makes my key point. A C tax is highly distorting unless it internalises all externalities from all businesses and industries without distortion. I am not suggesting we must not continue to internalise externalities, but I am saying that the case to pick on GHG emissions, while effectively ignoring the much more damaging others, has not been made. I assert that picking on GHG emissions is ideological, not rational.

      With that caveat, I have nothing against nuclear power, an I certainly hope that you are right that new nuclear technologies are potentially cleaner, cheaper, and safer.

      If you don’t already know this, then I am even more strongly persuaded that your arguments are ideologically driven rather than rational. I’d strongly suggest that people in your position should know this and should be looking at what can be done to change public opinion so the impediments to low cost nuclear power can be removed before advocating we impose damaging C taxes.

      (5) You ask, “Why is a C tax better than fixing the tax system?” I must have done a poor job of expressing myself clearly. I am advocating a carbon tax not as a substitute for fixing the tax system, but as *part* of a broader fix of the tax system.

      I understood your point. But, IMO, you have not made a case that the C tax is necessary or desirable. I see no reason to add an extra tax. I am far from convinced a C tax would be a good tax. I am totally unconvinced by your arguments.

    • Peter Lang

      Ed Dolan,

      Peter: Please send me a note when you write your post on progressives and the carbon tax.

      I am writing a post “Carbon Pricing – Why it will not succeed”. But it is not ready yet.

  56. “Introducing a carbon tax and using the proceeds to reduce rates on other taxes would maintain revenue neutrality while reducing tax distortions to business decisions.”

    “Such a tax would generate enough revenue to cut the corporate tax rate by 2.23 percentage points by 2015. The result would be net gains to the economy of $2.7 billion, when the economic burden of the carbon tax is balanced against the reduced burden of the corporate tax.”

    No, it would not result in a net gain to the economy. How can you have a 2.7 billion gain to the economy yet remain revenue neutral at the same time? Taking 2.7 billion out of the economy via a carbon tax and then reducing corp rates by about 2.7 billion results in a wash, not a gain. Then you have to figure in higher energy prices, which will be paid by the consumer. How is less money to spend good for the economy?

    Besides, can anyone tell us how much the global temperature will be reduced if I agree to carbon taxes? Can anyone tell us how much weaker that next storm will be? No. So why are we even having this discussion? Why should anyone be moved by tax efficiency arguments when the basis for the tax is built upon piles of BS in the first place?

    • Ken G writes, “How can you have a 2.7 billion gain to the economy yet remain revenue neutral at the same time? Taking 2.7 billion out of the economy via a carbon tax and then reducing corp rates by about 2.7 billion results in a wash, not a gain.”
      You are right that, if revenue neutrality is maintained, the effect on the budget is a loss, but taxes affect more than just revenue. They also affect behavior. Some taxes affect behavior in ways that reduce economic output, for example, high corporate taxes distort capital structure in favor of debt, encourage corporations to keep profits offshore, and reward some kinds of investment but discourage others. They also effectively tax large corporations with large tax staffs less than medium corporations who just end up paying the full rate. All these distortions slow growth and shrink output. Carbon taxes also affect behavior: They make businesses and consumers more carbon efficient. In the long run, they also reduce risks from climate change. When you balance the reduced distortions to capital structure, etc. against the gains from greater energy efficiency and reduced climate risk, you get a net gain to the economy even though revenue is a wash.

    • Ed Dolan | July 2, 2013 at 10:52 pm |

      You might find Dr. Ross McKitrick’s PhD thesis a useful survey of thought on the double-dividend subject about two decades ago, before the topic became so distorted by other forces.

      (McKitrick, Ross (1997). “Double-Dividend Environmental Taxation and Canadian Carbon Emissions Control” Canadian Public Policy December 1997, pp. 417-434.)

      Though McKitrick believes such a measure doesn’t reduce CO2 emission (despite a track record of successful results of carbon fee systems, including in his own country), he doesn’t believe it harmful, either.

    • That there is any gain due to reduced climate risks is a matter of belief, not fact.
      It is not clear at all that a carbon tax will have any emission reducing effect, and if it has – that it will produce any “climate” benefit.
      It is all a belief.

    • Jacob | July 3, 2013 at 6:01 am |

      In the sense that observations and data, statistics and inference, are the opposite of “just a belief”, you have it backwards.

      The British Columbia experiment is very clear in its statistics. Though there are a few dissenting opinions and interpretations of the numbers, the overwhelmingly, blindingly obvious conclusion that can be drawn from British Columbia’s economic performance and reduction of CO2 emission following its revenue neutral carbon tax is no mere “belief”.

      Are there other explanations for the data? Sure. If you contrive to contort and complicate, add unique conditionals and otherwise defy parsimony, simplicity and universality, you can fingoistically imagine some other hypothesis. But then, that would be an unscientific approach.

      The simplest, most parsimonious, most universal explanation for the actual data of the British Columbia case is that carbon taxes lower CO2E emission predictably and efficiently, while improving the economy and restoring faith in the fairness of the Market.

      That belief, the underpinning of Capitalism, sure.. that’s a belief in benefit. But that too is a belief based on the demonstration of the power of the Market.

      And are there benefits to securing the privity of the scarce, rivalrous, excludable, administratively practical resource that absorbs CO2 back out of the atmosphere? If you still need proof of the benefits of private ownership and capitalism, might I suggest you haven’t been paying attention to the planet you live on.

  57. I’m sorry, I don’t understand the concept the author is advocating.

    The current US tax system is broken. Agreed.

    Why is the proposed solution to the broken system to invent a new tax? It would make a great deal more sense to fix what is broken rather than implementing an entirely new tax. Trying to address two issues simultaneously (revision of the current tax system AND adding a carbon tax) increases the changes that at least one of those two processes won’t work. What will more likely happen is that a new carbon tax would get implemented (due to pressure from those with “environmental” concerns as well as those that are primarily interested in bringing in more tax revenue), while overall tax reform won’t happen. That seems like the worst possible outcome of the available choices.

    My impression is that conservatives understand that there are a plethora of reasons the US tax code is a mess. That mess of a tax code creates problems for the US economy. Conservatives understand that to fix these problems, one needs to address those root causes rather than to simply advocate forcibly taking additional resources away from more and more people.

    Bruce

  58. According to Mr. Dolan’s plan, a nice carbon tax could reduce the revenue problem. But wait! There’s more! Set high enough, it could also help with the entitlement / obligation problem. (The NPAB could chip in with further savings.)

    Nelson, Fraser. “It’s the Cold, Not Global Warming, That We Should Be Worried About.” Telegraph.co.uk, March 28, 2013, sec. elderhealth. http://www.telegraph.co.uk/health/elderhealth/9959856/Its-the-cold-not-global-warming-that-we-should-be-worried-about.html

    “No one seems upset that in modern Britain, old people are freezing to death as hidden taxes make fuel more expensive.
    “The government’s chief scientific officer, Sir David King, later declared that climate change was “more serious even than the threat of terrorism” in terms of the number of lives that could be lost. (2003)
    “Since Sir David’s exhortations, some 250,000 Brits have died from the cold, and 10,000 from the heat.”

    “Electricity to Be Rationed: Power Cuts in 2 Years Unless Industry Cuts Back, Warns Regulator.” Mail Online. Accessed June 28, 2013. http://www.dailymail.co.uk/news/article-2349719/Blackout-alert-Electricity-rationed-Power-cuts-2-years-unless-industry-cuts-warns-regulator.html

    “Britain could face a return to Seventies-style power rationing to prevent blackouts. The news came amid warnings that the UK may not be producing enough energy to keep the lights on by 2015.
    “Diktats from EU are forcing closure of old coal-fired power stations.”
    They push out carbon dioxide which is blamed for climate change. UK slow to build new nuclear power stations to replace old generators. Chief Secretary to the Treasury promises £10billion for new power plant. Offices and factories could be ‘bribed’ to close for up to four hours a day.

    Anonymous. “The ‘Social Cost of Carbon’ Gambit.” Wall Street Journal, June 27, 2013, sec. Review & Outlook. http://online.wsj.com/article/SB10001424127887323566804578551672709633396.html

    “The Wall Street Journal writes that regulators have conjured benefits to help sell new and costly energy regulation.”

  59. k scott denison

    I’m a fiscal conservative and social liberal. Why I don’t like this or any other essay about taxes is because it focuses the discussion on only 1/2 of the issue. It ignores the other 1/2: spending.

    I’m not interested in “revenue neutral” tax schemes – someone please post a citation to where one has ever been implemented in practice.

    I’m interested in deficit and debt-reducing spending cuts.

    Now, if one were to propose a new tax scheme that INCLUDES (as in REQUIRES) abolishing the IRS (a big cost that adds no productivity to the world), then I’m all ears. Then we can move onto the Department of Education (anyone seen any metrics that say our education has improved as a result of this massive boondoggle, er, “investment”), the Department of Energy, …

    Otherwise, I’ll pass.

    • David Springer

      Social Security and Medicare Trust Funds are currently underfunded. Mismangement by the federal government is the cause. And I might emphasize that Social Security and Medicare are trust funds not government services. Trust funds are not the government just like a savings account is not a bank.

    • Pooh, Dixie

      The word used by the government is “obligation”, just like other debt instruments.

    • Social security and medicare are not trust funds. They are simple taxes that are spent as soon as they are collected (OK, they are actually spend before they are collected like all federal taxes, but why quibble?). The “trust finds” are a con game.

      The proof? The benefits are not guaranteed. They can be changed by Congress at any time. And will be.

  60. David Springer

    JeffN | July 2, 2013 at 9:27 am |

    “States and the feds are already trying to figure out how to charge hybrids and electric cars so they cannot avoid the user fee.”

    Sure but the number of hybrids and electric cars are small potatoes in the big picture. A far larger source of lost revenue is simply an increase in the average fuel economy of the transportation fleet. 1975-1985 saw a better than 50% increase in average miles per gallon in response to the gas crisis beginning at the same time (circa 1976). I was a commuter. It sucked. Then the economy began to boom shortly after Reagan took office and from 1985 to 2005 average fuel ecoomy slipped about 7%. Then beginning in 2005 it began a steep increase again and has climbed nearly 20% by 2012 erasing the slippage and climbing to new record high 10% above the old record high.

    http://www.washingtonpost.com/blogs/wonkblog/files/2013/03/fuel-economy-improving.png

    This is causing a much more dramatic change in gas tax revenue. And it, along with increased use of natural gas for electricty and the general belt tightening caused by a prolonged recession has driven US CO2 production back to 1992 level.

    There’s probably a wonderful correlation between the number of unsafe, closed, and collapsed bridges and the decline in CO2 emission. ;-)

  61. Conservative/progressive is a false dichotomy and a distraction.

  62. Walt Allensworth

    History has shown us that there is little, if any, link between C02 and rising temperatures. All one has to do is look at the data. How about 16 years of increasing C02 and no temperature increases? How about a medieval warming period without C02? There are many references.

    Blaming carbon is a sham.

    So, let’s dispense with the carbon blame-game and simply agree that the liberals want to take more from those in society that “work for a living” and give it to those that vote Democrat.

    If you Rob Peter to pay Paul, you can count on the vote of Paul.

    How about this? Why don’t we simply live within our means?

    Grrrrrr.

  63. Conservatives don’t want a carbon tax. However, some “conservative” politicians might.

  64. Just in case we’ve forgotten, this is what the topic is discussing:

    Listen and read along, undistracted by image. Every claim of actual costs is sustained by evidence and analysis, such as Dr. Jennifer Francis’ work on jet streams.

    This was a speech made before the Arizona fighters died. The foresaw the impact of Risks, like this tragic consequence of subsidizing oil and coal so much it leads to the highest levels of CO2 in the atmosphere since the Eocene — a time so hot due the GHE that camels evolved in the Arctic.

    The regulatory option is all the hands-tied POTUS has to work with, due the grief of the Koch-pledged Congress and Senate who effectively signed an oath to a private business for cash to betray the public trust and fail in their duty to sustain a healthy Market by the appropriate Market mechanism.

    http://townhall.com/columnists/stevechapman/2013/07/04/how-to-get-rich-and-combat-global-warming-n1633368

    Adaptation and resiliency? Those mean an America, a world, in a constant state of repairing the last big flood, recovering from the last big drought, and paying through the nose for shelter and fertilizer, living and food.

    And that’s because a select few fossil industries benefit from special favors of government that give them gifts and special exemptions.

    Throw the bums out if they won’t tear up their pledge and act to correct the Market through privatization of the carbon cycle. We know this is not a tax. We understand it delivers the dividends to taxpayers in the form of lower taxes, in the form of cash in their pockets. We know it applies a royalty on users of the air for the benefits they obtain from burning it up. We know this is fairer than the way things stand now, a near panacea, the lowest cost way to address this unfairness, the least disruptive action, the least regulatory interference, the least government involvement of anything that addresses the wrongs done us by so few people they can be named in a mere paragraph.

    It starts: Exxon, Koch..

    • By way of background for those outside the US, this is the Republican Party of today. I think this new article sums it up nicely. Which is why Obama is not counting on them to help in these plans.
      http://www.guardian.co.uk/commentisfree/2013/jul/03/republican-party-demise-continues

    • Jim D | July 4, 2013 at 11:13 am |

      Not helpful.

      True, there are only 4 Democrats and two independents who’ve signed the Koch block-climate-solutions pledge compared to orders of magnitude more spineless politicians claiming Republican colors and Koch money for their votes in the legislature, but not all Republicans signed that treacherous oath, and not all are corrupted by it.

      Also, I think some who voted against Cap & Trade save the USA from a costly mistake that would’ve worked worse than the newer privatization fee and dividend plan.

      Making this about parties and politics is how the thing got so mired and bogged down in nonsense in the first thing. And all who politicized it share that blame.

    • JimD
      By way of background for those in the US it’s a good rule of thumb to ignore anything written in The Guardian. It is highly partisan.

      Tonyb

    • Tonyb | August 9, 2013 at 2:30 pm |

      If you’re ever traveling in America, you may find avoiding the phrase ‘rule of thumb’ wise; some morons falsely claimed textual historical support for the etymology of the phrase to mean you should not beat your wife with a stick thicker than your thumb.

      This is of course historical nonsense, though beating of wives happened in the past, and sadly continues today; eschewing the phrase irrelevantly does nothing to honor those victims of the practice in the past, and nothing to protect of provide redress in the cases of those suffering today.

      See how important it is to get history right? Well, I know you won’t, because you’ve already decided what the right answers of history ought be, but I thought I’d give it another try even at this late date. I’m an optimist at heart.

      Also, Jim D’s well aware of the problems of partisanship, as is evident from his post, though I quibble a bit with his conclusion.

    • BartR

      Thanks for your concern. I suspect you have been reading too much Wikipedia. Rule of thumb is surely a m easurement based on the thumb.Mind you if travelling in the states it’s not a phrase that slips easily into everyday language so I might be able to stay out of trouble.
      Tonyb

    • Tonyb | August 9, 2013 at 3:22 pm |

      Is there any reading of Wikipedia that isn’t too much?

    • BartR

      Nice one! I dare say it’s reliable on capital cities but I wouldn’t bet on it.
      Tonyb

  65. carbon tax is not about carbon… should be renamed: ”rip-off tax”

  66. A carbon tax is an energy tax, it will hurt those less able to pay for it more, an extra $1-2 thousand a year is not a huge amount for most. In Europe gas is more than double the cost in the US, so a large increase shouldnt affect competition much.
    Now, whether the tax money raised will be spent wisely, that is another matter, it would be better spend in the hands of those paying it IMO.

  67. Berényi Péter

    Yep, conservatives should love carbon tax for the same reason salt tax was loved.

    “he [Gandhi] waded in to the sea shore and picked up a handful of salt, proclaiming that with the handful of salt he was proclaiming the end of the British Empire”

    Indeed, end of said Empire has come in its due order.

  68. [Cross post from Bishop Hill]

    Ross McKitrick,

    Compliance cost of carbon pricing?

    Thank you for your responses to the main criticisms, posted on Bishop Hill and WUWT, of your paper AN EVIDENCE-BASED APPROACH TO PRICING CO2 EMISSIONS http://www.rossmckitrick.com/uploads/4/8/0/8/4808045/gwpf-paper-responses.pdf. An issue not yet mentioned is what would be the compliance cost of your proposal or, probably, of any carbon pricing scheme? This is an issue that seems to be largely ignored in the economic analyses to date (e.g, Nordhaus, Tol, Garnaut). I doubt the compliance cost would be trivial.

    I suspect the compliance cost for any carbon pricing scheme will become substantial over time. I expect it would increase as more and more, and smaller and smaller, emissions sources are required to be included.

    I expect the compliance cost would relate more to the size of the emission sources and the complexity of measuring emissions from those sources, rather than the quantity of total emissions covered. (For example, it is cheaper per tonne to measure emissions from a large power station than from a paint factory or a farm (see comment below regarding compliance issues for a paint factory). So, the compliance cost per tone would increase as the participation rate increases.

    I also expect that, over time, any carbon pricing scheme would tend towards requiring more and more participation; i.e. more countries included, more emissions sources included, more of the twenty-three Kyoto greenhouse gases included and lower threshold for inclusion. Any carbon pricing scheme will tend towards requiring every GHG emissions source in every country be included and the emissions measurements must be as precise and accurate as they are for trade, including international trade, in any other commodity we trade. At the limit, the emissions from every cow, sheep and goat in every country (e.g. including Eretria, Ethiopia, Mogadishu and Somalia) will have to be measured and reported.

    The ultimate compliance cost of the ETShttp://www.onlineopinion.com.au/view.asp?article=13578 suggests some of the cost items that need to be estimated.

    Contributors to compliance cost

    Question: what would be the compliance cost for carbon pricing once it is fully implemented and running at the level of financial integrity that will be expected?

    For example, what would be the annual cost for a country (e.g. Australia) for:

    – Bureaucracies (e.g. for Australia these bureaucracies would have a role: Department of Climate Change and Energy Efficiency (DCCEE), Treasury, Australian Taxation Office (ATO), Australian Federal Police, state police forces, state bureaucracies, Attorneys’ General Departments, Federal Department of Resources, Energy and Tourism, Bureau of Energy and Resources Economics (BREE), the equivalent state departments of energy, resources, agriculture, forestry, environment, Prime Minister and Cabinet, State departments of Premier and Cabinet, the law courts, High Court, jails, any others I haven’t thought of?

    – The businesses that have to report their emissions – what is the cost to implement and maintain the monitoring equipment and to report? See the EPA monitoring requirements: http://www.epa.gov/airmarkets/business/ecmps/docs/ECMPSEMRI2009Q2.pdf and http://www.epa.gov/airmarkt/emissions/docs/plain_english_guide_par75_final_rule.pdf

    – What is the cost to update and replace equipment, reporting systems and legacy data each time the rules change (as they do every few years; see history of past changes in US EPA’s monitoring requirements: http://www.epa.gov/airmarkt/emissions/docs/plain_english_guide_par75_final_rule.pdf , Section 1.2)?

    – Farmers and all the upstream and downstream industries (farming will be included eventually)

    – Accountants, lawyers, law courts?

    – Firms that use the data, analyse it and report? What is the cost for them to have to maintain and continually update their systems and legacy data?

    – Cost of monitoring the compliance of international carbon credit schemes?

    A real world example of the compliance cost of carbon pricing:

    Comment by an engineer, Graeme No.3: http://forum.onlineopinion.com.au/thread.asp?article=13578#235297

    I’ve retired from all that estimation but was involved when it started in NSW when I worked for a paint Company making some resins. The short answer is that we didn’t know what specific fuel types or amounts were combusted in our after burner (to reduce all emissions to CO2 and some nitrogen oxides).

    Firstly, a portion of the resin ingredients were chemically changed during reaction, and a mixture of the reactants and the changed substances went straight to the oil fired after burner. It was a complex and variable mixture, and analysing each reaction would have been a nightmare of complexity.

    Also into the afterburner went volatiles from the paint production. As there were over 6,000 products and hundreds of volatile ingredients it was impossible to calculate emissions.

    The 4 “methods” put forward by the public servants ranged from idiotic to bizarre. (No-one in the paint industry could supply the answer, but were threatened with fines if they didn’t).

    I moved on, thankfully, and my successor was a practical (unscrupulous) fellow who responded by generating a vast spread sheet of over 600MB. 16 pages of calculations, I’ve forgotten how many pages of information on composition, tonnage produced, batch sizes and frequency of manufacture. All in 10 point Arial font with no graphics. Factors were assumed and buried in obscure corners with no explanations.

    One resin might be spread over 200 products. And with 6000 rows and 120 columns on a page, try following through that, esp. with references from page to page to another page. It looked impressive, but trying to check it was nigh on impossible, but the public servants were pleased and even recommended that other paint companies consult him! His view was that he retired in 5 years and they wouldn’t figure it out in that time.His comment was “Brains baffle b*llsh*t”.

    This I add happened more than 5 years ago.

    Graeme No.3 posted four other interesting comments on the subject and finally this one: http://forum.onlineopinion.com.au/thread.asp?article=13578#235415

    curious how the old memories come back.

    At the time it seemed a clash of cultures; there wanted something and couldn’t see why it wasn’t supplied a.s.a.p. The public servants weren’t interested in our difficulties, they expected us to drop everything and comply with their demands. Almost feudal, like a Baron addressing serfs.

    The original demand came with a deadline, and threatened us with fines and/or imprisonment if we didn’t supply the information on time and guarantee its accuracy.

    I don’t think that the question of the costs of compliance ever crossed the minds of this government or its advisors. For over 50 years the amount of paperwork they’ve demanded from industry has grown and grown. Each Department assumes their demands are reasonable and not much work (forgetting that collecting data takes far more time than filing it) and not allowing for other departments demands.

    The howl from industry has been loud and clear for years, yet ignored. The burden is becoming too great, and will be resolved by either of two methods – that of the Israelites departing Egypt, or the French peasants revolting. For companies the first is in vogue.

    That we might have other priorities wasn’t considered, but even then the firm was trimming staff. We were down about 40 from 4 years before, and had about 170-180 working there.

    I lost contact but I know that there are now less than 50 there. Drastic cuts have been made because they are struggling to compete with overseas competitors, yet they were exporting quite large volumes when I was there.

    These comments illustrate some of the real compliance costs of carbon pricing. It’s important to recognise that once carbon pricing is begun the participation rate will increase over time to include smaller and smaller emissions sources. Eventually, when full international carbon pricing is in pace, most emissions source in every country will have to be measured And they measurements will be required to be precise and accurate.

    My Question: What will be the compliance cost for carbon pricing one it is implemented to the standard that will eventually be required?

  69. Ed Dolan,

    Peter: Please send me a note when you write your post on progressives and the carbon tax.

    I’ve written the article I mentioned and it has been published this morning on ‘Quadrant Online’: http://www.quadrant.org.au/blogs/doomed-planet/2013/07/no-gain-and-lots-of-pain-with-the-ets. I’ve sent you an email as you requested. I would welcome your comments on the article.

    • Peter Lang

      Ed Dolan,

      I tried to send the email to the link you provided but it failed and gave this message:
      “Oops! Google Chrome could not find ia360709.us.archive.org:

  70. The answer why Conservatives don’t agree is the difference between principle and practicality.

    Practically, it may or may not make sense for conservatives. But regarding principle, the idea of limited government, it does not make sense to expand the role of government into some “potential, unknown, nebulous” threat.

    With that, why not any restriction on individual liberties. The Bio bomber: gotta have endless surveillance. Guns kill, and someone might use a gun. Ban them all. And endless tentacles into the “perfect,” uniform, stagnant society. All because of “Maybe”. “Protection” against risk.

  71. Considering Dolan’s assertion “Why conservatives should love a carbon tax”, one should first define “Conservative”. What is it that “Conservatives” are trying to conserve?

    I am conservative. For myself, what I want “conserved” in America is the Liberty of its citizens. It is a founding principle that also conserves life and and the pursuit of happiness.

    Liberty is the endowed right of the individual citizen to decide what is best for himself or herself, and to act upon it under Constitutional law. Liberty is neither libertinism nor licentiousness. Therefore, the survival of Liberty requires self-discipline and respect for the Liberty of others. Over-reaching regulation, executive orders and open-ended legislation leads to Authoritarianism.

    Authoritarianism is a form of Tyranny.
    - Every regulation decreases Liberty of action (you must, you may not).
    - Every tax decreases Liberty to act.
    - Some recent laws go so far as to attack life itself (the Independent Payment Advisory Board and the death toll of Britain’s energy policy) and the opportunity to pursue happiness.

    In summary, let us not consider taxes until we have reversed the trend to (and costs of) Authoritarianism.

    • Add “Favoritism”:
      Strassel, Kimberley A. “Washington’s Latest Special Favor.” Wall Street Journal, August 8, 2013, sec. Potomac Watch. http://online.wsj.com/article/SB10001424127887324522504579000792763966698.html?mod=WSJ_Opinion_BelowLEFTSecond

    • Pooh, Dixie | August 9, 2013 at 1:32 pm |

      Bravo for stout defense of the principles of the US Constitution, however poorly you enunciate them.

      Liberty is a right not endowed by any authority, but self-evident, as are the obligations imposed on any citizen by possession of that right.

      Authoritarianism isn’t a form of Tyranny, however. Tyranny is a form of authoritarianism; collectivism’s ‘tyranny’ for example is in the fiction of a single ‘collective’ entity, a gestalt personifying authority from a collection as a tyrant. That’s a figurative phrase, a metaphor for an abstract precept, but not the same as that precept.

      Corporatism is no less authoritarianism, as would arguments ad populam, ad hominem, and the like, or any of the various meritocratic, autocratic, hierarchical, monarchical philosophies. Authoritarianism forms a continuum, varying from absolutism to anarchic.

      Not all regulations decrease Liberty. There are enabling regulations, regulations that define, regulations that permit, regulations that build foundations for greater range of freedoms than would exist without. By and large, in America, regulations buttress greater liberty.

      As taxes are all equivalent to any spending by government, and spending by government — the less, the better, for equivalent just outcomes — is the exercise of action upholding the nation, its laws and regulations, taxes therefore are the cornerstone of Liberty.

      Would you shirk service to defend your nation?

      Are you such a leech that you would benefit from the efficiency a stable currency brings to the Market without contributing to the minting of coin and printing of paper?

      Would you cheat regulated standards of weights and measures in trade and commerce?

      If you are, then you are the same unself-disciplined libertine you’ve taken pains to distance your argument from.

      While there is truth in your sentiment, while the emotional tenor of your cause, rings with the tones of the Founders, your noisome errors show no real appreciation of their words, or what America really is about.

      Too much regulation, bad regulation, needless restrictions on Liberty, weakening of the precept of personal responsibility?

      All terrible things.

      More terrible is the conniving, spinning and twisting of these words into opportunism and corruption we see too often in those who clothe themselves in the Flag.

    • Read further.

    • A very heartfelt statement of conservative principles. Unfortunately, it is entirely beside the point as to the merits of a carbon tax, as taken from a conservative point of view.

      You say: “the survival of Liberty requires self-discipline and respect for the Liberty of others. ” I agree. The question is whether polluters are respectful of the liberty of others. A long line of conservative, libertarian, and classical liberal thinking holds that pollution is an act of aggression against the liberty, the persons, and the property of others, analogous to the torts of assault, trespass, and nuisance. So, in order to invoke your principle in the present case, you first have to establish that production and use of carbon-based fuels causes no harm to others. BTW, that harm includes not just climate change, but also more proximate harm like pollution from particulates, SO2, NOX, ozone, etc. Otherwise, state action against pollution can be justified as a defense of liberty, not a violation of it.

      You also say: “Every tax decreases Liberty to act.: I agree. However, that is not the point under discussion here. The post we are commenting on posits a revenue neutral form of a carbon tax. What you would have to argue is that for any given level of taxation, including any hypothetical level of taxation lower than what we have now but greater than zero, a carbon tax more strongly violates the liberty of taxpayers to act than any other existing tax–that it is not just bad, but is the worst of all possible taxes.

      Until you articulate those arguments, I continue to maintain that a carbon tax is consistent with the conservative principles that you state.

    • Were it not for the wording of the Clean Air Act (CAA), CO2 could not have been ruled a “pollutant” by the EPA. This subjected 70-80% of our energy supply to EPA regulation as a “pollutant”. Aside from energy production, it also infers that ocean outgassing, forest fires, and production of cement are sources of “pollution”, as are me and you and many other sources of CO2. The CAA is sloppily written.

      Justice Stevens. “MASSACHUSETTS ET AL. V. ENVIRONMENTAL PROTECTION AGENCY ET AL.,” April 2, 2007. http://www.supremecourt.gov/opinions/06pdf/05-1120.pdf

      Page 26 (Opinion): The statutory text forecloses EPA’s reading (of no authority). The Clean Air Act’s sweeping definition of “air pollutant” includes “any air pollution agent or combination of such agents, including any physical, chemical . . . substance or matter which is emitted into or otherwise enters the ambient air . . . .”

      On its face, the definition embraces all airborne compounds of whatever stripe, and underscores that intent through the repeated use of the word “any.” Carbon dioxide, methane, nitrous oxide, and hydrofluorocarbons are without a doubt “physical [and] chemical . . . substance[s] which [are] emitted into . . . the ambient air.” The statute is unambiguous.

    • SO2 and NOX can be and are dealt with by means other than regulating the energy supply. Particulates can be and are screened out.

      Under political control, taxes can and are used as a form of income/asset redistribution for political advantage. Energy taxes might be “revenue neutral”, but almost never “politically neutral”. That is “bait”. Further, see the history of the Income Tax for what happens to low initial tax rates on the disfavored few.

      It is, by the way, one of the worst of all possible taxes. A tax on energy affects where you live, where you can afford to work, how warm or cool you can afford to be, what you can afford to eat, etc.

      The end game may be that promoted by the Ehrlichs: “We attempted to find a number that would maximize human options – enough people to have large, exciting cities and still maintain substantial tracts of wilderness for the enjoyment of outdoors enthusiasts and hermits.” (That number would be one-third of the current population.)

      Ehrlich, P.R., and A.H. Ehrlich. “The Population Bomb Revisited.” The Electronic Journal of Sustainable Development 1, no. 3 (2009): 63–71. http://dea.org.au/news/article/the_population_bomb_revisited_by_paul_r._ehrlich_and_anne_h._ehrlich

      Kindly note that in a “Brave New World” such as that, only the Savage is familiar with Shakespeare.

    • Ed Dolan
      @ August 9, 2013 at 5:42 pm

      At the start of your comment you said:

      A very heartfelt statement of conservative principles. Unfortunately, it is entirely beside the point as to the merits of a carbon tax, as taken from a conservative point of view.

      At the end of your comment you said;

      Until you articulate those arguments, I continue to maintain that a carbon tax is consistent with the conservative principles that you state.

      Why do you believe ‘Progressives’ point of view have merit but ‘Conservative(‘s)’ point of view” does not?

      Until you articulate a persuasive argument, I maintain that carbon pricing (tax, ETS, fee and dividend, or any other mechanism that raises the cost of energy) is irrational. Therefore, it is not consistent with conservative principles.

      The cost of carbon pricing would be huge. The benefits are unlike to be realised.

      Proponents of carbon pricing argue it is the least cost way to reduce greenhouse gas (GHG) emissions. Their argument is based on assumptions that are appropriate for a theoretical exercise but unlikely to be achieved in practice, let alone sustained for the time the policies would need to operate (decades or centuries). Significantly, little research has been done to investigate the probability that carbon pricing can be implemented and deliver the expected benefits in the real world.

      Uncertainty about the problem (man-made climate change) is a given; but uncertainty about the chosen solution is inexcusable. This is to say, we should be confident that our solutions are going to be effective, and the more expensive the solution the more confident we should be. In short, big responses require high levels of confidence that they will work. There seems to be a lack of credible evidence to demonstrate carbon pricing passes this test.

      http://jennifermarohasy.com/2013/08/why-the-ets-will-not-succeed-peter-lang/

    • Ed Dolan | August 9, 2013 at 5:42 pm |

      “Every tax decreases Liberty to act.: I agree.

      I respectfully disagree, in part for the reasons set out Bart R | August 9, 2013 at 2:20 pm | paragraph six; moreover, the exact relationship of Liberty to duty of self-discipline is evoked in the relationship of Liberty to duty to pay tax, where the tax is fair and justified by the national defense of Liberty. It is the unjust tax, the unfair tax, that decreases Liberty, and any relief or improvement of that tax scheme toward greater fairness and justice that is required for Liberty.

      Thus we see in the double dividend of a carbon tax — revenue neutral or not — and in the user pay principle (cui bonum) without the apt but unduly complicated polluter pay precept all the support for a carbon tax necessary on its face.

      With revenue neutrality, further, we are not invoking a tax argument but one of privatization, the return of the shared commons to private hands in a real and meaningful way. Compensation paid to owners of a property right is at least as self-evident as Liberty (try Liberty without breathing to prove this case), and by strictest terms due lack of actual consent for the expropriation of the property. This differs little from the case of cell phone bandwidth or compensation under eminent domain.

      Pooh, Dixie | August 9, 2013 at 6:19 pm |

      The entire energy supply is subject to EPA regulation by the scope and explicit wording of its enabling laws and charter. It is redundant to claim 70-80% is given to the agency’s discretion when it already is obliged by law to care for 100%.

      However ‘sloppy’ the wording of the Act, there are manifold lines of evidence both within and without the Act of the great clarity and specific will of Congress when the Act was enabled, and SCOTUS said so explicitly in the majority ruling with so sharp language as none can deny who can read and have read the ruling proper, and in particular underscored in the passage you cite.

      However, your list of everything from Frisbees to ocean outgassing and forest fires overlooks a more fundamental precept: the Congress is not enabled to alter the Laws of Physics, and no Agency thereof can administer every molecule one at a time. Pragmatic reading dispenses the ad absurdum you attempt.

      And what the heck does “politically neutral” mean?

      Does it mean because at some moment some politician is being paid by donations from some fat cat too lazy or inept to run an honest business and thus who wants to be taxed less, that honest, hardworking families and businesses ought bear an unfair extra burden of taxation?

      Because that’s what it sounds like you’re defending.

      And you’re defending it terribly. You go on to confuse fossil and energy, when the two are simply not the same; a tax on fossil does not restrict one’s choice of where to live or work, how much heat or cool, or what eat; indeed, a fairer double dividend tax on fossil improves the liberty of 70% of the population (or more) in the cases where they are enacted. We see hard figures from British Columbia backing this up.

      Malthusian arguments are irrelevant to tax questions, too, unless it is that the more pragmatically efficient and fair a tax, the smaller the tax can be made relative to the size of the economy, the smaller government gets, the larger population the nation can sustain, and the more irrelevant Malthus becomes: so much moreso for privatization arguments.

    • Pooh, Dixie | August 9, 2013 at 5:37 pm |

      Read Dolan.

    • I surmise you may have read Alinsky, Saul. Rules for Radicals. Vintage, 1989.

    • Pooh, Dixie | August 10, 2013 at 12:54 am |

      You may be confusing me with Barack Obama.

      I’ve never needed a handbook for community organizers.

    • To clarify for people who can’t be bothered to drill down, and don’t know Alinsky, he was a community activist who died in the 1970′s.

      His rules are (more or less accurately) summed up in Wikipedia (astoundingly):

      1.“Power is not only what you have, but what the enemy thinks you have.”
      2.“Never go outside the expertise of your people.”
      3.“Whenever possible, go outside the expertise of the enemy.”
      4.“Make the enemy live up to its own book of rules.”
      5.“Ridicule is man’s most potent weapon.”
      6.“A good tactic is one your people enjoy.”
      7.“A tactic that drags on too long becomes a drag.”
      8.“Keep the pressure on. Never let up.”
      9.“The threat is usually more terrifying than the thing itself.”
      10.”The major premise for tactics is the development of operations that will maintain a constant pressure upon the opposition.”
      11.“If you push a negative hard enough, it will push through and become a positive.”
      12.“The price of a successful attack is a constructive alternative.”
      13.“Pick the target, freeze it, personalize it, and polarize it.”

      This is one of the standard references used in analyses of propaganda and political manipulation. We see its patterns repeated in GOP choice of experts to testify on Science, Mosher’s sly intimations of secret knowledge, the use of ridicule by denizen after denizen when faced by fact and reason, and so forth.

    • We see actually Alinsky’s influence in the progressive movement, of which he was an important leader. Hillary Clinton, no less, did her baccalaureate dissertation on updating and improving the Alinsky method. Which she and the rest of the Dems have been working on since the 60s. Though none quite so avidly as Barack Obama.

    • So it is no surprise a closet progressive like Bart R tries to project his tactics onto conservative and libertarian opponents.

    • GaryM, failing to learn Rule 7, since 1971.

    • Pooh says: “SO2 and NOX can be and are dealt with by means other than regulating the energy supply. Particulates can be and are screened out.”

      I agree, they can be. However, polluters need some kind of incentive–a law, a tax, a regulation, whatever–in order to take the necessary technical measures, which are always costly. Where such incentives are absent (e.g., Los Angeles in the 1950s, China today) the measures do not get taken and pollution prevails at dangerous levels.

    • Don’t get sidetracked into arguing about SO2 and NOx. Stay focused on GHG emissions. Carbon pricing almost certainly will not succeed for GHG emissions for the reasons argued here:

      Why the ETS will not succeed
      http://jennifermarohasy.com/2013/08/why-the-ets-will-not-succeed-peter-lang/

  72. These twp posts explain why those who think rationally do not support a carbon tax:

    1. Why the ETS will not Succeed: Peter Lang
    http://jennifermarohasy.com/2013/08/why-the-ets-will-not-succeed-peter-lang/

    Conclusions

    Carbon pricing cannot succeed unless it is global.

    Global carbon pricing is unlikely to be implemented, let alone maintained.

    Australia’s ETS, if continued, would be high cost and deliver little if any benefit. Treasury projections of the net cost of Australia’s ETS and Nordhaus’ global projections of benefit scaled to Australia reveal Australia’s ETS would cost $12 for every $1 of projected benefit to 2050. However, the benefits would be lower, perhaps none, unless there is a global carbon price.

    Australia’s ETS is economically damaging and, therefore, unlikely to survive.

    2. In the next 37 years, Labor will spend $60,000 per Australian to change the weather
    http://joannenova.com.au/2013/08/in-the-next-37-years-labor-will-spend-60000-per-australian-to-change-the-weather/

    • Peter Lang | August 9, 2013 at 7:32 pm |

      All any carbon pricing scheme needs to be made global is for countries to recognize the carbon cycle poaching of their trading partners as goods cross the border, and apply trade sanctions.

    • Bart R

      A globally enforced (by whom?) carbon tax would not change our future climate one iota. (If you can show evidence to the contrary, please do so.)

      A carbon tax that is neither global nor enforced is even more absurd.

      Max

    • Bart R read the two links, then you might understand and if you make a valuable comment worth discussion I may respond to you (if you can leave out your smart-Alec remarks and pejorative comments).

    • manacker | August 9, 2013 at 8:19 pm |

      I refer you to the method of proof by induction.

      Premise 1: British Columbia, with an incomplete and limited form of something resembling carbon cycle privatization, reduced CO2E by over 17% in just five years, while its economy remained solid through rather challenging extraneous conditions, some of them attributable to climate change.

      Premise 2: Let us call British Columbia f(0).

      Premise 3: f(0) is a province, so lacks the power to invoke international trade measures.

      Premise 4: Further, by the premise of “how you gonna keep ‘em down on the farm, after they seen..”, political pressure within the country where f(0) is located (Canada, but that detail is unimportant), which we will call f(1), to adopt the policy of f(0) that so enriches f(0), and while drawing business from other parts of f(1) — call them f’(0) — will continue until the inevitable adoption at some later date of said policy.

      Premise 5: Suppose f(1) adopts the privatization policy of f(0), which is inevitably however unlikely in the immediate political circumstance

      Premise 6: International trade law allows f(1) to take trade measures on goods crossing its borders to combat poaching of f(1)’s resources where reasonably proximate to the value of said resources, under existing treaties and principles.

      Premise 7: We can show that for all other jurisdictions f(n), as their trade partners and neighbors f(n-1) adopt the policies of f(0), the pressure to likewise adopt f(0) becomes inevitable. In the alternative, once sufficient adoption of f(0) privatization has taken place to effectively cover all CO2E goods thus traded under trade sanctions, we obtain the same effect.

      The case of f(0), likewise, has another element. As n grows, f(0..n) becomes more efficient, with less leakage of CO2E emissions across borders, less poaching, more effectiveness. Further, as the price of CO2E under f(n) grows by the Law of Supply and Demand (driven now by rival nations competing to find the optimal level), the more rapidly the drop in CO2E emissions, until equilibrium is met.

    • Bart R

      You wrote:

      British Columbia, with an incomplete and limited form of something resembling carbon cycle privatization, reduced CO2E by over 17% in just five years

      Great!

      And in 2012 without any carbon tax at all in the (much larger) USA:

      carbon dioxide (CO₂) emissions from the energy sector dropped by 12% from 2007 and were at their lowest level since 1994.

      http://www.bcse.org/sustainableenergyfactbook.html

      Looks like it wasn’t the “carbon cycle privatization” than dunnit, Bart. (So much for your “proof by induction”).

      Max

    • Peter Lang | August 9, 2013 at 8:34 pm |

      You assume I have not read Nova and Marohasy.

      I have. I wasn’t impressed or cannot comment. In the case of Nova, internal Australian politics which I neither appraise myself competent to comment on nor judge myself to have the right to interfere in, being not a subject of the Australian government (for which I thank God).

      See, I don’t want a global carbon price enforced by any agency. I want one country to price the carbon cycle. The rest will follow by induction.

    • Bart R,

      The point of both articles is the costs and benefits. Very high cost for probably little or no benefit.

      This applies everywhere. So your dismissive comment about Australian politics is irrelevant. It is an example that is equally applicable in the USA. You or anyone else could apply the equivalent analysis for the USA. You’ll get a similar conclusions.

      There is next to no likelihood of a global carbon price. Without a global carbon price that meets the assumptions on which the modeling is based it cannot be implemented and survive. All this is explained in the article.

      If you cannot debate the substance of the article and find a genuine error in it, it would suggest your often applied motivated reasoning is preventing you looking at the issue with an open mind.

  73. Would taxing use of oxygen benefit from a similar argument?

    • Brian H | August 9, 2013 at 7:55 pm |

      O2 in air doesn’t demonstrate scarcity; it’s also not rivalrous in that O2 recycles rapidly compared to CO2E; it’s also not practical to exclude O2 recycling in the Market; it’s also not administrably feasible.

      And you mean ‘privatizing’, if you’re trying to talk sense.

      Taxing something that has no price means you’re applying a fee irrespective of value, which violates, or so I have read, a fundamental principle of tax theory.

  74. Ed Dolan,

    if you were genuinely interested it wanting to to understand what conservatives think and why they think like that, you’d ask them. Instead you, a ‘Progressive’, make up your interpretation what you think conservatives should think then make up strawman arguments. Given this, your posts and comments on this have no credibility.

    I’d urge you to read The Age of Global Warming is Over
    http://www.quadrant.org.au/magazine/issue/2013/7-8/the-age-of-global-warming-is-over

    I’d urge you, and the others here arguing the ‘Progressives’ case, to read it with a genuinely open and inquiring mind to attempt to understand the progressives perspective. You might even go on to read Rupert Darwall’s “recently published and very substantial book, The Age of Global Warming: A History“. [I haven't read it].

    • That just looks like an odd little victory dance by someone in the 3% corner of the room to me. My progressive perspective on that item.

  75. EUROPE PULLS THE PLUG ON ITS GREEN FUTURE
    August 10

    http://www.thegwpf.org/benny-peiser-europe-pulls-plug-green-future/

  76. Bart R: Since you and the IPCC are into “predictions” (whatever words are used to disguise that), try
    http://solarscience.msfc.nasa.gov/images/ssn_predict_l.gif

    • Pooh, Dixie | August 10, 2013 at 1:02 am |

      I’m not into predictions, and I think the IPCC wrong whenever it veers into throwing the bones and reading entrails.

      Why would you think otherwise?

      Though it is good you show that image of the Sun, an image depicting an event that repeats strongly every 22 years, and to a lesser degree every 11 years (more or less, it’s not a very precise cyclic event).

      And yet we see zero reflection of this solar event in any trend in Earth climate since the 1950′s, even though the pattern was strong for as far back as we can see before then, on virtually every essential climate data record.

      In other words, IT’S NOT THE SUN.

    • I had a reply, Bart R, but I neglected to compose it in a separate file. I changed the tab content by mistake, and it is gone.
      In essence, the pretty graphic was intended to show that solar cycle maxima are not the same, citing the Dalton and Maunder minima. I also noted some far out predictions for SS25 that are even less than SS24.
      I’ll see if I can get back to the rest of the comment later. Tonight, it is time for bed.
      Meanwhile, don’t be too sure that “It’s Not The Sun” (TSI). We have pretty good experience that “It’s not CO2″ either.

    • Bart R

      Though it is good you show that image of the Sun, an image depicting an event that repeats strongly every 22 years, and to a lesser degree every 11 years (more or less, it’s not a very precise cyclic event).

      And yet we see zero reflection of this solar event in any trend in Earth climate since the 1950′s, even though the pattern was strong for as far back as we can see before then, on virtually every essential climate data record.

      In other words, IT’S NOT THE SUN.

      Well now, Bart, using that logic we can also rule out CO2 as the driver.

      The observed 30-year warming and cooling cycles show no statistical correlation to the gradually increasing atmospheric CO2 concentration.

      In other words, IT’S NOT THE CO2.

      Right?

      Max

    • Bart R. You wrote (of the sun’s activity graph): “an image (of the sun’s activity) depicting an event that repeats strongly every 22 years, and to a lesser degree every 11 years (more or less, it’s not a very precise cyclic event).”

      Perhaps you should consider the sun. Here you are:

      Staff. “The Sunspot Cycle.” Scientific. NASA/Marshall Solar Physics, August 1, 2013. http://solarscience.msfc.nasa.gov/SunspotCycle.shtml

      Wikipedia contributors. “Solar Variation.” Wikipedia, the Free Encyclopedia, August 7, 2013. http://en.wikipedia.org/w/index.php?title=Solar_variation&oldid=563197456

      “Solar Activity – Past, Present, Future.” Scientific. Watts Up With That?, November 11, 2012. http://wattsupwiththat.com/2012/11/11/solar-activity-past-present-future/

      Guest post by Lief Svalgaard (astrophysicist, NASA solar panel member), who persuaded NASA that Solar Cycle 24 maximum was would be less than 1/2 that of Solar Cycle 23. As it is so far.

    • manacker | August 10, 2013 at 2:26 am |

      If you lie about lack of correlation, then you can make any argument you want based on lack of correlation.

      I can show by method of isolates a clear sun signal in the global mean temperature trend. I can show it repeating over and over again. I can show it then vanishing utterly in the 1950′s, not to be seen since.

      http://www.woodfortrees.org/plot/best/mean:191/mean:193/plot/best/mean:29/mean:57/isolate:13/normalise/mean:31/scale:2/mean:37/plot/sidc-ssn/mean:11/mean:13/normalise/from:1800/scale:-0.5/plot/esrl-co2/normalise

      I can show the correlation of CO2 and unnatural normalized trends in climate for a 60 year period, and in paleoclimatology for 800,000 years. You can deny this correlation on the, what, six years since 2007 showed that the trend remains rising between subdecadal volcanic episodes.. but your denial remains invalid.

      http://www.woodfortrees.org/plot/hadcrut4gl/mean:191/mean:193/from:1910/plot/hadcrut4gl/from:2006.33/to:2007.33/plot/hadcrut4gl/last:384/trend

      Pooh, Dixie | August 10, 2013 at 2:29 pm |

      I’ve considered the Sun. It WAS the Sun. Up to 1950. The graphical method conclusively shows this correlation to have been true.

      Then it stopped.

      It’s just no longer the Sun, at least not to sufficient level to find the signal any more.

      There’s only one thing that does that in signal theory, to a real signal: a stronger signal.

      There’s only one candidate that meets the requirements to explain what stopped the Sun signal: CO2E.

      Your evidence proves the opposite of the argument you make, more completely, more simply, more universally and with less exceptionalism than what you claim.

      Pooh, Dixie | August 10, 2013 at 4:03 pm |

      We know the Endpoint Problem prevents us from making claims of any sort on the data within half of the timescale of the smoothing that makes a curve meaningful on a graph.

      The timescales we find meaningful are 17 years or longer, and at 17 years only 95%, 19 times in 20. At 32 years, 99.5%, 19 times in 20.

      Since Earth has more land in the Northern Hemisphere by so much that it skews global normalized mean temperature trends, we use a minimum time step of one year.

      In the past 9 years (half of 17, rounded up), we see 2007 had a spike that far exceeds the expected rate of temperature growth, and we know of several candidate volcanic episodes that might adequately account for cooler than expected on a model that can’t anticipate volcanoes.

      In the past 16 years (half of 32), we see 14 of them are among the hottest years on record.

      We cannot accept your claims on any rational mathematical basis.

    • Chief Hydrologist

      Method of isolates? Apparently I can’t say the word fraud.

      Some scientists would put the sunspot peak in 1985.

      e.g. http://rspa.royalsocietypublishing.org/content/463/2086/2447.full#F3
      - http://lasp.colorado.edu/home/sorce/data/tsi-data/#plots

      Some properties peaked in 1992.

  77. Testing restoration of access.

  78. Bart R

    Following up to the comment by Pooh, Dixie:

    There are many studies of solar activity from the 19th century to today. Here is a link to one:
    http://www.warwickhughes.com/agri/Solar_Arch_NY_Mar2_08.pdf

    The study shows the average Wolf Number for solar cycles as follows:

    SC 10-15 (1858-1928) was around 90
    SC 18-23 (1945-2008) was around 148 (peaking in SC19 at 190)
    (i.e. a 64% increase)

    Other studies conclude that this solar activity was the highest in several thousand years.

    SC23 had already slowed down to 120 and current SC24 is starting off very inactive; the paper cited by PD estimates the Wolf number will peak at less than half that of previous SC23, or well below the average of SC 10-15 (1858-1928)

    We’ll have to wait and see if this will result in a prolongation of the current cooling trend.

    But it is premature to rule out the sun as a climate driving force.

    Max

  79. More for Bart R:

    “The Pause” has caused some distress among supporters of CAGW theory. Many explanations have been offered for this “travesty” of missing heat. The most popular is that such heat is buried in the “deep ocean” without detection in the “upper ocean”, and that doomsday will soon resume its climb. I have found no study (in these learned responses) of the possible effect of geothermal energy; a bit like the bottom of the pot warming sooner than the top.

    Being a Bear of little brain, moreover, I can not distinguish in the graph the difference between a temporary “Pause” and the peak of a cycle such as we see in the temperature record. If this Bear were human, I should prefer “Pause” to “Peak”.

  80. Dear Ed Dolan,

    Does your long pause in responding mean you are seriously considering this:

    Why the ETS will not Succeed: Peter Lang
    http://jennifermarohasy.com/2013/08/why-the-ets-will-not-succeed-peter-lang/

    Abstract:

    JUSTIFICATION for Australia’s carbon-pricing scheme assumes there will be a global carbon pricing system with our ETS a part of it. This assumption is probably wrong. It is unlikely a global carbon pricing system will be implemented, let alone sustained for the decades or even centuries that would be required.

    Without a global carbon-pricing system, national or regional carbon-pricing schemes would be prohibitively expensive if they are to achieve the projected benefits and, therefore, would not be sustainable. The high cost means that a scheme like the one Australia has legislated is not viable, and even regional carbon pricing schemes like the European ETS will not last. The ‘ball-park’ analysis presented here suggests Australia’s ETS would cost $12 for every $1 of projected benefit, to 2050.

    Excerpt from “Introduction“:

    Proponents of carbon pricing argue it is the least cost way to reduce greenhouse gas (GHG) emissions. Their argument is based on assumptions that are appropriate for a theoretical exercise but unlikely to be achieved in practice, let alone sustained for the time the policies would need to operate (decades or centuries). Significantly, little research has been done to investigate the probability that carbon pricing can be implemented and deliver the expected benefits in the real world.

    Uncertainty about the problem (man-made climate change) is a given; but uncertainty about the chosen solution is inexcusable. This is to say, we should be confident that our solutions are going to be effective, and the more expensive the solution the more confident we should be. In short, big responses require high levels of confidence that they will work. There seems to be a lack of credible evidence to demonstrate carbon pricing passes this test.

    I am wondering if after careful consideration you may write another post in which you say you now recognise:

    - carbon pricing is unlikely to be successful in the real world

    - carbon pricing in countries or regions would be enormously damaging to human well being and achieve negligible if any benefits

    - therefore is morally repugnant

    – The Conservatives have been correct to oppose carbon pricing and other economically irrational policies (like favouring high cost renewable energy) all along.

    You could title your mea culpa post “Why ‘Progressives should oppose carbon pricing and other economically irrational policies

    • I believe I have addressed all of these arguments. To summarize:

      1. I agree a carbon pricing system would work better the more widespread it is. That does not mean it would be entirely ineffective in a smaller area.

      2. There is ample evidence that prices affect behavior. To say otherwise is simply obtuse. Carbon prices are no different in that regard than cabbage prices.

      3. With regard to the moral issue: A cost benefit framework is not the right approach to the moral side of the issue. It is morally bad to harm others. The victim does not need to prove damages. A good example of this principle is the universal rejection of the “she wanted it” defense for rape. If there was no consent, “she wanted it”=”there were no damages” is irrelevant. So it is pollution, not pollution taxes, that are morally repugnant.

      I am sure I will have an opportunity in future posts to go over this ground again, since it doesn’t seem to sink in. Meanwhile, I will be happy to respond to any NEW arguments that you come up with.

    • Ed Dolan,

      1. I agree a carbon pricing system would work better the more widespread it is. That does not mean it would be entirely ineffective in a smaller area.

      entirely ineffective in a smaller area” is a strawman. The point is that the cost to participants, in a scheme in which there is less than a very high level of participation (e.g. 80%) from the whole world, is so high it would be prohibitive for the participants. And the leakage of emisisons from participants to non participants – as has been demonstrated by EU and Australia to China and other countries already – demonstrates that a global carbon pricing scheme will not be achieved and, therefore, all regional and single country schemes will fail. You have not addressed the substance of the arguments which are more fully presented here: http://jennifermarohasy.com/2013/08/why-the-ets-will-not-succeed-peter-lang/
      You’ve simply dismissed them by asserting you’ve addressed them. You have not. I’d refer you to Judith’s post on “10 signs of intellectual honesty” and also includes “10 signs of intellectual dishonesty”: http://judithcurry.com/2013/04/20/10-signs-of-intellectual-honesty/

      2. There is ample evidence that prices affect behavior. To say otherwise is simply obtuse. Carbon prices are no different in that regard than cabbage prices.

      Strawman argument. Disingenuous. Where did I say prices don’t affect behaviour? I did not say that. What I said is that carbon pricing will not succeed for the reasons explained in the post. You need to show why those arguments I presented are wrong. So far you haven’t’ done so and haven’t even attempted to do so, which suggests to me you cannot refute them.

      3. With regard to the moral issue: A cost benefit framework is not the right approach to the moral side of the issue. It is morally bad to harm others. The victim does not need to prove damages. A good example of this principle is the universal rejection of the “she wanted it” defense for rape. If there was no consent, “she wanted it”=”there were no damages” is irrelevant. So it is pollution, not pollution taxes, that are morally repugnant.

      You say: “It is morally bad to harm others.” I agree. And that is exactly what carbon pricing will do. It will harm others. Therefore it is immoral. You’ve made my case for me.

      I am sure I will have an opportunity in future posts to go over this ground again, since it doesn’t seem to sink in. Meanwhile, I will be happy to respond to any NEW arguments that you come up with.

      You haven’t responded to the arguments I’ve presented. Unsubstantiated assertions are not worthy.

    • Ed>/b>: You write “With regard to the moral issue: A cost benefit framework is not the right approach to the moral side of the issue. It is morally bad to harm others.”
      The moral issue is null if, as observed, the effect of Increased CO2 in the atmosphere is essentially nil. To make the effects of increased CO2 “catastrophic”, one must have substantial sensitivity to CO2 (no, the tundra and the hydrates are unlikely to rapidly outgas methane).
      Yet the observations show a low effect of sensitivity. Model Sensitivity is obtained from models tuned to adjusted data and parameter. I have not found the actual algorithms and data.
      Citizens will be badly hurt if the IPCC models are acted upon. That is the real moral issue. Carbon taxes, cap-and-trade and the other schemes are remarkably similar in purpose to the “Turnover Tax” of the former Soviet Union: raise the cost to limit demand to what the apparatchiks are willing to supply.

    • Pooh, Dixie

      The moral issue is null if, as observed, the effect of Increased CO2 in the atmosphere is essentially nil.

      The moral issue is also null if the proposed solution won’t solve the problem but will do economic harm (which means harm to human wellbeing). This is the case with carbon pricing for the reasons explained here: http://jennifermarohasy.com/2013/08/why-the-ets-will-not-succeed-peter-lang/ That is, even if CO2 will have seriously damaging effects, carbon pricing is not the answer to address it because it will not succeed.

      Ed Dolan is dodging addressing that.

    • Sorry about the bold. Botched the closing ‘<'.
      Here is a consolation prize: http://www.youtube.com/watch?v=dqvfcdy69dU

    • Peter Lang | August 12, 2013 at 2:10 am |

      The antecedents of your arguments are manifestly false, rendering them the inoperative ones.

      BC’s carbon taxes have been plentifully shown effective, and beneficial, to do no harm, to address moral issues of Market fairness that are independent of harm of CO2 — which is also plentifully proven, as accepted by 97% of those best suited to seek and find harms, and by at least 64% of people actually part of a revenue neutral carbon tax.

      Your arguments are anti-democratic, false, and unprincipled. You have no place lecturing on morals to anyone.

      Ditto, Dixie.

  81. [Repost to fix formatting]

    Dear Ed Dolan,

    Does your long pause in responding mean you are seriously considering this:

    “Why the ETS will not Succeed”: Peter Lang
    http://jennifermarohasy.com/2013/08/why-the-ets-will-not-succeed-peter-lang/

    Abstract:

    JUSTIFICATION for Australia’s carbon-pricing scheme assumes there will be a global carbon pricing system with our ETS a part of it. This assumption is probably wrong. It is unlikely a global carbon pricing system will be implemented, let alone sustained for the decades or even centuries that would be required.

    Without a global carbon-pricing system, national or regional carbon-pricing schemes would be prohibitively expensive if they are to achieve the projected benefits and, therefore, would not be sustainable. The high cost means that a scheme like the one Australia has legislated is not viable, and even regional carbon pricing schemes like the European ETS will not last. The ‘ball-park’ analysis presented here suggests Australia’s ETS would cost $12 for every $1 of projected benefit, to 2050.

    Excerpt from “Introduction“:

    Proponents of carbon pricing argue it is the least cost way to reduce greenhouse gas (GHG) emissions. Their argument is based on assumptions that are appropriate for a theoretical exercise but unlikely to be achieved in practice, let alone sustained for the time the policies would need to operate (decades or centuries). Significantly, little research has been done to investigate the probability that carbon pricing can be implemented and deliver the expected benefits in the real world.

    Uncertainty about the problem (man-made climate change) is a given; but uncertainty about the chosen solution is inexcusable. This is to say, we should be confident that our solutions are going to be effective, and the more expensive the solution the more confident we should be. In short, big responses require high levels of confidence that they will work. There seems to be a lack of credible evidence to demonstrate carbon pricing passes this test.

    I am wondering if after careful consideration you may write another post in which you say you now recognise:

    - carbon pricing is unlikely to be successful in the real world

    - carbon pricing in countries or regions would be enormously damaging to human well being and achieve negligible if any benefits

    - therefore is morally repugnant

    – The Conservatives have been correct to oppose carbon pricing and other economically irrational policies (like favouring high cost renewable energy) all along.

    You could title your mea culpa post “Why ‘Progressives’ should oppose carbon pricing and other economically irrational policies

  82. One last thing. According to this, not CO2, not the Sun. It’s money and power. At least for the IPCC.

    Sheppard, Noel. “UN IPCC Official Admits ‘We Redistribute World’s Wealth By Climate Policy’.” NewsBusters, November 18, 2010. http://newsbusters.org/blogs/noel-sheppard/2010/11/18/un-ipcc-official-we-redistribute-worlds-wealth-climate-policy

    An interview with Ottmar Edenhofer was co-chair of the IPCC’s Working Group III, and a lead author of the IPCC’s Fourth Assessment Report released in 2007

    • (Sheppard): The new thing about your proposal for a Global Deal is the stress on the importance of development policy for climate policy. Until now, many think of aid when they hear development policies.
      (Edenhofer): That will change immediately if global emission rights are distributed. If this happens, on a per capita basis, then Africa will be the big winner, and huge amounts of money will flow there. This will have enormous implications for development policy. And it will raise the question if these countries can deal responsibly with so much money at all.
      (Sheppard): climate policy?
      (Edenhofer): Basically it’s a big mistake to discuss climate policy separately from the major themes of globalization. The climate summit in Cancun at the end of the month is not a climate conference, but one of the largest economic conferences since the Second World War. Why? Because we have 11,000 gigatons of carbon in the coal reserves in the soil under our feet – and we must emit only 400 gigatons in the atmosphere if we want to keep the 2-degree target. 11 000 to 400 – there is no getting around the fact that most of the fossil reserves must remain in the soil.
      (Sheppard): De facto, this means an expropriation of the countries with natural resources. This leads to a very different development from that which has been triggered by development policy.
      (Edenhofer): First of all, developed countries have basically expropriated the atmosphere of the world community. But one must say clearly that we redistribute de facto the world’s wealth by climate policy. Obviously, the owners of coal and oil will not be enthusiastic about this. One has to free oneself from the illusion that international climate policy is environmental policy.

    • Sorry. Missed another closing tag.

  83. Expropriate and suppress any exploitation of fossil fuels world-wide. Not asking for much, is he?

    Where’s Vlad the Impaler when you need him?

  84. I’ve explained why carbon pricing almost certainly will not succeed and why the current attempts to introduce carbon pricing will almost certainly fail: http://jennifermarohasy.com/2013/08/why-the-ets-will-not-succeed-peter-lang/

    An article in yesterday’s Australian provided example so the sorts of issues involved. These are specific to the linking of the Australian ETS to the EU ETS, but they illustrates just come of the types of issues that would be encountered in trying to implement global carbon pricing of any type. I”’ post the art’cle in full because it is behind a paywall.

    QUOTE:
    ETS link can only hurt us

    IN early June, the winds in the state of Denmark were still. The turbines on the nation’s wind farms were turning slowly. In the suburbs of Copenhagen and other major towns and cities, the price of Denmark’s reliance on renewable energy was exacting a heavy toll on the householders.

    The Scandinavian press reported that on certain days Danish energy costs were up to 10 times those of neighbouring Sweden. The energy cost of a single load of laundry was 88 Danish kronor, or about $17. This is the high price of misguided climate and energy policies.

    That $17 load of washing is an exemplar of a failed policy experiment. It is a stark warning to avoid the costly and failed energy and climate policy approaches of the EU.

    But instead, the Rudd government wants not simply to imitate Europe, but to put Australia’s economic destiny in the hands of the designers of the European energy and climate policy disaster.

    The Rudd government’s decision to switch to emissions trading a year early will also bring forward the so-called link to the European trading scheme.

    The really amazing thing about the link is that Australian industry is much more exposed to the carbon price than are its European counterparts. That means that rises in the European carbon price will have a much bigger impact on Australian industry than on its European competitors.

    The Australian coal sector will be paying the European carbon price, but the European coal sector will not. That’s because methane – the gas generated during the mining of coal – is exempt from the EU ETS, but not from Australia’s scheme.

    The Australian gold industry will be paying the effective European carbon price, but the European gold industry will not. Why is that? The European gold industry is considered trade-exposed by EU bureaucrats, but the Australian government has decided that the local gold industry is not.

    Similarly, the European wine industry is considered trade-exposed, but the same Australian sector is not.

    European sugar producers and dairy processors are considered trade-exposed, but their Australian counterparts are not.

    Why are the jobs in these and 120 other European industry sectors worthy of protection while the jobs in the same Australian sectors are not?

    Why are European manufacturers of watches, ships, pleasure craft, sporting goods, brooms, brushes, chemicals and fertilisers trade-exposed when manufacturers of these goods in Australia are not?

    Why are European manufacturers of workwear, outerwear and underwear deserving of free permits under the European scheme while their competitors in Australia are not?

    The small number of EU industrial firms that do not receive trade-exposed treatment will face a far lower cost burden than do their Australian counterparts.

    Non-trade-exposed industrial firms in the EU will receive 80 per cent of permits free this year, 30 per cent of permits free in 2020, and only be required to buy all their permits in 2027.

    In contrast, non-trade-exposed industrial firms in Australia will buy permits covering 100 per cent of their liability from the first day of the scheme. Not a single European company will be required to buy 100 per cent of its carbon liability until 2027.

    Some argue that the link to the European scheme will mean a lower price for Australian firms. Don’t be so sure.

    There are powerful interests in Europe pushing for a higher carbon price. They want it much higher and for longer.

    Just last month the EU intervened in the carbon market to push the price up.

    That followed pressure from environment ministers from 12 EU member states.

    The ministers said that although “market interference” should be kept to a “minimum”, a “one-off and targeted intervention” was necessary to “minimise market uncertainty and distortions” and promote investment in low carbon technologies.

    This move underlined the indisputable fact that the EU ETS is no market at all.

    And that means that Australian industry is at the mercy of vested interests in Europe. We will be collateral damage.

    In effect, Australia has put its export interests into the hands of the trading bloc that has corrupted global agricultural markets for decades.

    That is a rare act of political incompetence that can only be reversed by scrapping the Gillard-Rudd carbon pricing scheme in all its various forms.
    END QUOTE

    • “The energy cost of a single load of laundry was 88 Danish kronor, or about $17. This is the high price of misguided climate and energy policies.

      That $17 load of washing is an exemplar of a failed policy experiment. ”

      It is indication of failed government policy. But someone is also getting $17
      for the energy used for a washing.
      If gas station charges a lot of money for gasoline, some people will say something should done about it- price gouging. I.e:
      “The Tennessee Division of Consumer Affairs is prepared to investigate any gas price-gouging complaints that we receive. ”

      But I would guess there will not be investigation for the charging $17 for the energy used for a washing load.
      Why? Because that politicians have made these arrangements. People are getting rich sell power so expensively.
      And the politicians want to be in the position select who will get rich as result of this completely predictable outcome of their laws they have passed.
      So it’s not about consumers paying higher prices, it’s about politician getting the power of choosing who is going to get such profit. And of course politicians are also going to get rich. Political power can and is converted into cold cash.
      Making the public poorer, isn’t what is driving these politicians to make these “failed government policy” it’s part where these laws are making selected businesses make lots of money. Now, politician may or may not know know the details [US federal politicians brazenly admit they they don't even know what's in the bills they are voting on] but the politicians know who are their campaign contributors. And you can be sure these lobbyists are getting good value on the dollars they contribute to politicians. So basically various politicians have and are getting some of profit which is involved with the price of $17 for electricity for washing load.
      Whether the politicians 1% or 10% of such profits, the point is they have and will make money by ensuring the right people get to price gouge and have the higher prices in general.

      So the vast amount corruption and the high prices, isn’t a mistake, it’s the plan of politicians wishing to gain power and wealth.

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