tag:blogger.com,1999:blog-582368152716771238.post7560689208931482182..comments2024-03-29T07:18:14.271-05:00Comments on The Grumpy Economist: Carbon Tax or Carbon Rights?John H. Cochranehttp://www.blogger.com/profile/04842601651429471525noreply@blogger.comBlogger22125tag:blogger.com,1999:blog-582368152716771238.post-91539938959753823182015-04-02T04:51:02.853-05:002015-04-02T04:51:02.853-05:00John, here are a few thoughts: "Towards a pro...John, here are a few thoughts: "Towards a productive libertarian approach on climate, energy and environmental issues"<br />http://tokyotom.freecapitalists.org/2010/02/10/productive-libertarian-approach-climate-energy-environmental-issues/<br /><br />Fwiw, Jerry Taylor says, "That's a great post, Tom": https://www.facebook.com/tokyotomsr/posts/10202875095717214?comment_id=10202877092647136<br /><br />TokyoTomhttp://tokyotom.freecapitalists.org/noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-76980078477362468982015-03-01T20:51:47.993-06:002015-03-01T20:51:47.993-06:00"It is the responsibility of the consumer to ..."It is the responsibility of the consumer to consume less, if they really care."<br />People want to be healthy and skinny and yet they continue to eat the garbage McDonalds serves us. We need soft paternalism to push the population in the right direction. CPI will inevitably rise significantly since our modern industries are so carbon reliant, but that is the price we have to pay if we don't want to live in a hell-on-earth. <br /><br />"Want to see lay-offs and an economic collapse?... then let's impose a carbon tax. Wait, those employees laid off from the private sector can march over to the gov't for a job b/c it'll employ a slew of gov't workers in order to regulate, monitor and inspect these rules which will cost taxpayers even more money than those subsidies we hate." <br /><br />Wouldn't that money be coming from the progressive carbon tax placed on these large corporations? Progressive carbon tax would make it unprofitable for those big companies to ship pineapples and would even the playing field for smaller, local farms (spurring the local economy).<br /><br />"I have one question to ask of those interested in this forum... are you certain, beyond a shadow of a doubt, that any of this will change what the future holds?"<br /><br />Obviously we cannot change the fact that carbon emissions will eventually make the planet inhabitable but what if we could delay that fate? I'm sure our kids and our kids' kids wouldn't mind...<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-36244038300963401812015-02-01T12:23:35.751-06:002015-02-01T12:23:35.751-06:00Richard Muller of Berkeley Earth has a wonderful p...Richard Muller of Berkeley Earth has a wonderful perspective on this arguement. Simply stated he asks if on ascending a staircase you think you've arrived when you reach a landing.Raccoon on the Edgehttps://www.blogger.com/profile/18129799604105543183noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-64168165631590420432015-01-08T13:26:59.901-06:002015-01-08T13:26:59.901-06:00I also meant to add that the IPCC 95% likelihood i...I also meant to add that the IPCC 95% likelihood is not a statistical or probability measure but is the judgment of the lead authors, like a polling of hands or some such, so it is not based on science or statistical analysis.Danley Wolfehttps://www.blogger.com/profile/14399726912508670481noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-77345563777298570212015-01-08T13:19:33.283-06:002015-01-08T13:19:33.283-06:00Grumpy: I don't know how anyone can separate (...Grumpy: I don't know how anyone can separate (1) the scientific debate from (2) the policy solutions. The two have become so muddled since the early 1990s UNFCCC (Rio Convention) at which the organizers declared that "... we should not allow lack of understanding / certainty prevent implementation of policy prescriptions" and "...the precautionary principle should be applied in all cases. The social cost of carbon is used to evaluate the "severity" of the damages caused by manmade causes. The last review (Fifth Assessment Review or AR5) by the IPCC increased to 95% certain the so called likelihood / probability of manmade causes being responsible for global warming. Meanwhile the current administration substantial revised upward the social cost of carbon used in evaluating damages from manmade greenhouse gases in support of executive orders were are now seeing. For example the SCC increased by $33/ton at 2.5% discount rate and $85/ton at 3% discount rate AND 95% likelihood / certainty. The science is badly politicized but there are more "balanced and sane" heads in the room that understand the uncertainty monster and how this is being used and abused.Danley Wolfehttps://www.blogger.com/profile/14399726912508670481noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-14455810761897999802015-01-08T10:48:22.421-06:002015-01-08T10:48:22.421-06:00In my youth I studied physics and dabbled in scien...In my youth I studied physics and dabbled in scientific computation. It seems to me that the physics, chemistry and math of CO2 build-up should be better understood than they appear to be.Absalonhttps://www.blogger.com/profile/09131268683451462949noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-55181306871825259222015-01-08T10:18:49.945-06:002015-01-08T10:18:49.945-06:00Wonderful idea on individually tradable rights, lo...Wonderful idea on individually tradable rights, logistics notwithstanding. If reason translated to policy, this is what it would look like.<br /><br />Even if people agreed limiting carbon is good (they don't), there's little room for conciliation here. Liberals love the EPA and you need not look far for cheering of the mileage regs. Conservatives scoff at even better-than-fair policy trade offs as the term "tax" is a verbal component to summon the ghost of Norquist. Industry already enjoys large barriers to entry against competitors so there's incentive to reject a scheme that may turn against them sooner than later. Consumers have been trained to reject anything that may raise gas prices regardless of trade offs.<br /><br />No, carbon limits are going nowhere fast. If limiting carbon is important to you, the best hope is found in the projections people like Kurzweil regarding solar. IF the cost/watt keeps dropping at its past 30 year pace it COULD BE competitive with coal (subsidy free) in less than 10 years. The speculative hopes only get more tenuous from there. More likely the problems will become clearer in the next decade & advocacy will move toward spewing other stuff into the atmosphere in the hopes we don't screw things up even more.tetchmagikoshttps://www.blogger.com/profile/01051423929562960316noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-75434384659342012622015-01-07T17:20:46.602-06:002015-01-07T17:20:46.602-06:00Hi Prof Cochrane!
I love reading your blog (even i...Hi Prof Cochrane!<br />I love reading your blog (even if, or in particular because I don’t always agree with your views).<br /><br />Allow me a quick comment on this topic. I think it's unfair (and misleading) to paint tax credits for electric cars, renewable energy etc. as measures designed to reduce carbon emissions NOW. Instead, they function as market incentives for developing alternative forms of energy and transportation that will help us make the leap out of fossil fuels in the future - for strategic as well as environmental reasons.<br /><br />We know we will run out of fuel. We know that energy dependency is a threat to national security. And we know we have to develop new technology to reduce dependency on dangerous suppliers, and impact on the environment. But we don’t know which technology will eventually evolve into a viable alternative. And at the individual level (or the corporation level since corporation = people) we don’t feel the need to invest in new technologies because (at the margin) no single individual is responsible for emitting that extra molecule of carbon that will tilt the balance.<br /><br />That’s why we have the government distribute funding for research. That’s why a good chunk of the University of Chicago’s budget comes from federal money. To fund a range of technologies that will ultimately produce a solution. Because we need concentration (of power or resources) to get us moving on problems where dilution (of responsibility) would accomplish nothing at all.<br /><br />In the end, we can see energy tax incentives as subsidies to solve the problem in the future (through subsidies to R&D) rather than as wrongful incentives to reduce carbon emissions now.Rubenhttp://chilicondata.com/about/noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-11207466952035144452015-01-07T16:49:02.439-06:002015-01-07T16:49:02.439-06:00Would you say, too, that four consecutive days of ...Would you say, too, that four consecutive days of down market means that the return on equity is negative?<br /><br />We need a model to make such a claim and the model needs to explain the past 50 years of data. <br /><br />Luckily there are statistical methods to determine if the time series of a random variable (in this case, ocean temperature) is trending up or down. And those models confirm temperature has been rising over the past couple of decades.<br /><br />What's in your model?Rubenhttp://chilicondata.com/about/noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-38324774491034925552015-01-07T14:28:08.820-06:002015-01-07T14:28:08.820-06:00People who are truly concerned with carbon still d...People who are truly concerned with carbon still drive around in cars, or ride in on bikes that have tires, brakes and handles made of petroleum products. I still see treehuggers calling people on cell phones (petroleum product), dressed in clothing (made in factories which are fueled with petroleum and transported in vehicles that burn diesel) and eat out-of-season fruit (year-round pineapples are transported from S America on diesel trucks). It is the responsibility of the consumer to consume less, if they really care. <br />Carbon Taxes end up penalizing companies who are producing products demanded by... that's right, consumers. Want to see lay-offs and an economic collapse?... then let's impose a carbon tax. Wait, those employees laid off from the private sector can march over to the gov't for a job b/c it'll employ a slew of gov't workers in order to regulate, monitor and inspect these rules which will cost taxpayers even more money than those subsidies we hate. I agree that price determines choice but it also creates social inequities... and subsidies. I do agree that carbon tax should eliminate needless and pestering legislation and regulation, but there is no silver bullet. I have one question to ask of those interested in this forum... are you certain, beyond a shadow of a doubt, that any of this will change what the future holds?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-52939040509332309822015-01-07T04:47:30.910-06:002015-01-07T04:47:30.910-06:00Probably your first article I agree with completel...Probably your first article I agree with completely.<br />(I assume you don't want to track CO2 emissions at personal level, but at the company level - you don't pay for CO2 emitted when you burn gas to heat your house, gas company pays for CO2 that can be produced from gas they deliver to you, and you pay that much more for that gas.)<br /><br />For any form of carbon tax, or price, or whatever, to be truly efficient in reducing CO2 emissions, you need to reach price of at least $40/tCO2. That way you eliminate coal power plants and gas power plants, eliminate coal as industrial and residential energy source and greatly reduce use of gas and oil for any stationary energy use (that is, not for transport). Great benefit: we will be able to stop worrying about the oil availability for the next few centuries (oil is essential for fertilizers and many other chemical products).<br />To achieve that and still keep normal way of life, the whole world would need to start building lots of new nuclear power plants, the only energy source capable to replace current coal/gas production. The benefit is: with mass production, following all the safety rules, NPPs would probably be cheap enough not to raise electricity prices. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-1592279402529374322015-01-07T03:56:15.890-06:002015-01-07T03:56:15.890-06:00The only trouble with The Global Warming Crisis is...The only trouble with The Global Warming Crisis is global temperatures have been flat since the turn of the century. So let's rebrand it "Climate Change" and keep hollering for help. How many more years of flat temperatures does it take to cause the Global Warmers to abandon their theory? <br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-16734149647379856042015-01-06T14:41:28.140-06:002015-01-06T14:41:28.140-06:00"Cap and trade" assumes that the right t..."Cap and trade" assumes that the right to emit CO2 belongs to existing emitters - that is why industry likes it. Carbon tax assumes that the right to emit CO2 belongs to the government. Peasants in Africa might feel that the right to emit CO2 into the global atmosphere does not belong to American companies, the American government or individual Americans. <br /><br />Calling it a tax is a political non-starter. I personally favor a system where a wholesaler would have to buy at auction from the government carbon permits allowing them to distribute within a three month window products creating, say, one tonne of CO2. The permits would be tradeable on an electronic exchange and the government would be regularly trickling permits into the market. You could control CO2 by setting minimum prices and maximum prices for the permits and the number of permits to be issued between the minimum and the maximum price (below the minimum permits don't get issued and above the maximum there is no limit to the number of permits.)Absalonhttps://www.blogger.com/profile/09131268683451462949noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-8318036323927009532015-01-06T12:02:43.410-06:002015-01-06T12:02:43.410-06:00we could get far more bang for the buck just elimi...we could get far more bang for the buck just eliminating housing and highway subsidies ... but who wants to think "deeply" about why we use more carbon / capita than other nations. Parth Venkathttps://www.blogger.com/profile/09830285782100016152noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-64461083190670777502015-01-06T11:50:24.357-06:002015-01-06T11:50:24.357-06:00My preferred way of thinking about this issue is f...My preferred way of thinking about this issue is from the individual rights perspective. Basically, I think it is a moral assumption that the right to pollute should be spread evenly across the population. That just appeals to my sense of fairness--we should all have an equal right to our shared space/planet. I think framing it in this perspective also makes apparent the underlying moral assumption in other proposals. For instance, Greg Mankiw's preferred policy is a carbon tax with off-setting cuts in labor taxes. He likes the benefits of getting rid of distortionary taxes, but I am troubled by the underlying assumption that implicitly high income people have more pollution rights than low income people. The same argument applies to handing out carbon tax or license revenue to congress's preferred green companies. Implicitly, we are assigning this constituency of the pollution rights.Charlie Clarkehttps://www.blogger.com/profile/02079017903923824877noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-25699762421365103472015-01-06T10:03:43.600-06:002015-01-06T10:03:43.600-06:00Of course the carbon accounting of such a system w...Of course the carbon accounting of such a system will be hard. The carbon problem is very hard.<br /><br />But don't make the mistake of dismissing the idea because of imagined enforcement paranoia.<br /><br />The vast majority of carbon emissions on the planet can be accounted to firms (oil, coal producers etc). Carbon fraud on the personal level would be a vanishingly small amount in the scheme of things.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-26736050161722572262015-01-05T19:04:50.136-06:002015-01-05T19:04:50.136-06:00before deciding on the optimum method of tax for c...before deciding on the optimum method of tax for carbon shouldn't the utility of carbon be assessed. The last paragraph and observation of white board theorizing makes the discussion of taxing another reason for disdain. Can a tax system be devised for enthused participants? Tom N. Portnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-35314850846055978522015-01-05T18:56:25.358-06:002015-01-05T18:56:25.358-06:00Love this!
A small number of years ago I made the...Love this!<br /><br />A small number of years ago I made the mistake of signing a petition for "cap and trade" legislation. Got messages on my answering facility from lawyers promoting the legislation. I wondered why such highly paid people were using their time to call me, but eventually hit upon the answer: Of course, such a law would easily permit of exceptions and create substantial rents!<br /><br />Not "cap and trade" but rather, "tax and trade [if there are any worthwhile trades left]"! Frank https://www.blogger.com/profile/00272351675231621678noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-39223402781814190982015-01-05T17:58:11.975-06:002015-01-05T17:58:11.975-06:00It seems to me that the carbon tax can be defeated...It seems to me that the carbon tax can be defeated by expanding government generosity. Roger Sparkshttps://www.blogger.com/profile/01734503500078064208noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-90309171394084502282015-01-05T16:01:25.208-06:002015-01-05T16:01:25.208-06:00The seller of firewood and campfire permits, or se...The seller of firewood and campfire permits, or seriously, gasoline, heating oil, propane and so forth has to get the permits. John H. Cochranehttps://www.blogger.com/profile/04842601651429471525noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-3215850486980163572015-01-05T15:58:57.344-06:002015-01-05T15:58:57.344-06:00I can hardly wait for the park ranger to ask for m...I can hardly wait for the park ranger to ask for my campfire carbon permit and count how many logs I have. "Hey I see some charring on those s'mores. That'll be another $1.48."<br /><br />Seriously, how would you count this stuff? How will they know you bought a bag of charcoal or if you cut down a tree for firewood? How will they know if you used it or not, or passed it along to someone else? Who's going to measure the methane your cow emits? I don't know who "they" are, but you know there will be "them" somewhere - possibly the bureaucrats recently let go from the DOE and EPA. <br /><br />I can just see Mike Rowe on "Dirty Jobs". "Tonight's show: cow-methane-measurement guy."JB McMunnhttps://www.blogger.com/profile/15468282698533043544noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-57695322291914555082015-01-05T13:48:53.785-06:002015-01-05T13:48:53.785-06:00FYI, about another recent article by Lawrence Summ...FYI, about another recent article by Lawrence Summers: http://www.thebigquestions.com/2015/01/05/what-is-larry-summers-thinking-2 Moggionoreply@blogger.com