[Sivad]

I meet very few proponents of cap-and-trade over straight carbon taxation, even if cap-and-trade might be the first-best solutions it seems to be rather widely recognized that regulatory capture nullifies any appeal it once had. Perhaps we're residing in two separate information bubbles but that's the impression I have gotten.

Looking at what's being proposed politically there seems to be a pretty uniform movement towards carbon taxation over cap-and-trade.

They're both carbon pricing schemes.

Carbon pricing usually takes the form either of a carbon tax or a requirement to purchase permits to emit, generally known as cap-and-trade, but also called "allowances".
https://en.wikipedia.org/wiki/Carbon_price

What would you propose, out of interest.

Directly financing infrastructure spending and green tech R&D. There are many ways to finance it that don't involve regressive taxation. I'd start by nationalizing the coal and oil companies, raising the capital gains tax, and reducing the military budget by at least 50%.

There will be pass-through of this tax from producers to consumers. That's a large part of the basis of the tax's regressiveness.

With complete, lump-sum redistribution to consumers we would expect the consumer to be at least as well off - and, under conditions where firms can't pass-on the full value of the tax, better off*.

Works in theory, but not very likely to play out that way in the real world. Maybe there would be a honeymoon period, but then the tax would start going up and the rebates down. And soon the neoliberal regressives would have the "FairTax" or the gas tax they've been dreaming about for decades.

[Vlerchan]

They're both carbon pricing schemes.

Fair enough.

Works in theory, but not very likely to play out that way in the real world. Maybe there would be a honeymoon period, but then the tax would start going up and the rebates down. And soon the neoliberal regressives would have the "FairTax" or the gas tax they've been dreaming about for decades.

You can include, in the bill, guidelines which dictate how the revenue should be spent so that the rebates couldn't start going down.

That's what California did with it's carbon trading programme, if I remember correct.

Directly financing infrastructure spending and green tech R&D. There are many ways to finance it that don't involve regressive taxation. I'd start by nationalizing the coal and oil companies, raising the capital gains tax, and reducing the military budget by at least 50%.

I also think this would be a drastically less efficient means of furthering green ends than what I proposed. For one it tackles the issue from one side, innovation, without tackling incentives around adoption (carbon taxation tackles both). Though, I'm also skeptical of the returns on innovation subsidies. But I agree it's progressive, I just wanted to add why I support proposals I have made ahead of it.

[Sivad]

An interesting thing to add here was an idea considered by the Hillary campaign that they didn't end up proposing but is interesting nonetheless was a carbon tax whose proceeds would be redistributed as a basic income (in typically unimaginative Hillary fashion called Alaska for america or some such).

That's just Hansen's fee-and-dividend, good luck selling it to the politicians or the American people. It's not surprising they didn't propose it. A carbon tax won't be politically viable in this country anytime in the foreseeable future. You need solutions that make sense regardless of global warming like upgrading infrastructure for efficiency and increasing investment into energy R&D, and even a progressive protectionism that prevents countries and corporations without decent labor, environmental, and human rights standards from bringing their products to American markets.

[mikema63]

Works in theory, but not very likely to play out that way in the real world. Maybe there would be a honeymoon period, but then the tax would start going up and the rebates down. And soon the neoliberal regressives would have the "FairTax" or the gas tax they've been dreaming about for decades.

That you will have to fight to keep and expand good programs does not mean you shouldn't fight for good programs. Your attitude is extraordinarily defeatist and it serves no goal or end to simply give up before you get started.

I could make a similar argument against literally any policy or political system. There is no way to guarantee that at some point that a group with the incentive to do so will not manipulate a policy or political system towards undesirable ends. This is so true that it borders on the trivial to even mention it.

Besides, a disbursement of cash to households directly would be extremely popular among a vast majority of the population and it would be very difficult to fight. Consider the resilience of Social Security which only directly benefits a fraction (though a vocal one) of the US population at any time and consider how much harder it would be to get rid of something that directly benefits nearly every single household. Indeed considering human psychology even many people with incomes high enough that they are on net hurt by carbon taxation will be in favor of it since people tend to see the cash check they get before all the little ways they are loosing money to the tax system.

My point is that the more broad a section of the population sees a direct and obvious benefit from a program the harder it will be to do what you suggest, and even if it weren't the fact that you have to fight for things that benefit society doesn't mean you should give up and go home.

That's just Hansen's fee-and-dividend, good luck selling it to the politicians or the American people. It's not surprising they didn't propose it. A carbon tax won't be politically viable in this country anytime in the foreseeable future. You need solutions that make sense regardless of global warming like upgrading infrastructure for efficiency and increasing investment into energy R&D, and even a progressive protectionism that prevents countries and corporations without decent labor, environmental, and human rights standards from bringing their products to American markets.

You don't get anything you don't fight for and I consider this something worth organizing and fighting for. Even if you don't get exactly what you want you create a network of people who can work towards related good policies like investment in R&D and infrastructure.

[Sivad]

You can include, in the bill, guidelines which dictate how the revenue should be spent so that the rebates couldn't start going down.

You can, but progressive policies don't survive the legislative process. We couldn't even get a public option with the ACA. A carbon price would most likely be used to reduce corporate and income taxes.

That's what California did with it's carbon trading programme, if I remember correct.

The cost of living went up, that's for sure.

Q: Why am I paying more for gasoline? I’ve never bought emissions permits.

A: True, but since 2015 the state’s fuel wholesalers have been required to participate in cap and trade. They pass their costs on at the pump.
http://www.sacbee.com/news/local/environment/article162517213.html

I also think this would be a drastically less efficient means of furthering green ends than what I proposed. For one it tackles the issue from one side, innovation, without tackling incentives around adoption (carbon taxation tackles both). Though, I'm also skeptical of the returns on innovation subsidies.

Why wouldn't cheaper energy technology be adopted and why wouldn't R&D produce returns? If history is any guide your skepticism is completely unwarranted.

[Vlerchan]

A carbon price would most likely be used to reduce corporate and income taxes.

I imagine it would me quite neutered by the time it reached the president's desk. However, if Democrats might rally behind it when they next have a chance, I feel we might still achieve a situation which it more positive than the one we are on an inevitable collision with:

Wealthier people are going to be much better off insulating themselves from the consequences of climate change. Even if it was attached to a poor rebate I would propose that there would be long-run net-positive outcomes for working class people. In fact, given the projections around crime rates under heightened temperatures, I think that even if all revenue was going to be put into reduced corporate taxation, working class people would be much better off in the long-run.

I also suspect that we may have an easier time getting through a national tax rebate before we halve defense expenditure so if we're picking our plans on the basis of some hard-nosed political realism I'm still voting for a carbon tax.

The cost of living went up, that's for sure.

Of course the cost of gas increased. That doesn't mean the proposal I am making would reduce welfare.

[...] wouldn't cheaper energy technology be adopted [...]

It would. But the relative advantage of adoption would be smaller than had we imposed carbon taxation - since costs are enhanced, too, incentives are double-sided. That investment in green technologies isn't riskless, it's also worth noting that the stream of benefits that might be accrued as a result of investment is also being considered at a discount. Plus, if the behavioral economics literature is a guide, individuals irrationally weight costs versus gains.

[...] why wouldn't R&D produce returns [...]

I should have been more clear. There's a rather lengthy literature which suggests that R&D subsidies are only partially effective, and result in non-trivial amounts of dead-weight loss.

If you are also referring to government R&D, I would expect non-trivial diminishing marginal returns.

[Sivad]

Besides, a disbursement of cash to households directly would be extremely popular among a vast majority of the population and it would be very difficult to fight. Consider the resilience of Social Security which only directly benefits a fraction (though a vocal one) of the US population at any time and consider how much harder it would be to get rid of something that directly benefits nearly every single household. Indeed considering human psychology even many people with incomes high enough that they are on net hurt by carbon taxation will be in favor of it since people tend to see the cash check they get before all the little ways they are loosing money to the tax system.

I guess I'd have to see some progressive victories on other fronts before I'd be willing to support an inherently regressive tax scheme that can easily be converted into massive subsidies for the wealthy. All you have to do is look at who's proposing these schemes to know who they're intended to benefit and who will be burdened by them. The other thing is that they're just bad policy, despite Vlerchan's claim, carbon pricing is an indirect and extremely inefficient "solution" to climate change.

[Sivad]

It would. But the relative advantage of adoption would be smaller than had we imposed carbon taxation - since costs are enhanced, too, incentives are double-sided.

That's easily addressed with a reasonable BAT policy.

If you are also referring to government R&D, I would expect non-trivial diminishing marginal returns.

If history is any indication you should expect leaps and bounds.

[Atlantis]

What region might that be?
Dry heat is less uncomfortable than humid heat but still, 40 degrees Celsius is very high. Too high to live without AC if you can afford it.

True, dry heat is more bearable; however, I even managed without AC in my apartment in Tokyo, which gets very hot and humid during the summer. Now I live in a semi-arid region, but I get by without AC. Even when mid-day temperatures reach 44 degrees Celsius, inside our traditional rammed earth building it never gets hotter than 26 degrees, even though the building is rather small. With a bigger building and higher ceilings, there is no problem at all with those temperatures.

[Vlerchan]

That's easily addressed with a reasonable BAT policy.

Would you be able to outline what this is?

When I google 'BAT policy' I was greeted with a page of links for Little League Baseball, though I suspect that's not what you're intending.

If history is any indication you should expect leaps and bounds.

The United States government has, in the recent past, pushed numerous advanced energy projects that have ended up being expensive failures.

Consider, for example, those two most famous, the Clinch River Breeder Reactor, and the Synthetic Fuel Company, which ran up billions in losses.

This isn't to claim that the government can't be a boon when it comes to supporting research, esp. of the basic sort. It can, but when it comes to the greatest threat facing our planet that we should put all our eggs in that basket, given historical failures treating the matter, I'm much less that convinced. The fact that the basket which intermittently gets seized by a group which doesn't even believe climate change is real doesn't help.

[MememyselfandIJK]

The fact that the basket which intermittently gets seized by a group which doesn't even believe climate change is real doesn't help.

Difficulty implementing long-term agendas, especially when intermediate results are unpleasant is a drawback of democracies and republics. It's just how the system works, and why some social scientists think that democracy may face a decline in the future.

[Sivad]

Would you be able to outline what this is?

BAT

The United States government has, in the recent past, pushed numerous advanced energy projects that have ended up being expensive failures.


This isn't to claim that the government can't be a boon when it comes to supporting research, esp. of the basic sort.

The atom bomb, the space program, computers, the internet, smart phone tech - all government R&D. The current neoliberal model of subsidizing corporate R&D is a fail , we need to get back to what works.

It can, but when it comes to the greatest threat facing our planet

Like with the Nazis?

that we should put all our eggs in that basket, given historical failures treating the matter, I'm much less that convinced.

Disregarding the monumental successes throughout history? Anyway, I'm not suggesting betting everything on technological breakthroughs, we could begin upgrading infrastructure and subsidizing a sensible implementation of wind and solar right now.

A carbon price without the patient capital of government investment is not going to accomplish all that much due to the problem of path dependence, we have to invest in innovation as a society if we want to solve the problem.

Green won’t come out of the blue

Many influential economists such as Yale’s William Nordhaus or Harvard’s Gregory Mankiw, want to fight climate change with a carbon tax. The problem is taxes do a better job of preventing bad things than encouraging better replacements.

Standard economics simply considers greenhouse gas emissions as an “externality” – an economic consequence experienced by a party who did not choose to incur it. Negative side effects such as pollution can be addressed by putting a price on them and forcing those responsible to pay – if your factory produces emissions, it’ll cost you. This is the idea behind carbon taxes. It is assumed that, by making polluting technologies relatively more expensive, the market will adjust, generating low-carbon innovations.

But innovation isn’t as simple as this. In particular, the development and spread of new technologies depends on what has gone before and you can’t simply expect a jump into renewable energy, for instance, when everything is geared towards fossil fuels. This idea of “path dependence” is fundamental to understanding technological change.

Inventors tend to build on existing knowledge, and infrastructure already in place means new technologies often incur high switching costs – just think of the advantage regular vehicles have over electric ones thanks to pre-existing petrol stations. And since the telephone is worthless unless you have someone to call, the value of a new technology may also depend on the number of people who use it. This is what economists call the “network effect”.

Carbon lock-in

All this momentum pushes us to continue with dirty technologies. Even a relatively high carbon tax may lead to firms seeking to make products and processes more efficient, rather than the riskier and more expensive process of changing things entirely. Take cars, for instance. Thanks to various environmental regulations you can now buy a vehicle that does more than 90 miles per gallon – but the big carmakers still haven’t truly embraced electric.

This sort of efficiency improvement may reduce emissions in the short run but eventually there are no more incremental gains to be had and further decarbonisation will require completely new technologies. These technologies will then be even more expensive, with path dependence even more deeply ingrained. This is carbon lock-in.

Carbon lock-in is one of the key insights of recent work in “directed technical change” by MIT economist Daron Acemoglu and colleagues. They find the most cost-effective way to address climate change is early action on both fronts: pricing carbon and supporting low-carbon innovation. Acemoglu and co differ from traditional economic models of climate change by properly considering how new technology emerges, instead of treating it as an “exogenous” process that suddenly arrives like manna from heaven.

Early policy intervention is crucial. It can change the path of innovation from “dirty” (carbon-intensive) to “clean” (low-carbon) and then once clean innovation gains a sufficient advantage it can be left alone, as profit-maximising firms will pursue clean innovation in their own interests.

The fact that the basket which intermittently gets seized by a group which doesn't even believe climate change is real doesn't help.

That's a problem for any policy. I would argue it's a much bigger problem for a a carbon price because that policy has no justification beyond catastrophic anthropogenic climate change.

[Hindsite]

Wow. True to form, Blackjack21, you talk only about typos and irrelevant things. You should be an editor, but not doing the editorials, as you only bring up the inane, and have no arguments.

What I do know is that the weatherman has said we are having colder temperatures her in Augusta, Georgia than is normal for this time of year. That seems to contradict all this global warming and climate change kaboki political posturing of the left wing numbnuts.

[Zagadka]

And this, children, is someone who doesn't know how science works.

[Godstud]

What I do know is that the weatherman has said we are having colder temperatures her in Augusta, Georgia than is normal for this time of year. That seems to contradict all this global warming and climate change kaboki political posturing of the left wing numbnuts.

Climate and weather are not the same.

For your further education about science:
NASA - What's the Difference Between Weather and Climate?
https://www.nasa.gov/mission_pages/noaa ... ather.html

[Hindsite]

Climate and weather are not the same.

For your further education about science:
NASA - What's the Difference Between Weather and Climate?
https://www.nasa.gov/mission_pages/noaa ... ather.html

This is the same bullshit the evolutionists give for believing God is not the Creator as the Holy Bible reveals. The secret ingredient is always a long period of time. According to them, the fairy tale of a frog being kissed and turning into a handsome prince, is science, if you replace the kiss with time, a lot of time.

[Suntzu]

One has to be feeble minded to believe Earth is 6,000 years old and completely covered with water 4,500 years ago (while the Egyptians were building pyramids).

[Hindsite]

One has to be feeble minded to believe Earth is 6,000 years old and completely covered with water 4,500 years ago (while the Egyptians were building pyramids).

Not any more feeble minded than a person who believes the Earth is billions of years old and all life just popped into existence , including the first humans.

[Suntzu]

To be a Christian one must believe an extra terrestrial came to Earth and impregnated a 12 year old Jewish girl who gave birth to a son with super natural powers.

[Hindsite]

To be a Christian one must believe an extra terrestrial came to Earth and impregnated a 12 year old Jewish girl who gave birth to a son with super natural powers.

Christians do not believe such nonsense.