Bad policy will boil the planet?

Posted by William M. Connolley on October 21, 2009
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The Economist has a couple of articles on energy policy and climate change, both related to Britain’s Committee on Climate Change, an untested body. My title comes from the first, which basically says that a carbon tax would be a good idea (I agree). The second sits rather oddly with the first, and says that the markets won’t work, and doesn’t mention the word tax at all. How can they come from the same report?

It looks like you can read the CCC report from http://www.theccc.org.uk/reports/progress-reports (not to be confused with the similar HoL committee here). No, the CCC is far more sexy and has a twitter feed and all that jazz. Still, the twitter feed will point you towards their report, so that is good. I just looked at the Executive summary – well, life is too short, no (I got home at 22:10: do I win a prize? Answer: no, don’t be stupid William).

They do suggest UK action to underpin the carbon price could provide support for required low-carbon investments (e.g. through introduction of a tax that adjusts according to EU ETS price fluctuations to deliver a target carbon price in the UK). Unfortunately that seems to be the only place that the mention “tax” in the context of carbon price.

The presentation of the report manages to say Our analysis suggests that in a risky, uncertain world, even with very high carbon prices, the market may not deliver necessary low-carbon investment, resulting in high emissions intensity (and high costs for consumers). which I take to be the source of the not-tax-but-reform-markets meme. But I don’t know where in the report itself this text comes from! At the moment, I’m not at all convinced they have clearly demonstrated why carbon taxes can’t do much of the work, and why they shouldn’t be pushed now.

[I forgot to mention: Gareth has already covered this -W]

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  1. #1 Alastair McDonald
    2009/10/22

    As you say life is too short, so I have not even read the executive summary, but I think I can explain why a carbon tax is not guaranteed to work.

    Say you taxed aircraft fuel to stop people flying off on their holidays, what would they do? They would spend the money they had saved by not flying abroad on traveling in the UK or caravaning in France.

    In other words, if taxing people prevents them spending their money on one fuel consuming item, they will only spend it on another. Or if they do buy the original item and pay the tax, then the government will spend that tax because otherwise the economy would stagnate. So the money will come back to the consumer who will spend it on goods produced by (and from, i.e. plastics) fossil fuels.

    The old economic idea was the labour theory of value. http://en.wikipedia.org/wiki/Labor_theory_of_value
    Today, pretty well all labour is supplied by burning fuels. Thus every time you spend money it is on something that has been created by burning fossils. The only quick way to reduce the growth in CO2 is to spend less, not to pass it to the government for them to spend.

    You may say that taxing carbon would encourage people to spend their on other energy sources. If there was a source of energy which could fill the gap left by not burning carbon, then a carbon tax would work. But as things stand that is not the case, and the only way to stop CO2 rising is for every one to become poorer :-(

  3. #3 Thomas Bewick
    2009/10/23

    William, I’m not exactly clear on your argument. The full report supports there being a carbon price, either through a hybrid instrument (EU ETS price floor) or carbon tax.

    As a general comment, people do not like carbon taxes, and politicians have responded to this. People are more in favour of regulations and standards to reduce emissions, even if this is higher cost.

    [EU ETS price floor is a stupid unworkable idea; fortunately it will never happen. My point was that "carbon tax" gets one very brief mention in the Exec Summary, easily missed, since there is no clear "these are our recommendations" section. If you've read the full report, great: where is the carbon tax bit?

    people do not like carbon taxes, and politicians have responded to this. People are more in favour of regulations and standards to reduce emissions, even if this is higher cost. Alas this is true. The obvious stupidity of it does not recommend it to me, though. The reasons we all know, so lets not re-hash them. They are fixable -W]

  4. #4 Thomas Bewick
    2009/10/23

    “where is the carbon tax bit?”

    If you search the report for “carbon price”, you’ll find mention of a possible UK carbon tax to stabilize the carbon price.

  5. #5 Hank Roberts
    2009/11/08

    Dorothy over at RC
    http://www.realclimate.org/index.php/archives/2009/10/350/comment-page-5/#comment-140944
    points to “… an even darker perspective, that of Australian professor Clive Hamilton, who has posted his October 21 lecture to the Royal Society of the Arts, “Is It Too Late to Prevent Catastrophic Climate Change?” http://www.clivehamilton.net.au/cms/media/documents/articles/rsa_lecture.pdf.

    Hamilton is:
    1 Charles Sturt Professor of Public Ethics, Centre for Applied Philosophy and Public Ethics at the Australian National University (clive.hamilton@anu.edu.au).
    The speech linked to:
    2 It is adapted from Chapter 1 of my forthcoming book, Requiem for a Species….

    Kids, don’t try this on your home planet.

    [I'm sure he is a very nice ethicist, but he is in no position to be giving lectures on climate change science. 'One of the most striking features of the global
    warming debate has been how, with each advance in climate science, the news keeps
    getting worse    : I don't believe this, per http://scienceblogs.com/stoat/2009/09/cassandras_of_climate.php. I must have ranted about tipping pont mania somewhere, but http://scienceblogs.com/stoat/2007/10/cool_it.php is the best I can find right now. It now seems almost certain that, if it has not occurred already, within the next several years enough warming will be locked in to the system to set in train feedback processes that will overwhelm any attempts we make to cut back on our carbon emissions. - nah, this is b*ll*cks. The accelerating rate of melting of the Arctic Sea ice has shocked the scientists studying it, with many believing that summer ice will disappear entirely within the next decade or two. At that point I gave up. This guy is pushing the 2007 ice, he is pushing quotes about the 2007 ice, yet it is written in October 2009. He is deliberately ignoring the 2008 and 9 ice. He is lying to us by omission, very deliberately.

    But I was making an effort to be nice, so I'd better stop that stuff.

    In an effort to be positive, I kept reading on, hoping that he'd stop recycling Hansen and Lenton at some point and actually talk about ethics, nominally his strong point. But I didn't see him do that. So I think his whole approach is wrong. He has no value to add in discussing the science; people in that position should just stick to the IPCC. He should talk about ethics -W]

  6. #6 Hank Roberts
    2009/11/08

    Maslowski in 2008 seemed to be thinking the same about Arctic ice, and 2009 wasn’t all that reassuring, was it?

    I’d guess the mismatch is insider vs. outsider history.

    Y’all who’ve been deeply involved for a long time, I’d guess, were aware of some worst case possibilities (even low likelihood ones) about yourselves (sudden flips, very high climate sensitivity) — not likelikhoods, but there was a while before they got ruled out — and in that context the news is indeed getting better not worse.
    This stuff seems different, at least because some of it has been published

    I see there’s an index page
    http://www.sustain.hokudai.ac.jp/researchers_in_network/_maslowski_wieslaw/index.php
    Presentation: http://hdl.handle.net/2115/34395
    Abstract:
    “… this research focuses on ice thickness and volume as it gives a better indication of the total sea ice cover variability and rates of change. Our analyses of combined sea ice and ocean model results suggests that the oceanic heat, in addition to atmospheric radiative and sensible heat input, contributes to sea ice melt, especially in regions coincident directly downstream of oceanic heat advection from the Pacific and Atlantic oceans (Serreze et al., 2007; Stroeve and Maslowski, 2007). The NPS model indicates an accelerated thinning trend in Arctic ice during the last decade. This trend is robust and independent of timescales for surface temperature and salinity relaxation in the ocean model (Maslowski et al., 2007). Validation of model output with submarine and satellite sea ice thickness data gathered during the last three decades supports this result. This lends credence to the postulation that the Arctic not only might (Maslanik et al., 2007), but is likely to be ice-free during the summer in the near future.”

    Of course the Navy may be biased in favor of open water ….

    More turned up this search than I found before; a sample:
    http://www.nopp.org/nopp/project-reports/reports/08maslow.pdf
    —
    Hansen (per the most recent of his occasional list emails) has just had major surgery and followup surgery (his writing seemed as ragged as people tell me I sounded a few years ago, after needing a couple episodes of anesthesia; that stuff can really mess your head).
    So much for context. But also per that recent email, the last weeks of that experience, he gave this:
    http://www.columbia.edu/~jeh1/2009/ClubOfRome_20091026.pdf

  7. #7 Thomas Bewick
    2009/12/31

    I thought I’d elaborate on my previous post.

    William wrote:

    “The presentation of the report manages to say Our analysis suggests that in a risky, uncertain world, even with very high carbon prices, the market may not deliver necessary low-carbon investment, resulting in high emissions intensity (and high costs for consumers). which I take to be the source of the not-tax-but-reform-markets meme. But I don’t know where in the report itself this text comes from!”

    Lord Turner of the CCC has explained the current problems in the market (Q230):

    http://www.publications.parliament.uk/pa/cm200809/cmselect/cmenvaud/uc616-iv/uc61602.htm

    Professor Newbery has covered these issues as well:

    http://www.publications.parliament.uk/pa/cm200809/cmselect/cmenvaud/memo/carbonmarkets/et0302.htm

    William wrote:

    “At the moment, I’m not at all convinced [the CCC] have clearly demonstrated why carbon taxes can’t do much of the work, and why they shouldn’t be pushed now.”

    Professor Grubb, who works on the CCC, has commented on the problems of a carbon tax (Q109):

    http://www.publications.parliament.uk/pa/cm200809/cmselect/cmenvaud/c393-ii/c39302.htm
    http://www.publications.parliament.uk/pa/cm200809/cmselect/cmenvaud/memo/carbonmarkets/et1902.htm

    [That all sounds rather familiar (I think you meant Q 107). Carbon taxes face opposition from people who don't like the word "tax". There appears to be an illusion that by calling it "cap and trade" you can get meaningful results instead. I don't believe that. Yes previous attempts to put in place something like a carbon tax were riddled with bizarre loopholes for special interests. The motto to take from that is no loopholes -W]

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