Carbon taxes: Macron is an idiot

Zut alors! Ze Chef Frog, Macron, ‘e iz not ‘appy wiz ze prix of ze Carbon: Europe needed a significant minimum carbon price to boost investment in its energy transition, and a European carbon tax at the bloc’s borders to guarantee fair competition for its companies… Macron said Europe had to give “the right price signal” for carbon emissions, and make them sufficiently high enough to attract investments. He said that a carbon price below 25 to 30 euros ($35.31) per ton was not efficient to spur investments in renewable energy and energy efficiency. If in the years ahead, we don’t have a significant price of carbon per ton to allow for a profound change in our economies, then it would be worthless. France has also been pushing for a reform of the carbon European Emissions Trading System (ETS). Carbon prices under the system, which charges companies for each ton of carbon dioxide they emit, have fallen to about 7 euros a ton from about 30 euros in 2008 because of a glut of permits.

…and zo on and zo forth. But all of this is vair silly, because as any fule kno, when you issue carbon permits, as the ETS does, you limit your emissions, because in your wisdom you have decided how much CO2 you wish to emit. So, a glut of permits means your schemes have been a brilliant success: emissions have indeed been limited, just as you wished. Had you wanted a price on carbon, you should have imposed a carbon tax instead. Obviously, no-one would suggest that the EU was too stupid to think of this; nor that the ETS was doomed from the start because a bunch of pols would certainly dish out an excess of permits to their favoured industries in order to buy votes, thereby totally undermining the scheme.

Is this all a bit negative? Couldn’t I at least give Macron some credit for at least wanting to raise the price, even if he’s a bit clueless about how to do it? Meh, maybe. Perhaps I’m being too radical. But I’d really rather him just to admit that the ETS is a failure, rip it up, and replace it with a carbon tax. Also, I suppose it is possible that Reuters have garbled his words; I haven’t found what he actually said. Furthermore there are hints about carbon tax in his election manifesto, but I haven’t found that, either. I did find Climat : Qu’est ce qu’il se joue réellement aujourd’hui au niveau mondial ? but apart from offering the amusement of Google translate turning “J’adhere” into “I adhesive”, wasn’t much use.

Refs

* Yet more carbon tax
* A response to a response to a proportionate response
* Rendre notre planète géniale à nouveau
* Macron’s ‘Make Climate Great Again’ campaign hires US scientists – although not literally; actually “Macron is scheduled to unveil some of the marquee scientists selected on December 12th”.

Comments

  1. #1 David B. Benson
    2017/09/30

    Carbon dioxide emissions tax.

    Nobody cares how much graphite and diamond is mined.

    I suppose it is too much to expect politicians and reporters to understand Grammer School chemistry, but really…

    [Pffft, the terms are equivalent. I could imagine a stupid or careless enough legislature actually writing regulations that cover graphite, but let’s hope not -W]

  2. #2 Tim Worstall
    2017/10/01

    Erm, why not just issue fewer permits?

    [If you’re sticking with the ETS then I guess that would be the obvious solution. Perhaps too simple for a subtle Frenchman. I find that I don’t know if ETS permits are given or bought; wiki tells me that in phase III (2013 – 2020) “auctioning a majority of permits rather than allocating freely” will happen; though that appears to be false so I’ve corrected it. Perhaps they could really screw up their courage and auction more of the permits instead of flinging them at their friends for free? But even if only 40% are auctioned, it should be possible to reduce that. Though presumably the permits last for a while, so the effects might be slow to come through -W]

  3. #3 CIP
    2017/10/01

    So is your point that you want carbon to be cheaper? Macron wants more expensive carbon and, according to what you write, is pursuing either or both of a carbon tax or stricter permitting to that end.

    You appear to be arguing that the present permitting system is just fine, and Macron is an idiot to want to change that. Have you really drunk that much of the Exxon Koolaid?

    [I’m not quite sure how you manage to interpret I’d really rather him just to admit that the ETS is a failure, rip it up, and replace it with a carbon tax like that. Or The ETS is stupid, part n + 1 or any of the earlier ones. But to be explicit, in case I was too subtle: no, I think carbon should be more expensive, but continuing with the ETS isn’t the way to do it -W]

  4. #4 Frank Rizzo
    2017/10/01

    So does this mean you’re against hybrid ETS/price options? See discussion here, for example:
    http://qed.econ.queensu.ca/pub/faculty/garvie/eer/pizer2002.pdf

    The California scheme has a price floor (and ceiling?) and is generally viewed to be well designed.

    [Interesting link, thanks. As the abstract says Although most
    of the debate on global climate change policy has focused on quantity controls due to their
    political appeal, this paper argues that price controls are more efficient
    . Simulations based on a stochastic computable general equilibrium model indicate that the expected welfare gain from the optimal price policy is five times higher than the expected gain from the optimal quantity policy. An alternative hybrid policy combines both the political appeal of quantity controls with the efficiency of prices, using an initial distribution of tradeable permits to set a quantitative target, but allowing additional permits to be purchased at a fixed ‘‘trigger’’ price. Even sub-optimal hybrid policies offer dramatic efficiency improvements over otherwise standard quantity control
    (my bold). All this, of course, is “in theory”. My main objection to the “hybrid” scheme is it’s complexity. It is possible that an all-powerful and all-wise authority might in theory design and implement a viable hybrid scheme, I think that in practice it would get gerrymandered to death.

    As to California, I’m not familiar with it. I found https://en.wikipedia.org/wiki/Global_Warming_Solutions_Act_of_2006 but that doesn’t tell me about floors or ceilings, or indeed tell me that it is well designed :-) -W]

  5. #5 Kevin ONeill
    2017/10/01

    WC writes:”I’d really rather him just to admit that the ETS is a failure, rip it up, and replace it with a carbon tax.”

    Was Macron even tangentially involved in putting the ETS in place?

    [Maybe; though I don’t see the relevance -W]

    Does he have that much power that he can just rip it up and replace it with a carbon tax? I must admit I didn’t realize his election carried that much weight.

    [No, he doesn’t. You can interpret my comment as “But I’d really rather him just to admit that the ETS is a failure, him just to express his support for ripping it up, and him just to express his support for replaceing it with a carbon tax.” -W]

  6. #6 Vinny Burgoo
    2017/10/01

    An offical English version of Macron’s speech:

    http://www.diplomatie.gouv.fr/IMG/pdf/english_version_transcript_-_initiative_for_europe_-_speech_by_the_president_of_the_french_republic_cle8de628.pdf

    [Thanks. The relevant looks to be:

    I have made my choice: I deeply believe that Europe must be a pioneer of an effective and equitable ecological transition. For this to happen, we need to transform our transport, our housing, our industries. For this to happen, we need to invest and provide powerful incentives for this transformation. It is first necessary to establish a fair carbon price, one that is high enough to ensure this transition. Here too, there will be a fight. Here too, there will be lobbies, resistance saying that it is a good idea but only a few euros. In the coming years, if we do not have a significant carbon price per tonne so as to develop very different directions for our economies, then it will be pointless.

    Studies have shown that anything below €25 to €30 per tonne is not effective. It is towards this goal that we should work, and starting today, we must get organized to do so – this is crucial. A significant floor price, a genuine single price, a genuine transition to trigger this transformation of our economies, supporting sectors in need, supporting regions that will be victims of these changes with contracts designed to best address the needs on the ground that will help to promote regions where outdated production models are the most prevalent so that they can benefit from the creation of new jobs.

    This transition also means having a European energy market that really works, therefore finally wanting and fostering interconnections. For a long time, we slowed their progress, here too, because it was not necessarily one of our core corporate interests. We need, with Spain, with Portugal, with all of our neighbours, to develop these interconnections. Why? Because in certain seasons, when renewable energy is produced in large quantities, we must ensure that all of Europe benefits. At other times, when nuclear energy is indispensable, low-carbon – nocarbon – and low-cost, we must also pool the benefits. We will have a European energy market that functions more efficiently if at last we swiftly develop these interconnections. If this strategy is to be successful, we must also ensure that our manufacturers that are most exposed to globalization are on an equal footing with competing companies and industries from other regions in the world that do not have the same environmental requirements. That is why we should have a European border carbon tax; it is crucial.

    The floor price, interconnections, the regional transition contract and border carbon tax are the four pillars of this ambition for energy in Europe. All of this cannot be done in a day, I am aware of the resistance of some, but if we refuse to talk about it or move in this direction, I know one thing: it will never be done. Yet we can give ourselves a firm goal: in five years, in 10 years, we can build transitions to accomplish this, but starting today, let’s move forward. Europe must spearhead this energy transition and it needs this ambition, this unified market to build this model.

    Meh. He hasn’t been misquoted or taken out of context -W]

  7. #8 crandles
    2017/10/04

    Are the BAU scenarios drifting hopelessly away from reality?

    https://www.theguardian.com/environment/2017/oct/04/solar-power-renewables-international-energy-agency

    [quote]
    The authority[IEA], which is funded by 28 member governments, admitted it had previously underestimated the speed at which green energy was growing.

    One energy expert said that the IEA report was, if anything, underestimating the speed of renewables’ growth and the impact of them becoming so cheap.

    Tim Buckley, director of energy finance studies at Australia-based analysts IEEFA, said: “2016 was another record high year of renewable installs and unexpectedly large renewable energy cost deflation, again highlighting the IEA’s continued underestimation of both these two trends driving the increasingly global market transformation.”[/quote]

    That does sound like it continues to be the case when you read things like

    [quote]Despite the recent opening of the UK’s first subsidy-free solar farm, the prospects for British solar are fairly gloomy: the amount of solar forecast to be installed by 2022 is a fifth of the amount installed over the last five years.
    [/quote]

    Is there a point where a carbon tax could become a distraction from getting on with a more important task of ensuring electric grids can cope with large amounts of renewables?

    [Cheerful, isn’t it? Won’t we look silly if the market-folk or even the extreme Libertarians were right? -W]

  8. #9 crandles
    2017/10/04

    To add to above comment
    https://www.theguardian.com/business/2017/sep/26/summer-green-energy-national-grid-carbon-emissions-solar-uk

    “Between 21 June and 22 September, the carbon intensity of the grid – as measured in grammes of C02 emitted per KWh of power generated – was more than halved from its level over the same period four years ago.”

    Second half obviously more difficult than first half, but still, just four years!

  9. #10 crandles
    2017/10/04

    Was it ‘extreme Libertarian’ism that brought this about or has there been lots of R&D grants given in appropriate directions over the last 30+ years?

    [You will never know how the market would have reacted without grants. But the point – if I was unclear – I was making was that the EL’s constant argument is “that all taxes – even nice ones like carbon taxes – are govt interventions, and should be avoided if possible; and that you’ll be surprised how well things work out without”. And I criticised that in the linked post. And yet, if your sunny scenario works out, they may be right -W]

    Why should it be the climate scientists that look silly?

    [I didn’t define “we”. But most of the people reading / writing / commenting this aren’t climate, so my comment should not be interpreted as aimed at them; “we” was deliberately ill-defined -W]

    Surely the pols with all their attempts at Paris Accord and similar look the more foolish for wasting their time while the scientists were needed to get the GW theory established so that R&D grants were given in appropriate direction?

    Or is that too rose tinted towards Climate scientists and researchers being brilliant and pols being completely useless?

  10. #11 crandles
    Away from crystal ball?
    2017/10/04

    >”[And yet, if your sunny scenario works out, they may be right -W]

    I would say
    If a sunny scenario works out, they may well claim to be right. While I can’t be sure exactly how things would have panned out without grants, lack of grant money would almost certainly delay availability of necessary knowledge and we would be further from solving CC. Claiming to be right and being right look like different things in this case to me.

    [That wasn’t quite what I meant, but I’ll find it hard to say it precisely. Suppose that you’re right: that subsidies were necessary to get us where we are now. But how much of the rest was necessary? Was, for example, the Paris agreement necessary? Is any of the ETS from this point onwards needed? Is agitating for carbon taxes now pointless? And so on -W]

  11. #12 Andrew Dodds
    2017/10/05

    crandles #9

    Ok.. this ticks the standard boxes for ‘optimistic abuse of statistics’. Measuring carbon intensity (not emissions), using a limited time period (summer, when demand is lower), not breaking down the various contributions..

    For instance, how is the conversion of Drax to wood burning counted? Very dubious in terms of CO2 emissions. Are we replacing coal with gas on a large scale (again, not exactly deep green)? If we create a system where many generators can only operate for 6 months of the year, what will that do to total system costs? If solar and batteries really is the answer in the UK, exactly how many batteries are needed for our huge seasonal swings in generation?

  12. #13 crandles
    2017/10/05

    Optimistic abuse? Yes, but at least the quote made most of those issues clear.

    Drax wood burning may well be a good point that wasn’t clear.

    Coal to gas. Seems like an important change to allow renewables portion to grow whereas keeping with coal would create more problems because it is much less dispatchable. So not clear what your point is with ‘not exactly deep green’. Isn’t it reasonable to consider this coal to gas as part of the process of getting to higher renewables percentage and the progress should be recognised.

    Total emissions for total demand may well be better than intensity for climate implications but for measuring progress it might be arguable that intensity is better particularly if there has been a change in level of demand that is not expected to continue at that rate. I suggest either is better than simply renewables percentage.

    Generators for only 6 months of the year. How is this different from current situation? Winds tend to be higher in winter than summer while solar is obviously reverse. So some combination of solar and wind might be a better fit for demand than just ff making this problem less of an issue rather than more.

    Further, batteries are good for daily cycling: doesn’t that reduce generation capacity needed to nearer average demand in peak season rather than at least sufficient for peak demand?

    Answer isn’t going to be ‘solar and batteries’, more like solar and wind and batteries and some nuclear, some hydro, some pump up storage, …., (and some declining levels of gas while we build up these renewables).

    How many batteries? Well why do I care? Of course it depends on amount of pump up storage, flow batteries etc. Don’t see why I need to do the calculations unless you are asserting there isn’t enough material X to do it in which case I think the onus is on you to show that there isn’t sufficient.

  13. #14 crandles
    2017/10/05

    >”[Suppose that you’re right: that subsidies were necessary to get us where we are now. But how much of the rest was necessary? Was, for example, the Paris agreement necessary? Is any of the ETS from this point onwards needed? Is agitating for carbon taxes now pointless? And so on -W]”

    Can’t expect world to work as well as possible with hindsight. To have thrown everything at making renewables cheaper than ff and not bothered with all the COP meeting etc may have worked better but if we had done that and it turned out we couldn’t do renewables cheaper, that would have been a much worse situation.

    It may well be that prior to Paris, it was clear enough which way things were going and Paris could have been abandoned in favour of a renewables are going to be cheaper and at some point soon (still several years away) it will make sense to ban sales of new ICE cars, ban new ff plants etc. without too much adverse effect.

    Once you have a juggernaut of political efforts in motion, how easy is it to stop it or radically change direction? Pols may well see such things as ways of appeasing environmentalists who are always pushing for more action and the pols feel they need something to waffle on about. So not easy to stop it dead in its tracks?

  14. #15 David B. Benson
    2017/10/05

    Off topic but physicists will appreciate
    https://m.phys.org/news/2017-10-earth-climate-topological-insulators-common.html
    for the underlying unity.

    [Seems believable, though naturally I haven’t checked the maths. It doesn’t obviously shed any new light on Kelvin or Rossby waves, though -W]

    [I see RS covers this too. (Re)reading it from that, perhaps the flow is the other way: the insulators folk can perhaps learn from all the stuff that’s already been done on K/R -W]

    [But (without having ploughed through the details) Waves that drive global weather patterns finally explained, thanks to inspiration from bagel-shaped quantum matter is clearly bullshit -W]

  15. #16 Russell
    2017/10/07

    W, Blame the popularization, not the physics or as M.Macron would say , ze vulgarisation scientifique. Topological insulators , like Majorana fermions, do not make for easy analogies-

    [You should allow comments on your blog then I could have said it there… -W]

  16. #17 David B. Benson
    2017/10/07

    WMC — The point about why islands don’t matter for either K or R waves is a good one; hadn’t seen it before.

    [I didn’t see that bit; I’d assume they don’t matter because they’re too small to be visible. The accounts of this just look like https://xkcd.com/793/ to me; if there are new results this reveals, I’m missing it. Do they actually claim anything new? -W]

  17. #18 Russell
    2017/10/07

    WMC should read the VV^WT sidebar- I changed blogs some years ago because teh unedited commentariat generated ~99.5% drivel or worse.

    It’s vastly easier to add comments like yours as updates- just did

    [You need to get better quality commentators like I have :-) -W]

  18. #19 Russell
    2017/10/07

    Unfortunately, being banned by Breitbart and VVatts precludes banning their commenters, and dealing with them would cut into time better spent on peer review.

    Cue spluttering noises from Tom Fuller et. al.

  19. #20 Raymond Arritt
    2017/10/08

    Sigh. Physicists.

    Next they’ll “discover” that the equations that govern buoyant oscillations in the atmosphere have the same form as the ones that govern a weight oscillating on a spring. “We discovered that the atmosphere’s stratification plays a role similar to that of a spring constant” said physics professor J. Ellington Twygg-Smythe.

    Grumble. Sigh.

  20. #21 David B. Benson
    2017/10/08

    The only new thing is noticing that the same equations result starting from very different physics. I find that appealing.

    [Yes, that’s fair enough; it is indeed appealing. I’m objecting to the pop articles which go rather beyond that, as so often happens -W]

  21. #22 John Brookes
    Australia
    2017/10/11

    You are in furious agreement with James Hansen on this. Originally I disagreed with him and thought an ETS might work, but it seems that the special pleading involved in getting one set up ends up corrupting it too much. So a carbon tax is the way to go.

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