The world will one day adopt a carbon tax—but only after exhausting all the alternatives

carbon-tax-now Says the Economist.

THIS is an unusually busy moment in the unhappy history of efforts to curb climate change. In two weeks at the end of June the world’s three biggest polluters unveiled carbon-reducing measures. In China and America these are more ambitious than previous policies. But they fall far short of what is needed to rein in the relentless rise in global carbon emissions... Many of the American and Chinese moves are of the command-and-control variety... In China there is a public-health justification for this sort of approach. Beijing suffered an “airpocalypse” in January, with smog 40 times above safe levels: too high at any price. America has no such justification. Mr Obama is using measures associated with Soviet central planning out of desperation: he cannot get climate laws through Congress, so executive orders are his only weapons... The trouble is, such measures are not very accurate. Bans or quantitative limits restrict emissions without considering the policy’s full costs... you want the biggest bang for your buck. The way to get that is to use market mechanisms to discover, say, the most efficient way of cutting carbon. America does not have such a mechanism at the federal level and is struggling to set one up. Europe can claim to be ahead here... But the scheme is complex and has been undermined by vast exemptions—flaws which apply to China’s new scheme, too... Winston Churchill famously said America would always do the right thing after exhausting the alternatives. The right thing in climate policy for all the big countries is a carbon tax, which is simpler and less vulnerable to fluctuations in emissions than cap-and-trade schemes.


The right response to Obama’s climate push - when P3 and the R Street Institute agree, you know something must be true.

More like this

From James Hrynshyn's link:

"Abba Eban .... In March 1967 .... said: 'Men and nations behave wisely when they have exhausted all other resources.'”

Pity about that sequence.

Strip-mining resources got us through two brief centuries of grossly unwise behavior.

Overshoot collapses.

Ensuing wise behavior is grossly constrained by the impoverishment.

Oh, wait, I forgot magical cornicupian ingenuity always replaces whatever's lacking because **MONEY*.

Resources depleted? -- oh, atmosphere, oceans, topsoil, biodiversity, and other such.

Deux ex machination will be along any minute to sort it out.

By Hank Roberts (not verified) on 28 Jun 2013 #permalink

Where would the tax go? What level would you tax? Refineries, drillers. end use tax? Plus, governments are notorious for borrowing against future generations. Carbon bonds that mature and are due 20 years from now would be created. Another large issue is how to structure the tax so that it's not regressive. So-called "sin taxes" on alcohol and tobacco can reduce their overall use precisely because they are regressive but people heat and cool their homes with carbon. That can't be regressive or we'll come home from holiday like France a few years ago with Nana melted into the rocker. BTW, don't go to France on the day the law says the A/C has to be shut off. It's awful. Some society scheduled their annual conference there that week and a room full of profusely sweating professors and researchers is not pleasant.

One of the issues with current gasoline taxes is that the G is now dependent on them for infrastructure. Alternative fuel and Zero Emissions cars aren't paying those taxes now so guess what's proposed to offset that?

"Alternative fuel and Zero Emissions cars aren’t paying those taxes now so guess what’s proposed to offset that?"

They are in Oregon, in the form of higher registration fees.

Fairest vehicle tax is weight and mileage, as this correlates fairly well with the vehicle's share of wear and tear on roads. The fuel tax in the past was a reasonable proxy for this. Obviously not so when you have electric and hybrid cars out there.

"One of the issues with current gasoline taxes is that the G is now dependent on them for infrastructure."

In the US, at least, the tax has always been intended to help fund infrastructure, that's the point.

Not until someone has written a book on peak water and the coming hydrogen crisis

@dhogaza - I asked it as a rhetorical question and you are correct. They are implementing the opposite of a carbon tax on zero emission vehicles. While reasoning that it is needed for infrastructure is true, the net effect is the opposite of a carbon tax. mileage and weight coupled with a peak demand factor would be a better tax but they will never rescind the infrastructure gas tax and replace it with a carbon tax while putting infrastructure on mileage and weight.

Australia has a carbon tax, and surprisingly enough, the world didn't end when it was introduced.

But despite this it is very unpopular. People can be so dumb...

By John Brookes (not verified) on 30 Jun 2013 #permalink

BTW, don’t go to France on the day the law says the A/C has to be shut off.

Has someone been pulling your leg? I've lived in France for over a decade and have never heard that one before.

By turboblocke (not verified) on 30 Jun 2013 #permalink

British Columbia has a revenue-neutral carbon tax that is politically popular and more effective than the wonks thought it would be.

Of course most Americans have no idea where British Columbia is. Vacationing Vancouverites who drive down to California are sometimes asked by friendly locals, looking at their license plates, "You guys drove here all the way from South America?"

By Andy Skuce (not verified) on 30 Jun 2013 #permalink

Although I wouldn't put myself as anti-carbon-tax specifically - it would do some good - I don't see it as a panecea as far as global warming goes, because we have an active example in the form of petrol taxes/fuel duty. Even at extremely high levels (c. 300%) this has not achieved a huge reduction in use. The reason for this (and a reason why carbon taxes are unlikely to be as effective as hoped) is that of sunk costs and associated costs. Even very high carbon taxes don't add that much, proportionately, to the costs of running a car - they have no effect on depreciation, MOT, repairs, etc.

[Um. But you are suffering from the "a carbon tax won't stop all carbon use" error. A carbon tax is merely mean to internalise the cost of carbon use - not prevent it -W]

In a similar manner, a carbon tax that doubled the price of coal would not double the cost of coal power at wholesale level, and have yet less impact at retail level. And power plants are multi-decade investments; you could, for instance, invest in new nuclear plants to avoid the carbon tax, gambling that the carbon tax stays in place, or devote a fraction of the cash to intense political lobbying to get the carbon tax shrunk and/or repealed.

And, of course, Carbon Taxes high enough to significantly change behavior have to be either applied globally or at the very least on imports - whilst noting that a small scale carbon tax would probably not cause any problems of import substitution.

By Andrew Dodds (not verified) on 01 Jul 2013 #permalink


Give it another 10 years and even the most ardent CAGW supporters will have to admit that they were wrong. Well, maybe it will take 20 years for the MOST ardent supporters, but the facts will prove it.

After 25 years without warming, there will be no excuse to continue the charade!

What is "CAGW"? It's not a term used in science, so I'm at a bit of a loss.

By American Idiot (not verified) on 01 Jul 2013 #permalink

Has someone been pulling your leg? I’ve lived in France for over a decade and have never heard that one before.

Could be. Maybe that's what they tell visitors when they switched the system to heat for the year but that's what they said.

@American Idiot:

What is “CAGW”? It’s not a term used in science, so I’m at a bit of a loss.

Catastrophic Anthropogenic Global Warming, I believe. If anyone knows that this is incorrect, please correct it.

By Julian Frost (not verified) on 01 Jul 2013 #permalink

.. where 'Catastrophic' is defined as:

'Something really, really bad that all these scientists have been absolutely 100% certain will happen, like, next tuesday, but if you are one of those annoying oiky types that want specifics then you are just going to have to google for it 'cause I'm not going to make an ass of myself by either claiming a prediction that no one's ever made or something that's already happened, m'kay'?

You can see why they shorten this to 'C'.

By Andrew Dodds (not verified) on 02 Jul 2013 #permalink

'Catastrophic ' is a blunt instrument in the arsenal of semantic agression.

Those forced to abandon their decade long effort to deny the existence of AGW slap the C in front of it in hope of distracting us from the previous fiasco.

When, as the statistics fluctuate and the death toll picks up to the level of alarm engendered by the culling of old French folk by hyperthermia a few summers ago, the C in CAGW will be abandoned in favor of more exotic comapratives- surely you don't believe in the religion of Existential or Terminal Global Warming ?

Russell -

The old folks in France were "culled" because their relatives and caregivers were on vacation. This led to a great deal of finger-pointing and commentary on French societal structure.

The heat wave was a freak regional occurrence and had no global component. So, it can't be tied to global warming.

This has been quite extensively covered and if you still want to blame "global warming" you are being deceptive.

Tom C:

The heat wave was a freak regional occurrence and had no global component. So, it can’t be tied to global warming.

This has been quite extensively covered and if you still want to blame “global warming” you are being deceptive.

Not so fast:

You can try accusing Tamino of deception, but you'll need to cite a convincing refutation of his argument.

By Mal Adapted (not verified) on 02 Jul 2013 #permalink

Honi soit qui Mal Adopted pense

Occasionally, there is good news:…
Here the Australian government provides part-funding for a bio-gas installation for a meatworks that will:
- replace a coal-fired boiler, saving 7,200 tonnes of coal per year
- reduce its electricity consumption by 50%
- produce fertiliser for sale
- produce clean water for sale
- reduce CO2 emissions by 95%
- reduce its carbon tax liability to nil
- reduce overall operating costs 35%

This funding was made available through the Carbon Tax, which was established in Australia 12 months ago.…

By Craig Thomas (not verified) on 03 Jul 2013 #permalink

We do the right thing after exhausting the alternatives because. sometimes, an alternative works better. The President of the United States has well considered the carbon tax and has rejected it. For us, the carbon tax has become one of the alternative we've exhausted on our way to doing the right thing.

It would help your position to have more general agreement on the structure and metrics of a carbon tax. Agreement may not be possible. The premise for the carbon tax is that there is some urgency in the matter of CO2 emissions. There is no sense of urgency in, "Well, we're going to get there eventually.."

The carbon tax has no chance of being enacted by the big countries in the next decade. It therefore cannot be the right thing to do today or in the near future (the argument for it, however convincing, notwithstanding).

The two market mechanisms tried so far haven't worked. There are better market mechanisms, which do not depend on Leviathan's hand,

By Paul Kelly (not verified) on 06 Jul 2013 #permalink

what will happen to the global climate now that CO2 is 0.04% of the atmosphere? can anyone give a rational answer? why introduce some kind of bogus fraudulent tax that will not bring down CO2 one jot - but will make certain quasi-political entities £$billions? the whole idea is madness!!

By phil wright (not verified) on 07 Jul 2013 #permalink

And the carbon tax will have no effect upon Earth's surface temperatures.

Planetary surface temperatures have very little to do with incident radiation. At the base of the theoretical troposphere of Uranus it is about 320K but virtually no Solar radiation reaches down through 350Km of its atmosphere to that altitude.

The Sun cannot heat the surfaces of planets like Earth and Venus to the observed temperatures with direct radiation. So it doesn't matter how much the atmosphere slows cooling if we can't explain how the temperature gets to 288K on Earth or 730K on Venus before any such cooling begins.

In fact it is energy from the Sun which does the warming by first heating the atmosphere with incident radiation. That absorbed energy then disturbs the thermodynamic equilibrium and this leads to convective heat transfer down towards the surface.

[convective heat transfer down towards the surface - oh dear. Need I point out more? -W]

In physics "convective heat transfer" can comprise diffusion as well as advection, but advection is not necessary. We don't need to explain such heat transfer by imagining air moving up or down. We need to understand the process described in the Second Law of Thermodynamics, as in Sections 4 to 9 here.


The "C" does in fact stand for catostrophic.

[Your spelling is catastrophic -W]

Think about it. If the warming isn't catostrophic, who cares?

[You're pretending to be unable to see anything in between "benign, ignorable" and "catastrophic". This is just silly, you need to slap yourself about the face with a wet fish and reconsider. Plenty of people buy insurance for eventualities which are unpleasant and expensive but not catastrophic -W]

And, btw, it hasn't been, nor will it be, catostrophic.

Actually we do the right thing after exhausting all the alternatives in the same way way my keys are always in the last place I look. Not that I've exhausted the infinite permutations on the locations of the search, just that it's silly to keep looking for keys after they have been found. The world would be pretty boring if we solved all the problems at the first go. Have to spice it up with mistakes and fool's errands and such (some call it "experimentation"). Solving problems that have already been solved though is silly so it only looks like we stop after trying everything else. Trust me, there are more permutations on "wrong" than can be dreamt of in your philosophy, Horatio.

#3 and 4: if we had a carbon tax in the US, then a separate charge on EVs for highway maintenance would make sense. In the absence of a carbon tax, overcharging gas vehicles for highway is better than imposing the cost on EVs. Oregon's approach and that of other states is a huge mistake.

By Brian Schmidt (not verified) on 12 Jul 2013 #permalink

Nice fish !

"... market mechanisms to discover the most efficient way of cutting carbon".

Efficient market mechanisms are those which bring the price of a product down, allowing more people to participate in the market. There is product, consumer, supply and demand. Artificially raising demand is likely a better market mechanism than artificially raising price. It is certainly an alternative worth exhausting for urgency's sake.

By Paul Kelly (not verified) on 12 Jul 2013 #permalink

"Efficient market mechanisms are those which bring the price of a product down."

Take Econ 101 over again and get back to us. See you then.

[This may be a good place to mention…, which contains the classic "Of course, ideally, a perfectly “revenue neutral” tax would not change any individual’s taxes. Under a perfectly revenue neutral tax change, if you used to pay a tax on A, you would pay the exact same amount now but with the tax assessed on B. In the BC case, for example, where you used to pay a tax on income, instead you’d pay the same amount of tax on energy, based on its carbon content. Of course, there’s a million practical problems with achieving such a perfectly equitable revenue neutrality, and I’ll get to them. But for now, let’s agree that a theoretically perfect revenue neutral tax would ensure that in the changeover, nobody gained and nobody lost." -W]

By American Idiot (not verified) on 16 Jul 2013 #permalink

In his WUWT posts on the carbon tax Willis informs us that:

a) Even if BC stopped emitting any CO2, this would only reduce climate change by a tiny little bit; four million people can't undo the pollution of 7 billion, so why bother?
b) Since BC has a growing population, gross emissions are shrinking more slowly than per-capita emissions, which means that carbon taxes are really ineffective when it comes to reducing the population; immigrants keep coming, women still get pregnant, old people don't even die of cold faster, so what's the point of all this?
c) He redefines "revenue neutral" as meaning revenue neutral for every individual--gas guzzlers and the parsimonious emitters alike--not just revenue neutral for the government.
d) He's oddly silent on the facts that the tax is politically popular (the party that introduced it has been re-elected twice now) and that the tax has not yet wrecked the economy, despite stern warnings of imminent doom from the climate contrarians.

Most people in BC have actually benefitted modestly from the carbon tax, as a recent study shows.…

By Andy Skuce (not verified) on 17 Jul 2013 #permalink