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Elon Musk: Only a Carbon Tax Will Accelerate the World's Exit from Fossil Fuels

157 points by cpeterso 11y ago

ghouse 11y ago
A phased-in revenue-neutral carbon tax of $30/ton would increase electricity rates in (most of) the US by < 10%. And could lower income taxes (or if not revenue neutral) reduce the debt. What's not to like?
- eru 11y ago
  If it's revenue neutral and lowering income taxes, where would the big `victims' be?
  - SEJeff 11y ago
    Electricity producing plants that burn cheap fossil fuels such as coal :)
  - rhc2104 11y ago
    People/companies that use more fossil fuels.
  - diamondtrim 11y ago
    As usual, probably the poor & lower middle class unless the income tax reduction were explicitly directed to the lowest tax brackets to limit impact on working poor. Those below the poverty line would see an increase in their energy costs at the pump and and home electric bills as energy producers raise rates to compensate (and the impoverished are the least able to convert their use, so will be the longest affected by the transition).
    - mac01021 11y ago
      The best solution I've seen is a "fee and dividend" system, where a carbon fee is collected and the proceeds are rebated in equal amounts to every legal resident of the nation. This means that, when gas prices go up, a lower-class person whose carbon footprint is exactly that of the average citizen will be reimbursed for the extra gas money by exactly the right amount. And the tax ends up being not regressive. Compare the carbon footprint of a well-to-do businessman who flies coast-to-coast on a monthly basis with that of a working-class guy who drives ten miles a day and heats his house with oil. The former is greater then the latter by several times. The working-class guy contributes a relatively small share to global warming, but bears an equal share of the public cost induced by the changing climate. Under the fee-and-dividend system, every man reimburses the public for the cost that he is imposing on them through his CO2 emissions, and is reimbursed by everyone else for the cost they impose on him. Because of this I argue that a carbon fee and dividend is the right policy from a social justice perspective, and should be enacted even if it is not going to be sufficient to push us as a society off of fossil fuels. Google "carbon fee and dividend" or see this (http://www.skepticalscience.com/CCL-pushing-for-US-fee-and-dividend.html http://www.skepticalscience.com/CCL-pushing-for-US-fee-and-d...) for more.
    - serge2k 11y ago
      You could do a credit back from the proceeds.
  - danieltillett 11y ago
    The big victims are the owners of fossil fuel deposits and infrastructure. Have a guess who is funding all the FUD about global warming. Personally I think we should just buy the fossil fuel owners out at current market prices and shut them down as soon as possible. FUD in this area is just too effective to counter with logic or science so lets pay them off. If we wanted to be really clever we could do a 1 for 1 swap - Exxon we are buying your oil field and here is a wind farm in return.
    - pzone 11y ago
      You should stop casting these guys as villains, it obscures the main point of your argument. You would probably do the same lobbying if you were in their position. (Rather, if you were a major shareholder in Exxon, you would demand that managers do it.) Just think of this in terms of Exxon &c having an effective negotiating position for blocking the carbon tax. We don't have to buy things at current market prices, but at a discount. Recognizing that there's room for negotiation is what everyone overlooks.
      - danieltillett 11y ago
        I didn't mean to cast Exxon and co as villains, just explain why. Yes I think we need to recognise that they have a very strong hand and deal with it head on. Trying to fight them will only mean we all lose.
  - samcheng 11y ago
    Fossil fuel producers and power plant operators. A few states, and therefore a motivated group of Senators, would be hit disproportionately hard. Places like Wyoming and West Virginia drive a considerable part of their economy from coal, and fracking has led to natural gas windfalls in states like North Dakota. You would imagine that some large carbon-intensive companies, like Koch or ExxonMobil, would also be impacted significantly. EDIT: The counterpoint is that a gas tax in particular is quite regressive. The poor pay a larger portion of their income toward necessities like fuel to drive to work. They also are less likely to be able to afford that Tesla. Entry-level service workers can't work from home. They might be commuting large distances from cheaper outlying areas. There are many reasons why (if not managed properly) a carbon tax could hurt the wrong people. It still seems like the right idea to me, though! We need to avoid calling it a 'tax' though, to avoid the Grover Norquist influence...
  - bigiain 11y ago
    The answer used to be "aluminum smelters" (aluminum, aka "frozen electricity"). Interestingly, the aluminum smelters in the mountains behind Portland closed down when the datacenters moved in and bought all the cheap hydro electricity they used to use. My guess is that a tax increase on electricity will hit the Google/Facebook/Amazon/Apple/Microsoft and other "cloud businesses" pretty hard...
    - unchocked 11y ago
      Doubt it. If the price of electricity goes up 20%, the cost of computing goes up <20%. Sellers of computing pass that cost onto consumers. I don't know anyone who would go out of business if their server bill went up 20%, especially if it went up the same for their competitors.
    - crdoconnor 11y ago
      Aluminium smelters in Germany are actually getting a big subsidy. They're varying their electricity usage based upon the output of Germany's solar/wind farms and getting paid a hefty sum to do so (possibly too much). This is having a negative impact on other smelters across the world. Effectively they're doing the same job we were always told batteries would do.
      - greglindahl 11y ago
        If they're paying a fair amount for electricity, it's not a subsidy. And it's probably not a minute-timescale change like batteries. Energy storage and batteries are quite different things.
    - ZeroGravitas 11y ago
      Microsoft already implements an internal carbon tax, so those sectors of Microsoft are already paying some amount for this. I think they spend the money raised on efficiency and sourcing clean energy.
  - hueving 11y ago
    The poor and lower middle class who effectively pay no income taxes already.
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- serge2k 11y ago
  The fact that a 10% increase in electricity costs is probably going disproportionately affect the poor?
  - 5ersi 11y ago
    The proposed tax is basically a spending tax, much like a sales tax. It would effectively raise the price of any products/services that rely on carbon-based energy to be made/delivered. Remind me: how does a spending tax disproportionately affect the poor? The tax goes into a local/federal budget, where poor disproportionately benefit from it (compared to what they put in). Also, the arguably biggest global challenge in the next decades is going to be to slow/reverse the adverse effects of the global warming, which WILL disproportionately affect the poor (which have less ability to adapt or move). So how is doing something about global waring really disproportionately affecting the poor on the long run?
    - pzone 11y ago
      Poor living in rural/exurban areas, spend more of their money on utilities & transportation overall You're assuming here that the money will be spent on the poor, but we really have to make sure that will actulaly happen if we want the carbon tax to have fair distributional implications
    - samcheng 11y ago
      Some people need to scrape together cash to buy enough gas to get to work. Poor people spend a disproportionate amount of their income on necessities like fuel for an aging inefficient vehicle, electricity or natural gas to heat a cheaply-constructed home, and factory-farmed food created with cheap nitrogen fertilizer. All of those necessities get more expensive with a carbon tax, so we need a way to cushion the impact on those who struggle to pay for the basics. While the impact of global warming does impact the global poor quite heavily (think of places like Bangladesh) it doesn't really hurt the poor in developed places much more than the rich in developed places. I was a lot less worried about El Niño when I rented an apartment, for example.
    - brandonmenc 11y ago
valvar 11y ago
Not that I disagree (in fact I strongly agree), but is Musk really the person we should be taking this from? It's a bit like taking investment advice from your bank, meseems. Not necessarily a bad idea, but you might want to hear with people who don't have an active interest in the placement of your money first.
- enraged_camel 11y ago
  >>Not necessarily a bad idea, but you might want to hear with people who don't have an active interest in the placement of your money first. Those people do in fact agree with Musk. Here's James Henson, one of the world's foremost climate scientists: http://arstechnica.com/science/2015/11/prominent-climate-scientist-offers-scathing-critique-of-obamas-paris-plans/ http://arstechnica.com/science/2015/11/prominent-climate-sci... "The only way to meaningfully address carbon emissions is to put a tax on carbon-based fuels, and to refund the entire amount as a dividend to consumers."
  - valvar 11y ago
    That's what I mean. That article, for example, would have been a much more meaningful submission. Musk's vested interests make it harder to take his statements at face value (even if they are entirely correct).
- msellout 11y ago
  Well, your barber is an expert on hair.
  - hawkice 11y ago
    Well, if you really want to drill down on this example: the barber doesn't have substantial interests in which type of haircut you get. Tesla has substantial interest in which kind of carbon tax you get -- high carbon tax would be a boon. Doesn't materially effect how good an idea carbon taxes are, though. Also, do people ask their barber what haircut they should get? I have only ever done a buzz cut or given a description / picture.
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3pt14159 11y ago
Not just a carbon tax, but a system of well thought out taxes that cover the negative externalities of every part of pollution so that the market can efficiently allocate investments. For example, most people don't know that coal causes more radiation damage to humans than nuclear. Why is this? Because coal gets released right into the atmosphere, while spent fuel rods get stored away from human contact. I know that there are political realities that prevent all of the taxes that should be in effect from coming into effect, but those political realities can change once the issue is reframed. Every dollar of pollution tax could, for example, be directed at lowering the income tax rate. This can make the proposal much more tenable to voters and the more right wing side of the intelligentsia that pushes for changes in government policy.
- pzone 11y ago
  That sounds like a lovely economist's utopia, but probably we should be tackling our problems one at a time
- sukulaku 11y ago
  > well thought out taxes that cover the negative externalities of every part of pollution so that the market can efficiently allocate investments But it's not "the market" that decides how electricity is produced in a country, right? It's the government.
  - alerkay 11y ago
    Good point
karmacondon 11y ago
> "This approach already occurs, Musk said, citing how taxes are higher on cigarettes and alcohol than fruits and vegetables" This is a good point, but generally discouraging the use of cigarettes or alcohol through taxation only effects people who consume those products. If you raise the tax on carbon, that cost could be passed on by businesses in unexpected ways. If the cost of me shipping vegetables across the country goes up by 2%, I'm just going to increase what I charge for shipping by at least 2% and the cost could well be passed on directly to consumers. Eventually I might be outcompeted by someone who has a fleet of electric trucks. Maybe, at some point. But until that happens, people could end up paying slightly more than they do now for essentials. Maybe this effect is covered in the policy details or by the term "revenue neutral". Either way a carbon tax is probably a good idea, but the chain of cause and effect isn't so clear.
- wskinner 11y ago
  This is simply a consequence of how prices communicate information through the market, and is the whole point. End-consumers should pay more for things that have a (direct or indirect) carbon footprint. Otherwise why would they change their behavior?
- jowiar 11y ago
  It's absolutely covered by "revenue neutral". We tax things, but then distribute the tax revenue among the citizenry. The cost absolutely will get passed on, but that is accounted for in the end when you receive a check for ~1/300,000,000th of the net tax paid. The increased cost of essentials would be a total wash, as presumably everyone is paying roughly the same -- except to the extent that by pricing the externality, there might be space to undercut the market with a non-polluting option where one didn't exist before, encouraging R&D.
  - deleted 11y ago
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    - zardo 11y ago
      This is the type of law being proposed. It has nothing to do with war. https://en.m.wikipedia.org/wiki/British_Columbia_carbon_tax https://en.m.wikipedia.org/wiki/British_Columbia_carbon_tax
serge2k 11y ago
Oh cool, a billionaire pushing a tax that will hurt the poor while he gets to make money helping millionaires avoid it.
- lectrick 11y ago
  Well, forcing gas to be cheaper had some unintended side effects in Venezuela: http://www.wsj.com/articles/SB10001424127887324000704578386771059515346 http://www.wsj.com/articles/SB100014241278873240007045783867... Anyway, I don't see how such a tax would single out the poor more than others. The negative externalities of burning gas to move cars (not to mention weed whackers and lawnmowers etc., which are somehow exempt from emissions controls and pollute horribly) need to be accounted for somehow. See: The tragedy of the commons.
  - dogma1138 11y ago
    The poor spend a considerably larger portion of their income on food, heating, and transportation which will be the 3 areas that suffer the most by a generic carbon tax. The food and agricultural industries represent most of our carbon emission as it is which will increase food prices. The poor would more likely to live in housing with inefficient heating burning either fossil fuel or using electric heating, and the poor are more likely to have to commute longer distances and are more likely to be dependent on both older vehicles and vehicles such as trucks and van which produce more carbon than newer efficient cars. This discrepancy will affect both the poor people in the developed world and developing nation that cannot afford the latest and greatest in new technologies, you won't be driving a Prius in central Africa you'll be driving a jeep from the 1980's. A flat carbon tax is very similar to VAT which is well known to affect lower income families considerably more than higher income ones which is why countries which use a VAT system rather than sales tax often exempt certain products such as food from it or tax it at a lower rate. When you spend most of your money on consumables or products which will be used to the point of not being able to be resold you are effectively bearing a more burden than those who spend a much smaller portion of their income on consumables and buy products which hold their value well as VAT is designed to capture the value of any potential future resells unlike a direct sales tax which only taxes a single point of sale. And if we make the carbon tax either deferential or tradeable (e.g. the old carbon caps) it will only result in developing nations being exploited further, if you can buy a nations carbon cap cheaply you'll do so, if the carbon tax in that nation is only pennies on the dollar compared to yours then you'll move your factories there and pollute at will because that would be the economical way to do business. There isn't a simple solution and while carbon tax is the easiest there's a good reason why allot of economists fear it even more than they fear global warming.
danieltillett 11y ago
I used to think that carbon taxes were the way to go, but I have seen how effective the fossil fuel industry is at creating FUD. When you consider an effective carbon tax makes all their assets worthless it is not surprising that they will do whatever it takes to block anything other than a nominal carbon tax. There really is only one way to get past the fossil fuel industry and that is to buy them out. Given the benefit from stopping global warming is spread over the whole community it is actually fairer if we did this rather than push a disproportionally share onto the owners of fossil fuel. Lets get serious and just pay off Exxon and their buddies.
- unchocked 11y ago
  Wow, hadn't thought of that. I wonder how much carbon you can lock up by buying long term oil leases and sitting on them, and what the price per ton would be.
  - danieltillett 11y ago
    In theory all of it. The complication is quite a bit of the "underground carbon" is owned by governments, but these can also be bought off. The key is stop fighting the owners of carbon and start working with them.
- pzone 11y ago
  This is a point which gets overlooked pretty often. It's the same as the value of taxi medallions in the Uber debate. Allowing Uber to operate in a city where technically only medallion owners were supposed to drive is actually really shitty to the owners of those medallions. You open it up, suddenly tell them that their investment is worthless because of a change in regulations. It's really unfair to them. Perhaps the way to quiet the medallion owners would be to pay them like 25% or 50% of what they were worth earlier in compromise bill allowing Uber in. They don't feel so slighted, everyone else gets Uber. That's win-win. How it would work in this case: pass a compromise bill which involves paying these companies some amount of cash so their shareholders won't feel so slighted. They will give up their fight against carbon taxes, and we avert global catastrophe.
dclowd9901 11y ago
Would this mean my company would charge me for using the break room microwave?
- madeofpalk 11y ago
  Yes, I'm sure it does. In practice though, I'm sure it will just get added to the electricity bill your employer sends you every month.
- ericd 11y ago
  It would just increase the price of dirty electricity. If they don't charge you for electricity now, I don't see why they would post-carbon-tax.
free2rhyme214 11y ago
Who wants to get taxed more? Answer: Democrat Bay Area Environmentalists & cheese eating surrender monkeys
- dkural 11y ago
  Yet they seem to be wealthier and healthier than the poor folk voting against their interests in the middle of the country.
- bluthru 11y ago
  It's not "taxed more", it's "taxed in accordance to its harm".
friendzis 11y ago
Carbon tax becomes a peculiar piece of legislation when viewed from Pirate Party's perspective (not necessarily that I agree with it, no ad hominem please). According to Rick Falkvinge [1] legislation must: * Be targeted at a problem * Solve the problem * Not create other problems in best case, worse problems in worst case * Be evidence based Carbon emission is considered a problem because it contributes to climate change. For carbon tax to be considered targeting a problem we must accept that climate change is a problem. Does it solve a problem? At least not directly. Taxes on tobacco and alcohol do not eliminate consumption, prohibition in US created a Mafia, jail-time for drug possession does not eliminate consumption, we have hard evidence confirming that. Such tax hinders accessibility, though. Since at least transportation is fossil fuel dependant, more or less everything (commodities including: food, public transportation) will get more expensive, thus less accessible. Do we have hard evidence (numbers, not general economic speculation) that x level carbon tax will lower carbon emissions by y? [1]: http://falkvinge.net/pirate-wheel/principles/quality-legislation/ http://falkvinge.net/pirate-wheel/principles/quality-legisla...
- pzone 11y ago
  You don't have to reduce carbon emissions to zero to solve global warming, you just have to discourage emissions to some degree. That is exactly what a carbon tax does. It directly solves the problem. Revenue-neutral tax is the key to dismissing the point about accessibility. You can take the tax revenue and mostly give it to poor people who are hurt the most by the tax.
- soared 11y ago
  By your logic we should remove alc/tobacco taxes then? Global warming (in the long term) is more harmful than either of those.
DAddYE 11y ago
I don't think will ever work. There are countries where taxes are way higher than US. For example in Italy [1] we are around 50% (including VAT and local taxes) and other than decreasing the productivity of companies it never had a "mind" impact. In fact Italy is one of the countries with most cars (per citizen) and that invest less/nothing in alternative energies. [1] https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-...
- pilsetnieks 11y ago
  From the article: > Musk, who has pushed for a carbon tax before, said the tax should be revenue neutral and phased in over a period of years. A revenue neutral tax means governments would still receive the same amount of money despite a change in the tax code. Under Musk’s scenario, taxes would be weighted heavily on carbon, and reduced in other areas. This approach already occurs, Musk said, citing how taxes are higher on cigarettes and alcohol than fruits and vegetables. He's proposing lowering other taxes simultaneously, so the government gets the same amount, no tax hike necessary.
- cma 11y ago
  That's just a generic across the board tax you are talking about and linking to isn't it? Rather than a specific incentive/disincentive in one area (carbon emissions).
- pzone 11y ago
  50% tax on everything across the board is different from differentially taxing carbon. Taxing everything at once just slows down all economic behavior at once, but putting an additional tax on carbon makes people shift their behavior to avoid that tax in particular.
ulfw 11y ago
also can be read as "Only a Carbon Tax Will Accelerate Sales of My Extremely Expensive Vehicles"
funkyy 11y ago
You cannot just introduce tax and hope for best when the whole tax system and tax recovery is a joke that hurts mainly SMBs. Its not like big corporations will pay them anyway. If you want to introduce a tax on something so intangible as emissions, you would need to build easy to track and easy to use tax system.
- pzone 11y ago
  ?? You just tax sales of oil, natural gas, etc. and a few other specific activities, like raising livestock, it's super easy If Congress can implement something as complex as the Dodd-Frank act, I'm sure it can measure and tax something as basic as carbon emissions
  - dagw 11y ago
    If only a few countries introduces/enforces this tax it will simply drive the huge carbon emitters to move their emissions to other countries. The only people that will be hurt are those that are too small to move.
    - pzone 11y ago
      Yes, and that's why 160+ world leaders are gathering in Paris to take steps toward a global carbon emissions agreement
      - funkyy 11y ago
        US and China are unlikely to go with it or they will end up playing the rules. The same as it is now. Also - you are right, taxing will work. Its not like corporations and huge manufacturers will play the system and avoid paying taxes or getting them back through loopholes. Only ones affected will be mostly SMBs and regular folks - as always.
walsh-cloonagh 11y ago
Spending is a lot easier than taxing. A country could just offer to buy a increasing amount of zero emission electricity and sell it on the free market until electricity was no longer generated from sources that yielded carbon. The same approach could work for battery cells that could be used in cars until non-electric vehicles were no longer competitive. This could be funded by that country's current (probably) progressive tax system. This doesn't cover air, sea, heating and agriculture emissions. But a carbon tax may not be an adequate incentive to develop electric aircraft or cargo vessels in any case.
- pzone 11y ago
  what?
  - adventured 11y ago
    The parent is arguing for extreme subsidization to alter the market for electricity and vehicles (etc). They effectively want the government to spend a lot of money to bankrupt the fossil fuels industry and fossil fuel vehicles, with subsidies toward the generation of renewables and producing electric vehicles. They're wrong that spending is easier however. Republicans control Congress and the US made a massive mistake in taking on ~$15 trillion in new public debt between 2000 and 2015. Simply put, the US doesn't have vast excess spending room (which means it would require tax increases or new taxes). It would cost trillions over a few decades to pull off the parent's plan.
    - pzone 11y ago
      I agree that a subsidy is infeasible policy. But it wouldn't be effective even if it were feasible to pull off. Suppose the government gives out free Priuses. Well, then people are going to drive more. Even though some people may be driving more fuel efficient cars, it's not clear that total carbon emissions decrease. Suppose the government provides free solar cells for everyone. Then people will use a lot more electricity. But solar cells require some carbon emissions to produce, and since people use so much more electricity overall, it's not clear whether carbon emissions decrease or increase. Either way it's just a totally goofy thought experiment, since a carbon tax is exactly the right answer, and this subsidy idea is so misguided that it could possibly even increase carbon emissions
whazor 11y ago
In my opinion a carbon tax is also interesting for oil and gas companies. As the carbon tax would enable them to compete on technologies that minimize the carbon output of their machines. It would enable them to differentiate from each other.
EGreg 11y ago
I am worried. Even if we switch to other forms of energy, aren't we heating up the planet? Or do we expect it all to be radiated faster to space over time? http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-physicist/ http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-...
- pzone 11y ago
  Oh god, that article, classic /r/badeconomics No, we don't have to worry about heating up the planet from our energy use, the only major factor is the degree to which the atmosphere traps heat
sukulaku 11y ago
Elon might want to investigate the issue he's talking about: https://www.youtube.com/watch?v=lQqPQ0i_fl0 https://www.youtube.com/watch?v=lQqPQ0i_fl0 >> Don't you hate when Fox News and the other MSM spin-meisters use simple tricks to skew and misrepresent data and statistics? How about when the World Meteorological Organization does it? Or NASA? Or the Journal of Climate? Or GISS? Join James for today's thought for the day as he shows you some of the grade school level parlour tricks the global warming alarmists use to misrepresent their data and bamboozle the public.
- tempestn 11y ago
  His quibble with the bar graphs there doesn't make a lot of sense given that a Y-axis starting at 0 degrees is just as arbitrary as starting it at 13.4 degrees.
  - sukulaku 11y ago
    The point was that starting the Y-axis "suitably high" makes it look like the relative differences in the values are greater than they actually are. In this case, it was done to make "climate change" look like a vastly bigger problem than it actually is. It wasn't just "his quibble" - it's a very real problem with the way the (actual non-)issue is presented to the masses.
jbb555 11y ago
Yeah I was a big fan of Elon Musk, and then he says this. Ugh. Tax never solved anything except letting politicians take your money for their own uses. He's fallen for it.
- pzone 11y ago
  Are you joking? It is harder to find a tighter consensus among experts than the conclusion that a tax is the best policy to curb carbon emissions. http://www.brookings.edu/research/opinions/2013/03/12-taxing-carbon-gale http://www.brookings.edu/research/opinions/2013/03/12-taxing...
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Synaesthesia 11y ago
Another thing that would help is to stop subsidizing the fossil-fuel industry! The IMF estimates that about $5.3 trillion is spent annually subsidizing fossil fuel energy. http://www.imf.org/external/pubs/ft/survey/so/2015/NEW070215A.htm http://www.imf.org/external/pubs/ft/survey/so/2015/NEW070215...
- danieltillett 11y ago
  This is certainly the low hanging fruit.
piokoch 11y ago
The question is who will pay that tax? In Musk vision governments should lower other taxes (which one?) and introduce carbon tax. I am afraid that the devil is in the details and it may turn out that this tax will be paid mostly by car owners (rising delivery costs, so food prices would grow) or people in rural areas who use coal heaters. The poor will suffer most in such case. I am also afraid that governments wouldn't do anything else to lower carbon emission - doing that would be stupid, they get more money thanks to large carbon emission. I think it is time to figure out honestly, without any eco/anti-eco bullshit what it the best (clear, cheap and practical) way to produce energy. I suspect this will never be done, as eco people would have to admit that nuclear energy is a viable option to go (I don't believe we can base modern economy on energy sources that depend on weather). Anti-eco people would have to admit that fresh air is something more important than coal mine owners interest (and coal mine workers interest too). I really regret nuclear energy had such a bad press and, as a result, there weren't any significant innovation in that area (in particular how to reuse nuclear wastes).
- pzone 11y ago
  Well, lower taxes on poor people. Increase welfare, subsidize public transportation and other things that help transfer money to people who are hurt by the tax. "Figure out the best way to produce energy" is not something we can figure out posting on HN, or even in a presidential debate. It is a complex and very uncertain question, but since it is a question of innovation, it is the kind of question that markets are very good at answering. A carbon tax directs the market toward finding out the solution efficiently.
- tbabb 11y ago
  > I am afraid that the devil is in the details and it may turn out that this tax will be paid mostly by car owners (rising delivery costs, so food prices would grow) or people in rural areas who use coal heaters. The poor will suffer most in such case. [citation needed]
TheWoodsy 11y ago
Carbon tax in Australia. All extra expenses were passed along down the chain to the consumer. We got rid of the tax. Prices stayed the same. sigh Implementation and/or regulation is key.
- icelancer 11y ago
  >Implementation and/or regulation is key. Sounds like it worked perfectly as designed. That's what happens when things are regulated.
- crdoconnor 11y ago
  >Carbon tax in Australia. All extra expenses were passed along down the chain to the consumer. We got rid of the tax. Prices stayed the same. In general if a corporate think tank said something happened or something is going to happen and it impinges upon their profits, there's a better than even chance they're lying through their teeth. See also: minimum wage, regulation of the financial sector, anything to do with debt, etc.
transfire 11y ago
Or a new battery that holds twice the power, charges twice as fast and costs half as much. Yeah, or that.
netcan 11y ago
When it comes to carbon reduction using tax, tradable, caps or any other instrument that tries to use the price system to alter consumption levels… I think you need a very sober economic estimate of efficiency and cost. A tax is not very different economically from other price increases in carbon fuels. These prices vary a lot over time. We also already have fairly variable taxes between countries on the use of carbon fuels for (eg) cars. Here's oil: http://www.nasdaq.com/markets/crude-oil-brent.aspx?timeframe=10y http://www.nasdaq.com/markets/crude-oil-brent.aspx?timeframe... The price varies a lot. Consumption does not vary that much or that fast. This is called price inelasticity of demand. Demand does not drop much for incremental increases in price. This means that to decrease consumption we'd need a very high carbon tax. In Europe, petrol has been taxed heavily for a long time and prices are higher than in the US. The long term effect has been somewhat smaller cars, not a completely different transportation market. There are also the realpolitik problems. When the public is concerned about something (say water), it's not impossible to convince the public (consumers) to bear a burden. But, entrenched economic interest are harder to sway or wrangle. This leads to weird regulation. An area where water use is distributed 15/35/50 between households/industry/agriculture will successfully enact water restrictions of some sort on households, the minor participant. There are equivalents in energy. I'm not saying do nothing, but I am saying be smart. Some plans are winers from a public debate perspective but do not solve the problem. I am against a plan that acts a a regressive tax affecting the middle and lower classes harshly unless it is going to have a big impact. If a household with $4,000 annual fuel costs (heating and transport) is to pay $7,000, the overall expected result better be big steps towards carbon goals. I have a hard time seeing this happen. Lets do a back of the envelope: take that $5.3 trillion externality at face value. Lets assume the world's 2 billion top consumers pay the majority of it. Call it 4 trillion, $2k each, $8k for a family of 4. How much of a reduction will we see? 10%? 25%? I'm not completely down on the idea. Elon Musk suggests lowering taxes elsewhere, being revenue neutral. This is a realistic politics problem again. Lets say we can do that though, globally. Reduce bottom level income tax and value added taxes by this much, people would be less harmed. Still, transport & heating make up a large part of poorer people's income so it's hard to think of a way this would not be regressive. I'm sure it is theoretically possible, but very hard. At the end of this ramble, I'm not sure where I am. I'd like to see a realistic estimate of actual reductions in emissions. This is too big a deal not to fix the problem.
tmaly 11y ago
how would another tax benefit the current economy? How would this tax be spent?

157 points by cpeterso 11y ago

A phased-in revenue-neutral carbon tax of $30/ton would increase electricity rates in (most of) the US by < 10%. And could lower income taxes (or if not revenue neutral) reduce the debt. What's not to like?

eru 11y ago
If it's revenue neutral and lowering income taxes, where would the big `victims' be?
- SEJeff 11y ago
  Electricity producing plants that burn cheap fossil fuels such as coal :)
- rhc2104 11y ago
  People/companies that use more fossil fuels.
- diamondtrim 11y ago
  As usual, probably the poor & lower middle class unless the income tax reduction were explicitly directed to the lowest tax brackets to limit impact on working poor. Those below the poverty line would see an increase in their energy costs at the pump and and home electric bills as energy producers raise rates to compensate (and the impoverished are the least able to convert their use, so will be the longest affected by the transition).
  - mac01021 11y ago
    The best solution I've seen is a "fee and dividend" system, where a carbon fee is collected and the proceeds are rebated in equal amounts to every legal resident of the nation. This means that, when gas prices go up, a lower-class person whose carbon footprint is exactly that of the average citizen will be reimbursed for the extra gas money by exactly the right amount. And the tax ends up being not regressive. Compare the carbon footprint of a well-to-do businessman who flies coast-to-coast on a monthly basis with that of a working-class guy who drives ten miles a day and heats his house with oil. The former is greater then the latter by several times. The working-class guy contributes a relatively small share to global warming, but bears an equal share of the public cost induced by the changing climate. Under the fee-and-dividend system, every man reimburses the public for the cost that he is imposing on them through his CO2 emissions, and is reimbursed by everyone else for the cost they impose on him. Because of this I argue that a carbon fee and dividend is the right policy from a social justice perspective, and should be enacted even if it is not going to be sufficient to push us as a society off of fossil fuels. Google "carbon fee and dividend" or see this (http://www.skepticalscience.com/CCL-pushing-for-US-fee-and-dividend.html http://www.skepticalscience.com/CCL-pushing-for-US-fee-and-d...) for more.
  - serge2k 11y ago
    You could do a credit back from the proceeds.
- danieltillett 11y ago
  The big victims are the owners of fossil fuel deposits and infrastructure. Have a guess who is funding all the FUD about global warming. Personally I think we should just buy the fossil fuel owners out at current market prices and shut them down as soon as possible. FUD in this area is just too effective to counter with logic or science so lets pay them off. If we wanted to be really clever we could do a 1 for 1 swap - Exxon we are buying your oil field and here is a wind farm in return.
  - pzone 11y ago
    You should stop casting these guys as villains, it obscures the main point of your argument. You would probably do the same lobbying if you were in their position. (Rather, if you were a major shareholder in Exxon, you would demand that managers do it.) Just think of this in terms of Exxon &c having an effective negotiating position for blocking the carbon tax. We don't have to buy things at current market prices, but at a discount. Recognizing that there's room for negotiation is what everyone overlooks.
    - danieltillett 11y ago
      I didn't mean to cast Exxon and co as villains, just explain why. Yes I think we need to recognise that they have a very strong hand and deal with it head on. Trying to fight them will only mean we all lose.
- samcheng 11y ago
  Fossil fuel producers and power plant operators. A few states, and therefore a motivated group of Senators, would be hit disproportionately hard. Places like Wyoming and West Virginia drive a considerable part of their economy from coal, and fracking has led to natural gas windfalls in states like North Dakota. You would imagine that some large carbon-intensive companies, like Koch or ExxonMobil, would also be impacted significantly. EDIT: The counterpoint is that a gas tax in particular is quite regressive. The poor pay a larger portion of their income toward necessities like fuel to drive to work. They also are less likely to be able to afford that Tesla. Entry-level service workers can't work from home. They might be commuting large distances from cheaper outlying areas. There are many reasons why (if not managed properly) a carbon tax could hurt the wrong people. It still seems like the right idea to me, though! We need to avoid calling it a 'tax' though, to avoid the Grover Norquist influence...
- bigiain 11y ago
  The answer used to be "aluminum smelters" (aluminum, aka "frozen electricity"). Interestingly, the aluminum smelters in the mountains behind Portland closed down when the datacenters moved in and bought all the cheap hydro electricity they used to use. My guess is that a tax increase on electricity will hit the Google/Facebook/Amazon/Apple/Microsoft and other "cloud businesses" pretty hard...
  - unchocked 11y ago
    Doubt it. If the price of electricity goes up 20%, the cost of computing goes up <20%. Sellers of computing pass that cost onto consumers. I don't know anyone who would go out of business if their server bill went up 20%, especially if it went up the same for their competitors.
  - crdoconnor 11y ago
    Aluminium smelters in Germany are actually getting a big subsidy. They're varying their electricity usage based upon the output of Germany's solar/wind farms and getting paid a hefty sum to do so (possibly too much). This is having a negative impact on other smelters across the world. Effectively they're doing the same job we were always told batteries would do.
    - greglindahl 11y ago
      If they're paying a fair amount for electricity, it's not a subsidy. And it's probably not a minute-timescale change like batteries. Energy storage and batteries are quite different things.
  - ZeroGravitas 11y ago
    Microsoft already implements an internal carbon tax, so those sectors of Microsoft are already paying some amount for this. I think they spend the money raised on efficiency and sourcing clean energy.
- hueving 11y ago
  The poor and lower middle class who effectively pay no income taxes already.
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serge2k 11y ago
The fact that a 10% increase in electricity costs is probably going disproportionately affect the poor?
- 5ersi 11y ago
  The proposed tax is basically a spending tax, much like a sales tax. It would effectively raise the price of any products/services that rely on carbon-based energy to be made/delivered. Remind me: how does a spending tax disproportionately affect the poor? The tax goes into a local/federal budget, where poor disproportionately benefit from it (compared to what they put in). Also, the arguably biggest global challenge in the next decades is going to be to slow/reverse the adverse effects of the global warming, which WILL disproportionately affect the poor (which have less ability to adapt or move). So how is doing something about global waring really disproportionately affecting the poor on the long run?
  - pzone 11y ago
    Poor living in rural/exurban areas, spend more of their money on utilities & transportation overall You're assuming here that the money will be spent on the poor, but we really have to make sure that will actulaly happen if we want the carbon tax to have fair distributional implications
  - samcheng 11y ago
    Some people need to scrape together cash to buy enough gas to get to work. Poor people spend a disproportionate amount of their income on necessities like fuel for an aging inefficient vehicle, electricity or natural gas to heat a cheaply-constructed home, and factory-farmed food created with cheap nitrogen fertilizer. All of those necessities get more expensive with a carbon tax, so we need a way to cushion the impact on those who struggle to pay for the basics. While the impact of global warming does impact the global poor quite heavily (think of places like Bangladesh) it doesn't really hurt the poor in developed places much more than the rich in developed places. I was a lot less worried about El Niño when I rented an apartment, for example.
  - brandonmenc 11y ago

valvar 11y ago

Not that I disagree (in fact I strongly agree), but is Musk really the person we should be taking this from? It's a bit like taking investment advice from your bank, meseems. Not necessarily a bad idea, but you might want to hear with people who don't have an active interest in the placement of your money first.

enraged_camel 11y ago
>>Not necessarily a bad idea, but you might want to hear with people who don't have an active interest in the placement of your money first. Those people do in fact agree with Musk. Here's James Henson, one of the world's foremost climate scientists: http://arstechnica.com/science/2015/11/prominent-climate-scientist-offers-scathing-critique-of-obamas-paris-plans/ http://arstechnica.com/science/2015/11/prominent-climate-sci... "The only way to meaningfully address carbon emissions is to put a tax on carbon-based fuels, and to refund the entire amount as a dividend to consumers."
- valvar 11y ago
  That's what I mean. That article, for example, would have been a much more meaningful submission. Musk's vested interests make it harder to take his statements at face value (even if they are entirely correct).
msellout 11y ago
Well, your barber is an expert on hair.
- hawkice 11y ago
  Well, if you really want to drill down on this example: the barber doesn't have substantial interests in which type of haircut you get. Tesla has substantial interest in which kind of carbon tax you get -- high carbon tax would be a boon. Doesn't materially effect how good an idea carbon taxes are, though. Also, do people ask their barber what haircut they should get? I have only ever done a buzz cut or given a description / picture.

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3pt14159 11y ago

Not just a carbon tax, but a system of well thought out taxes that cover the negative externalities of every part of pollution so that the market can efficiently allocate investments. For example, most people don't know that coal causes more radiation damage to humans than nuclear. Why is this? Because coal gets released right into the atmosphere, while spent fuel rods get stored away from human contact. I know that there are political realities that prevent all of the taxes that should be in effect from coming into effect, but those political realities can change once the issue is reframed. Every dollar of pollution tax could, for example, be directed at lowering the income tax rate. This can make the proposal much more tenable to voters and the more right wing side of the intelligentsia that pushes for changes in government policy.

pzone 11y ago
That sounds like a lovely economist's utopia, but probably we should be tackling our problems one at a time
sukulaku 11y ago
> well thought out taxes that cover the negative externalities of every part of pollution so that the market can efficiently allocate investments But it's not "the market" that decides how electricity is produced in a country, right? It's the government.
- alerkay 11y ago
  Good point

karmacondon 11y ago

> "This approach already occurs, Musk said, citing how taxes are higher on cigarettes and alcohol than fruits and vegetables" This is a good point, but generally discouraging the use of cigarettes or alcohol through taxation only effects people who consume those products. If you raise the tax on carbon, that cost could be passed on by businesses in unexpected ways. If the cost of me shipping vegetables across the country goes up by 2%, I'm just going to increase what I charge for shipping by at least 2% and the cost could well be passed on directly to consumers. Eventually I might be outcompeted by someone who has a fleet of electric trucks. Maybe, at some point. But until that happens, people could end up paying slightly more than they do now for essentials. Maybe this effect is covered in the policy details or by the term "revenue neutral". Either way a carbon tax is probably a good idea, but the chain of cause and effect isn't so clear.

wskinner 11y ago
This is simply a consequence of how prices communicate information through the market, and is the whole point. End-consumers should pay more for things that have a (direct or indirect) carbon footprint. Otherwise why would they change their behavior?
jowiar 11y ago
It's absolutely covered by "revenue neutral". We tax things, but then distribute the tax revenue among the citizenry. The cost absolutely will get passed on, but that is accounted for in the end when you receive a check for ~1/300,000,000th of the net tax paid. The increased cost of essentials would be a total wash, as presumably everyone is paying roughly the same -- except to the extent that by pricing the externality, there might be space to undercut the market with a non-polluting option where one didn't exist before, encouraging R&D.
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  - zardo 11y ago
    This is the type of law being proposed. It has nothing to do with war. https://en.m.wikipedia.org/wiki/British_Columbia_carbon_tax https://en.m.wikipedia.org/wiki/British_Columbia_carbon_tax

serge2k 11y ago

Oh cool, a billionaire pushing a tax that will hurt the poor while he gets to make money helping millionaires avoid it.

lectrick 11y ago
Well, forcing gas to be cheaper had some unintended side effects in Venezuela: http://www.wsj.com/articles/SB10001424127887324000704578386771059515346 http://www.wsj.com/articles/SB100014241278873240007045783867... Anyway, I don't see how such a tax would single out the poor more than others. The negative externalities of burning gas to move cars (not to mention weed whackers and lawnmowers etc., which are somehow exempt from emissions controls and pollute horribly) need to be accounted for somehow. See: The tragedy of the commons.
- dogma1138 11y ago
  The poor spend a considerably larger portion of their income on food, heating, and transportation which will be the 3 areas that suffer the most by a generic carbon tax. The food and agricultural industries represent most of our carbon emission as it is which will increase food prices. The poor would more likely to live in housing with inefficient heating burning either fossil fuel or using electric heating, and the poor are more likely to have to commute longer distances and are more likely to be dependent on both older vehicles and vehicles such as trucks and van which produce more carbon than newer efficient cars. This discrepancy will affect both the poor people in the developed world and developing nation that cannot afford the latest and greatest in new technologies, you won't be driving a Prius in central Africa you'll be driving a jeep from the 1980's. A flat carbon tax is very similar to VAT which is well known to affect lower income families considerably more than higher income ones which is why countries which use a VAT system rather than sales tax often exempt certain products such as food from it or tax it at a lower rate. When you spend most of your money on consumables or products which will be used to the point of not being able to be resold you are effectively bearing a more burden than those who spend a much smaller portion of their income on consumables and buy products which hold their value well as VAT is designed to capture the value of any potential future resells unlike a direct sales tax which only taxes a single point of sale. And if we make the carbon tax either deferential or tradeable (e.g. the old carbon caps) it will only result in developing nations being exploited further, if you can buy a nations carbon cap cheaply you'll do so, if the carbon tax in that nation is only pennies on the dollar compared to yours then you'll move your factories there and pollute at will because that would be the economical way to do business. There isn't a simple solution and while carbon tax is the easiest there's a good reason why allot of economists fear it even more than they fear global warming.

danieltillett 11y ago

I used to think that carbon taxes were the way to go, but I have seen how effective the fossil fuel industry is at creating FUD. When you consider an effective carbon tax makes all their assets worthless it is not surprising that they will do whatever it takes to block anything other than a nominal carbon tax. There really is only one way to get past the fossil fuel industry and that is to buy them out. Given the benefit from stopping global warming is spread over the whole community it is actually fairer if we did this rather than push a disproportionally share onto the owners of fossil fuel. Lets get serious and just pay off Exxon and their buddies.

unchocked 11y ago
Wow, hadn't thought of that. I wonder how much carbon you can lock up by buying long term oil leases and sitting on them, and what the price per ton would be.
- danieltillett 11y ago
  In theory all of it. The complication is quite a bit of the "underground carbon" is owned by governments, but these can also be bought off. The key is stop fighting the owners of carbon and start working with them.
pzone 11y ago
This is a point which gets overlooked pretty often. It's the same as the value of taxi medallions in the Uber debate. Allowing Uber to operate in a city where technically only medallion owners were supposed to drive is actually really shitty to the owners of those medallions. You open it up, suddenly tell them that their investment is worthless because of a change in regulations. It's really unfair to them. Perhaps the way to quiet the medallion owners would be to pay them like 25% or 50% of what they were worth earlier in compromise bill allowing Uber in. They don't feel so slighted, everyone else gets Uber. That's win-win. How it would work in this case: pass a compromise bill which involves paying these companies some amount of cash so their shareholders won't feel so slighted. They will give up their fight against carbon taxes, and we avert global catastrophe.

dclowd9901 11y ago

Would this mean my company would charge me for using the break room microwave?

madeofpalk 11y ago
Yes, I'm sure it does. In practice though, I'm sure it will just get added to the electricity bill your employer sends you every month.
ericd 11y ago
It would just increase the price of dirty electricity. If they don't charge you for electricity now, I don't see why they would post-carbon-tax.

free2rhyme214 11y ago

Who wants to get taxed more? Answer: Democrat Bay Area Environmentalists & cheese eating surrender monkeys

dkural 11y ago
Yet they seem to be wealthier and healthier than the poor folk voting against their interests in the middle of the country.
bluthru 11y ago
It's not "taxed more", it's "taxed in accordance to its harm".

friendzis 11y ago

Carbon tax becomes a peculiar piece of legislation when viewed from Pirate Party's perspective (not necessarily that I agree with it, no ad hominem please). According to Rick Falkvinge [1] legislation must: * Be targeted at a problem * Solve the problem * Not create other problems in best case, worse problems in worst case * Be evidence based Carbon emission is considered a problem because it contributes to climate change. For carbon tax to be considered targeting a problem we must accept that climate change is a problem. Does it solve a problem? At least not directly. Taxes on tobacco and alcohol do not eliminate consumption, prohibition in US created a Mafia, jail-time for drug possession does not eliminate consumption, we have hard evidence confirming that. Such tax hinders accessibility, though. Since at least transportation is fossil fuel dependant, more or less everything (commodities including: food, public transportation) will get more expensive, thus less accessible. Do we have hard evidence (numbers, not general economic speculation) that x level carbon tax will lower carbon emissions by y? [1]: http://falkvinge.net/pirate-wheel/principles/quality-legislation/ http://falkvinge.net/pirate-wheel/principles/quality-legisla...

pzone 11y ago
You don't have to reduce carbon emissions to zero to solve global warming, you just have to discourage emissions to some degree. That is exactly what a carbon tax does. It directly solves the problem. Revenue-neutral tax is the key to dismissing the point about accessibility. You can take the tax revenue and mostly give it to poor people who are hurt the most by the tax.
soared 11y ago
By your logic we should remove alc/tobacco taxes then? Global warming (in the long term) is more harmful than either of those.

DAddYE 11y ago

I don't think will ever work. There are countries where taxes are way higher than US. For example in Italy [1] we are around 50% (including VAT and local taxes) and other than decreasing the productivity of companies it never had a "mind" impact. In fact Italy is one of the countries with most cars (per citizen) and that invest less/nothing in alternative energies. [1] https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-...

pilsetnieks 11y ago
From the article: > Musk, who has pushed for a carbon tax before, said the tax should be revenue neutral and phased in over a period of years. A revenue neutral tax means governments would still receive the same amount of money despite a change in the tax code. Under Musk’s scenario, taxes would be weighted heavily on carbon, and reduced in other areas. This approach already occurs, Musk said, citing how taxes are higher on cigarettes and alcohol than fruits and vegetables. He's proposing lowering other taxes simultaneously, so the government gets the same amount, no tax hike necessary.
cma 11y ago
That's just a generic across the board tax you are talking about and linking to isn't it? Rather than a specific incentive/disincentive in one area (carbon emissions).
pzone 11y ago
50% tax on everything across the board is different from differentially taxing carbon. Taxing everything at once just slows down all economic behavior at once, but putting an additional tax on carbon makes people shift their behavior to avoid that tax in particular.

ulfw 11y ago

also can be read as "Only a Carbon Tax Will Accelerate Sales of My Extremely Expensive Vehicles"

funkyy 11y ago

You cannot just introduce tax and hope for best when the whole tax system and tax recovery is a joke that hurts mainly SMBs. Its not like big corporations will pay them anyway. If you want to introduce a tax on something so intangible as emissions, you would need to build easy to track and easy to use tax system.

pzone 11y ago
?? You just tax sales of oil, natural gas, etc. and a few other specific activities, like raising livestock, it's super easy If Congress can implement something as complex as the Dodd-Frank act, I'm sure it can measure and tax something as basic as carbon emissions
- dagw 11y ago
  If only a few countries introduces/enforces this tax it will simply drive the huge carbon emitters to move their emissions to other countries. The only people that will be hurt are those that are too small to move.
  - pzone 11y ago
    Yes, and that's why 160+ world leaders are gathering in Paris to take steps toward a global carbon emissions agreement
    - funkyy 11y ago
      US and China are unlikely to go with it or they will end up playing the rules. The same as it is now. Also - you are right, taxing will work. Its not like corporations and huge manufacturers will play the system and avoid paying taxes or getting them back through loopholes. Only ones affected will be mostly SMBs and regular folks - as always.

walsh-cloonagh 11y ago

Spending is a lot easier than taxing. A country could just offer to buy a increasing amount of zero emission electricity and sell it on the free market until electricity was no longer generated from sources that yielded carbon. The same approach could work for battery cells that could be used in cars until non-electric vehicles were no longer competitive. This could be funded by that country's current (probably) progressive tax system. This doesn't cover air, sea, heating and agriculture emissions. But a carbon tax may not be an adequate incentive to develop electric aircraft or cargo vessels in any case.

pzone 11y ago
what?
- adventured 11y ago
  The parent is arguing for extreme subsidization to alter the market for electricity and vehicles (etc). They effectively want the government to spend a lot of money to bankrupt the fossil fuels industry and fossil fuel vehicles, with subsidies toward the generation of renewables and producing electric vehicles. They're wrong that spending is easier however. Republicans control Congress and the US made a massive mistake in taking on ~$15 trillion in new public debt between 2000 and 2015. Simply put, the US doesn't have vast excess spending room (which means it would require tax increases or new taxes). It would cost trillions over a few decades to pull off the parent's plan.
  - pzone 11y ago
    I agree that a subsidy is infeasible policy. But it wouldn't be effective even if it were feasible to pull off. Suppose the government gives out free Priuses. Well, then people are going to drive more. Even though some people may be driving more fuel efficient cars, it's not clear that total carbon emissions decrease. Suppose the government provides free solar cells for everyone. Then people will use a lot more electricity. But solar cells require some carbon emissions to produce, and since people use so much more electricity overall, it's not clear whether carbon emissions decrease or increase. Either way it's just a totally goofy thought experiment, since a carbon tax is exactly the right answer, and this subsidy idea is so misguided that it could possibly even increase carbon emissions

whazor 11y ago

In my opinion a carbon tax is also interesting for oil and gas companies. As the carbon tax would enable them to compete on technologies that minimize the carbon output of their machines. It would enable them to differentiate from each other.

EGreg 11y ago

I am worried. Even if we switch to other forms of energy, aren't we heating up the planet? Or do we expect it all to be radiated faster to space over time? http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-physicist/ http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-...

pzone 11y ago
Oh god, that article, classic /r/badeconomics No, we don't have to worry about heating up the planet from our energy use, the only major factor is the degree to which the atmosphere traps heat

sukulaku 11y ago

Elon might want to investigate the issue he's talking about: https://www.youtube.com/watch?v=lQqPQ0i_fl0 https://www.youtube.com/watch?v=lQqPQ0i_fl0 >> Don't you hate when Fox News and the other MSM spin-meisters use simple tricks to skew and misrepresent data and statistics? How about when the World Meteorological Organization does it? Or NASA? Or the Journal of Climate? Or GISS? Join James for today's thought for the day as he shows you some of the grade school level parlour tricks the global warming alarmists use to misrepresent their data and bamboozle the public.

tempestn 11y ago
His quibble with the bar graphs there doesn't make a lot of sense given that a Y-axis starting at 0 degrees is just as arbitrary as starting it at 13.4 degrees.
- sukulaku 11y ago
  The point was that starting the Y-axis "suitably high" makes it look like the relative differences in the values are greater than they actually are. In this case, it was done to make "climate change" look like a vastly bigger problem than it actually is. It wasn't just "his quibble" - it's a very real problem with the way the (actual non-)issue is presented to the masses.

jbb555 11y ago

Yeah I was a big fan of Elon Musk, and then he says this. Ugh. Tax never solved anything except letting politicians take your money for their own uses. He's fallen for it.

pzone 11y ago
Are you joking? It is harder to find a tighter consensus among experts than the conclusion that a tax is the best policy to curb carbon emissions. http://www.brookings.edu/research/opinions/2013/03/12-taxing-carbon-gale http://www.brookings.edu/research/opinions/2013/03/12-taxing...

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Synaesthesia 11y ago

Another thing that would help is to stop subsidizing the fossil-fuel industry! The IMF estimates that about $5.3 trillion is spent annually subsidizing fossil fuel energy. http://www.imf.org/external/pubs/ft/survey/so/2015/NEW070215A.htm http://www.imf.org/external/pubs/ft/survey/so/2015/NEW070215...

danieltillett 11y ago
This is certainly the low hanging fruit.

piokoch 11y ago

The question is who will pay that tax? In Musk vision governments should lower other taxes (which one?) and introduce carbon tax. I am afraid that the devil is in the details and it may turn out that this tax will be paid mostly by car owners (rising delivery costs, so food prices would grow) or people in rural areas who use coal heaters. The poor will suffer most in such case. I am also afraid that governments wouldn't do anything else to lower carbon emission - doing that would be stupid, they get more money thanks to large carbon emission. I think it is time to figure out honestly, without any eco/anti-eco bullshit what it the best (clear, cheap and practical) way to produce energy. I suspect this will never be done, as eco people would have to admit that nuclear energy is a viable option to go (I don't believe we can base modern economy on energy sources that depend on weather). Anti-eco people would have to admit that fresh air is something more important than coal mine owners interest (and coal mine workers interest too). I really regret nuclear energy had such a bad press and, as a result, there weren't any significant innovation in that area (in particular how to reuse nuclear wastes).

pzone 11y ago
Well, lower taxes on poor people. Increase welfare, subsidize public transportation and other things that help transfer money to people who are hurt by the tax. "Figure out the best way to produce energy" is not something we can figure out posting on HN, or even in a presidential debate. It is a complex and very uncertain question, but since it is a question of innovation, it is the kind of question that markets are very good at answering. A carbon tax directs the market toward finding out the solution efficiently.
tbabb 11y ago
> I am afraid that the devil is in the details and it may turn out that this tax will be paid mostly by car owners (rising delivery costs, so food prices would grow) or people in rural areas who use coal heaters. The poor will suffer most in such case. [citation needed]

TheWoodsy 11y ago

Carbon tax in Australia. All extra expenses were passed along down the chain to the consumer. We got rid of the tax. Prices stayed the same. sigh Implementation and/or regulation is key.

icelancer 11y ago
>Implementation and/or regulation is key. Sounds like it worked perfectly as designed. That's what happens when things are regulated.
crdoconnor 11y ago
>Carbon tax in Australia. All extra expenses were passed along down the chain to the consumer. We got rid of the tax. Prices stayed the same. In general if a corporate think tank said something happened or something is going to happen and it impinges upon their profits, there's a better than even chance they're lying through their teeth. See also: minimum wage, regulation of the financial sector, anything to do with debt, etc.

transfire 11y ago

Or a new battery that holds twice the power, charges twice as fast and costs half as much. Yeah, or that.

netcan 11y ago

When it comes to carbon reduction using tax, tradable, caps or any other instrument that tries to use the price system to alter consumption levels… I think you need a very sober economic estimate of efficiency and cost. A tax is not very different economically from other price increases in carbon fuels. These prices vary a lot over time. We also already have fairly variable taxes between countries on the use of carbon fuels for (eg) cars. Here's oil: http://www.nasdaq.com/markets/crude-oil-brent.aspx?timeframe=10y http://www.nasdaq.com/markets/crude-oil-brent.aspx?timeframe... The price varies a lot. Consumption does not vary that much or that fast. This is called price inelasticity of demand. Demand does not drop much for incremental increases in price. This means that to decrease consumption we'd need a very high carbon tax. In Europe, petrol has been taxed heavily for a long time and prices are higher than in the US. The long term effect has been somewhat smaller cars, not a completely different transportation market. There are also the realpolitik problems. When the public is concerned about something (say water), it's not impossible to convince the public (consumers) to bear a burden. But, entrenched economic interest are harder to sway or wrangle. This leads to weird regulation. An area where water use is distributed 15/35/50 between households/industry/agriculture will successfully enact water restrictions of some sort on households, the minor participant. There are equivalents in energy. I'm not saying do nothing, but I am saying be smart. Some plans are winers from a public debate perspective but do not solve the problem. I am against a plan that acts a a regressive tax affecting the middle and lower classes harshly unless it is going to have a big impact. If a household with $4,000 annual fuel costs (heating and transport) is to pay $7,000, the overall expected result better be big steps towards carbon goals. I have a hard time seeing this happen. Lets do a back of the envelope: take that $5.3 trillion externality at face value. Lets assume the world's 2 billion top consumers pay the majority of it. Call it 4 trillion, $2k each, $8k for a family of 4. How much of a reduction will we see? 10%? 25%? I'm not completely down on the idea. Elon Musk suggests lowering taxes elsewhere, being revenue neutral. This is a realistic politics problem again. Lets say we can do that though, globally. Reduce bottom level income tax and value added taxes by this much, people would be less harmed. Still, transport & heating make up a large part of poorer people's income so it's hard to think of a way this would not be regressive. I'm sure it is theoretically possible, but very hard. At the end of this ramble, I'm not sure where I am. I'd like to see a realistic estimate of actual reductions in emissions. This is too big a deal not to fix the problem.

tmaly 11y ago

how would another tax benefit the current economy? How would this tax be spent?