5 ms·

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 revenu

by 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.
  - deleted 11y ago
    [deleted]
  - deleted 11y ago
    [deleted]
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

by ghouse 11y ago

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.
- deleted 11y ago
  [deleted]
- deleted 11y ago
  [deleted]

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