7 ms·

It seems like this observation of Wright's Law in action should lead to more politically palatable policy prescriptions. If cap and trade is out, just shifting

It seems like this observation of Wright's Law in action should lead to more politically palatable policy prescriptions. If cap and trade is out, just shifting some energy incentives to favor renewable or large orders to grow the market could push renewable to the place where it just straight out dominates energy.

Retric 11y ago
IMO, anything other than a strait carbon tax is a horrible idea. Cap and trade works out as billions in free money to existing company's and makes this a long term political football. Subsidies always have the same downsides as communist style planned economies. ex: Ridicules amounts of corn production because of politics not because that's a good use of resources.
- melling 11y ago
  I was under the impression that a carbon tax hurts the poor. http://news.stanford.edu/news/2014/february/kolstad-carbon-tax-022814.html http://news.stanford.edu/news/2014/february/kolstad-carbon-t...
  - toomuchtodo 11y ago
    Not when you rebate it back to those under a certain income threshold.
    - melling 11y ago
      How do you know what to rebate people? The carbon tax will hit more than their electric bill. Also, some people have greener electricity than others. Here's how electricity is generated by state: https://www.washingtonpost.com/graphics/national/power-plants/ https://www.washingtonpost.com/graphics/national/power-plant...
      - epistasis 11y ago
        If it affects the poor, it would make the most sense to rebate purely on income level, equally based on income level. If the idea is to just give it back to the people that paid into it, that completelt defeats the entire purpose.
        melling 11y ago
        So, someone who lives in a state with green electricity, and buys products from "green companies", will get the same as someone from a coal state, like West Virginia? The question is why are you giving rebates to people who are mostly using green energy?
        epistasis 11y ago
        Because they aren't dumping as much carbon into the atmosphere. Thats the entire point of it all! Those who are dumping carbon into the atmosphere are free loading on the rest of society, expecting others to pay for their externalities. And it's not "giving rebate" it's returning tax revenues to those that can least afford them. But there are many other sources of carbon than poorly planned electrical systems. Driving, flying, and industry.
        melling 11y ago
        The poor person in West Virginia getting his electricity from dirty coal and driving a 10 year old F150 is getting the same rebate. He's buying stuff from Walmart that's shipped from China. Are you rewarding people for using less carbon or is the rebate to help offset the cost past through from companies passing on the extra tax onto consumers? Two different claims are being made.
        MaysonL 11y ago
        They may be getting the same rebate, but they aren't paying the same tax. If the rebate is the same for all, then those who use less will make a profit, considering the $rebate - $tax amounts, while those using more will pay more tax than they get in rebates. (This is assuming a revenue neutral arrangement).
    - SilasX 11y ago
      Better to just rebate a fixed amount to everyone so that you preserve the incentives for cutting back any marginal unit of fossil fuel consumption, while mitigating the overall income effect.
  - aoeusnth1 11y ago
    Just adjust income tax to compensate. Penalizing carbon production is a simple incentive-compatible way to have society receive compensation for the actual damage of people's actions.
  - greglindahl 11y ago
    You can find citations to discussions & proposals for how to mitigate that in many places, such as the Wikipedia Carbon Tax article: https://en.wikipedia.org/wiki/Carbon_tax#Distributional_impacts https://en.wikipedia.org/wiki/Carbon_tax#Distributional_impa...
  - SilasX 11y ago
    In the sense that it's a kind of consumption tax, and consumption taxes are (considered[1]) regressive, then yes. So? Consumption (of fossil fuels) is the problem. Any policy measure that cuts fossil fuel consumption will thus necessarily be regressive to the extent that it precisely targets the problem. It's not like cap-and-trade or efficiency mandates somehow avoid that. But whatever anti-fossil-fuel measure you impose can be mitigated with orthogonal welfare policies. Also, it's not policy options can ever lack downsides. [1] I saw "considered" because the traditional result only gets that by a confused accounting basis. Yes, a consumption tax hits less of a rich person's income, but it hits the same amount of their later consumption. Don't compare income apples to consumption oranges.
  - Gibbon1 11y ago
    If a carbon tax will hurt the poor imagine what climate change is going to do to them. Personally I think poor people tend to be in this sort of budgetary Malthusian squeeze. If you raise the price of one thing then something else will have to give. Tax their gasoline more the end result is they'll buy 'less car' and have less money left over for rent. Since rents are likely the only other fungible cost that's where the money will ultimately come from.
    - fpoling 11y ago
      It reminds me of an old joke when Soviet Union tried to decrease alcohol consumption through rising alcohol prises: When father came home, his son announced that vodka would cost 50% more and said: - Father, does it mean that you are going to drink less? - No son, it means that you are going to eat less.
  - mikekchar 11y ago
    This is something you will have to deal with anyway. Let's take the the US for an example (although this will apply virtually anywhere in the world). I don't have time to gather excellent data, but wikipedia tells me that in 2010 28% of households made less than $25K, 51% made less than $50K, 69% made less than $75K. So in reality, about 30% are in a fairly serious pinch nearly all the time and 50% are probably doing OK, but still having to watch their budgets pretty closely. Only 30% of the population has the kind of earnings that people on HN generally consider acceptable. Let's say that energy which doesn't liberate much carbon is 20% more expensive than carbon intensive energy (who knows). Really, only 30% of the population can easily swallow that cost increase. And even then, if we are talking about replacing cars, etc, etc the capital costs are actually outside the reach of a large percentage of those people (imagine being told that you have to replace your car today... could you afford it?) In reality, if only the people who could afford it switched, it would not actually represent a large reduction in carbon usage. You have to disproportionately affect lower income brackets because that's were the vast majority of people live. So if you tax carbon to make it attractive to switch, it's really not any more expensive. The main issue is making sure that people are able to deal with the capital expenses. Otherwise they won't switch. So IMHO, you are correct that carbon tax alone won't be enough. But there isn't really a downside to such a tax as long as you find a way to deal with capital expenses. In order to be successful, the poor must switch to the more expensive option.
  - WalterBright 11y ago
    A carbon tax could be coupled with a reduction in, say, sales tax. The incentive to reduce carbon would still be there, but the regressive effect on the poor would be mitigated.
- wonderlust 11y ago
  I changed my thinking on this after playing the game democracy 3. There are lots of ways to dramatically decrease co2 production, and a lot of ways to keep production minimal. My favorite strategy was changing spending to subsidize rail over roads, subsidize and market bicycles, and push for electric cars. Not directly applicable necessarily, but the number of things that have lower co2 production as a side effect is pretty large.
  - WalterBright 11y ago
    Be careful about drawing conclusions about economy games. The rules in them are often set up to validate the theories of the game designers.
    - awinter-py 11y ago
      Or as feeder policies for presidential nominees. People claim Cain's 9-9-9 plan from whenever he ran was based on simcity.
      - WalterBright 11y ago
        Some people have told me that SimCity was based on Empire http://www.classicempire.com http://www.classicempire.com !
- Houshalter 11y ago
  Carbon tax isn't sufficient either. It would lower the demand in one country, but the same fossil fuels could be shipped to another country and burned there. Until the demand for fossil fuels decreases below the cost it takes to extract them from the ground. That cost is low, and could get lower with improving technology. Instead there should be a tax on taking carbon out of the ground or importing it into the country. A tax so high that it becomes economically unviable to do it. Anything else is political games.
  - Brakenshire 11y ago
    > Instead there should be a tax on taking carbon out of the ground or importing it into the country. Doesn't that have the same problem? Anything energy intensive just shifts outside of the borders of that country where the tax is enforced. IMO, carbons taxes need to be built into the trade deals. You need to say "we're creating a level playing field between our countries, but we do that on the basis that we are both going to do our bit to solve common problems". The major reason tackling climate change is difficult is because it is a tragedy of the commons.
douche 11y ago
Except that unless batteries and storage solutions get orders of magnitude better, you have to back every megawatt of solar or wind with natural gas, oil, or coal for the calm, cloudy days.
- Retric 11y ago
  Hydro is 6% of US electricity supply and is already used as built in storage. Pumped storage is vastly better than batteries. Also the variance between median days and calm days for wind is far less extreme than generally assumed. PV solar also provides power in cloudy weather. Anyway the US can get to ~99.99% from ~30% oversupply and ~6 hours of grid storage which is vastly less than many people assume. PS: Cloudy calm days over large areas are fairly rare. Heavy clouds are generally associated with weather and increased wind. EX: Hurricane incoming, solar down wind UP.
  - ptaipale 11y ago
    > Pumped storage is vastly better than batteries Yes, except for those who live next to the reservoir (or actually, in the would-be reservoir). That could be people, or nature.
    - Retric 11y ago
      Raising or lowering two existing lakes by a few feet can provide lot's of pumped storage with minimal issues. Or in the extreme case, consider Lake Erie is next to Lake Ontario. Pumping extra water back up for a few hours a day would have minimal issues as boat bilge water has already cross contaminated them.
      - qbrass 11y ago
        Almost 700,000 gallons of water go untapped over Niagara Falls every second. There's no point in pumping water back up until you've harnessed that first.
        11y ago

Retric 11y ago

IMO, anything other than a strait carbon tax is a horrible idea. Cap and trade works out as billions in free money to existing company's and makes this a long term political football. Subsidies always have the same downsides as communist style planned economies. ex: Ridicules amounts of corn production because of politics not because that's a good use of resources.

melling 11y ago
I was under the impression that a carbon tax hurts the poor. http://news.stanford.edu/news/2014/february/kolstad-carbon-tax-022814.html http://news.stanford.edu/news/2014/february/kolstad-carbon-t...
- toomuchtodo 11y ago
  Not when you rebate it back to those under a certain income threshold.
  - melling 11y ago
    How do you know what to rebate people? The carbon tax will hit more than their electric bill. Also, some people have greener electricity than others. Here's how electricity is generated by state: https://www.washingtonpost.com/graphics/national/power-plants/ https://www.washingtonpost.com/graphics/national/power-plant...
    - epistasis 11y ago
      If it affects the poor, it would make the most sense to rebate purely on income level, equally based on income level. If the idea is to just give it back to the people that paid into it, that completelt defeats the entire purpose.
      - melling 11y ago
        So, someone who lives in a state with green electricity, and buys products from "green companies", will get the same as someone from a coal state, like West Virginia? The question is why are you giving rebates to people who are mostly using green energy?
        epistasis 11y ago
        Because they aren't dumping as much carbon into the atmosphere. Thats the entire point of it all! Those who are dumping carbon into the atmosphere are free loading on the rest of society, expecting others to pay for their externalities. And it's not "giving rebate" it's returning tax revenues to those that can least afford them. But there are many other sources of carbon than poorly planned electrical systems. Driving, flying, and industry.
        melling 11y ago
        The poor person in West Virginia getting his electricity from dirty coal and driving a 10 year old F150 is getting the same rebate. He's buying stuff from Walmart that's shipped from China. Are you rewarding people for using less carbon or is the rebate to help offset the cost past through from companies passing on the extra tax onto consumers? Two different claims are being made.
        MaysonL 11y ago
        They may be getting the same rebate, but they aren't paying the same tax. If the rebate is the same for all, then those who use less will make a profit, considering the $rebate - $tax amounts, while those using more will pay more tax than they get in rebates. (This is assuming a revenue neutral arrangement).
  - SilasX 11y ago
    Better to just rebate a fixed amount to everyone so that you preserve the incentives for cutting back any marginal unit of fossil fuel consumption, while mitigating the overall income effect.
- aoeusnth1 11y ago
  Just adjust income tax to compensate. Penalizing carbon production is a simple incentive-compatible way to have society receive compensation for the actual damage of people's actions.
- greglindahl 11y ago
  You can find citations to discussions & proposals for how to mitigate that in many places, such as the Wikipedia Carbon Tax article: https://en.wikipedia.org/wiki/Carbon_tax#Distributional_impacts https://en.wikipedia.org/wiki/Carbon_tax#Distributional_impa...
- SilasX 11y ago
  In the sense that it's a kind of consumption tax, and consumption taxes are (considered[1]) regressive, then yes. So? Consumption (of fossil fuels) is the problem. Any policy measure that cuts fossil fuel consumption will thus necessarily be regressive to the extent that it precisely targets the problem. It's not like cap-and-trade or efficiency mandates somehow avoid that. But whatever anti-fossil-fuel measure you impose can be mitigated with orthogonal welfare policies. Also, it's not policy options can ever lack downsides. [1] I saw "considered" because the traditional result only gets that by a confused accounting basis. Yes, a consumption tax hits less of a rich person's income, but it hits the same amount of their later consumption. Don't compare income apples to consumption oranges.
- Gibbon1 11y ago
  If a carbon tax will hurt the poor imagine what climate change is going to do to them. Personally I think poor people tend to be in this sort of budgetary Malthusian squeeze. If you raise the price of one thing then something else will have to give. Tax their gasoline more the end result is they'll buy 'less car' and have less money left over for rent. Since rents are likely the only other fungible cost that's where the money will ultimately come from.
  - fpoling 11y ago
    It reminds me of an old joke when Soviet Union tried to decrease alcohol consumption through rising alcohol prises: When father came home, his son announced that vodka would cost 50% more and said: - Father, does it mean that you are going to drink less? - No son, it means that you are going to eat less.
- mikekchar 11y ago
  This is something you will have to deal with anyway. Let's take the the US for an example (although this will apply virtually anywhere in the world). I don't have time to gather excellent data, but wikipedia tells me that in 2010 28% of households made less than $25K, 51% made less than $50K, 69% made less than $75K. So in reality, about 30% are in a fairly serious pinch nearly all the time and 50% are probably doing OK, but still having to watch their budgets pretty closely. Only 30% of the population has the kind of earnings that people on HN generally consider acceptable. Let's say that energy which doesn't liberate much carbon is 20% more expensive than carbon intensive energy (who knows). Really, only 30% of the population can easily swallow that cost increase. And even then, if we are talking about replacing cars, etc, etc the capital costs are actually outside the reach of a large percentage of those people (imagine being told that you have to replace your car today... could you afford it?) In reality, if only the people who could afford it switched, it would not actually represent a large reduction in carbon usage. You have to disproportionately affect lower income brackets because that's were the vast majority of people live. So if you tax carbon to make it attractive to switch, it's really not any more expensive. The main issue is making sure that people are able to deal with the capital expenses. Otherwise they won't switch. So IMHO, you are correct that carbon tax alone won't be enough. But there isn't really a downside to such a tax as long as you find a way to deal with capital expenses. In order to be successful, the poor must switch to the more expensive option.
- WalterBright 11y ago
  A carbon tax could be coupled with a reduction in, say, sales tax. The incentive to reduce carbon would still be there, but the regressive effect on the poor would be mitigated.
wonderlust 11y ago
I changed my thinking on this after playing the game democracy 3. There are lots of ways to dramatically decrease co2 production, and a lot of ways to keep production minimal. My favorite strategy was changing spending to subsidize rail over roads, subsidize and market bicycles, and push for electric cars. Not directly applicable necessarily, but the number of things that have lower co2 production as a side effect is pretty large.
- WalterBright 11y ago
  Be careful about drawing conclusions about economy games. The rules in them are often set up to validate the theories of the game designers.
  - awinter-py 11y ago
    Or as feeder policies for presidential nominees. People claim Cain's 9-9-9 plan from whenever he ran was based on simcity.
    - WalterBright 11y ago
      Some people have told me that SimCity was based on Empire http://www.classicempire.com http://www.classicempire.com !
Houshalter 11y ago
Carbon tax isn't sufficient either. It would lower the demand in one country, but the same fossil fuels could be shipped to another country and burned there. Until the demand for fossil fuels decreases below the cost it takes to extract them from the ground. That cost is low, and could get lower with improving technology. Instead there should be a tax on taking carbon out of the ground or importing it into the country. A tax so high that it becomes economically unviable to do it. Anything else is political games.
- Brakenshire 11y ago
  > Instead there should be a tax on taking carbon out of the ground or importing it into the country. Doesn't that have the same problem? Anything energy intensive just shifts outside of the borders of that country where the tax is enforced. IMO, carbons taxes need to be built into the trade deals. You need to say "we're creating a level playing field between our countries, but we do that on the basis that we are both going to do our bit to solve common problems". The major reason tackling climate change is difficult is because it is a tragedy of the commons.

douche 11y ago

Except that unless batteries and storage solutions get orders of magnitude better, you have to back every megawatt of solar or wind with natural gas, oil, or coal for the calm, cloudy days.

Retric 11y ago
Hydro is 6% of US electricity supply and is already used as built in storage. Pumped storage is vastly better than batteries. Also the variance between median days and calm days for wind is far less extreme than generally assumed. PV solar also provides power in cloudy weather. Anyway the US can get to ~99.99% from ~30% oversupply and ~6 hours of grid storage which is vastly less than many people assume. PS: Cloudy calm days over large areas are fairly rare. Heavy clouds are generally associated with weather and increased wind. EX: Hurricane incoming, solar down wind UP.
- ptaipale 11y ago
  > Pumped storage is vastly better than batteries Yes, except for those who live next to the reservoir (or actually, in the would-be reservoir). That could be people, or nature.
  - Retric 11y ago
    Raising or lowering two existing lakes by a few feet can provide lot's of pumped storage with minimal issues. Or in the extreme case, consider Lake Erie is next to Lake Ontario. Pumping extra water back up for a few hours a day would have minimal issues as boat bilge water has already cross contaminated them.
    - qbrass 11y ago
      Almost 700,000 gallons of water go untapped over Niagara Falls every second. There's no point in pumping water back up until you've harnessed that first.
      - 11y ago