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I agree that public education campaigns are not a solution; but you expressed a lot of skepticism about also the economic interventions short of a total ban on

I agree that public education campaigns are not a solution; but you expressed a lot of skepticism about also the economic interventions short of a total ban on carbon-emitting fuels. Before a ban becomes practical, other methods must be used to reduce usage, and economic interventions like taxes, alternative energy incentives, and properly-designed carbon markets have proven effective (though that last seems pretty hard to get right).

dalbasal 9y ago
I guess we disagree on how well taxes, incentives, and carbon markets have done. II think that most of the wins we got have come from more direct interventions like building public transport (NY & Amsterdam vs Houston or Montreal) and replacing carbon based grid power. ..the skepticism... Basically, the majority of “interventions” are based on price. Higher prices, lower consumption. That’s the economics assumption in a nutshell. The reason I think that this is flawed is “demand elasticity.” We know fuel demand to be “inelastic” meaning that for any change in price, consumption will change very little. To cut consumption by 25-50%, prices will need to increase a lot, more than feasible in a normal political situation. Fuel consumption is inelastic in the medium-long term, very inelastic in the short term. Fuel is often used as a literal textbook example (along with cocaine) for this concept. The only way to change the elasticity is alternatives. The economics of encouraging the invention of alternatives is.. well.. “theory” in the pedestrian sense of the word. Academic ideas that are debated without much resolution. This part is not like the first part (elasticity), which is well understood. So, these interventions might work for creating alternatives, but I dunno. In any case, it looks like alternatives have appeared (regardless of how we think they got here). So, lets cut the BS, trust ourselves to assess the viability of these alternatives , pick winners and go for a 10-20 year phase out culminating in a near total ban. Conceptually, I’m arguing against the idea the economics-based policies should be abstract, general policies that could apply to carbon, sugar, makeup or anything. I’m saying look at this specific market. Picking winners in 2018 is a lot less risky than picking winners in 2008, when EVs or mostly solar grids were still unproven. If we determine that alternatives are viable (I think we are just getting there now) then pull the trigger, ban carbon fuel.
- azernik 9y ago
  Changes to fuel costs aren't totally inelastic. The problem for altering consumer behavior is: 1. The decisions that change fuel consumption - what car to buy and where to live/work - are taken infrequently, and so make feedback slow. 2. People are bad at weighing costs that don't show up in the sticker price. This is addressable and addressed through incentives applied at the time of purchasing a car rather than purchasing fuel. Issue 1 also applies to business users (automotive and industrial alike), and is inherent to any big infrastructure transition - even with a ban, you'd still have this long lead time. Issue 2 is solvable on the consumer side with proper structuring of incentives. Both the American subsidies for electrics and the European punitive taxes on gasoline cars seem effective at changing public behavior, and have made EVs competitive earlier than they otherwise would have been (hence spurring a lot of private R&D money that would not have flowed otherwise).
  - dalbasal 9y ago
    1. (fuel cost) is the purer version of the carbon tax. In theory (the one behind most of these policies that I'm objecting to), this should be sufficient. As you say, it's slow. I'd also say that it's no good (due to inelasticity) even if we were willing to wait. Say you could turn the American consumer into a Belgian one in 10 years by doubling petrol prices. They'd still drive a bit more due to cities' structure and the country's size, but in little euro hatchbacks they'd save 25% of the fuel/carbon. Maybe I'm exaggerating. Maybe we could cut 30% with a 75% price increase. Either way, that's a lot of pain for very moderate long term gain. Most hard hit would be poorer people who can't afford to "upgrade" their car. I agree on the second point. This is a better policy. Unfortunately, the European punitive taxes are mostly not upfront or even new car specific. This puts most of the burden on old car drivers, with most of the "elasticity" going towards EOLing cars younger and upgrading to newer ICE cars tailored to this new tax regime. Its a slow, inefficient and regressive, but still preferable to fuel/carbon taxes. Simpler would be better. €X upfront subsidy or tax on EVs or ICEs. More emphasis on EVs than efficient ICEs as ICE efficiency is not really en route to where we want to go, 0 emissions. Less economic/policy sophistication. Intervene at the time decisions are made (like you say). Build towards a ban.

dalbasal 9y ago

I guess we disagree on how well taxes, incentives, and carbon markets have done. II think that most of the wins we got have come from more direct interventions like building public transport (NY & Amsterdam vs Houston or Montreal) and replacing carbon based grid power. ..the skepticism... Basically, the majority of “interventions” are based on price. Higher prices, lower consumption. That’s the economics assumption in a nutshell. The reason I think that this is flawed is “demand elasticity.” We know fuel demand to be “inelastic” meaning that for any change in price, consumption will change very little. To cut consumption by 25-50%, prices will need to increase a lot, more than feasible in a normal political situation. Fuel consumption is inelastic in the medium-long term, very inelastic in the short term. Fuel is often used as a literal textbook example (along with cocaine) for this concept. The only way to change the elasticity is alternatives. The economics of encouraging the invention of alternatives is.. well.. “theory” in the pedestrian sense of the word. Academic ideas that are debated without much resolution. This part is not like the first part (elasticity), which is well understood. So, these interventions might work for creating alternatives, but I dunno. In any case, it looks like alternatives have appeared (regardless of how we think they got here). So, lets cut the BS, trust ourselves to assess the viability of these alternatives , pick winners and go for a 10-20 year phase out culminating in a near total ban. Conceptually, I’m arguing against the idea the economics-based policies should be abstract, general policies that could apply to carbon, sugar, makeup or anything. I’m saying look at this specific market. Picking winners in 2018 is a lot less risky than picking winners in 2008, when EVs or mostly solar grids were still unproven. If we determine that alternatives are viable (I think we are just getting there now) then pull the trigger, ban carbon fuel.

azernik 9y ago
Changes to fuel costs aren't totally inelastic. The problem for altering consumer behavior is: 1. The decisions that change fuel consumption - what car to buy and where to live/work - are taken infrequently, and so make feedback slow. 2. People are bad at weighing costs that don't show up in the sticker price. This is addressable and addressed through incentives applied at the time of purchasing a car rather than purchasing fuel. Issue 1 also applies to business users (automotive and industrial alike), and is inherent to any big infrastructure transition - even with a ban, you'd still have this long lead time. Issue 2 is solvable on the consumer side with proper structuring of incentives. Both the American subsidies for electrics and the European punitive taxes on gasoline cars seem effective at changing public behavior, and have made EVs competitive earlier than they otherwise would have been (hence spurring a lot of private R&D money that would not have flowed otherwise).
- dalbasal 9y ago
  1. (fuel cost) is the purer version of the carbon tax. In theory (the one behind most of these policies that I'm objecting to), this should be sufficient. As you say, it's slow. I'd also say that it's no good (due to inelasticity) even if we were willing to wait. Say you could turn the American consumer into a Belgian one in 10 years by doubling petrol prices. They'd still drive a bit more due to cities' structure and the country's size, but in little euro hatchbacks they'd save 25% of the fuel/carbon. Maybe I'm exaggerating. Maybe we could cut 30% with a 75% price increase. Either way, that's a lot of pain for very moderate long term gain. Most hard hit would be poorer people who can't afford to "upgrade" their car. I agree on the second point. This is a better policy. Unfortunately, the European punitive taxes are mostly not upfront or even new car specific. This puts most of the burden on old car drivers, with most of the "elasticity" going towards EOLing cars younger and upgrading to newer ICE cars tailored to this new tax regime. Its a slow, inefficient and regressive, but still preferable to fuel/carbon taxes. Simpler would be better. €X upfront subsidy or tax on EVs or ICEs. More emphasis on EVs than efficient ICEs as ICE efficiency is not really en route to where we want to go, 0 emissions. Less economic/policy sophistication. Intervene at the time decisions are made (like you say). Build towards a ban.