5 ms·

The people in the cities benefit from the things the rural people produce (i.e.food). Why shouldn't they shoulder the cost of at least some of the the externali

The people in the cities benefit from the things the rural people produce (i.e.food). Why shouldn't they shoulder the cost of at least some of the the externalities also?

mhb 8y ago
They do when they pay for the food.
freeone3000 8y ago
Usually this would be accomplished by farmers passing on higher food prices on to the supermarkets and the consumer.
- flukus 8y ago
  Unfortunately this doesn't work in a globalized race to the bottom. People can go buy a cheaper item that was shipped around the world 3 times before landing on supermarket shelves.
  - AnthonyMouse 8y ago
    That is a completely separate problem. If country X can produce food cheaper than yours, your farmers will be unprofitable and you'll end up importing food (or subsidizing local food somehow). If both countries impose a carbon tax in the same amount, nothing about that has changed. Moreover, the best way to do a carbon tax is to just give the money back to people -- use it to fund a UBI. Then the amount can be as high as you want because the higher you make the tax, the more progressive it is, because it increases the amount of the UBI. Let corporations pay more for diesel with the money going to individuals. Paying $900/month in additional fuel tax to get $1000/month in UBI would be great for the poor. Not so much for the oil companies.
    - rlucas 8y ago
      No, you've got comparative advantage crucially wrong. If country X can produce food a bit cheaper/better than you, but produces shoes much cheaper/better, then you end up growing at least some of your own food and importing shoes from X. https://www.econlib.org/library/Topics/Details/comparativeadvantage.html https://www.econlib.org/library/Topics/Details/comparativead...
      - AnthonyMouse 8y ago
        Comparative advantage has nothing to do with it. The market price of a global commodity has the opportunity costs already priced in. It's the reason more prosperous countries have higher labor costs. If you and some other country are producing food for the same cost (e.g. because you pay more for an hour of labor but have better automation), adding the same cost to each doesn't affect your competitiveness. You both still have the same costs as each other. The same amount of fuel tax only affects you differently if you require a different amount of fuel to produce the same amount of food. Then the party using less fuel has the advantage and may end up producing more food while the party using more fuel produces less. But that's what we want to happen -- having the other country produce food in that case is the desired outcome, because it can do it for lower cost once the externalities of burning carbon are priced in.
        AstralStorm 8y ago
        That does not work because most of the food transportation is by ship freight and truck, which have enough range to evade your tax. And the local transport costs are identical between local and export farmer, while local production is more expensive on labor and fuel. The only thing to do is to raise duties on food and... it is risky politically. Alternatively, subsidize much more. Good luck!
        AnthonyMouse 8y ago
        > That does not work because most of the food transportation is by ship freight and truck, which have enough range to evade your tax. Solution: If the carbon tax for the product's production and transportation is not collected by the country of origin, it is collected by customs on import. > And the local transport costs are identical between local and export farmer, while local production is more expensive on labor and fuel. If it's more expensive on labor, it was the whole time. If it uses more fuel, discouraging it is the intended outcome.
    - flukus 8y ago
      > If country X can produce food cheaper than yours, your farmers will be unprofitable and you'll end up importing food It really depends on where the tipping point is, country X might have a slight advantage but measures like this can widen the gap, then secondary factors like economies of scale kick in. > If both countries impose a carbon tax in the same amount, nothing about that has changed. Most international agreements are (rightfully) trying to give developing countries a reprieve and let the developed ones shoulder must of the short term burden for the renewable transition. But it's happening at the same time that we're reducing tariffs and developing countries get a double advantage while the working class in developed nations get a kick in the guts. > Moreover, the best way to do a carbon tax is to just give the money back to people -- use it to fund a UBI I'm all for both, but using a carbon tax to fund UBI would invert the incentive, governments would want companies polluting more to fund their welfare commitments. We see the same with high cigarette taxes, the government gets dependent on them for general revenue.
      - AnthonyMouse 8y ago
        > It really depends on where the tipping point is, country X might have a slight advantage but measures like this can widen the gap, then secondary factors like economies of scale kick in. For most markets with behaviors like that you're already doomed, because the other country will figure it out and borrow some money so they can operate temporarily at a loss or convince the government to provide temporary subsidies until they achieve the economies of scale. More likely a marginal cost increase would only result in a marginal reduction in demand. Notice also that this is the exact argument used against anything that increases costs on local businesses. France might have some candidate regulations nearer to the front of the line than the carbon tax if they were actually interested in taking that seriously. > Most international agreements are (rightfully) trying to give developing countries a reprieve and let the developed ones shoulder must of the short term burden for the renewable transition. But then it's doing what it's supposed to do. Why volunteer for a burden and then complain when it comes? > But it's happening at the same time that we're reducing tariffs and developing countries get a double advantage while the working class in developed nations get a kick in the guts. Which is why all the money should be going to a UBI. > I'm all for both, but using a carbon tax to fund UBI would invert the incentive, governments would want companies polluting more to fund their welfare commitments. We see the same with high cigarette taxes, the government gets dependent on them for general revenue. This is a generic anti-tax argument. If the government collected tax revenues from American tech companies, they would become dependent on the money and become unwilling to resist their privacy invasions, therefore they should subject all those companies to no taxes. The thing about that argument in this case is that it only applies as long as the carbon tax exists, which will make it continue to exist, which is good. Moreover, the easiest way for the government to placate recipients and give them more money isn't to get people to burn more oil (which is pretty hard if you're taxing it heavily), it's to raise the carbon tax rate. Which is also good. At some point people will actually stop burning oil and the UBI would have to be funded some other way if you want to keep it, but so what? Having that problem implies having solved the original one. And having a population that has seen the benefits of a UBI and wants to continue having it seems like a pretty good problem to have too.
  - mrmanner 8y ago
    > People can go buy a cheaper item that was shipped around the world 3 times before landing on supermarket shelves. This is a very good argument for higher carbon taxes -- they would make the shipped item more expensive. And if transported goods are much cheaper than locally produced even after paying a transportation cost including taxes, then maybe it's time for some producers to try something else. Or to convince the government that there's a value in producing food in that specific area and get more subsidies.
alphabettsy 8y ago
Is that what prices are for?

The people in the cities benefit from the things the rural people produce (i.e.food). Why shouldn't they shoulder the cost of at least some of the the externalities also?

mhb 8y ago

They do when they pay for the food.

freeone3000 8y ago

Usually this would be accomplished by farmers passing on higher food prices on to the supermarkets and the consumer.

flukus 8y ago
Unfortunately this doesn't work in a globalized race to the bottom. People can go buy a cheaper item that was shipped around the world 3 times before landing on supermarket shelves.
- AnthonyMouse 8y ago
  That is a completely separate problem. If country X can produce food cheaper than yours, your farmers will be unprofitable and you'll end up importing food (or subsidizing local food somehow). If both countries impose a carbon tax in the same amount, nothing about that has changed. Moreover, the best way to do a carbon tax is to just give the money back to people -- use it to fund a UBI. Then the amount can be as high as you want because the higher you make the tax, the more progressive it is, because it increases the amount of the UBI. Let corporations pay more for diesel with the money going to individuals. Paying $900/month in additional fuel tax to get $1000/month in UBI would be great for the poor. Not so much for the oil companies.
  - rlucas 8y ago
    No, you've got comparative advantage crucially wrong. If country X can produce food a bit cheaper/better than you, but produces shoes much cheaper/better, then you end up growing at least some of your own food and importing shoes from X. https://www.econlib.org/library/Topics/Details/comparativeadvantage.html https://www.econlib.org/library/Topics/Details/comparativead...
    - AnthonyMouse 8y ago
      Comparative advantage has nothing to do with it. The market price of a global commodity has the opportunity costs already priced in. It's the reason more prosperous countries have higher labor costs. If you and some other country are producing food for the same cost (e.g. because you pay more for an hour of labor but have better automation), adding the same cost to each doesn't affect your competitiveness. You both still have the same costs as each other. The same amount of fuel tax only affects you differently if you require a different amount of fuel to produce the same amount of food. Then the party using less fuel has the advantage and may end up producing more food while the party using more fuel produces less. But that's what we want to happen -- having the other country produce food in that case is the desired outcome, because it can do it for lower cost once the externalities of burning carbon are priced in.
      - AstralStorm 8y ago
        That does not work because most of the food transportation is by ship freight and truck, which have enough range to evade your tax. And the local transport costs are identical between local and export farmer, while local production is more expensive on labor and fuel. The only thing to do is to raise duties on food and... it is risky politically. Alternatively, subsidize much more. Good luck!
        AnthonyMouse 8y ago
        > That does not work because most of the food transportation is by ship freight and truck, which have enough range to evade your tax. Solution: If the carbon tax for the product's production and transportation is not collected by the country of origin, it is collected by customs on import. > And the local transport costs are identical between local and export farmer, while local production is more expensive on labor and fuel. If it's more expensive on labor, it was the whole time. If it uses more fuel, discouraging it is the intended outcome.
  - flukus 8y ago
    > If country X can produce food cheaper than yours, your farmers will be unprofitable and you'll end up importing food It really depends on where the tipping point is, country X might have a slight advantage but measures like this can widen the gap, then secondary factors like economies of scale kick in. > If both countries impose a carbon tax in the same amount, nothing about that has changed. Most international agreements are (rightfully) trying to give developing countries a reprieve and let the developed ones shoulder must of the short term burden for the renewable transition. But it's happening at the same time that we're reducing tariffs and developing countries get a double advantage while the working class in developed nations get a kick in the guts. > Moreover, the best way to do a carbon tax is to just give the money back to people -- use it to fund a UBI I'm all for both, but using a carbon tax to fund UBI would invert the incentive, governments would want companies polluting more to fund their welfare commitments. We see the same with high cigarette taxes, the government gets dependent on them for general revenue.
    - AnthonyMouse 8y ago
      > It really depends on where the tipping point is, country X might have a slight advantage but measures like this can widen the gap, then secondary factors like economies of scale kick in. For most markets with behaviors like that you're already doomed, because the other country will figure it out and borrow some money so they can operate temporarily at a loss or convince the government to provide temporary subsidies until they achieve the economies of scale. More likely a marginal cost increase would only result in a marginal reduction in demand. Notice also that this is the exact argument used against anything that increases costs on local businesses. France might have some candidate regulations nearer to the front of the line than the carbon tax if they were actually interested in taking that seriously. > Most international agreements are (rightfully) trying to give developing countries a reprieve and let the developed ones shoulder must of the short term burden for the renewable transition. But then it's doing what it's supposed to do. Why volunteer for a burden and then complain when it comes? > But it's happening at the same time that we're reducing tariffs and developing countries get a double advantage while the working class in developed nations get a kick in the guts. Which is why all the money should be going to a UBI. > I'm all for both, but using a carbon tax to fund UBI would invert the incentive, governments would want companies polluting more to fund their welfare commitments. We see the same with high cigarette taxes, the government gets dependent on them for general revenue. This is a generic anti-tax argument. If the government collected tax revenues from American tech companies, they would become dependent on the money and become unwilling to resist their privacy invasions, therefore they should subject all those companies to no taxes. The thing about that argument in this case is that it only applies as long as the carbon tax exists, which will make it continue to exist, which is good. Moreover, the easiest way for the government to placate recipients and give them more money isn't to get people to burn more oil (which is pretty hard if you're taxing it heavily), it's to raise the carbon tax rate. Which is also good. At some point people will actually stop burning oil and the UBI would have to be funded some other way if you want to keep it, but so what? Having that problem implies having solved the original one. And having a population that has seen the benefits of a UBI and wants to continue having it seems like a pretty good problem to have too.
- mrmanner 8y ago
  > People can go buy a cheaper item that was shipped around the world 3 times before landing on supermarket shelves. This is a very good argument for higher carbon taxes -- they would make the shipped item more expensive. And if transported goods are much cheaper than locally produced even after paying a transportation cost including taxes, then maybe it's time for some producers to try something else. Or to convince the government that there's a value in producing food in that specific area and get more subsidies.

alphabettsy 8y ago

Is that what prices are for?