4 ms·

Gas should be $20 per gallon. (see economic model below). So b) is super interesting to me. Obama’s former Chief Economist, Michael Greenstone at U. Chicago st

by tito 7y ago

Gas should be $20 per gallon. (see economic model below). So b) is super interesting to me. Obama’s former Chief Economist, Michael Greenstone at U. Chicago studies the social cost of carbon. He modeled the cost of carbon at around $2,000 per ton. That means a gallon of gas “costs” society $20. Which is a multiple of the current price of a gallon (~$4) today. This isn’t a 10% or 20% tax on gas, this is a nuts and bolts rebuilding of society. I’m excited to be a part of it. I can understand how some would find that unwinnable or overwhelming. But to me the climate is the largest business opportunity civilization has ever seen.

bryanlarsen 7y ago
Luckily you don't have to be that extreme. Carbon sequestration costs between $100 and $600 per ton. So if you set a carbon tax at $2000 per ton everybody would sequester and nobody would pay the tax and gas would be $6 - $10 per gallon. Which would be the carbon tax and the market economy working as designed. Awesome, and it's incredible we aren't doing it. And going to the point of the article. $20/pound hamburger would have very similar results. ($20 number completely made up)
- tito 7y ago
  Hey right on, that’s a nice twist, appreciate it! That’s obvious to me now that you say it but wasn’t before. Yes, there’s the beginnings of a market ceiling to the price. We need to get the supply of that $100-$600 capture up. Either using it for new products or burying it. Thanks again!
- OJFord 7y ago
  > And going to the point of the article. $20/pound hamburger would have very similar results. Isn't that about where we are? That's $10 for half and $5 for a 'quarter-pounder'? > ($20 number completely made up) Oh. What's the point of / how can you meaningfully discuss the 'results' of a made-up number?
bluedevil2k 7y ago
Not sure how well that would go over with the average American, suddenly seeing their usual $200-$300'ish monthly bill on gas suddenly change to $2000 - $3000/month. And who would get all that extra tax revenue? I assume the US Government, but does anyone have any belief that the US Government would actually put that money towards carbon offsets?
- tito 7y ago
  I’m not saying the tax you propose will ever happen, I don’t think it could or necessarily should. This is a model of the real social cost of carbon. Which means someone will pay it, maybe not you or me though, and maybe not right now. And that cost may go up.
- aphextim 7y ago
  If it cost me 10x to fill my 500 gallon propane tank, well it's back to burning wood/cutting down trees for me.
  - bryanlarsen 7y ago
    If you're not being stupid about it, you're cutting down mature trees and not trampling the volunteer seedlings. Mature trees (especially coniferous trees) are fairly carbon neutral because they suppress undergrowth. Seedlings capture tons of carbon. So the tax would incentivize emitting much less net carbon. That's the point.
    - aphextim 7y ago
      >If you're not being stupid about it, you're cutting down mature trees and not trampling the volunteer seedlings. Most of the time I can drive around my family's property and find many trees that have already fallen and are down without having to even cut mature trees. It's just the extra work that goes into it rather than calling up the gas company for a refill. I am lucky and my great grandpa/family has been passing the farm/land down through the generations and now it's a 'family' farm with about 1500 acres, and about 2/3 of that is forest with trails. Worst case scenario I contract out some kids/young adults in the area to cut/haul/stack my wood if I am short on time and unable to get enough for the winter myself. Lots of Maple trees in Upper Michigan :D
TOGoS 7y ago
Stop trying to make everything a "business opportunity". There will always be a competitive advantage in exploiting people and destroying the environment. People don't burn down rainforests for the fun of it. If civilization is going to survive it's because we collectively recognize the destructive nature of markets based around profits and start doing things for the sake of life.
- esailija 7y ago
  How dare you question the will of free markets and the dictatorship of capital. The Invisible Hand will somehow make sure everything works out just fine in the end, I'm sure of it. Huh I guess we aren't post-religion society after all.
- bryanlarsen 7y ago
  $20/gallon gas may be a "business opportunity" for some but it will have the vast majority of capitalists screaming at the top of their lungs. If you want to combat capitalism and big corporate you directly hit it where it hurts, in their profits. Adding rules and regulations and outright bans just induces regulatory capture and ends up strengthening big corporations. A carbon tax is the most effective means for combating climate change because it's so straightforward and because it provides direct pressure on capitalism's precious markets.
  - beatgammit 7y ago
    And if you simply refund the money to citizens, you preserve the market's ability to self relate instead of picking winners and losers through subsidies and regulations. Maybe increasing gas prices will favor electric cars, maybe we'll see a resurgence in hydrogen or other alternative fuel sources, idk. What I do know is that polluting will be less attractive and we'll see innovations.
vonmoltke 7y ago
> Obama’s former Chief Economist, Michael Greenstone at U. Chicago studies the social cost of carbon. He modeled the cost of carbon at around $2,000 per ton. That means a gallon of gas “costs” society $20. Do you have a source for this? He cited much lower estimates in his Congressional testimony: https://epic.uchicago.edu/sites/default/files/Greenstone%20SCC%20testimony%20022717.pdf https://epic.uchicago.edu/sites/default/files/Greenstone%20S...
balt_s 7y ago
> But to me the climate is the largest business opportunity civilization has ever seen. I nominate this for "Most telling HN comment of 2019".

by tito 7y ago

bryanlarsen 7y ago

Luckily you don't have to be that extreme. Carbon sequestration costs between $100 and $600 per ton. So if you set a carbon tax at $2000 per ton everybody would sequester and nobody would pay the tax and gas would be $6 - $10 per gallon. Which would be the carbon tax and the market economy working as designed. Awesome, and it's incredible we aren't doing it. And going to the point of the article. $20/pound hamburger would have very similar results. ($20 number completely made up)

tito 7y ago
Hey right on, that’s a nice twist, appreciate it! That’s obvious to me now that you say it but wasn’t before. Yes, there’s the beginnings of a market ceiling to the price. We need to get the supply of that $100-$600 capture up. Either using it for new products or burying it. Thanks again!
OJFord 7y ago
> And going to the point of the article. $20/pound hamburger would have very similar results. Isn't that about where we are? That's $10 for half and $5 for a 'quarter-pounder'? > ($20 number completely made up) Oh. What's the point of / how can you meaningfully discuss the 'results' of a made-up number?

bluedevil2k 7y ago

Not sure how well that would go over with the average American, suddenly seeing their usual $200-$300'ish monthly bill on gas suddenly change to $2000 - $3000/month. And who would get all that extra tax revenue? I assume the US Government, but does anyone have any belief that the US Government would actually put that money towards carbon offsets?

tito 7y ago
I’m not saying the tax you propose will ever happen, I don’t think it could or necessarily should. This is a model of the real social cost of carbon. Which means someone will pay it, maybe not you or me though, and maybe not right now. And that cost may go up.
aphextim 7y ago
If it cost me 10x to fill my 500 gallon propane tank, well it's back to burning wood/cutting down trees for me.
- bryanlarsen 7y ago
  If you're not being stupid about it, you're cutting down mature trees and not trampling the volunteer seedlings. Mature trees (especially coniferous trees) are fairly carbon neutral because they suppress undergrowth. Seedlings capture tons of carbon. So the tax would incentivize emitting much less net carbon. That's the point.
  - aphextim 7y ago
    >If you're not being stupid about it, you're cutting down mature trees and not trampling the volunteer seedlings. Most of the time I can drive around my family's property and find many trees that have already fallen and are down without having to even cut mature trees. It's just the extra work that goes into it rather than calling up the gas company for a refill. I am lucky and my great grandpa/family has been passing the farm/land down through the generations and now it's a 'family' farm with about 1500 acres, and about 2/3 of that is forest with trails. Worst case scenario I contract out some kids/young adults in the area to cut/haul/stack my wood if I am short on time and unable to get enough for the winter myself. Lots of Maple trees in Upper Michigan :D

TOGoS 7y ago

Stop trying to make everything a "business opportunity". There will always be a competitive advantage in exploiting people and destroying the environment. People don't burn down rainforests for the fun of it. If civilization is going to survive it's because we collectively recognize the destructive nature of markets based around profits and start doing things for the sake of life.

esailija 7y ago
How dare you question the will of free markets and the dictatorship of capital. The Invisible Hand will somehow make sure everything works out just fine in the end, I'm sure of it. Huh I guess we aren't post-religion society after all.
bryanlarsen 7y ago
$20/gallon gas may be a "business opportunity" for some but it will have the vast majority of capitalists screaming at the top of their lungs. If you want to combat capitalism and big corporate you directly hit it where it hurts, in their profits. Adding rules and regulations and outright bans just induces regulatory capture and ends up strengthening big corporations. A carbon tax is the most effective means for combating climate change because it's so straightforward and because it provides direct pressure on capitalism's precious markets.
- beatgammit 7y ago
  And if you simply refund the money to citizens, you preserve the market's ability to self relate instead of picking winners and losers through subsidies and regulations. Maybe increasing gas prices will favor electric cars, maybe we'll see a resurgence in hydrogen or other alternative fuel sources, idk. What I do know is that polluting will be less attractive and we'll see innovations.

vonmoltke 7y ago

> Obama’s former Chief Economist, Michael Greenstone at U. Chicago studies the social cost of carbon. He modeled the cost of carbon at around $2,000 per ton. That means a gallon of gas “costs” society $20. Do you have a source for this? He cited much lower estimates in his Congressional testimony: https://epic.uchicago.edu/sites/default/files/Greenstone%20SCC%20testimony%20022717.pdf https://epic.uchicago.edu/sites/default/files/Greenstone%20S...

balt_s 7y ago

> But to me the climate is the largest business opportunity civilization has ever seen. I nominate this for "Most telling HN comment of 2019".