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I don't see how this would really work. A carbon tax in an ideal situation is just a consumption tax. This means that it's the consumer that pays it. Rich peopl

I don't see how this would really work. A carbon tax in an ideal situation is just a consumption tax. This means that it's the consumer that pays it. Rich people don't eat more food nor do they drive dozens of cars at once. If we want this carbon tax to offset our greenhouse emissions then that means it will necessarily disproportionately impact poor people. And then you want to turn around and pay that money back to people as UBI? It'll be a slight redistribution of wealth from the wealthy to the poor and that's it. It won't fulfill the role of a UBI. In an unideal world it will just be gamed to all hell instead. Also, good luck getting people to swallow a doubling of their tax bill even if you give it back.

haram_masala 6y ago
Could a carbon tax also be assessed against capital gains that benefit from carbon emission? That might address the inherent inequality you mention.
- Aerroon 6y ago
  I'm unsure how you would go about doing that. You would somehow have to be able to assess the carbon emissions of every company. This gets quite difficult, because you have to start answering questions such as "do we count the carbon emissions of the individual employees?" It might seem like a silly question, but this could have an impact on which types of businesses people invest in. It would probably just be easier to have a general carbon tax that gets paid back to people. Then separately you could have a UBI paid for by capital gains taxes or something along those lines. But somebody else probably knows more about this.
  - guerrilla 6y ago
    Do they not already have to report emissions?
    - bradlys 6y ago
      I work for a fintech startup. I'd be very surprised if we had to report emissions. Yet, we are definitely a method for the rich to get richer through investments. And we currently benefit from a particular kind of carbon footprint - somewhat indirectly.
      - guerrilla 6y ago
        No but they may have to declare that they have nothing to declare or those who do need certain kinds of operatimg licences that your company doesn't. Obviously they know who's running refineries, paper mills and things like that.
  - JumpCrisscross 6y ago
    > You would somehow have to be able to assess the carbon emissions of every company And then map that to every stock, bond, loan and asset.
  - prostoalex 6y ago
    Economists distinguish between three scopes of emissions https://www.economist.com/briefing/2020/06/20/how-much-can-financiers-do-about-climate-change https://www.economist.com/briefing/2020/06/20/how-much-can-f... It gets complicated as direct taxation just encourages moving the dirtiest link in the supply chain offshore. E.g. manufacture tire in the US and be subject to a high emissions tax, manufacture them abroad and then import them into US - and you're golden.
    - bickeringyokel 6y ago
      Could you not solve that issue with tariffs?
- adrianN 6y ago
  A carbon tax is best levied at the point of extraction. Businesses that currently benefit from emitting a lot will automatically reduce in value.
  - LoSboccacc 6y ago
    *automatically move abroad to complacent countries where emission can be whatever you want them to be
    - adrianN 6y ago
      Why would they? If they export their goods they get the tax back and if they wanted to import after moving to a different country they'd have to pay at the border.
      - LoSboccacc 6y ago
        and how much would they pay at the border?
        adrianN 6y ago
        The best estimate as to how much carbon the product released times the price of carbon of course. I'd guess the estimates would be on the high side to encourage domestic production.
        LoSboccacc 6y ago
        > complacent countries where emission can be whatever you want them to be and whom you gonna trust for measuring/estimate the carbon produced in the complacent country? "yes sir we have all these kind of filters and capture schemes" preemptive reply to "but we're going to check and fine them": Panama Papers happened and nothing was done about them.
        adrianN 6y ago
Ericson2314 6y ago
> This means that it's the consumer that pays it. Rich people don't eat more food nor do they drive dozens of cars at once. Rich people may not consume more in proportion to their wealth, but they do consume more in absolute terms. WRT carbon tax in particular the rich do consume substantiall more with plane rides, so the tax side would be more progressive than a plain VAT. Also, they buy their kids cars. > It'll be a slight redistribution of wealth from the wealthy to the poor and that's it. It won't fulfill the role of a UBI. Maybe it's not enough but that doesn't make it a bad thing. One could combine a bunch of externalizes taxes (carbon, land, etc.) which together could create a better UBI. Or yes, throw in VAT Yang style too. > In an unideal world it will just be gamed to all hell instead. "gaming" is finding ways to maximally consume / Cabon impact. Yes, please game this as much as possible! > Also, good luck getting people to swallow a doubling of their tax bill even if you give it back. By definition only the people that consume 2 / punative-rate the average double there taxes. I'm sure these few rich people will raise a fit and have outside political power, but this applies to any progressive tax.
- dannyw 6y ago
  Consumption based taxes are regressive, not progressive, though, even if the rich consume more in absolute terms. The key is they consume less in relative terms.
  - Ericson2314 6y ago
    It makes no sense to judge the tax isolation anymore than it makes sense to judge the dividend in isolation.
- prostoalex 6y ago
  > WRT carbon tax in particular the rich do consume substantiall more with plane rides For perspective, US airlines' consumption of aviation fuel is 197 mln gallons a year. US motorists' consumption of vehicle fuel is 390 mln gallons a day. https://www.eia.gov/energyexplained/gasoline/use-of-gasoline.php https://www.eia.gov/energyexplained/gasoline/use-of-gasoline...
RickJWagner 6y ago
It could be a conspicuous consumption tax. Yachts, for example. Or private jets. Or even huge houses. We could tax the snot out of all of these. It would probably make them only more desirable status symbols, and thus stimulate the tax.
- gjs278 6y ago
  you have no sense of math. if you forcefully took back every mansion and giant boat from the rich and sold them at auction for double their value, you wouldn’t even fund the medicare/medicaid budget for more than two years.
jumpman500 6y ago
I get your point but I think sending the right signals to the market about carbon use is more important. If we need to tax the rich more we tax the rich more. If we can’t control global warming poor people have much worse things than taxes coming to ruin their lives.
NumberWangMan 6y ago
Rich people may not eat more food, but they may eat food that is shipped in from all over the world. They don't drive dozens of cars at once, but they do have lots of things delivered, and tend not to take public transport as much. They also tend to fly a lot more (which is a big source of emissions), and live in big houses with lots of lights and area to heat and cool. I agree with your point that a carbon tax would not serve the purpose of a UBI. Now I'm gonna go off topic a bit and focus on carbon taxes. I volunteer with Citizens Climate Lobby. The bill we're trying to get through the House of Representatives, H.R. 763 aka the Energy Innovation Act, is a carbon tax, but it's not like you imagine, I think. It taxes fossil fuels at the point of production, and therefore allows normal market mechanisms to adjust the prices of everything. No change to individual tax bills. Some things would get more expensive, but we would all get a check in the mail to offset. If you pollute more than average, the check wouldn't make up for the increased prices, but if you pollute less, you'd benefit. The change in prices will shift consumption away from the emissions-intensive goods and services, toward those that are greener. The poor would disproportionately benefit from this. Not just financially -- carbon emissions and pollution that affects health are of course closely linked, and it's poor people who suffer the most from pollution, because they can't afford to move somewhere else to escape it. It's not just about individual behavior -- companies would feel the same shift in incentives. Another way to think of the tax, from an economist's point of view, is that it's just correctly pricing a market externality. The weird thing about a carbon tax like this is that a majority of Americans support it, but most of us don't think that it's a majority! It's already popular, we just have to convince Congress.
- wahern 6y ago
  > which is a big source of emissions Slight tangent: 2% globally[1], 3% domestically[2] is big? [1] https://www.iata.org/en/programs/environment/climate-change/ https://www.iata.org/en/programs/environment/climate-change/ [2] https://www.eesi.org/papers/view/fact-sheet-the-growth-in-greenhouse-gas-emissions-from-commercial-aviation https://www.eesi.org/papers/view/fact-sheet-the-growth-in-gr...
  - qqqwerty 6y ago
mr_toad 6y ago
> In an unideal world it will just be gamed to all hell instead. I suspect that as the carbon tax incidence of certain groups changes over time they (or others) will lobby for commensurate changes in UBI (or any other similar compensation schemes). The result will be that both measures will be rendered ineffective.
jointpdf 6y ago
Implementations vary, but the most efficient design is to tax carbon as far upstream as possible (e.g. oil refineries), rather than at the manufacturer or household level. So, it’s not a direct tax on consumers the way a sales tax is. In theory, this cost is then passed on down the chain in the form of higher prices for carbon intensive products and processes. A carbon tax is overwhelmingly considered to be the most efficient solution by economists for Econ101 reasons—pricing negative externalities (correcting a market failure is more efficient than doing nothing), and enabling competition and comparative advantage (more efficient than command-and-control policies). The idea of taxing things we want less of is known as a Pigouvian tax, by the way—and it’s considered a no-brainer even by the most conservative economists (e.g. Mankiw). > good luck getting people to swallow a doubling of their tax bill even if you give it back. Not so! Public opinion on climate change has shifted dramatically in the last several years. This poll from last year (and from a top Republican pollster to boot) found that people support a carbon-tax-and-dividend policy 4-to-1. 75% of GOP voters (!) under age 40 support this type of policy. Read all of the results, they are remarkable. It’s a winner in the eyes of both economists and the public. https://www.clcouncil.org/media/Luntz-Carbon-Dividends-Polling-May-20-2019-FINAL.pdf https://www.clcouncil.org/media/Luntz-Carbon-Dividends-Polli...
- ikiris 6y ago
  so... how do you tax at the top when the top happens outside your administrative zone?
  - jointpdf 6y ago
    Hence why international coordinated action (all countries pricing carbon) is the best option. Alternatively, carbon tariffs: https://www.niskanencenter.org/border-adjusting-imported-products-in-a-carbon-tax-not-impossible/ https://www.niskanencenter.org/border-adjusting-imported-pro...
    - iso1631 6y ago
      > Hence why international coordinated action (all countries pricing carbon) is the best option. Also not going to happen
iciac 6y ago
To correct this slightly, a carbon tax changes the relative price of goods (rather than a consumption tax, which is typically flat). The primary industries affected tend to be industrial, rather than than consumption based (e.g. energy, freight, mining, and smelting).
barumrho 6y ago
Is it necessarily true that consumption requires carbon?
- korantu 6y ago
  And even if it does, could it be atmospheric/captured carbon instead?
lambdatronics 6y ago
You're neglecting that the carbon-intensive activities would now be at a disadvantage compared to carbon-free ones -- which would shift consumer behavior.
gdubs 6y ago
Couple of things: the wealthy absolutely emit more carbon then everyone else. Second, from a macroeconomics point of view, it doesn’t really matter if you tax the supplier or the consumer — in theory, it balances out the same.
- vlz 6y ago
  > the wealthy absolutely emit more carbon then everyone else Probably true, but probably not proportionally so. If you are 10x, 100x or 1000x as wealthy as me, you are probably not emitting 10x, 100x or 1000x more carbon than me. This makes an emission tax still disproportionate in some sense.
  - jaakl 6y ago
    It actually can be proportional. What do rich do with their money? More money with factories, mines, refineries etc they own directly or via funds, and exactly these are taxed.
    - Aerroon 6y ago
      But the rich don't pay those carbon taxes. That simply gets rolled into the price of whatever they produce. It's the people buying the end product that pay for it. A wealthy person could also simply not invest in these businesses. They could invest in nothing at all.
      - gdubs 6y ago
        The point about it not mattering so much whether you’re taxing the supply side or the demand side is that higher prices ultimately lead to lower sales, effecting the producer. That’s the whole point of a carbon tax — to make carbon unaffordable. While at first that will likely be “regressive” (since most consumption is carbon driven), over time it would lead to decoupling carbon from the supply chain through innovation.
AnthonyMouse 6y ago
There are two big reasons you can't fund a full UBI exclusively with a carbon tax. The first is that the size of the carbon tax would be problematic. If you wanted to fund a UBI from e.g. VAT, or income tax, you might need a rate of something like 20%. If you wanted to fund the same sized UBI from a carbon tax, the rate would have to be thousands of percent, because burning carbon is not that huge a proportion of all economic activity. And then that would be very disruptive, because rather than some kind of gradual phase out of carbon, everyone would abandon it immediately to avoid the incredibly high tax. Which is the second problem. Even if you used a less oppressive rate so that people would phase out carbon over some number of years rather than some number of weeks, that's eventually what would happen, and then your tax base dries up. It inherently can't be a long-term funding source because its purpose is to make carbon go away. It is, however, a brilliant way to distribute the proceeds of a carbon tax. The "UBI" would then be a smaller amount (or require additional funding from general taxes), but it would effectively moot the entire economic impact of the tax (everyone is, on average, getting all the money back) while still creating a good incentive to be the first to stop burning carbon.
EGreg 6y ago
No. A UBI paid for by pigovian taxes would be redistributed right back to the people, counteracting the problem you mentioned that led to the Yellow Vest protests. It would align the public’s incentives with increasing the tax, thereby increasing the cost of the negative externalities! UBI is a very powerful tool for aligning the public’s incentives with collective action that may otherwise be intractable.
- Proven 6y ago
  Everything you claim is false. If tax money is redistributed back to the people why collect it? Obviously it's not evenly redistributed, hence the plunder. Public incentives and interest don't exist to begin with. My personal interest is to not pay any tax I don't want to (I'd pay some for defense and justice), for example.
  - EGreg 6y ago
    You collect taxes for two reasons: 1. To counteract the UBI and withdraw money from the economy 2. To use fiscal policy to make certain externalities more expensive, thus making people choose to transition to their alternatives. Collective action problems can’t be solved otherwise.
jariel 6y ago
"s then that means it will necessarily disproportionately impact poor people." It correlates with green house emissions, it has nothing to do with rich or poor. FYI rich people emit more carbon and would in fact end up paying more.
sjtindell 6y ago
The solution to not doubling the tax bill is to consolidate lots of the existing expensive programs into UBI rather than adding it on.
- CarbyAu 6y ago
  I wonder how much "money you'd save" by having near zero paperwork for eligibility. Also, while those jobs would be gone, those people could then do more economically "productive" things.
zhoujianfu 6y ago
We should have a carbon tax and we should have a UBI, but they don’t really have a lot to do with each other.
TheSmiddy 6y ago
When the carbon tax was introduced in Australia the tax free threshold was increased from $6000 to $18,000 and additional tax benefits were given to low income and welfare recipients. Anybody earning less than $80,000pa at the time were better off under the carbon tax, and anybody earning above that were in a position to make purchases to lower their impact.
MuffinFlavored 6y ago
why can’t we do a flat tax? why is the answer always “let’s tax the rich more” off rip?
- roberto 6y ago
  Because they never get taxed and they only get richer. https://www.businessinsider.com/billionaires-got-565-billion-richer-during-the-coronavirus-pandemic-2020-6 https://www.businessinsider.com/billionaires-got-565-billion...
  - MuffinFlavored 6y ago
    https://youtu.be/S6HEH23W_bM https://youtu.be/S6HEH23W_bM what are your thoughts on this video?
runarberg 6y ago
> A carbon tax in an ideal situation is just a consumption tax. Maybe a stupid question: But why is it given that a carbon tax is a consumption tax? Why don’t we tax the producers? Like why not tax the airline companies, as opposed to the air tickets? The gas stations, as opposed to the drivers? etc.
- dpad 6y ago
  Producers are taxed, however the tax is passed on the customers in the form of increased price. Because the companies costs increased (due to tax) and it wants to maximalize its profit.
- PoignardAzur 6y ago
  Short answer: let's say shipping a single person costs 100$ to an airline, and the airline sells the ticket 120$; but then you require that the airline pay 20$ in taxes per ticket they sell: at this point the airline will sell its tickets 140$. There's some wiggle room (eg maybe some airlines get too much profits and with the right incentives you can get them closer to the market price), but generally speaking, taxes to corporation trickle down directly to consumers. That's something people don't understand, because they visualize giant mega-corporations as extracting immense amounts of wealth from the poor and giving it to their rich CEOs, but in practice these corporations benefit from economies of scale, and their margins are fairly tight.
  - runarberg 6y ago
    Even though there is no difference economically speaking, there is definitely a psychological difference. We have studies that prove this fact. It is a gross oversimplification to ignore the perceived difference of an airline raising their price because of a tax, and a consumer having to have to pay an extra tax of their air tickets.
bryanrasmussen 6y ago
Every few years or so people pick on Al Gore because of the size of his carbon footprint, basically rich people use more resources and resources in our world get very much linked to energy usage - a good non Al Gore bashing look at it https://www.greenbuildingadvisor.com/article/the-truth-about-al-gores-carbon-footprint https://www.greenbuildingadvisor.com/article/the-truth-about...
cortesoft 6y ago
They don't eat more food, but they travel more, they buy more produced goods, they buy more cars, etc.
mac01021 6y ago
It's called a "carbon fee & dividend" and an increasing number of people are advocating it. (https://clcouncil.org/economists-statement/ https://clcouncil.org/economists-statement/) It's nowhere near enough to fund a UBI that most people could live on without additional assistance, but that's no reason not to do it. It just means you need to fund your UBI with other sources of revenue too. Really, I think the GP used the wrong word when they called the dividend a "UBI". And it _really_ is the best policy. Even if it did nothing to reduce emissions, it's a matter of justice. I won't tell you that you can't fly across the country every single weekend or emit a gigaton of carbon mining bitcoin but, if you do, you _really_ should reimburse me and my 2-year-old daughter for the harm you're doing to our futures. Likewise, when I heat my ridiculous suburban mansion to 80F through the New York winter, I'm harming you and your children, so I should reimburse you. But it WILL have a great effect on emissions (if ever implemented). Probably more than any other policy we might enact. Some of the comments around here complain about how regressive a carbon tax is. But in fact it is only regressive when not combined with the dividend. The price of a poor person's carbon footprint as a fraction of their income or wealth IS larger than that of a wealthier person. But the fact is that most poor and urban working class people's dividends will be greater than the carbon fee they pay, while people who have giant houses, travel by air a lot, etc will pay more in fees than they receive in dividends. This page (https://citizensclimatelobby.org/household-impact-study/ https://citizensclimatelobby.org/household-impact-study/) has a nice chart showing the fees and where they come from for an average household in each income quintile in the USA. The expected fees for each quintile (under a $15/ton carbon fee) are $173, $219, $252, $292, $381. On another page on the same site, you can find that the expected dividend (which just depends on the number of adults/children in the household) is $288. Lastly, this policy is currently a bill in the US House of Representatives (https://en.wikipedia.org/wiki/Energy_Innovation_and_Carbon_D... https://en.wikipedia.org/wiki/Energy_Innovation_and_Carbon_D...) and is currently "sponsored" (whatever that means) by 18% of the house. Sadly almost all democrats. I think the policy saw more republican support during the few years before the current administration, but I can't find the data too easily at this moment. This bill and past ones like it include a schedule for the price of emissions to start low and increase over the next several decades. The tax itself is to be collected at mines, ports, and oil refineries, where fossil fuels first enter the economy. Regular people will only see it in the form of initially-very-small increases in the price of goods and services. And they'll get their dividend check or direct deposit every month. I don't think I know anyone who wouldn't love getting that check in the mail.

haram_masala 6y ago

Could a carbon tax also be assessed against capital gains that benefit from carbon emission? That might address the inherent inequality you mention.

Aerroon 6y ago
I'm unsure how you would go about doing that. You would somehow have to be able to assess the carbon emissions of every company. This gets quite difficult, because you have to start answering questions such as "do we count the carbon emissions of the individual employees?" It might seem like a silly question, but this could have an impact on which types of businesses people invest in. It would probably just be easier to have a general carbon tax that gets paid back to people. Then separately you could have a UBI paid for by capital gains taxes or something along those lines. But somebody else probably knows more about this.
- guerrilla 6y ago
  Do they not already have to report emissions?
  - bradlys 6y ago
    I work for a fintech startup. I'd be very surprised if we had to report emissions. Yet, we are definitely a method for the rich to get richer through investments. And we currently benefit from a particular kind of carbon footprint - somewhat indirectly.
    - guerrilla 6y ago
      No but they may have to declare that they have nothing to declare or those who do need certain kinds of operatimg licences that your company doesn't. Obviously they know who's running refineries, paper mills and things like that.
- JumpCrisscross 6y ago
  > You would somehow have to be able to assess the carbon emissions of every company And then map that to every stock, bond, loan and asset.
- prostoalex 6y ago
  Economists distinguish between three scopes of emissions https://www.economist.com/briefing/2020/06/20/how-much-can-financiers-do-about-climate-change https://www.economist.com/briefing/2020/06/20/how-much-can-f... It gets complicated as direct taxation just encourages moving the dirtiest link in the supply chain offshore. E.g. manufacture tire in the US and be subject to a high emissions tax, manufacture them abroad and then import them into US - and you're golden.
  - bickeringyokel 6y ago
    Could you not solve that issue with tariffs?
adrianN 6y ago
A carbon tax is best levied at the point of extraction. Businesses that currently benefit from emitting a lot will automatically reduce in value.
- LoSboccacc 6y ago
  *automatically move abroad to complacent countries where emission can be whatever you want them to be
  - adrianN 6y ago
    Why would they? If they export their goods they get the tax back and if they wanted to import after moving to a different country they'd have to pay at the border.
    - LoSboccacc 6y ago
      and how much would they pay at the border?
      - adrianN 6y ago
        The best estimate as to how much carbon the product released times the price of carbon of course. I'd guess the estimates would be on the high side to encourage domestic production.
        LoSboccacc 6y ago
        > complacent countries where emission can be whatever you want them to be and whom you gonna trust for measuring/estimate the carbon produced in the complacent country? "yes sir we have all these kind of filters and capture schemes" preemptive reply to "but we're going to check and fine them": Panama Papers happened and nothing was done about them.
        adrianN 6y ago

Ericson2314 6y ago

> This means that it's the consumer that pays it. Rich people don't eat more food nor do they drive dozens of cars at once. Rich people may not consume more in proportion to their wealth, but they do consume more in absolute terms. WRT carbon tax in particular the rich do consume substantiall more with plane rides, so the tax side would be more progressive than a plain VAT. Also, they buy their kids cars. > It'll be a slight redistribution of wealth from the wealthy to the poor and that's it. It won't fulfill the role of a UBI. Maybe it's not enough but that doesn't make it a bad thing. One could combine a bunch of externalizes taxes (carbon, land, etc.) which together could create a better UBI. Or yes, throw in VAT Yang style too. > In an unideal world it will just be gamed to all hell instead. "gaming" is finding ways to maximally consume / Cabon impact. Yes, please game this as much as possible! > Also, good luck getting people to swallow a doubling of their tax bill even if you give it back. By definition only the people that consume 2 / punative-rate the average double there taxes. I'm sure these few rich people will raise a fit and have outside political power, but this applies to any progressive tax.

dannyw 6y ago
Consumption based taxes are regressive, not progressive, though, even if the rich consume more in absolute terms. The key is they consume less in relative terms.
- Ericson2314 6y ago
  It makes no sense to judge the tax isolation anymore than it makes sense to judge the dividend in isolation.
prostoalex 6y ago
> WRT carbon tax in particular the rich do consume substantiall more with plane rides For perspective, US airlines' consumption of aviation fuel is 197 mln gallons a year. US motorists' consumption of vehicle fuel is 390 mln gallons a day. https://www.eia.gov/energyexplained/gasoline/use-of-gasoline.php https://www.eia.gov/energyexplained/gasoline/use-of-gasoline...

RickJWagner 6y ago

It could be a conspicuous consumption tax. Yachts, for example. Or private jets. Or even huge houses. We could tax the snot out of all of these. It would probably make them only more desirable status symbols, and thus stimulate the tax.

gjs278 6y ago
you have no sense of math. if you forcefully took back every mansion and giant boat from the rich and sold them at auction for double their value, you wouldn’t even fund the medicare/medicaid budget for more than two years.

jumpman500 6y ago

I get your point but I think sending the right signals to the market about carbon use is more important. If we need to tax the rich more we tax the rich more. If we can’t control global warming poor people have much worse things than taxes coming to ruin their lives.

NumberWangMan 6y ago

Rich people may not eat more food, but they may eat food that is shipped in from all over the world. They don't drive dozens of cars at once, but they do have lots of things delivered, and tend not to take public transport as much. They also tend to fly a lot more (which is a big source of emissions), and live in big houses with lots of lights and area to heat and cool. I agree with your point that a carbon tax would not serve the purpose of a UBI. Now I'm gonna go off topic a bit and focus on carbon taxes. I volunteer with Citizens Climate Lobby. The bill we're trying to get through the House of Representatives, H.R. 763 aka the Energy Innovation Act, is a carbon tax, but it's not like you imagine, I think. It taxes fossil fuels at the point of production, and therefore allows normal market mechanisms to adjust the prices of everything. No change to individual tax bills. Some things would get more expensive, but we would all get a check in the mail to offset. If you pollute more than average, the check wouldn't make up for the increased prices, but if you pollute less, you'd benefit. The change in prices will shift consumption away from the emissions-intensive goods and services, toward those that are greener. The poor would disproportionately benefit from this. Not just financially -- carbon emissions and pollution that affects health are of course closely linked, and it's poor people who suffer the most from pollution, because they can't afford to move somewhere else to escape it. It's not just about individual behavior -- companies would feel the same shift in incentives. Another way to think of the tax, from an economist's point of view, is that it's just correctly pricing a market externality. The weird thing about a carbon tax like this is that a majority of Americans support it, but most of us don't think that it's a majority! It's already popular, we just have to convince Congress.

wahern 6y ago
> which is a big source of emissions Slight tangent: 2% globally[1], 3% domestically[2] is big? [1] https://www.iata.org/en/programs/environment/climate-change/ https://www.iata.org/en/programs/environment/climate-change/ [2] https://www.eesi.org/papers/view/fact-sheet-the-growth-in-greenhouse-gas-emissions-from-commercial-aviation https://www.eesi.org/papers/view/fact-sheet-the-growth-in-gr...
- qqqwerty 6y ago

mr_toad 6y ago

> In an unideal world it will just be gamed to all hell instead. I suspect that as the carbon tax incidence of certain groups changes over time they (or others) will lobby for commensurate changes in UBI (or any other similar compensation schemes). The result will be that both measures will be rendered ineffective.

jointpdf 6y ago

Implementations vary, but the most efficient design is to tax carbon as far upstream as possible (e.g. oil refineries), rather than at the manufacturer or household level. So, it’s not a direct tax on consumers the way a sales tax is. In theory, this cost is then passed on down the chain in the form of higher prices for carbon intensive products and processes. A carbon tax is overwhelmingly considered to be the most efficient solution by economists for Econ101 reasons—pricing negative externalities (correcting a market failure is more efficient than doing nothing), and enabling competition and comparative advantage (more efficient than command-and-control policies). The idea of taxing things we want less of is known as a Pigouvian tax, by the way—and it’s considered a no-brainer even by the most conservative economists (e.g. Mankiw). > good luck getting people to swallow a doubling of their tax bill even if you give it back. Not so! Public opinion on climate change has shifted dramatically in the last several years. This poll from last year (and from a top Republican pollster to boot) found that people support a carbon-tax-and-dividend policy 4-to-1. 75% of GOP voters (!) under age 40 support this type of policy. Read all of the results, they are remarkable. It’s a winner in the eyes of both economists and the public. https://www.clcouncil.org/media/Luntz-Carbon-Dividends-Polling-May-20-2019-FINAL.pdf https://www.clcouncil.org/media/Luntz-Carbon-Dividends-Polli...

ikiris 6y ago
so... how do you tax at the top when the top happens outside your administrative zone?
- jointpdf 6y ago
  Hence why international coordinated action (all countries pricing carbon) is the best option. Alternatively, carbon tariffs: https://www.niskanencenter.org/border-adjusting-imported-products-in-a-carbon-tax-not-impossible/ https://www.niskanencenter.org/border-adjusting-imported-pro...
  - iso1631 6y ago
    > Hence why international coordinated action (all countries pricing carbon) is the best option. Also not going to happen

iciac 6y ago

To correct this slightly, a carbon tax changes the relative price of goods (rather than a consumption tax, which is typically flat). The primary industries affected tend to be industrial, rather than than consumption based (e.g. energy, freight, mining, and smelting).

barumrho 6y ago

Is it necessarily true that consumption requires carbon?

korantu 6y ago
And even if it does, could it be atmospheric/captured carbon instead?

lambdatronics 6y ago

You're neglecting that the carbon-intensive activities would now be at a disadvantage compared to carbon-free ones -- which would shift consumer behavior.

gdubs 6y ago

Couple of things: the wealthy absolutely emit more carbon then everyone else. Second, from a macroeconomics point of view, it doesn’t really matter if you tax the supplier or the consumer — in theory, it balances out the same.

vlz 6y ago
> the wealthy absolutely emit more carbon then everyone else Probably true, but probably not proportionally so. If you are 10x, 100x or 1000x as wealthy as me, you are probably not emitting 10x, 100x or 1000x more carbon than me. This makes an emission tax still disproportionate in some sense.
- jaakl 6y ago
  It actually can be proportional. What do rich do with their money? More money with factories, mines, refineries etc they own directly or via funds, and exactly these are taxed.
  - Aerroon 6y ago
    But the rich don't pay those carbon taxes. That simply gets rolled into the price of whatever they produce. It's the people buying the end product that pay for it. A wealthy person could also simply not invest in these businesses. They could invest in nothing at all.
    - gdubs 6y ago
      The point about it not mattering so much whether you’re taxing the supply side or the demand side is that higher prices ultimately lead to lower sales, effecting the producer. That’s the whole point of a carbon tax — to make carbon unaffordable. While at first that will likely be “regressive” (since most consumption is carbon driven), over time it would lead to decoupling carbon from the supply chain through innovation.

AnthonyMouse 6y ago

There are two big reasons you can't fund a full UBI exclusively with a carbon tax. The first is that the size of the carbon tax would be problematic. If you wanted to fund a UBI from e.g. VAT, or income tax, you might need a rate of something like 20%. If you wanted to fund the same sized UBI from a carbon tax, the rate would have to be thousands of percent, because burning carbon is not that huge a proportion of all economic activity. And then that would be very disruptive, because rather than some kind of gradual phase out of carbon, everyone would abandon it immediately to avoid the incredibly high tax. Which is the second problem. Even if you used a less oppressive rate so that people would phase out carbon over some number of years rather than some number of weeks, that's eventually what would happen, and then your tax base dries up. It inherently can't be a long-term funding source because its purpose is to make carbon go away. It is, however, a brilliant way to distribute the proceeds of a carbon tax. The "UBI" would then be a smaller amount (or require additional funding from general taxes), but it would effectively moot the entire economic impact of the tax (everyone is, on average, getting all the money back) while still creating a good incentive to be the first to stop burning carbon.

EGreg 6y ago

No. A UBI paid for by pigovian taxes would be redistributed right back to the people, counteracting the problem you mentioned that led to the Yellow Vest protests. It would align the public’s incentives with increasing the tax, thereby increasing the cost of the negative externalities! UBI is a very powerful tool for aligning the public’s incentives with collective action that may otherwise be intractable.

Proven 6y ago
Everything you claim is false. If tax money is redistributed back to the people why collect it? Obviously it's not evenly redistributed, hence the plunder. Public incentives and interest don't exist to begin with. My personal interest is to not pay any tax I don't want to (I'd pay some for defense and justice), for example.
- EGreg 6y ago
  You collect taxes for two reasons: 1. To counteract the UBI and withdraw money from the economy 2. To use fiscal policy to make certain externalities more expensive, thus making people choose to transition to their alternatives. Collective action problems can’t be solved otherwise.

jariel 6y ago

"s then that means it will necessarily disproportionately impact poor people." It correlates with green house emissions, it has nothing to do with rich or poor. FYI rich people emit more carbon and would in fact end up paying more.

sjtindell 6y ago

The solution to not doubling the tax bill is to consolidate lots of the existing expensive programs into UBI rather than adding it on.

CarbyAu 6y ago
I wonder how much "money you'd save" by having near zero paperwork for eligibility. Also, while those jobs would be gone, those people could then do more economically "productive" things.

zhoujianfu 6y ago

We should have a carbon tax and we should have a UBI, but they don’t really have a lot to do with each other.

TheSmiddy 6y ago

When the carbon tax was introduced in Australia the tax free threshold was increased from $6000 to $18,000 and additional tax benefits were given to low income and welfare recipients. Anybody earning less than $80,000pa at the time were better off under the carbon tax, and anybody earning above that were in a position to make purchases to lower their impact.

MuffinFlavored 6y ago

why can’t we do a flat tax? why is the answer always “let’s tax the rich more” off rip?

roberto 6y ago
Because they never get taxed and they only get richer. https://www.businessinsider.com/billionaires-got-565-billion-richer-during-the-coronavirus-pandemic-2020-6 https://www.businessinsider.com/billionaires-got-565-billion...
- MuffinFlavored 6y ago
  https://youtu.be/S6HEH23W_bM https://youtu.be/S6HEH23W_bM what are your thoughts on this video?

runarberg 6y ago

> A carbon tax in an ideal situation is just a consumption tax. Maybe a stupid question: But why is it given that a carbon tax is a consumption tax? Why don’t we tax the producers? Like why not tax the airline companies, as opposed to the air tickets? The gas stations, as opposed to the drivers? etc.

dpad 6y ago
Producers are taxed, however the tax is passed on the customers in the form of increased price. Because the companies costs increased (due to tax) and it wants to maximalize its profit.
PoignardAzur 6y ago
Short answer: let's say shipping a single person costs 100$ to an airline, and the airline sells the ticket 120$; but then you require that the airline pay 20$ in taxes per ticket they sell: at this point the airline will sell its tickets 140$. There's some wiggle room (eg maybe some airlines get too much profits and with the right incentives you can get them closer to the market price), but generally speaking, taxes to corporation trickle down directly to consumers. That's something people don't understand, because they visualize giant mega-corporations as extracting immense amounts of wealth from the poor and giving it to their rich CEOs, but in practice these corporations benefit from economies of scale, and their margins are fairly tight.
- runarberg 6y ago
  Even though there is no difference economically speaking, there is definitely a psychological difference. We have studies that prove this fact. It is a gross oversimplification to ignore the perceived difference of an airline raising their price because of a tax, and a consumer having to have to pay an extra tax of their air tickets.

bryanrasmussen 6y ago

Every few years or so people pick on Al Gore because of the size of his carbon footprint, basically rich people use more resources and resources in our world get very much linked to energy usage - a good non Al Gore bashing look at it https://www.greenbuildingadvisor.com/article/the-truth-about-al-gores-carbon-footprint https://www.greenbuildingadvisor.com/article/the-truth-about...

cortesoft 6y ago

They don't eat more food, but they travel more, they buy more produced goods, they buy more cars, etc.

mac01021 6y ago

It's called a "carbon fee & dividend" and an increasing number of people are advocating it. (https://clcouncil.org/economists-statement/ https://clcouncil.org/economists-statement/) It's nowhere near enough to fund a UBI that most people could live on without additional assistance, but that's no reason not to do it. It just means you need to fund your UBI with other sources of revenue too. Really, I think the GP used the wrong word when they called the dividend a "UBI". And it _really_ is the best policy. Even if it did nothing to reduce emissions, it's a matter of justice. I won't tell you that you can't fly across the country every single weekend or emit a gigaton of carbon mining bitcoin but, if you do, you _really_ should reimburse me and my 2-year-old daughter for the harm you're doing to our futures. Likewise, when I heat my ridiculous suburban mansion to 80F through the New York winter, I'm harming you and your children, so I should reimburse you. But it WILL have a great effect on emissions (if ever implemented). Probably more than any other policy we might enact. Some of the comments around here complain about how regressive a carbon tax is. But in fact it is only regressive when not combined with the dividend. The price of a poor person's carbon footprint as a fraction of their income or wealth IS larger than that of a wealthier person. But the fact is that most poor and urban working class people's dividends will be greater than the carbon fee they pay, while people who have giant houses, travel by air a lot, etc will pay more in fees than they receive in dividends. This page (https://citizensclimatelobby.org/household-impact-study/ https://citizensclimatelobby.org/household-impact-study/) has a nice chart showing the fees and where they come from for an average household in each income quintile in the USA. The expected fees for each quintile (under a $15/ton carbon fee) are $173, $219, $252, $292, $381. On another page on the same site, you can find that the expected dividend (which just depends on the number of adults/children in the household) is $288. Lastly, this policy is currently a bill in the US House of Representatives (https://en.wikipedia.org/wiki/Energy_Innovation_and_Carbon_D... https://en.wikipedia.org/wiki/Energy_Innovation_and_Carbon_D...) and is currently "sponsored" (whatever that means) by 18% of the house. Sadly almost all democrats. I think the policy saw more republican support during the few years before the current administration, but I can't find the data too easily at this moment. This bill and past ones like it include a schedule for the price of emissions to start low and increase over the next several decades. The tax itself is to be collected at mines, ports, and oil refineries, where fossil fuels first enter the economy. Regular people will only see it in the form of initially-very-small increases in the price of goods and services. And they'll get their dividend check or direct deposit every month. I don't think I know anyone who wouldn't love getting that check in the mail.