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> market forces that create these problems can be marshaled to solve them. For example, if the wealthiest countries implemented a carbon tax including a border

> market forces that create these problems can be marshaled to solve them. For example, if the wealthiest countries implemented a carbon tax including a border adjustment (accounting for goods from countries with a laxer carbon policy) would give governments a single, simple dial that the could turn to lower carbon emissions. Taxes are not market forces, they are exogenous interventions on markets. Which means having wealthiest countries implement a carbon tax is not riding market dynamics for free, but a difficult multi-agent cooperation problem that makes defecting competitively very advantageous. This includes for example requiring cooperation with India (5th in GDP) and China (2nd in GDP) who have been enjoying high, multi-year economic growth, whose de-carbonization would hurt their economies disproportionately, unlike other rich countries. Unfortunately exports only account for ~20% of their GDPs so there is only so much leverage to apply there either.

ncmncm 6y ago
Just about everything humans do is an exogenous intervention on markets, one way or another. And markets respond to them, via the cited market forces. The notion of the "free market" is a toxic fiction. Any market that works for its participants is intricately curated.
- acituan 6y ago
  > Just about everything humans do is an exogenous intervention on markets, one way or another Markets is simply the name for a particular collective of human interactions in response to pricing signals based on supply and demand, it is not a separate entity of its own. Taxes are exogenous in that they distort the equilibrous price points. That is not saying that it is always bad, because markets do fail. > The notion of the "free market" is a toxic fiction. Free market is a useful fiction for some economic modeling. No one has invoked the notion that real world markets has to/can be free, as mentioned, they do fail. But also interventions on them do fail catastrophically too. This is important, because whether to intervene with markets or not is not as hard as the question of exactly in what manner to intervene. Our pet economic policy/intervention ideas might sound nice but rarely work exactly the way intended without side effects. Lack of a carbon tax is doesn't have to be due to a conspiracy of misanthropic apocalyptic evil but simply due to the difficulty of the multi-agent cooperation it requires based on the current incentive structures.
  - throwaway894345 6y ago
    Can you elaborate on multiagenct cooperation? I grant your abstract point that markets are hard, but carbon taxes specifically are pretty straight forward and we can see that Europe has no disastrous consequences in their implementation. Further, we know to a very high degree of confidence that continuing our carbon subsidy will have disastrous consequences. A carbon tax is the simplest and most elegant solution.
    - acituan 6y ago
      > Can you elaborate on multiagenct cooperation? In short what Paris Agreement intends and what it fails to achieve. It assumes signatories will be voluntarily reducing their carbon emissions without binding enforcement, and they don't. For a while let's assume that energy production is the only activity that causes carbon emission. Compared to staying at status quo, reducing carbon emissions is at least expensive for its infrastructure transition costs, but can also be more expensive for its operating costs if the country was particularly rich in non-green energy resources. This means, making a transition while others are not is particularly disadvantageous to that state's economy; they will be producing everything for more expensive while buying cheaply produced non-green imports from non-abiding countries. This is even worse if we consider that no single country's carbon neutrality means much for meeting global warming targets. This means defecting is very profitable for any given country, which creates a game theoretic equilibrium at no one doing any decarbonization. Transitioning to the other equilibrium (where everyone is handicapped equally with green production) requires every agent to be ensured that other agents are not defecting in a lockstep fashion, and current policy tools cannot achieve that (at least yet).
      - throwaway894345 6y ago
        It seems like you’re correctly identifying the tragedy of the commons nature of environmentalism, but then advocating that we ruin the environment because if we don’t someone else will, which is to say the only sure-fire way to lose. Maybe I’m misreading—it’s late. Hopefully you will correct my error.
throwaway894345 6y ago
Taxing carbon is just removing the carbon subsidy that we currently enjoy because it isn’t sustainable. If we decide we want to subsidize India’s pollution or whatever, we can still do that. Anyway, you don’t have a market at all without government and you don’t have a government without taxes so appeals to taxes being an intrusion aren’t persuasive IMO.
- bodono 6y ago
  Google 'black market'.
  - throwaway894345 6y ago
    I'm not sure what point you're making. Even if the tax leads to a small black market for unregulated pollution, the legitimate market would remain regulated and thus our society would reap enormous environmental benefits. Moreover, the effort to thwart the tax constitutes a cost in and of itself, albeit the cost would necessarily be lower than the tax (to the extent that it's not lower, there is no incentive for a black market at all, which is also a real possibility)--this increased cost of pollution will also deter pollution just like the tax itself. Note that we tax lots of things effectively: gasoline, cigarettes, etc, and in none of those cases have a significant portion of the legitimate market moved to a black market--those taxes are quite effective. Lastly, Europe already has its own carbon taxes without the (rather silly) hypothetical consequences raised by critics in this thread.
    - acituan 6y ago
      > Anyway, you don’t have a market at all without government That is not true, in fact most of the markets in history operated either without currencies (e.g. barter, farm labor etc) or with currencies that have inherent value (e.g gold, silver). A switch to fiat money implies state backing indeed, but a) it doesn't have to be one particular state (e.g. can do business with US dollars in some 3rd world countries) and innovations like bitcoin enable markets without any centralized currency. > If we decide we want to subsidize India’s pollution or whatever, we can still do that. That is the crux of the criticism you say you find silly. How exactly? Please show your work, because I am curious how we can subsidize China or India's emissions resulting from their domestic economy. > Europe already has its own carbon taxes Again please pay attention to domestic vs imported carbon. Most of the claims of approximating carbon neutrality is much smaller than in reality, because of the increasing consumption of carbon positive goods from developing countries.

ncmncm 6y ago

Just about everything humans do is an exogenous intervention on markets, one way or another. And markets respond to them, via the cited market forces. The notion of the "free market" is a toxic fiction. Any market that works for its participants is intricately curated.

acituan 6y ago
> Just about everything humans do is an exogenous intervention on markets, one way or another Markets is simply the name for a particular collective of human interactions in response to pricing signals based on supply and demand, it is not a separate entity of its own. Taxes are exogenous in that they distort the equilibrous price points. That is not saying that it is always bad, because markets do fail. > The notion of the "free market" is a toxic fiction. Free market is a useful fiction for some economic modeling. No one has invoked the notion that real world markets has to/can be free, as mentioned, they do fail. But also interventions on them do fail catastrophically too. This is important, because whether to intervene with markets or not is not as hard as the question of exactly in what manner to intervene. Our pet economic policy/intervention ideas might sound nice but rarely work exactly the way intended without side effects. Lack of a carbon tax is doesn't have to be due to a conspiracy of misanthropic apocalyptic evil but simply due to the difficulty of the multi-agent cooperation it requires based on the current incentive structures.
- throwaway894345 6y ago
  Can you elaborate on multiagenct cooperation? I grant your abstract point that markets are hard, but carbon taxes specifically are pretty straight forward and we can see that Europe has no disastrous consequences in their implementation. Further, we know to a very high degree of confidence that continuing our carbon subsidy will have disastrous consequences. A carbon tax is the simplest and most elegant solution.
  - acituan 6y ago
    > Can you elaborate on multiagenct cooperation? In short what Paris Agreement intends and what it fails to achieve. It assumes signatories will be voluntarily reducing their carbon emissions without binding enforcement, and they don't. For a while let's assume that energy production is the only activity that causes carbon emission. Compared to staying at status quo, reducing carbon emissions is at least expensive for its infrastructure transition costs, but can also be more expensive for its operating costs if the country was particularly rich in non-green energy resources. This means, making a transition while others are not is particularly disadvantageous to that state's economy; they will be producing everything for more expensive while buying cheaply produced non-green imports from non-abiding countries. This is even worse if we consider that no single country's carbon neutrality means much for meeting global warming targets. This means defecting is very profitable for any given country, which creates a game theoretic equilibrium at no one doing any decarbonization. Transitioning to the other equilibrium (where everyone is handicapped equally with green production) requires every agent to be ensured that other agents are not defecting in a lockstep fashion, and current policy tools cannot achieve that (at least yet).
    - throwaway894345 6y ago
      It seems like you’re correctly identifying the tragedy of the commons nature of environmentalism, but then advocating that we ruin the environment because if we don’t someone else will, which is to say the only sure-fire way to lose. Maybe I’m misreading—it’s late. Hopefully you will correct my error.

throwaway894345 6y ago

Taxing carbon is just removing the carbon subsidy that we currently enjoy because it isn’t sustainable. If we decide we want to subsidize India’s pollution or whatever, we can still do that. Anyway, you don’t have a market at all without government and you don’t have a government without taxes so appeals to taxes being an intrusion aren’t persuasive IMO.

bodono 6y ago
Google 'black market'.
- throwaway894345 6y ago
  I'm not sure what point you're making. Even if the tax leads to a small black market for unregulated pollution, the legitimate market would remain regulated and thus our society would reap enormous environmental benefits. Moreover, the effort to thwart the tax constitutes a cost in and of itself, albeit the cost would necessarily be lower than the tax (to the extent that it's not lower, there is no incentive for a black market at all, which is also a real possibility)--this increased cost of pollution will also deter pollution just like the tax itself. Note that we tax lots of things effectively: gasoline, cigarettes, etc, and in none of those cases have a significant portion of the legitimate market moved to a black market--those taxes are quite effective. Lastly, Europe already has its own carbon taxes without the (rather silly) hypothetical consequences raised by critics in this thread.
  - acituan 6y ago
    > Anyway, you don’t have a market at all without government That is not true, in fact most of the markets in history operated either without currencies (e.g. barter, farm labor etc) or with currencies that have inherent value (e.g gold, silver). A switch to fiat money implies state backing indeed, but a) it doesn't have to be one particular state (e.g. can do business with US dollars in some 3rd world countries) and innovations like bitcoin enable markets without any centralized currency. > If we decide we want to subsidize India’s pollution or whatever, we can still do that. That is the crux of the criticism you say you find silly. How exactly? Please show your work, because I am curious how we can subsidize China or India's emissions resulting from their domestic economy. > Europe already has its own carbon taxes Again please pay attention to domestic vs imported carbon. Most of the claims of approximating carbon neutrality is much smaller than in reality, because of the increasing consumption of carbon positive goods from developing countries.