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I agree, and I think that what you said about the rate being incorrect is right. Pigovian taxes are great in models but extraordinarily difficult to implement.
by usednet 5y ago
I agree, and I think that what you said about the rate being incorrect is right. Pigovian taxes are great in models but extraordinarily difficult to implement. Measuring externalities, especially of something like carbon production, is a monumental task that economists in my opinion have been failing at. Another commenter linked a great analysis on how economists are drastically underestimating the economic effect of climate change (assuming 90% of GDP won’t be affected because its indoors!).
On the second point I somewhat disagree. The current inelasticity of demand is extremely important as climate change will become uncontrollable at longer timeframes. The current trend is not enough and not fast enough. I agree with the authors that Pigovian subsidies for renewables worldwide are necessary as soon as possible.
- LudwigNagasena 5y ago> economists are drastically underestimating the economic effect of climate change (assuming 90% of GDP won’t be affected because its indoors!) Please, take Steve Keen with skepticism. He is, so to say, an unreliable narrator.
- usednet 5y agoI like Steve Keen. I find his work convincing and practical.
- colinmhayes 5y agoThat's fine. Just know that he's effectively a quack.
- soVeryTired 5y agoIt'd be nice to see a refutation of his arguments, or at least a recognition of them. As it stands I've just seen two ad hominems in a row and not much else.
- LudwigNagasena 5y agohttps://economics.stackexchange.com/questions/43116/did-william-nordhaus-exclude-87-of-economic-industries-from-his-climate-change https://economics.stackexchange.com/questions/43116/did-will... https://economics.stackexchange.com/a/18992/1601 https://economics.stackexchange.com/a/18992/1601
- orwin 5y agoOn this, I've read a critic of Nordhaus (in French) that said basically the same thing. AKA: Nordhaus willfully ignore in his research two major facts: you cannot operate machines with famished workers, and people need to be able to move around to produce value. The impact on GDP will be much higher, especially if agriculture is hit by climate change.
- LudwigNagasena 5y agoIt doesn’t look “basically the same” to me.
- orwin 5y agoI don't know this person that well, i just read his paper linked in this comment page that said similar things on Nordhaus to what I've already read.
- imtringued 5y ago>Pigovian taxes are great in models but extraordinarily difficult to implement. Yeah so what? The bureaucracy of an income tax is a drag on an economy. The bureaucracy of pigovian taxes is a blessing for the economy.
- usednet 5y agoI’m not fundamentally opposed to pigovian taxes, they are the best option in many cases. For climate change, definitely not the best option. I personally advocate for cap and trade.