5 ms·

I think the key insight that's missing in these discussions is we need to tax carbon at the point of extraction, not at the point of consumption. We need to mak

by dTal 5y ago

I think the key insight that's missing in these discussions is we need to tax carbon at the point of extraction, not at the point of consumption. We need to make mines and wells unsustainably expensive to operate. If people really need oil, they'll find ways to manufacture it more cheaply from biowaste. The trouble is that this is a Hard Problem because a huge fraction of the world's carbon is extracted in or by countries whose geopolitical standing would be crushed by this. But unless we do this, the same amount of carbon will ultimately be extracted and subsequently burned by somebody. (Also when push comes to shove nobody actually gives a shit about any of this, and any politician who deliberately does anything to raise fuel prices will find their head on a pike)

intrasight 5y ago
Carbon is a global problem indeed. The most global I would say. So clearly we can't have such a tax be only on local production. Makes me wonder if Bitcoin could play a role.
- tombert 5y ago
  Ok, I'll bite...how exactly does this have anything to do with bitcoin?
  - intrasight 5y ago
    I don't. Only connection is that they are both global problems ;)
afarrell 5y ago
It would need to be at the point of extraction or importation. Then you'd need tax treaties with countries who are adopting similar policies.
namdnay 5y ago
why? we tax cigarettes at the point of consumption and that has worked fine.
- thargor90 5y ago
  Supply chains are not 100% transparent. We know how bad one unit of "cigarette" is for our health, but we don't know how bad one unit of xxx is for the environment. An apple can have a co2 footprint of multiple tons of co2 or zero tons of co2. We can't know for sure.
- dTal 5y ago
  Because you should tax the thing you want to stop. Burning carbon is absolutely fine, provided the carbon originally came from the atmosphere and not buried deposits. It's the open-loop cycle that's the problem. The moment you dig it up, eventually it's bound for atmosphere. You want to financially encourage the development of "green" petroleum - nobody will bother if it's taxed all the same. Also, if you try and individually tax the hundreds of thousands of different uses for carbon, according to how much carbon each thing uses, inevitably you'll get it wrong, and this will create inefficiencies and perverse incentives to do arbitrage between the various poorly calibrated taxes. What you want is for the market to figure it all out!
- initplus 5y ago
  Products don’t come with a label measuring how much oil was burned in their production. Even if the manufacturer wanted to know, tracing that detail through their entire supply chain is really difficult. Preventing fraud is also very challenging. Whereas if you tax at extraction this is automatically take into account at every step of the supply chain. The market does all the hard work for you.
- imtringued 5y ago
  Taxing carbon at the point of consumption is like taxing a product if the manufacturers' employees have smoked at the point of consumption. How are you going to enforce that? A product that was manufactured by smokers and non smokers looks identical.
jollybean 5y ago
" If people really need oil, they'll find ways to manufacture it more cheaply from biowaste." What? No. We don't care about the extraction. If oil must be burned, don't care whether it's Oil from wells or Oil from biowaste. If it's oil for burning an engine, and we need that engine to operate for some economic reason - then we actually want people to consume the cheapest version. We don't want to make people jump through hurdles to 'run an engine that we need to run' for no reason. We may want to make sure that running that engine is economically essential, in which case keeping prices high, or, by some regulation. The act of 'extraction' is not a problem, there's not much negative from that. Other than geostrategic issues (i.e. Russia) we don't care where it comes from. What we want to do is tax the fuel itself - not emissions. The emissions are a direct function of the fuel. We know X litres of gas will create Y tonnes for Co2 and that's it. So tax the fuel instead of getting people to figure out emissions. Oil that is used for other reasons, we don't really care about. We could put a fuel tax, and a natural gas tax up right now - we already have mechanisms in place for that.
- dTal 5y ago
  >If oil must be burned, don't care whether it's Oil from wells or Oil from biowaste. Yes, we really do. There is vastly more carbon in the atmosphere than a hundred years ago. Where did it come from? You can burn oil made from biowaste all day and all night and it won't raise CO2 levels one little bit. Why? Because all that carbon came from the atmosphere to begin with! All the carbon in living things comes from plants, who get it from atmospheric CO2. It's a closed cycle. The problem is solely, 100%, taking carbon that has been safely in the ground for millions of years, and through a convoluted process putting it in the atmosphere and never retrieving it. And then being shocked that atmospheric CO2 levels are returning to what they were millions of years ago, in the period aptly known as the "Carboniferous".
  - jollybean 5y ago
    Oh, no, this is flawed reasoning. Sorry. "You can burn oil made from biowaste all day and all night and it won't raise CO2 levels one little bit. Why? Because all that carbon came from the atmosphere to begin with! All the carbon in living things comes from plants, who get it from atmospheric CO2. It's a closed cycle." Oil comes from plants and animals, crushed under the weight of the earth, it's also a 'natural cycle' - but that doesn't matter at all. "The problem is solely, 100%, taking carbon that has been safely in the ground for millions of years, a" No, it has nothing to do with that at all. It doesn't matter where or how the carbon gets into the air. Anything that is going to be used as a fuel, we tax, relative to the amount of CO2 it emits, and that's that. If as it turns out it's incredibly more efficient to burn 'biofuel' than it is to extract Oil - fine. But it's probably not the case.
losvedir 5y ago
Taxing at the point of extraction or consumption should be equivalent, right? No one extracts for the sheer fun of it. It seems to me we could take a page out of Europe's VAT book which is ultimately paid by the consumer but tracks the "value added" throughout the supply chain from raw resources to finished goods.
- Groxx 5y ago
  I think it's mostly that one is fairly easy to track, the other is nightmarishly hard and also easy to evade. Main problem with at-production is that not all consumptions are equal, and it puts the cost equally on all.
  - NumberWangMan 5y ago
    So the implementation I like (https://energyinnovationact.org/ https://energyinnovationact.org/) would tax the production, but companies could get a tax rebate for non-fuel consumption, such as manufacturing plastics. That puts the onus on companies to get their rebate and is a lot easier to enforce, but is pretty fair -- plastics don't cause emissions aside from the energy used in their production (which would already be taxed if it comes from fossil fuels). I guess one issue would be if you're burning a lot of plastic garbage, like I've heard is common in Japan, though I don't know if that's a big contributor to emissions.
    - dTal 5y ago
      I think it's fair to say it would become common, if you imposed punitive taxes on everything except plastic. Once it's out of the ground, it's a matter of time before it ends up in the atmosphere, unless unusually careful sequestration measures are taken. Better to subsidize those, and tax generation, rather than try to micromanage the bit in between.
  - dTal 5y ago
    All consumption is equal, to a first approximation. To avoid it ending up in the atmosphere you'd have to go out of your way to ensure that whatever fossil-fuel-based product gets sequestered back in the ground after use - all of it, and somewhere where nobody can easily dig it up again and burn it.
NumberWangMan 5y ago
A lot of people actually do give a shit, myself included! I like the approach of coupling a carbon tax with a dividend -- it's a lot more palatable to centrists and people who lean right, because it isn't going to what they might consider government waste -- the money from the tax just gets returned to the people. This is the policy that Citizens' Climate Lobby pushes (the EICDA [1]), and there are a LOT of people working on getting it passed. [1] https://energyinnovationact.org/ https://energyinnovationact.org/

by dTal 5y ago

intrasight 5y ago

Carbon is a global problem indeed. The most global I would say. So clearly we can't have such a tax be only on local production. Makes me wonder if Bitcoin could play a role.

tombert 5y ago
Ok, I'll bite...how exactly does this have anything to do with bitcoin?
- intrasight 5y ago
  I don't. Only connection is that they are both global problems ;)

afarrell 5y ago

It would need to be at the point of extraction or importation. Then you'd need tax treaties with countries who are adopting similar policies.

namdnay 5y ago

why? we tax cigarettes at the point of consumption and that has worked fine.

thargor90 5y ago
Supply chains are not 100% transparent. We know how bad one unit of "cigarette" is for our health, but we don't know how bad one unit of xxx is for the environment. An apple can have a co2 footprint of multiple tons of co2 or zero tons of co2. We can't know for sure.
dTal 5y ago
Because you should tax the thing you want to stop. Burning carbon is absolutely fine, provided the carbon originally came from the atmosphere and not buried deposits. It's the open-loop cycle that's the problem. The moment you dig it up, eventually it's bound for atmosphere. You want to financially encourage the development of "green" petroleum - nobody will bother if it's taxed all the same. Also, if you try and individually tax the hundreds of thousands of different uses for carbon, according to how much carbon each thing uses, inevitably you'll get it wrong, and this will create inefficiencies and perverse incentives to do arbitrage between the various poorly calibrated taxes. What you want is for the market to figure it all out!
initplus 5y ago
Products don’t come with a label measuring how much oil was burned in their production. Even if the manufacturer wanted to know, tracing that detail through their entire supply chain is really difficult. Preventing fraud is also very challenging. Whereas if you tax at extraction this is automatically take into account at every step of the supply chain. The market does all the hard work for you.
imtringued 5y ago
Taxing carbon at the point of consumption is like taxing a product if the manufacturers' employees have smoked at the point of consumption. How are you going to enforce that? A product that was manufactured by smokers and non smokers looks identical.

jollybean 5y ago

" If people really need oil, they'll find ways to manufacture it more cheaply from biowaste." What? No. We don't care about the extraction. If oil must be burned, don't care whether it's Oil from wells or Oil from biowaste. If it's oil for burning an engine, and we need that engine to operate for some economic reason - then we actually want people to consume the cheapest version. We don't want to make people jump through hurdles to 'run an engine that we need to run' for no reason. We may want to make sure that running that engine is economically essential, in which case keeping prices high, or, by some regulation. The act of 'extraction' is not a problem, there's not much negative from that. Other than geostrategic issues (i.e. Russia) we don't care where it comes from. What we want to do is tax the fuel itself - not emissions. The emissions are a direct function of the fuel. We know X litres of gas will create Y tonnes for Co2 and that's it. So tax the fuel instead of getting people to figure out emissions. Oil that is used for other reasons, we don't really care about. We could put a fuel tax, and a natural gas tax up right now - we already have mechanisms in place for that.

dTal 5y ago
>If oil must be burned, don't care whether it's Oil from wells or Oil from biowaste. Yes, we really do. There is vastly more carbon in the atmosphere than a hundred years ago. Where did it come from? You can burn oil made from biowaste all day and all night and it won't raise CO2 levels one little bit. Why? Because all that carbon came from the atmosphere to begin with! All the carbon in living things comes from plants, who get it from atmospheric CO2. It's a closed cycle. The problem is solely, 100%, taking carbon that has been safely in the ground for millions of years, and through a convoluted process putting it in the atmosphere and never retrieving it. And then being shocked that atmospheric CO2 levels are returning to what they were millions of years ago, in the period aptly known as the "Carboniferous".
- jollybean 5y ago
  Oh, no, this is flawed reasoning. Sorry. "You can burn oil made from biowaste all day and all night and it won't raise CO2 levels one little bit. Why? Because all that carbon came from the atmosphere to begin with! All the carbon in living things comes from plants, who get it from atmospheric CO2. It's a closed cycle." Oil comes from plants and animals, crushed under the weight of the earth, it's also a 'natural cycle' - but that doesn't matter at all. "The problem is solely, 100%, taking carbon that has been safely in the ground for millions of years, a" No, it has nothing to do with that at all. It doesn't matter where or how the carbon gets into the air. Anything that is going to be used as a fuel, we tax, relative to the amount of CO2 it emits, and that's that. If as it turns out it's incredibly more efficient to burn 'biofuel' than it is to extract Oil - fine. But it's probably not the case.

losvedir 5y ago

Taxing at the point of extraction or consumption should be equivalent, right? No one extracts for the sheer fun of it. It seems to me we could take a page out of Europe's VAT book which is ultimately paid by the consumer but tracks the "value added" throughout the supply chain from raw resources to finished goods.

Groxx 5y ago
I think it's mostly that one is fairly easy to track, the other is nightmarishly hard and also easy to evade. Main problem with at-production is that not all consumptions are equal, and it puts the cost equally on all.
- NumberWangMan 5y ago
  So the implementation I like (https://energyinnovationact.org/ https://energyinnovationact.org/) would tax the production, but companies could get a tax rebate for non-fuel consumption, such as manufacturing plastics. That puts the onus on companies to get their rebate and is a lot easier to enforce, but is pretty fair -- plastics don't cause emissions aside from the energy used in their production (which would already be taxed if it comes from fossil fuels). I guess one issue would be if you're burning a lot of plastic garbage, like I've heard is common in Japan, though I don't know if that's a big contributor to emissions.
  - dTal 5y ago
    I think it's fair to say it would become common, if you imposed punitive taxes on everything except plastic. Once it's out of the ground, it's a matter of time before it ends up in the atmosphere, unless unusually careful sequestration measures are taken. Better to subsidize those, and tax generation, rather than try to micromanage the bit in between.
- dTal 5y ago
  All consumption is equal, to a first approximation. To avoid it ending up in the atmosphere you'd have to go out of your way to ensure that whatever fossil-fuel-based product gets sequestered back in the ground after use - all of it, and somewhere where nobody can easily dig it up again and burn it.

NumberWangMan 5y ago

A lot of people actually do give a shit, myself included! I like the approach of coupling a carbon tax with a dividend -- it's a lot more palatable to centrists and people who lean right, because it isn't going to what they might consider government waste -- the money from the tax just gets returned to the people. This is the policy that Citizens' Climate Lobby pushes (the EICDA [1]), and there are a LOT of people working on getting it passed. [1] https://energyinnovationact.org/ https://energyinnovationact.org/