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The general argument seems fine, but there’s one critical flaw in the initial calculation: negative climate externalities are not priced in, and they should be.

The general argument seems fine, but there’s one critical flaw in the initial calculation: negative climate externalities are not priced in, and they should be. Once priced in, if the argument still holds, fine, but I suspect it doesn’t, because the negative externality cost of burning non-renewables should be exceedingly high.

tiahura 4y ago
Should we also price in the positive externalities or only the negative ones?
- LadyCailin 4y ago
  Sure, those can be priced in too, and the negative externalities of renewables should be priced in to those calculations as well; building solar panels isn’t itself carbon neutral. But I don’t see these calculations in either direction listed.
tony_cannistra 4y ago
I hear you, but honestly I'm not sure this is a reasonable request for an article of this scope. Pricing "negative climate externalities" is hardly a simple task. I appreciated this article for its cogency, but also because he clearly is aware of the climate-related impacts of burning natural gas, and attempts to address them pragmatically. (e.g. the sections about carbon taxes, and carbon capture.)
- namuol 4y ago
  Thankfully it’s an important enough question that some people have already done some work for us. The IMF put out a report last year about this very subject. Here’s a relevant snippet from the summary: > Globally, fossil fuel subsidies were $5.9 trillion in 2020 or about 6.8 percent of GDP, and are expected to rise to 7.4 percent of GDP in 2025. Just 8 percent of the 2020 subsidy reflects undercharging for supply costs (explicit subsidies) and 92 percent for undercharging for environmental costs and foregone consumption taxes (implicit subsidies). Here’s the full report: https://www.imf.org/en/Publications/WP/Issues/2021/09/23/Still-Not-Getting-Energy-Prices-Right-A-Global-and-Country-Update-of-Fossil-Fuel-Subsidies-466004 https://www.imf.org/en/Publications/WP/Issues/2021/09/23/Sti...

tiahura 4y ago

Should we also price in the positive externalities or only the negative ones?

LadyCailin 4y ago
Sure, those can be priced in too, and the negative externalities of renewables should be priced in to those calculations as well; building solar panels isn’t itself carbon neutral. But I don’t see these calculations in either direction listed.

tony_cannistra 4y ago

I hear you, but honestly I'm not sure this is a reasonable request for an article of this scope. Pricing "negative climate externalities" is hardly a simple task. I appreciated this article for its cogency, but also because he clearly is aware of the climate-related impacts of burning natural gas, and attempts to address them pragmatically. (e.g. the sections about carbon taxes, and carbon capture.)

namuol 4y ago
Thankfully it’s an important enough question that some people have already done some work for us. The IMF put out a report last year about this very subject. Here’s a relevant snippet from the summary: > Globally, fossil fuel subsidies were $5.9 trillion in 2020 or about 6.8 percent of GDP, and are expected to rise to 7.4 percent of GDP in 2025. Just 8 percent of the 2020 subsidy reflects undercharging for supply costs (explicit subsidies) and 92 percent for undercharging for environmental costs and foregone consumption taxes (implicit subsidies). Here’s the full report: https://www.imf.org/en/Publications/WP/Issues/2021/09/23/Still-Not-Getting-Energy-Prices-Right-A-Global-and-Country-Update-of-Fossil-Fuel-Subsidies-466004 https://www.imf.org/en/Publications/WP/Issues/2021/09/23/Sti...