« That's what I Call Blowback | Main | Make My Monsters Grow! »

November 10, 2006

While We're On the Subject of Elite Consensus

by Nicholas Beaudrot of Electoral Math

The populists are winning the battle against the elite "consensus" on carbon taxes. I put "consensus" in scare quotes because no elected Republican will say they support carbon taxes. Nor will any right-of-center economist who works for an elected Republican. Nor will any right-of-center economist who wants to work for an elected Republican. Only right-of-center economists who used to work for elected Republicans, plus permanent academic right-of-center economists, plus various right-wing pundits who cite carbon taxes as a "free market" solution to global warming instead of regulation, are willing to forthrightly state that carbon taxes are an idea worth considering.

Let us also recall the great BTU tax experiment of the 1993 Deficit Reduction Act, an idea so unpopular that it passed the House on a razor thin margin, died in the Senate, was left out of the final bill, and used in campaign ads against many a House Democrat who walked the plank for an idea that never became law. Incoming "Coal Belt" Democrats from Pennsylvania, Indiana, and Kentucky will probably not look too keenly on a Carbon tax, even as a tax swap. And no one wants to go back to their district to explain why they raised the price of gas by $1.20 a gallon, even if everyone gets a $5,000 pay raise as a result. So until prominent elected Republicans come out in favor of the Al Gore carbon-for-payroll tax swap, just say no.

See also EPI's Max Sawicky carbon tax skepticism. as well as Gar W. Lipow's arguments that they won't even help fight global warming.

November 10, 2006 | Permalink

Comments

Bah. Why do something as complicated as a carbon tax when you can do simpler things like improving CAFE standards and passing tougher emission regulations on power plants? Why make something complicated just to make it fit into a market framework? It seems rather silly.

Posted by: NonyNony | Nov 10, 2006 10:36:17 PM

Posted by: NonyNony | Nov 10, 2006 7:36:17 PM Bah. Why do something as complicated as a carbon tax when you can do simpler things like improving CAFE standards and passing tougher emission regulations on power plants? Why make something complicated just to make it fit into a market framework? It seems rather silly.

I agree with NonyNony regarding relying on Carbon taxes as the main instrument, since they are obviously going to require much higher gas prices and electricity prices to have the same effect as direct action to reduce greenhouse warming.

However, Carbon Taxes are an essential complement of the large public and private works program that we need to reduce the massive vulnerability of the country to shocks in external energy sources and the massive third party costs that are being imposed on a time-lagged basis through the climate crisis.

NonyNony sensibly alludes to the fact that markets cannot design complex systems. However, the large scale public and private works program must be focused on the "big" targets for energy efficiency and sustainable energy opportunities.

It is therefore also important to also pluck all the "low hanging fruit" available across the board, not all of which will be put into place by a Connie Mae financial instrument, and only by relying on the decentralized impact of carbon taxes can we ensure that we are not leaving that low hanging fruit on the tree.

Posted by: BruceMcF | Nov 10, 2006 10:58:03 PM

No to Carbon taxes. No to Pigouvian taxes. Yes to Pigouvian subsidies. No to much of anything that slows the economy and development. Yes to 10% inflation, if a good idea. We will not conserve our way out of this...well without a Malthusian solution. I'm agin that.

Election Returns and Alternativ Energy ...this is good.

Posted by: bob mcmanus | Nov 10, 2006 11:24:53 PM

"we need to reduce the massive vulnerability of the country to shocks in external energy sources and the massive third party costs"

About one third of the world lives in floodable territory. By the time, that will be at least 3-4 billion people. They will not drown quietly and without all sorts of costs to Americans.

If we don't use the oil and coal, China and Brazil and Bangladesh will. "Energy independence" is suicide and homocide. Unless we can offer them a dirt-cheap alternative. It is going to cost a lot of oil to build and distribute a trillion solar panels. Or whatever. I happen to think America, on a productivity basis, will use that energy more efficiently than others.

I think we grow, innovate, and develop our way out of this, and by us I mean the world. Or we all die.

Posted by: bob mcmanus | Nov 11, 2006 12:08:18 AM

Use anti-market tools like CAFE or regulations to make republicans say "no we should do a carbon tax instead" and use bipartisan cover. But take CAFE over nothing.

Posted by: dan | Nov 11, 2006 12:14:53 AM

Posted by: bob mcmanus | Nov 10, 2006 9:08:18 PM "Energy independence" is suicide and homocide.

It seems that quite a lot of tacit background is built into this assertion. I don't see that Energy Independence can be homocide, and its the present course of escalating Energy Dependence that is economic suicide ... except suicide like smoking, with the action done at one point in time and then the damage showing up later.

Posted by: BruceMcF | Nov 11, 2006 12:43:13 AM

"I don't see that Energy Independence can be homocide"

As far as I am concerned the, or one of many, questions is "How do we stop Brazil and Sumatra from burning their rainforests." The less energy America uses the less we will be motivated to develop cheap transferrable alternatives.

It doesn't matter who puts the carbon in the air. As one of the richest, smartest countries it is our moral responsibility and in our existential interest to bring the third world up. Fast, fast, fast.

Globalization, even with America as maximal consumer, creates a job overseas, which means a kid is educated or a woman liberated, the knowledge base increased, etc.

If we don't use the oil, China and India get it cheaper. Have you looked at the Indian infrastructure? 75 yr old trains in many places. Will the rest of the world burn oil and coal more cleanly than America? Sequester as well? We should use it to develop efficient technologies, etc, but I don't feel guity about using it.

Posted by: bob mcmanus | Nov 11, 2006 1:03:58 AM

While all of the eggheads are scambling to come up with more and more complicated systems (mostly to impress each other), the answer is, again, the market. High enegery prices accomplishes all of the objectives.
It forces conservation at the grass roots level, encourages develpment of alternative sources of energy and makes them economically viable, creates markets for energy efficient cars without legislation (no need for better Cafe standards) as well as forces conservation upon the third world.

However, Democrats were lamenting the high prices running up to the election as they could not use it as a political tool against their enemies. Nothing will really happen until you understand that high energy prices will accomplish everything you want.

When the interest of the individual and the interest of society are the same, things happen.

Posted by: Fred Jones | Nov 11, 2006 8:46:08 AM

In addition to CAFE standards, as an alternative or supplement to carbon taxes let's try cutting carbon subsidies.

Posted by: Sanpete | Nov 11, 2006 12:06:36 PM

Carbon tax - meh. Give me a good gas tax and improved CAFE standards and I'll be pretty happy.

Posted by: Adam | Nov 11, 2006 12:28:28 PM

Posted by: bob mcmanus | Nov 10, 2006 10:03:58 PM It doesn't matter who puts the carbon in the air. As one of the richest, smartest countries it is our moral responsibility and in our existential interest to bring the third world up. Fast, fast, fast.

So long as the US pumps out dreams of an unsustainable economy throughout the world, so long as we are saying to the middle and low income nations of the world, "Do as we say, not as we do", that goal will be subverted.

As one of the richest and one of the smartest countries, it is our moral responsibility to develop the technologies, in the broadest sense of the world, to allow us to be Energy Independent, so that those technologies are available to the adopted and modified to suit by the middle income nations of the world.


Posted by: BruceMcF | Nov 11, 2006 12:51:57 PM

"So long as the US pumps out dreams of an unsustainable economy throughout the world"

The carbon economy may be unsustainable; but I think it needs to be replaced with an alt-energy economy that looks almost identical.

Example:SUV's. One option is a carbon tax that will incentivize a switch to Yugos. John of Dymaxion has articles about 50-70kwh capacitors. Add cheap fast nuclear, and we have something to sell. What is luxury SUVs in America is necessary light trucks in the less developed world, in order to build distribution systems.

IOW, for America, driving less, or carpooling, or mass transit will not produce transferrable technologies. We have to work on the assumption that energy consumption will massively increase overseas as the world develops.
And lowering our energy consumption will hurt everyone.

Posted by: bob mcmanus | Nov 11, 2006 1:26:44 PM

Bob, why won't conserving energy create transferable technologies? Whatever enables us to thrive with less consumption ought to be transferable.

Posted by: Sanpete | Nov 11, 2006 1:53:38 PM

Posted by: bob mcmanus | Nov 11, 2006 10:26:44 AM IOW, for America, driving less, or carpooling, or mass transit will not produce transferrable technologies.

Carpooling is always only a stop gap solution. But the town planning that permits people to drive less is clearly transferable to most middle income nations. Mass transit that can attract middle income Americans will definitely be transferable to middle income nations.

For low income nations, the US actively pushes energy consuming development, because US program AID is primarily a program for selling the goods and services of US corporations, and only secondarily (at best) a program for helping low-income nations with their development. If American corporations are selling, for example, capital goods for resource efficient production processes, then that's what USAID will be pushing.


Posted by: BruceMcF | Nov 11, 2006 5:00:19 PM

"Bob, why won't conserving energy create transferable technologies?" ...It will.

Okay, real simple question:will more efficient fleets in the US, or better insulated buildings, or flourescent bulbs, reduce the global amount of carbons burned and released?

Fred above is right, eventually price will increase efficiency/conservation technologies, so right now I want as much carbon burned for alt development as possible. It will take energy to create energy, and carbon is a very efficient and portable source. I don't want to create the windmill farms with nuclear plants. Very expensive. I don't know if it is even reasonable to transport windmills to Zambia or Burma with solar or nuclear cargo ships.

I don't know. Combination probably best.

I also want to maximise growth everywhere. The more energy burned, the faster alternatives are developed.

The thing about "Energy Independence"...it is just nonsense. China will be burning coal to make our shoes, and burning oil to ship them here. The more shoes we buy, the faster China goes off carbon. When China goes off carbon, it becomes available to Africa.

This is probably full of contradictions. But mainly Manhattan project for alt-energy. After substitutes are available, then worry about conservation and efficiency.

Posted by: bob mcmanus | Nov 11, 2006 5:22:08 PM

"tax" is such a dirty word these days. Let's talk carbon credits and carbon trading. This is already happening. The largest carbon trading system is the European Union Emission Trading Scheme. Less than 2 years old, it did 7.2 billion euros in 2005. The USA has 25 years experience with the same idea, but trading sulfer dioxide credits.

A carbon broker wants to pay me to plant trees and replace my Hummer with a Prius? Hell yeah! Works for me. Far from perfect and relies on carbon caps, but alternative currencies are a hot topic among economists.

And man, I hope you guys are kidding with the "use it up faster so we have to solve it" argument. You're talking about using up your kids' future.

Posted by: GreenDreams | Nov 11, 2006 6:33:18 PM

will more efficient fleets in the US, or better insulated buildings, or flourescent bulbs, reduce the global amount of carbons burned and released?

It will reduce it relative to what it would be if we don't do those things.

Investing in efficiency technology and carbon alternatives will lower the price of conservation and alternatives to carbon. China already has terrible pollution problems that it's starting to take seriously. If it's presented with the reality that it's cheaper overall to conserve than buy and use more carbon, it will do so.

Posted by: Sanpete | Nov 11, 2006 6:46:02 PM

Posted by: bob mcmanus | Nov 11, 2006 2:22:08 PM Okay, real simple question: will more efficient fleets in the US, or better insulated buildings, or flourescent bulbs, reduce the global amount of carbons burned and released?

So the question is, if the biggest emitter reduces its emissions, will that reduce the global amount of CO2 emitted?

Evidently, it will decrease the total amount emitted by the US. It will obviously drive battery and high efficiency constant output engine costs down, which will bring PHEV's in the reach of more of the global middle class sooner. The rapid increase in windpower on the grid combined with smartgrid technology will bring smart grid technologies within reach of more nations.

If you are asking whether the US reducing its emissions will automatically reduce global carbon emissions, of course not. On the converse, however, the US failing to reduce its emissions is likely to doom global efforts to failure, given that the US is the highest emitter, and one of the highest income countries in the world, and lower income countries will constantly point to the US when they are asked to put in a higher share of their GDP to achieve smaller gains.

It is, in short, necessary and helpful but not sufficient.

Posted by: BruceMcF | Nov 11, 2006 6:58:10 PM

The comments to this entry are closed.