Revkin speculates that Barnes' proposal is a way to break the deadlock stopping climate change legislation.
I think he may be right. Tax emissions. (Or cap them and auction permits.) Refund the revenue to everybody. It has the following political advantages:
- It is simple and easy to understand.
- It puts a price on emissions without really penalizing anybody. It is a no-hair-shirt solution.
This last point is worth emphasizing. It does not punish consumers, because the increased prices they pay are made up for by the dividend check. It does not really punish fossil fuel companies, because the tax they pay gets passed along to customers who have new money to pay those increased prices. Of course, fossil fuel companies do lose, as people use less of their product, but that is not punishment; it is an inevitable result of their selling a product whose side effects can no longer be tolerated. Since it will take time to phase out fossil fuels, oil and coal companies are free to use the time tax-and-dividend gives them to make the transition to other businesses, perhaps by expanding the investments they have already made in wind and solar.
I'm going to post soon on why I think the people who think tax-and-dividend (or any mechanism depending on price) can be the sole, or even main, solution are wrong. Price is insufficient by itself; public investment and rule-based regulation have to remain the primary solutions. But price is not avoidable as part of the solution.
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Comments
View as Flat
David Roberts Posted 10:28 am
07 Jun 2008
Uh
I'm a fan of C&D, but is there any evidence whatsoever that it's "looking good" politically in the wake of LW? Is it even on the political radar in any real way? A couple of amendments from conservative senators do not a "break the logjam" make.
grist.org
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Biodiversivist Posted 10:50 am
07 Jun 2008
I was serious when I suggested a hybrid
bill. Distribute just enough back to voters to make it political poison to obstruct the next attempt.
In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world
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Gar Lipow Posted 11:36 am
07 Jun 2008
Title
David I accept no critiques on my titles. Talk to your staff who always change mine if you have complaints.
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Gar Lipow Posted 11:43 am
07 Jun 2008
Addendum
On balance I think most of the changes are improvements net. But this was one exception, not the only one.
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GreyFlcn Posted 1:10 pm
07 Jun 2008
Well
The key part to me that makes it work best isn't the dividend
It's the cap&upstream-auction parts.
The big pile of money collected for that? Frankly that should be spent on buying votes.
Whether that means social programs, green energy, or even funding individual senator's pet projects, I don't really care.
Just so long as it's not going back towards funding general operations for coal/oil/gas industries it'd work just fine.
Do be blunt, you could call it:
Cap, Upstream Auction, & PorkBarrel
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GreyFlcn Posted 1:12 pm
07 Jun 2008
But the key part
The key part to all of this is
- Auction Permits
- Remove Offsets
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gmobus Posted 1:24 pm
07 Jun 2008
A follow up article
Revkin followed up the article with this one today. The last line captured my thoughts about these "market" schemes very well. "...this is not a free lunch."
You can catch my response to the notion that we can accomplish carbon reductions and not break a sweat in one of the comments on that page.
Or you can go to: Question Everything
George Mobus, Associate Professor, Institute of Technology, University of Washington Tacoma, and Professional Student for Life
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amazingdrx Posted 2:13 pm
07 Jun 2008
Hmmm
"...It does not punish consumers, because the increased prices they pay are made up for by the dividend check. It does not really punish fossil fuel companies, because the tax they pay gets passed along to customers who have new money to pay those increased prices."
It seems unlikely that this would actually result in GHG reductions. Where would the incentive be?
http://amazngdrx.blogharbor.com/blog
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Jon Rynn Posted 2:43 pm
07 Jun 2008
Gar --
If you look at Hansen's memo and slide as shown in Revkin's post (the first one you refer to), you'll notice his self-professed conservatism coming out -- he wants politicians' "hands-off" any money, because, according to his theory of government, it just gets funneled by lobbyists (I'm not saying he'
s totally wrong, I just think that sometimes spending can go in the right places). So he seems pretty much opposed to public investment.
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Gar Lipow Posted 2:58 pm
07 Jun 2008
Where would incentives be?
AmazingDRX
The simple answer is you even though you have more money, prices are higher; so you get faster payback on savings. Insulation that would have paid back its cost in seven years will now pay itself back in three and a half. A solar cell that was not economic before may now be. In economic jargon, the price signals are there. I think the effect of that is sometimes overestimated; but it is not zero.
Another way to look at it. Energy costs more, but you get a check for that difference, so you have the same to spend on everything but as before. Energy has become a higher percent of your costs. Even if you can live exactly as before, you will notice if energy goes from around 10% of your spending to 15% or 20% of your spending. If your electric bill doubles, that is something that you will notice even if you have a C.A.R.E. check to pay the difference between it and your old bill. Writing that larger hurts. And you will look harder to find a way to cut the bigger bill than you would have for the smaller one.
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Gar Lipow Posted 3:06 pm
07 Jun 2008
George Mobus
From your site:
So when you say "question everything", you mean question everything but George Mobus? Because there are very few people I'm not interested in talking with. But someone who is so convinced he is right, he is not interested in hearing counter arguments? That does not sound like anyone whose thought it is worth spending time trying to understand. Also the idea that any disagreement with you is pushback is pretty arrogant sounding. Maybe you did not mean that the way it sounded, and are not really under the impression that there is no chance you are wrong, and no chance you have something to learn. that would be more consistent with the bit about "lifelong student".
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gmobus Posted 3:36 pm
07 Jun 2008
Gar
You may not have noticed that the quote was inside the blockquote from the comment made in Andy's blog. It was directed at some of the comment posters in the Dot Earth arena who have consistently pummeled me in past posts with arguments of why I can't possibly be right.
As far as questioning me on rightness or wrongness of the ideas I posted - fire away.
George Mobus, Associate Professor, Institute of Technology, University of Washington Tacoma, and Professional Student for Life
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hapa Posted 5:19 pm
07 Jun 2008
looked at this last year.
PRO: easy soft-ration. introduces the idea of equal ecosystem shares.
PRO: the direct distribution of prevention money, helping to finance demand changes without creating more consumer debt, and saving valuable post-collapse civil court time (that might be better used screaming; this is the fundamental difference between carbon dioxide and tobacco smoke).
PRO: includes end customers in the carbon market, giving us a say, by giving us financial wiggle room. this may not work; debt is too heavy. dividends would have to be protected from asset seizure. (this is already done with some entitlements, i think.)
PRO: IMO, lets the government focus on what it does better, which is setting standards, organizing shared costs, providing neutral support, and inspecting. all those things get corrupted when the government is paying industries to be in business for political reasons, instead of either doing the work itself, acting as a broker, or maintaining the field of play. global warming is two problems: one of reality and one of perception. i think this tax-and-send idea gets the gummint people out of their perception business -- taking actions with the money that prove actions are being taken with the money -- and into the preferable "what holes do we need to plug" frame of thinking.
CON: look at the regressive tax shift since 1980 and tell me you think a carbon tax would be invulnerable to political interference.
CON: hansen -- loudly -- blew off the problems this would cause for paperless workers -- saying "it will yield strong incentive for aliens to become legal" -- a completely wrong-headed picture of north american labor economics. this potentially huge gotcha i think shows the need to pull NAFTA and replace it with something that works for the planet and the people, under the current circumstances.
CON of some imaginary "no regulations, no coordination, no safety net" version: you can buy a lot of snake oil with free money. choosing a less costly piece of equipment isn't easy and people will be doing it quickly and there isn't a lot of other money floating around if they get snookered.
CON: even with aggressive ground-laying by government equipment standards and teaching and such, the refund doesn't help meet both the cost of new equipment and the radical depreciation of current non-green property.
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Gar Lipow Posted 2:56 am
08 Jun 2008
Critiiques of C.A.R.E.
I think those critiques make sense of Cap & Share is all you do.
But I think it has to be accompanies by regulations and public investment. Trains. HVDC lines. Storage. Renewable energy standards for utilities. Massive subsidized programs to insulate residences. Massive requirements for more efficiency in office buildings.
In terms of the undocumented: give a card to every resident, legal or not. If someone lives here they are paying the tax, so give them the refund.
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Sam Wells Posted 6:18 am
08 Jun 2008
Spending "free" money
The critical flaw in your argument is that people will pay for "green" stuff if they get all that cash back. The same can be said about the Fed's flawed thinking that a few billion would stimulate the economy. How silly. People are going to pay off debt or do something stupid. Human nature, baby.
If it is truly a revenue neutral system, you really haven't injected any new money into the system anyway. You're just recycling old money. Bummer.
Let's say the cape & share system really does work somehow, in the short run. The Law of Diminishing Returns and the Law of Unexpected Results says it is not sustainable over the long haul. Plan B, then?
Onward through the fog
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Gar Lipow Posted 6:44 am
08 Jun 2008
Secondary means
Sam, you are committing one of the standard fallacies. (I'm assuming you are not deliberately engaging in dishonest argument.)
1) No one claims that 100% of the return will be spent on green things. But if prices are higher and energy is taking a higher percent of income people will find ways of avoiding some of that cost. For example, as we see with oil prices, when prices get high enough SUVs drop in value drastically. Or to take another example, if energy costs suddenly mean pork is more expensive than chicken, some people will eat more chicken and less port. For that matter if meat prices rise compared to legumes, more people may cut meat consumption and eat more beans. So the claim is just that it will have some effect. Your use of the term "all" is a classic slippery slope fallacy - answering an exaggerated form of what you are arguing against, rather than what was actually said.
Your argument about the law of diminishing returns and unexpected consequences would apply to ANY attempt to do something about climate chaos. Anything we try will have unexpected consequences and probably diminishing returns. There is nothing in either rule of thumb that says returns will always diminish to zero or that the unexpected consequences will always outweigh the benefits. It there was we could never do anything.
But a key point, and one you ignored is something I include in my post:
Cap & Dividend or any attempt to price emissions won't work sufficiently as the sole means of emissions reduction. It won't even work as the primary means. It is a reinforcement and needed leak plugger.
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GreyFlcn Posted 7:03 am
08 Jun 2008
How you use the money doesn't matter
The pile of money has no real purpose other than to get enough votes. If it encourages good climate behavior, all the better. But don't count on it.
The real core purpose of carbon legislation is to add an externality cost to fossil energy.
i.e. "Make the stuff you don't want more expensive".
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sindark Posted 1:23 am
10 Jun 2008
Potentially good method for creating incentives
I could imagine this working very well:
For example, let's imagine a tax that starts at a relatively modest $20 per tonne of carbon dioxide equivalent (CO2e). The mean Canadian produces about 23 tonnes of carbon a year, meaning they would pay $460 in carbon tax that year. That being said, the mean Canadian would also get back $460 as a dividend. A Canadian who is really trying (not flying, not eating meat, living in an efficient home, not driving, etc) might have much more modest emissions: say, 6 tonnes a year. They would pay $120 in carbon taxes and get back $460 - a nice 'thank you' for living a life that does less harm to others. Of course, someone who flies trans-Atlantically several times a year might end up paying significantly more in tax than they get back as a dividend.
Now say it is ten years on. The price of carbon has risen to $50 per tonne of CO2e and mean emissions per person have fallen by 25%. The break-even point is now 17.25 tonnes of carbon. As a result, someone who has not changed their lifestyle is now paying (23 - 17.25) * $50 or $287.50 a year in carbon taxes. If the 6 tonne person also managed a 25% cut, they would be earning (17.25 - 4.5) * $50 or $637.50 more in dividends than they paid in taxes.
a sibilant intake of breath
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