Global Warming - Tax or Standards?
As global warming becomes an increasingly urgent issue, there are many calls for action. Many call for standards to be set, to achieve a reduction in pollution. In some cases, it seems to make sense to set a standard or to simply prohibit a product or service that causes too much pollution. However, there are several arguments that make tax more attractive compared to standards and outright prohibition. Taxing supply of energy that was generated by burning fossil fuel can often be a better alternative to achieve reductions in pollution. As such taxes make pollution more expensive, markets could work out what was the least polluting alternative.
As global warming becomes an increasingly urgent issue, there are many calls for action. Many call for standards to be set, to achieve a reduction in pollution. In some cases, it seems to make sense to set a standard or to simply prohibit a product or service that causes too much pollution. However, there are several arguments that make tax more attractive compared to standards and outright prohibition. Taxing supply of energy that was generated by burning fossil fuel can often be a better alternative to achieve reductions in pollution. As such taxes make pollution more expensive, markets could work out what was the least polluting alternative.
How well do standards work? The inevitable practicalities of standards are that some rather polluting behavior will be permitted, while other behavior that was far less polluting will be prohibited. Standards are often popular as they seem to come at no direct cost for consumers, whereas taxes only seems to cost us money. But in reality, the cost of compliance with standards can be huge and it may not always make sense, i.e. people do not often see how a standard helps reducing pollution. A tax has a direct relationship with the pollution and therefore makes more sense, especially if the proceeds of tax are used to subsidize local supply of clean and renewable energy.
There is popular support for outlawing cars that are too polluting, but does that justify standards rather than tax? Perhaps someone only drives a rather polluting car for a very small distance once in a while, producing far less pollution than someone who drives a clean car for long distances daily. With tax there's no such judgement call to be made. Taxing emissions constitutes a straitforward and effective instrument to reduce global warming, whereas standards could lead to all kinds of complications.
There's not just an economic argument in there, it's also a moral issue. The reality of global warming urges us to reduce all pollution, rather than to prohibit only some forms of pollution while legalizing and protecting other forms of pollution, as if some were justified in polluting since they complied with an arbitrary standard or were exempt from complying. Indeed, will the army be expected to comply, will police in persuit of subject stick to the limit or will the burglars, for that matter? Tax can simply apply across the board, to all supply of energy resulting from burning fossil fuel. All users pay the tax and they will pay more, the more they use such energy. Such a tax makes sense and is also fair - it penalises all pollution and it penalises the bigger polluter more than the smaller polluter, at a flat rate or under a scale that can be gliding or exponential and that is under control of the legislator and can be adjusted as needed. Standards, by contrast, set arbitrary limits - rather than to prohibit all pollution, they approve some pollution and prohibit other pollution. Standards operate in a framework that only allows one option, i.e. one has to comply with the standard.
There's not just an economic argument in there, it's also a moral issue. The reality of global warming urges us to reduce all pollution, rather than to prohibit only some forms of pollution while legalizing and protecting other forms of pollution, as if some were justified in polluting since they complied with an arbitrary standard or were exempt from complying. Indeed, will the army be expected to comply, will police in persuit of subject stick to the limit or will the burglars, for that matter? Tax can simply apply across the board, to all supply of energy resulting from burning fossil fuel. All users pay the tax and they will pay more, the more they use such energy. Such a tax makes sense and is also fair - it penalises all pollution and it penalises the bigger polluter more than the smaller polluter, at a flat rate or under a scale that can be gliding or exponential and that is under control of the legislator and can be adjusted as needed. Standards, by contrast, set arbitrary limits - rather than to prohibit all pollution, they approve some pollution and prohibit other pollution. Standards operate in a framework that only allows one option, i.e. one has to comply with the standard.
Standards put legislators in charge of running the economy. Where standards produce only one correct outcome (i.e. one has to comply with the prescriptions), tax is much more flexible and leaves more choice in the hands of suppliers to come up with products that respond to market demand. These market mechanisms make tax a much more effective instrument, both economically and in terms of reducing global warming. Standards lead to a single product, designed by legislators and administrators, with all the associated risks of bureaucratic waste, little innovation, favoratism and collusion.
Standards give suppliers an economic incentive to operate on the edges of what the standard permits, seeking loopholes and ways to slip through the mazes. A standard forces all suppliers to produce a product that is just as polluting as their competitors, thus maximising (permittable) pollution. By contrast, tax doesn't prescribe product details other than that the more one pollutes, the more tax is paid. Tax thus leaves it up to suppliers to design a product, while creating incentives to produce a product that reduces pollution more than their competitors.
Also, standards can come not only with a high cost of compliance, but also a high cost of administering the standard. Who pays for the cost of setting the standard, administering it, the technical testing and the testing of the dicisions in court? Who pays for the cost of enforcement? What will happen if one does not comply? Who pays for imprisonment of offenders?
By contrast, tax raises money in a rather simple and straiforward manner, without the need for a battery of trained technical staff and experts to test things. As said, the proceeds of tax could be used to subsidize local supply of clean and renewable energy, making the policy more effective, whereas there's less clarity what the impact will be of the cost of standards.
Standards cost a lot of money. Should penalties paid by offenders perhaps pay for that cost? Designing a policy on that basis would only lead to administrators becoming dependent on revenue from fines and give them an incentive to chase fines instead of reducing global warming. It's often hard to get rid of such administrators. Tax, by contrast, will simply go away by itself. If no more energy is sold that resulted from burning of fossil fuel, then no tax will be levied on the supply of such energy.
In conclusion, there are plenty of arguments why tax makes more sense, compared to standards. There are futher alternatives, such as a "cap and trade" policy. This was discussed in the earlier article: Global Warming - cap and trade or tax?
For more discussions on tax, see the article Tax greenhouse gas emissions!
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Comments: 86
Taxes are easily absorbed by the wealthy, and therefore do not curb their behavior. Similarly, industry would simply pass the increased costs down the line to the consumer, instead of retooling to curb the behavior.
Energy Use Taxes would only curb the activities of the middle and lower income classes. They are the only segments of society whose financial flow is low enough to actually feel pain over this kind of pinching. A tax like this would push many more of them off the earning treadmills and put them under the wheels of public assistance.
Tax credits, public recognition and easier financing for being Green would be the biggest helps.
And such a proposed tax on consumer vehicles wouldn't curb the Wealthy at all but would harm the poor and working poor who can't afford vehicles that are more environment friendly.
I know my family can't. We drive a Ford mini-van. We can't afford anything better, and have no choice in our vehicle size. We have 5 children! Can you see us trying to fit our family in something smaller?
Well thought out and argued on both sides of your question.
With a current look at Federal standards regarding air pollution (ozone smog) over big cities, I know that most in Texas (and likely the nation) have failing or marginal grades. I'm not sure what they are doing to fix that or if they are really very motivated to. I'm not sure what the penalties are for failing the air quality standards, but I think it is related to Federal funding assitence with roads etc. I think the state though is just finding other ways around those funds, so in that sense, the standards system itself is failing. In Dallas and several other cities, I know that the air quality was a big factor in the grass roots and mayoral movement to block construction of Umpteen new Coal Fired Power Plants across the state (they were eventually successful with the help of other allies and factors).
On the other hand, efficiency standards seem to have been working/helping regarding appliences: like the energy star certification. Starting with government offices requiring use of efficient appliances, growing a base to sell more of such appliances and then having such appliances be "desirable" in the public arena as a "brand" or "label" effect. Requireing standards to be met in order to be "certified" can be helpful. I do think standards can be important.
One point about taxes is that they can be seen as a "self sustaining/reliant" system as well with subsidies coming from those taxes becoming a revenue relied on by those alternative energy suppliers and so maintaining a degree of polluting sources to maintain the tax base becomes somewhat desired (concisouly on unconciously). I think it would be very important to remain aware of that "trap" ... I do agree though that the process of the taxes itself though, would have a substantial effect in the market economy. Industries that "pass the cost down" to consumers very likely could lose those customers to the subsidized alternative/renewable energy suppliers, which is key to making that whole scheme work. Tax break incentives for consumers who chose "green" energy would/do also help that process. We seem to get stuck in the rut of thinking that the Industry could just Stick the cost to the Little fellow (which indeed they do very much), but we should remember that the little fellow does have recourse. Part of the Energy Industry wrangling going on here in Texas was that a major company got caught passing on cost to customers that they had been legaly restricted from doing.
I'm sure there are folks who have a much better handle on the details and in's and out's of taxing energy producers and how to structure such a system.
I think that you cannot over estimate the importance of creating an efficiency mindset on the broad scale, in which efficiency itself adds to the economy and puts it at its optimal sustainable level...
Also, I think it's important to remember and be aware of human psychological reaction to taxation itself. There was a study done investigating people's reaction to instant reward and future expectation of reward. Almost everytime, people would (I think males especially) take the smaller instant reward over the larger future reward. (I believe an article discussed the study in the New Scientist www.newscientist.com). I suppose there is a utility to that behavioral development but alternatively there is also wisdom to be found in being aware of our behavior and our potential.
Sorry to go on so, but I do think this is an important topic. Thank you Sam for your article(s).
Another possible answer to those objecting to the tax because it hurts the poor and middle class disproportionately is to specify that a portion of the revenue from this tax can be used as incentives for the poor and middle class to purchase less polluting products - e.g., a substantial rebate for buying a hybrid or solar water heating system. Or, as Gore has suggested, carbon could be taxed instead of income - not a tax increase, but a change in tax policy to tax bad behavior instead of good.
David: "I'm not sure what the penalties are for failing the air quality standards, but I think it is related to Federal funding assitence with roads etc."
Aren't power companies supposed to be fined for pollution beyond a certain amount? I know I've read how lax the current administration has been enforcing laws like the Clean Air Act. In fact, this administration has tried to undercut the Clean Air and Clean Water Acts for some time. That might be another arguement for a tax rather than standards. It's more difficult to hide decisions about taxes than some obscure environment standard that can be undercut while politicians call their decisions the opposite of what those same decisions actually accomplish - e.g., Clear Skies Initiative.
Global warming is NOT an urgent issue. It has not even been established to be an issue. Just because the liberal Media and Al Gore say so, doesn't make it so.
The invasion of America by illegal aliens and radical Muslims IS an urgent issue, but one the Democrats would rather sweep under the carpet. The closing of our borders IS an urgent issue. The curtailing of out-of-control spending by Congress IS an urgent issue. The censoring of Internet porn, violent video games and other forms of entertainment that are destroying our youth IS an urgent issue.
The only thing global warming is, is a red herring to distract us from what really is urgent. There's nothing wrong with and everything right with taking care of the earth for future generations to enjoy. I'm all for conservation. But global warming is a political football that the Democrats are using to get the attention of the American public. They have nothing to say, they have no platform, no solutions: so they've come up with global warming, a totally unproven and unscientific perception of why the earth is changing - even though it has followed the same pattern for millions of years.
If our enemies wanted to destroy us by distracting us from what really is urgent, they couldn't have done a better job, and the Democrats are helping them nicely. The Republicans are also throwing in with uncontrolled spending and partnering on the worst imigration bill ever authored. Both parties care about nothing but power, and the liberal Media cares about nothing but getting their slice of the attention.
Rather than being distracted as our politicians and the Media are, we the people need to focus on what really is urgent: securing our borders, reducing government, protecting our young, promoting opportunities for people to use their abilities - in other words, life, liberty and the pursuit of happiness.
There will always be Chicken Littles in the form of Al Gore and others who want to grab the spotlight for their fifteen seconds of fame by telling us the sky is falling, and there will always be the liberal press right there to record their words. But where are the level-headed, the sober thinkers, the moderates, the judicious, the balanced? Those are the voices we need to be listening to.
Our politicians care nothing about us. If things are going to change for the better, we are the ones who will have to make them happen, but they need to be the things that truly matter and truly are urgent. Not some fantastic fairy tale dreamed up by an egocentric politician to keep the spotlight on himself.
Waitsel Smith
And, yes, let's take away the freedoms of our fellow-Americans. Let's be the pigs in Animal Farm. It's always safe to advocate reducing someone else's freedom, isn't it?
Oil men aren't in charge. In case you haven't noticed, it's not the oil men who just added an enormous new tax to the already exhorbitant tax at the pump. It was our beloved government.
Oil men aren't the enemy here: it is a government that is irresponsible and unanswerable to anyone. So, go ahead, believe the global warmning scare if you like. But that is exactly how the government wants us: scared, advocating that they increase our taxes, totally dependent on them for everything.
"Oh, please, Mr. Government Man, please protect me from the big, bad global warming monster!"
"Okay, but first, give me all your money."
"Yes, sir. Are you sure ALL my money will be enough?"
"It's enough for now. Later, we may want more."
"Yes, sir. Thank you, sir."
Can you say "baaaaaaaaaa?"
Waitsel Smith
Conversely, an energy tax that pinches, but does not forbid low and middle income earners from purchasing and using energy, would triple in it's effect on that classes overall financial burden. This results as industry passes their increased energy costs down the consumer model (the bulk of which is on the backs of middle and low income earners); while it would hardly be felt in the personal lives of the rich.
Increasing costs (adding a tax) carries the highest negative impact on those with the least amount of money; and the least amount of impact on those with the most money.
Let me remind that "the rich" in our country constitute less than twenty percent of the population; with one percent of that group controlling over thirty percent of the nation's wealth. To effectively pinch this segment of the population in an economic fashion a tax would have to be leveled in the hundreds of dollars per energy unit; something the lower eighty percent-ers could not survive.
As for tax credits or subsidies for the poor, I never mentioned any such thing. My suggestion was to provide tax credits and financial assistance to anyone and everyone (rich or poor) for every Green choice they can make.
Rewards versus punishment. A hand up instead of a kick in the groin. Building foundations, instead of just knocking them out.
Good article with well thought out solutions, but are they necessary?
I became very enthusiastically concerned about the warming of the planet until I discovered global warming has occurred approximately 5000 and 11,000 years ago.
So we all must question whether this is caused by man.
For the simplistic benefit of mankind we must "clean-up" our atmosphere by using
alternative sources of energy. i.e.; solar, air, etc. We must employ different systems as well.
There is a well known cliche which is "talk is cheap". Some how we must motivate
mankind to employ these altenative sources different avenues rather than continuing to depend on the fossil. A tax credit, which will be very expensive, would probably work.
Many thanks,
Bob Cornell
Mind you, I'm not saying global warming does exist, I'm saying no matter how much you tax yourselves, the Gores of the world will have legislation that lets them off the "tax" hook. What does this mean? It means they legislate themselves out of the "pay to fix the problem" loop.
Maybe if Joe and Mary Sixpack paid more attention to how Congress actually carries out their business and how they exempt themselves from the laws, we'd have real changes in this country.
Here is a real solution to global warming and every other problem we have: Don't vote for the incumbent. Completely clean house and watch how fast the newly elected start listening to the people instead of the lobbyists.
My word about global warming, pphhttt...
Anything that breathes produces CO2. Plants live on CO2 people live on Oxygen which is produced by plants. I have a lot of problems thinking CO2 is any problem at all. CO is a different story.
When you burn gasoline, diesel, coal or any other fossel fuel the product of combustion is CO. That stuff can kill you. Therefore I agree we need more efficient running machines. I do think solar or wind generated electricity is a good idea but it is so expensive to install it is financially prohibitive. I don't understand these so called "scientists" worrying about Carbon Dioxide and claiming it is produced by burning fossel fuels when what is produced is Carbon MONoxide. There is a big difference and if the "scientist" don't know the difference how can I believe ANYTHING he/she says?
As to the origional article - I think we have more taxes than we need now let alone adding more. If anyone thinks as a consumer that they are not paying all the corporate taxes think again. Business is there to make money. Taxes are overhead and the cost is passed down to whoever buys the product.
Texas or Georgia would do for now, don't you think?
Colonel: "Doesn't anyone else remember back in the 70s when the same bunch of "scientists" were predicting a commint "ice age"?"
It really doesn't matter how many times this "talking point" is debunked, the contrarians are going to bring it up again and again. Here is the real story:
http://www.realclimate.org/index.php/archives/2005/01/the-global-cooling-myth/
Actually, CO, CO2, HC, NOx, SOx, and H2O are emissions from gasoline. Emissions from coal are particulate matter (ash), trace elements (mercury, selenium, arsenic, etc.), NOx, SOx, CO2, methane, and uncombustible mineral matter. Natural gas emissions include CO2, CO, NOx, SOx, particulates, and mercury. These, of course, are partial lists of only the major pollutants from use of these fossil fuels.
Also, according to this website
http://www.naturalgas.org/environment/naturalgas.asp
the volume of CO2 emissions in burning natural gas, coal and oil far exceeds the volume of CO in pounds per unit of energy output.
Good. Go sign up to buy green energy. Many utilities offer that option. You can find out if yours does here:
http://www.epa.gov/greenpower/locator/index.htm
If your utility doesn't have that option, you can buy green energy from Sterling Planet's national program:
http://www.sterlingplanet.com/
If you really think conservation is important, that is.
I have no clue how I feel about any of this, and I long for the day when there is no longer a sinful world or any politics to deal with.
As a meteorolgist on this board stated, changes in climate have been slight, and there are many possible causes for it.
On the other hand, global terrorism is provable (Twin Towers?) and you can build public policy on that. Illegal immegration is provable (20 million?) and you can build public policy on that. Yet, the Democrats and Republicans can't even agree that there is a problem in either of those cases enough to come up with a public policy that works.
Something is wrong somewhere. Why don't we focus on provable problems and making our politicians come up with workable solutions, rather than running after the latest Chicken Little theory?
Waitsel Smith
It is a far wiser environmental policy to err on the side of caution and be proven wrong than to carry on regardless and discover that it's too late to fix things.
".. you say that one percent of rich people may control so much wealth that tax will hardly hurt them. But if this group constitutes just one percent of car drivers then why are you so concerned about their failure to come clean?"
'C'mon Sam, The rich are not just average drivers; they usually own multiple cars, boats, planes, motorcycles, RVs, etc. But, that is beside the point. Maybe I misread your article, but I thought it was referring to energy use other than just driving. When it comes to using energy of ALL sorts, the rich far surpass the average consumer in both use and waste.
Additionally, the rich have a great amount of influence on what other people do. Not only do they often have a significantly sized "home" staff, they are also often the owners or chief-officers of corporations. They can set policy that will influence the energy using trends of thousands.
"Moreover, why wouldn't the rich actually be leaders in making the change, precisely because they can afford to buy that cleaner car?"
Yes. Why wouldn't they? As a matter of fact; Why AREN'T they; and why haven't they? With all the money, education and resources at their disposal, why aren't they leading the changes to greener living? How come they are not trading in their Mercedes, Bentleys, Hummers and Rolls Royces for greener cars? How come their country club parking lots aren't filled with Priuses? Considering that these environmental issues have been around for decades, and that greener cars and greener home use would reduce their expenditures, why haven't they been leading the charge toward going green? ...
"Also, why would rich people waste money and keep polluting, if the tax makes clean and renewable energy a better alternative, both financially and morally?"
...I suspect it's because the savings to their personal wallets would currently only represent a change of about .0001 percent (or less) of their cash flow, and that they don't really see where that "savings" is worth their trouble. Americans idolize our rich exactly for their abilities to enjoy extravagancy. If they all went as green as the average Joe and Jane the rich would reduce their social standing, amongst themselves and amongst the general populace. They (as a group) resist it out of an affordable laziness and from a fear of endangering their status.
Let's stop accusing the rich for all the trouble in the world and let's stop taxing people for being successful. Instead, let's implement policies that work. This is not an issue of rich against poor, the issue is how to deal with global warming most effectively. You may agree that clean and renewable energy is worthwhile supporting, but who should pay for this?
I totally agree that this is not a "rich against poor" issue. Also, I'm not accusing the rich for all the troubles in the world (although they certainly could solve a fair number of them). You are the one who brought up the tax idea. My responses address the problems I see with using taxes to strong arm the nation into greener living. One of the primary problems being that taxes hurt the lowest earners the most, and the wealthiest the least. Funding this change predominantly from the wallets of the poorest is not good social planning. It's like trying to put out a fire by making everyone bring a gallon of water from their homes while lakes and streams flow availably near-by.
Doesn't it make most sense to get those who pollute most to pay for it? That prospect will be a huge incentive for them to change their lifestyle, especially if the proceeds will make alternatives cheaper.
Absolutely, Sam!! .. and the biggest polluters are Industry; not average consumers. Whatever plan is adopted will need to curb or alter industry's energy use the most.
We all pollute, we are all the cause of this mess. The best thing we can do is reduce our pollution individually by buying from the most reponsible companies, using products with low envirotnmental impact; doing without things we do not need; and urging friends and family to do likewise.
Standards almost always fall victim to higher profits or more power.
Taxes mostly get eaten up by goverments more interested in self perpetuation than the poeple who live in their nations.
We are all in this together and need to do our bit to make things better.
By the way thanks for bringing up this crucial subject for fruitful discussion.
I agree that taxes run the risk of being consumed by administrators who seek to perpetuate their bureauracy. That's why what I propose is a combination of tax and subsidies. The proceeds of the proposed tax on fossil fuel should be spent to subsidize local supply of clean and renewable energy, rather than end up in the consolidated government funds.
Your say that industry is the biggest polluter. Under my proposal, they would be taxed for their use of fossil fuel, which will be an incentive for industry to shift to clean and renewable energy, which will be subsidized from the proceeds of this tax. But all industry, poor and rich businesses, should face such a tax, there should not be exemptions or deducations for business that make losses or claim to be engaged in R&D. If your local electricity grid sources its electricity from oil, gas or coal-fired plants, it will have to pay the tax when buying this fuel. In case of fuel stations they could similarly pay the 10% tax if they buy fossil fuel. But we should avoid double taxing. If one business has paid the tax and sells that energy to another bussiness, then that second business would not have to pay the tax again.
I insist that a tax on fossil fuel would not necessarily hurt the poor most, especially not when the proceeds are used to subsidize clean and renewable energy. Tax will hurt those most who use most fossil fuel, while the proceeds will help poor (and rich) people who use clean and renewable energy. They will financially benefit, and very much so, much more than big users of fossil fuel will hurt, since clean and renewable energy now constitutes such a small part of the total amount of energy consumed. A tax of only 10% on fossil fuel will generate a huge amount of funding. In fact, companies could sell clean and renewable energy almost for free and still make a profit due to the subsidies. For more details, see the discussion at:
http://groups.google.com/group/greenhouseeffect/msg/471355920b4f1c66
"Global warming is an unprovable theory."
"I also doubt the man-induced global warming theory, but I HATE pollution."
"Global warming is NOT an urgent issue."
The issue behind such remarks is political - not scientific - as indicated by this tirade:
"That's right, let's solve our problems with more taxes. Ever heard of the American Revolution? Why do liberals always think they can solve our problems with more taxes? It's never helped in the past, but hey: who says we have to learn from our mistakes?
And, yes, let's take away the freedoms of our fellow-Americans. Let's be the pigs in Animal Farm. It's always safe to advocate reducing someone else's freedom, isn't it?"
No, if you don't have any more credibility regarding a scientific issue in which the scientific evidence is compelling, then how can you expect to have any credibility in your political views?
If you don't agree that carbon taxes are good option for dealing with a true scientifically urgent situation, they you have to come up with something else, because to do nothing is absolutely unacceptable.
Gore suggested taxing carbon instead of income. That is not a tax increase. Why is that not a good idea?
P.S. Dear Steve B. Any new tax is and increase in the taxes paid. Accounting 101.
I'm sorry Kyle. The evidence simply does not support your ideology.
Kyle: "Any new tax is and increase in the taxes paid. Accounting 101."
I think Gore's proposal is replacing one tax with another (1-1=0) - that's not an increase. Math 101.
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/27/AR2007062700097.html
This because there are so many deductions and loopholes in the tax system. If we're to introduce a progressive tax on fossil fuel (one that increases as one pollutes more), then we have to be very cautious about possible exemptions and deductions.
BTW, Ramzy, I'm a free-lance speechwriter and policy developer.
I don't know if you're commenting on Gore's proposal to substitute a carbon tax for an income tax here. He is not proposing increasing the income tax, but eliminating it. A carbon tax would take its place, and this would necessarily be a pretty hefty carbon tax to equal the same revenue as the current income tax. I think there would be an equally hefty incentive thereby to deploy renewable technologies.
Tax issue aside, I often wonder about the criticism that renewables are not competitive with fossils. I think this is a misperception due to the facts that 1. fossils are subsidized, 2. fossils have not had to pay royalties for drilling on public lands, and 3. there are substantial hidden costs to using fossils that are presently "externalized" to the taxpayer, not the least of which is funding needless wars in the Mideast. If we were having to pay the real costs of using fossils, renewables would be more than competitive.
The trick, as it is, to making renewables competitive with fossils (ultimately replacing fossils) is mass production. The initial costs for using renewables remains prohibitive for most people presently. However, as the capacity for mass production grows, the prices will come down. The same thing happened with information technology, and look - an average joe like me can use a PC now.
For those, who say that renewables - or tax incentives and subsidies to renewables - is anti-capitalistic, or is socialistic, I would say that fossils have benefitted from corporate socialism for decades. I would refer them to Amory Lovins' and Paul Hawkins' book, "Natural Capitalism," and to William McDonough's book, "Cradle to Cradle."
Sam: "...this tax will reward those who pay the tax (those using most energy), in that they will benefit most from having cheaper and better alternatives to choose from."
Maybe those, who say that "tax" is the wrong word would be satisfied with just paying the real cost of fossils. Instead of describing it as a tax, just say the "price" includes the cost of damage to the air, water and land of using fossils. It also includes the cost of military intervention in the Mideast so that we can "protect our vital national interests in the region."
My point is that if the rich can afford the higher energy prices (being rich) while the poor get compensated (either directly from the proceeds of the carbon tax or because the proceeds will be used to lower income and payroll taxes), then there will be little or no change to people's patterns of energy use. As said, the rich can afford to continue with their current lifestyle while the poor get financial support, so there's little or no incentive for either to change.
Instead, I don't want to see the proceeds of emissions tax added to the consolidated revenue, because of the risk that it will be used to assist people buying fossil fuel. Instead, I want all proceeds to be used directly to subsidize clean and renewable energy. It should be a local dollar for dollar exchange, to assure people that their money will be used to lower the price of clean energy in their area. That way, the combined policy will be most effective and most easily accepted.
Replacing existing taxes will be very hard in the sense of staying "revenue neutral". An emissions tax introduced as a new tax makes it easier to raise extra money to subsidize alternative energy, which will reduce the local price of alternative energy which in turn will help the poor. A new tax could be justified on those grounds and also on the need to become energy independent and since the urgency of global warming warrents compensation for cost to be more directly included in the price of fossil fuel.
My feeling is that a new tax at a mere 10% would be acceptable to the public and (given the proportion of energy now generated from fossil fuel) such a tax would result in a huge amount of money. If (as I propose) all that money was used to subsidize clean and renewable energy, it would probably be more than the alternative energy industry could handle at this time.
I ran across this article and thought you may be interested. It offers some data that your view is the preferred view by the public, though maybe not to the extent that you (or I) would like.
http://pubs.acs.org/subscribe/journals/esthag-w/2007/july/policy/ee_climate.html
Sam: "I don't want to see the proceeds of emissions tax added to the consolidated revenue, because of the risk that it will be used to assist people buying fossil fuel. Instead, I want all proceeds to be used directly to subsidize clean and renewable energy."
I certainly won't argue with that. I think Americans would accept this, especially if they saw it as a temporary tax designed to help renewables reach mass production, at which point fossils would not be able to compete.
The above link notes Americans would accept $10/month tax on their electric bill. I suspect this is not the 10% you want, but I'd like to see what you think about this article. Thanks.
Global Warming in an Age of Energy Anxiety
Why progressives should shift the emphasis from regulation to investment in their political and policy approach.
http://www.prospect.org/cs/articles?article=global_warming_in_an_age_of_energy_anxiety
Indeed, people can easily get confused and scared by cost aspects. Tax is seen as bad, people see it as extra cost, unless the link is made with the decreasing cost of alternative energy facilitated by such a tax, which could lower their energy bills as well. All too often, tax is seen as costly, while subsidies are seen as another extra cost people have to pay on top of a carbon tax. Therefore, what should be emphasized is that all proceeds of such a tax will subsidize supply of clean and renewable energy, which will in the end make energy cheaper for all of us, rather than more expensive.
Also, many people didn't feel that they would benefit from the proceeds of the tax raised by Proposition 87, since much of the money would go into R&D, education and development of alternative fuel and alternative fuel vehicles. Instead, only supply of clean and renewable energy should be subsidized. That will make the tax more popular, as people see tangible financial benefits, while it also prevents that money will create an R&D and education bureaucracy that will demand further taxes without perceived tangible financial benefits for voters.
Another weak aspect of Proposition 87 was that it proposed to tax drilling of oil in California. Opponents therefore pointed out that this would increase imports of oil. Instead, the proposition should have been that the tax would apply to all supply of fossil fuel in California, which would also have covered supply of fossil fuel to generate electricity.
Precisely! This is a tax that could (and should) fase itself out. Once renewables are cheap enough, people will no longer buy gasoline, nor will their electricity grid source its power from plants that burn fossil fuel. In fact, I am convinced that renewables are already price-competitive, if the price of fossil fuel included the now hidden costs of dependency on oil from the Middle East (including sending armies to secure oil supply) and the cost of pollution to our health and in terms of global warming.
Also, oil companies' main focus is on selling oil and they will fight any regulatory proposal that seeks to reduce their profits from this. Proponents could barely raise $50 million to defend Proposition 87 and almost $40 million of this was funded by one person, Steve Bing, while opponents had no problems raising more than $95,000,000 mainly from oil companies for their campaign against.
Investors should be aware that a company that puts all its eggs into the one basket of oil supply will loose bigtime, given the realities of global warming urging us to stop burning oil. We can draw comparisons here with the tobacco industry, which also spent huge amounts of money fighting the inevitable. Instead of wasting money on such campaigns, oil companies should diversify into clean and renewable energy, which hold the promise of greater profitability.
Absolutely, but how do you get the average joe to see it. The Prospect article, I think, correctly points out that an oil based marketing campaign can take down the best policy. On another thread, an global warming cynic says: ""...it's going to fall on the global alarmists to explain what the impact of government mandates and taxes will have the economy." He is wrong in terms of policy, but he makes a political point - the same point made by the Prospect article.
You and the Prospect article correctly (I think) state that the issue has to be explained to the public correctly, and that takes leaders willing to put their political careers on the line. Who's willing to do that? You and the Prospect article point out that sound policy is not going to carry the day when powerful business interests can easily outdistance your marketing funds.
Sam: "Investors should be aware that a company that puts all its eggs into the one basket of oil supply will loose bigtime, given the realities of global warming urging us to stop burning oil."
Here's the rub: can Americans think in terms of the long-term, national interest? Or are we doomed to hasten our own demise by continuing to think in terms of short-term, exclusively self-interest? Some investors are well aware of the issue you raise.
http://www.campaignexxonmobil.org/default.asp
But they are in a minority and have had little effect on corporate decisions.
Sam: "We can draw comparisons here with the tobacco industry, which also spent huge amounts of money fighting the inevitable."
Unfortunately, fossil industries seem to take the path of the tobacco industry.
http://www.ucsusa.org/news/press_release/ExxonMobil-GlobalWarming-tobacco.html
I don't see any leaders (presidential candidates - Rep or Dem) making the case or connecting the dots between energy, health, environment, economy, jobs, and foreign policy. My answer to the global warming cynic's statement above would be that the public is going to be paying taxes one way or another - to get us to a point of energy independence by building a renewable energy infrastructure or by continuing to fight a series of resource wars in the mideast and beyond. But I don't see any leader putting this out there.
Of course, that doesn't mean that we can expect that the most sound policy will be adopted everywhere within a few years. But that's just a reason for us to keep pushing the urgency of the issue even more.
There has been a lot of research on diagnosing the problem, but very little thought has gone into the prescriptions. Universities keep focusing on research by climatologists and environmentalists that largely tell us what we already know. Mind you, I do not want to say any bad things about such research. But where are the studies by political scientists, accountants, legal experts, policy modellers and trend analysts, PR specialists, marketing advisors and investment consultants? Few seem able or willing to compare the various policies for their effectiveness and acceptability. One thing that has changed is media attention. Let's just hope more newspaper reports will start looking into what are the most effective and acceptable policies.
Actually, there are several resources for solutions. w. even visited OCD Ovonics the week following his "America is addicted to oil" speech. The websites are:
http://www.ovonic.com/
http://www.uni-solar.com/
The founder of Ovonics, Stan Ovshinsky, is featured in this 2005 PBS video:
http://www.pbs.org/saf/1506/video/watchonline.htm
Additionally, Amory Lovins, interviewed here by Charlie Rose
http://gristmill.grist.org/story/2006/12/1/0719/59319
directs the Rocky Mountain Institute. He is a renewables genius:
http://www.rmi.org/
Two recent books describe the plethora of solutions and prescriptions available.
"Natural Capitalism," Hawken, Lovins and Lovins.
http://www.amazon.com/Natural-Capitalism-Creating-Industrial-Revolution/dp/0316353000/ref=pd_bxgy_b_text_b/104-2674845-8263157?ie=UTF8&qid=1182728269&sr=1-3
"Cradle to Cradle," McDonough and Braungart.
http://www.amazon.com/Cradle-Remaking-Way-Make-Things/dp/0865475873/ref=pd_bxgy_b_text_b/104-2674845-8263157?ie=UTF8&qid=1182728269&sr=1-3
Or perhaps you meant that there are few legislative prescriptions/solutions. Without incentives, solutions already in existence will have a difficult time gaining ground. And so far, the Dems either haven't delivered or are being blocked by the Rep minority.
As said, we should tax fossil fuel that is supplied for burning. Proceeds should be used to subsidize local clean energy, allocated on the basis that the cleanest alternatives should be the first in line to receive subsidies. While the percentage of the subsidy should be equally heigh for each type of alternative supply of clean energy, the height of that percentage could be made dependent on growth in the local market of clean energy. Thus, if that market doesn't show much growth, the percentage would automatically be lowered, freeing up money that will subsequently go to subsidize the type of energy supply that is next in line.
That would create a regulatory framework that is least prone to political interference. How to decide whether there wasn't much growth in a particular local market? Simple - if in most comparable places similar subsidies did result in high growth of, say, wind turbines supplying energy to the grid, but if that's not the case in this particular place, then something is stopping investors to build more wind turbines in this particular place. Whatever that reason is, it makes more sense to subsidize the type of energy supply that is next in line in terms of being clean and renewable. If even that doesn't produce the desired effect, the percentage would be lowered again, until we do see a more substantial shift away from burning fossil fuel to clean and renewable energy.
That still leaves the question as to who is the cleanest of them all? The term "extra heat" could be used as a criterion in that respect. What constitutes "extra heat" was discussed earlier in my article:
http://www.gather.com/viewArticle.jsp?articleId=281474976926336
I would love to get some feedback on these ideas!
Alas, my representative is Roger Wicker (R-MS), and my senators are Trent Lott (R-MS) and Thad Cochran (R-MS). I have written to them for years. Apparently, I have no influence with them judging by their voting records. So..., I've contributed to campaigns of favorable politicians in other states in which there is a chance that favorable candidates might be elected, e.g., Tester in Montana. I plan on doing the same in the 2008 election, because (believe me) the people of MS are not going to unseat my representative or senators.
I think first, we have to have the politicians to write the laws to support the policies you suggest. I don't know if the Sanders/Boxer bill now working in the senate does that, although I know the general idea of shifting subsidies/tax breaks from the fossil fuels to the renewables is part of that bill. There are other bills, but I don't know if any of the others address these areas of policy you reference.
Sam: "We need a transparent and consistent framework that allows investors to plan ahead, with a minimum of bureaucracy and political favoratism."
Absolutely! As I understand it, one of the main drawbacks to renewables has been the absence of a long-term tax scheme that encourages investment. Congress writes a tax break for a year or two, and that is not an environment that encourages investment. I don't know why congress doesn't lay out a 30 year tax incentive for renewables. What could be the holdup?
Sam: "...allocated on the basis that the cleanest alternatives should be the first in line to receive subsidies."
I would say that the type of renewable best suited to a specific geographical area should be first in line, e.g., wind is better suited to South Dakota; solar to Nevada or Arizona. It may work out that way anyway, regardless of how you begin the subsidy structure, since the potential for each of the renewables is generally known in each geographical area. Still, I recently heard a head of an electrical union in MA state that solar works in MA, and that if it will work there, it'll work anywhere. Also, I recently heard something that made alot of sense - solar and wind work in tandem. When wind is low, solar is high and vice versa. Finally, a storage vehicle, e.g., hydrogen, would possibly part of the picture for wind and solar. So, among wind, solar and hydrogen, there might not be one energy source superior to the others, since they work together.I guess the point is that geographical area would have to be considered relative to subsidies, along with how they work with each other.
I'll have to look up your other article to be able to comment on it, but I'd also like to hear your thoughts on the politics that would support policies you are advocating.
http://commonsense.ourfuture.org/dingell_playing_troublemaker?tx=3
My preference is for federal government only to build the framework that says what kind of supply should be taxed/subsidized and which marks should trigger higher or lower taxes/subsidies. States could then collect the taxes to pass them straight on to the cleanest alternatives. Federal Government could restrict itself to a supervisory role of monitoring output and growth, while focusing more on international policy, aiming to convince other countries to adopt similar policies.
Absolutely! Some areas are better suited to solar, others better to wind power. Geothermal power is very much location-specific. Hydro-electric power requires water and is excellent where the Great Lakes are. The Great Lakes could actually function as a storage for surplus power generated by solar or wind. Such surplus power could be used to pump water back up into a higher lake, so that hydro power can be used when there's little wind or sunshine. As you say, hydrogen could also act as storage. Google is working on that, have a look at:
http://google.org/recharge/overview.html
I imagine it can work like this: Your car gets recharged at your work, say, by solar panels on the roof of your office (as in the case of Google) and after driving home you sell the surplus from your battery to the grid where you live, in the evening, i.e. at a time when demand there is at a peak and prices are high. Then, you recharge again at night when prices are at their lowest, to get you to work the next day. A single recharge takes only 15 minutes and can last for 20-40km. For the 70% of Americans who drive less than 33 miles per day, no gasoline would be necessary at all!
Anyway, I do want the States to decide what is the best mix of clean technologies in their area, but I want federal government to set the criteria deciding who can line up for inclusion in that mix. My suggestion is that those technologies that don't add extra heat should be first in line.
Government may use zoning to allocate subsidies to areas designated as communities without roads. Such communities can use physical barriers to keep out cars, so they don't need zoning restrictions for that, but they need to be able to have buildings that have combined residential and business functions, educational functions, medical and hospitality functions, retail, restaurants, etc. I earlier proposed a special tax on meat with the proceeds used to subsidize vegetarian restaurants in such communities without roads.
http://groups.google.com/group/humanities/browse_thread/thread/22b5ade6c3a9c989/76878cb9ed670e7a
http://groups.google.com/group/humanities/msg/76878cb9ed670e7a
For the full thread, click on 'Communities without roads' at the top.
I'll also repeat the above post:
Zoning laws, yes it's important that they are reviewed, they can do more bad than good. Many are currently pushing local government to change standards for buildings, to make offices more energy efficient. Zoning can be a useful tool in town planning, e.g. to ensure that no unhealthy industrial activities take place next to a school, but instead of getting government to decide all details of how and where we can be more efficient, we should simply tax emissions and use the proceeds to subsidize clean alternatives. Then, market mechanisms will find the most efficient ways.
Government may use zoning to allocate subsidies to areas designated as communities without roads. Such communities can use physical barriers to keep out cars, so they don't need zoning restrictions for that, but they need to be able to have buildings that have combined residential and business functions, educational functions, medical and hospitality functions, retail, restaurants, etc. I earlier proposed a special tax on meat with the proceeds used to subsidize vegetarian restaurants in such communities without roads.
I understand your point here, and I also think that the higher gas prices go, the better - tax or no tax. But I'm not sure what to make of Dingell. He's been a real friend of the auto industry, and he opposes raising CAFE standards. The article I linked notes he isn't serious about carbon taxes in any case. He would introduce it to show it's a political loser, the article says.
Sam: "My preference is for federal government only to build the framework that says what kind of supply should be taxed/subsidized...."
Yep - to define the rules so that the players know how to play. Sounds good to me.
I saw the piece about Google here:
http://www.renewableenergyaccess.com/rea/news/story?id=49007
I agree with you on John Dingell, but since he chairs the Energy Committee, he's in the best position to introduce such legislation to Congress. I hope that the proposals will be judged on their merits and amended where needed. I guess that - once ready - the proposals will show up at:
http://energycommerce.house.gov/energy_110/
Another thing about companies like Google, which I recently read (cannot remember the source - I think it was in re: to the hypercar). Companies like GM and Ford may not be the companies that make cars in the future. Cars may be produced by companies like Google, given traditional automakers' resistance to retooling for more efficient production. Much simpler production processes may make the traditional automakers obsolete. Google's deployment of these technologies seem to me to be steps in this direction.
More on the hypercar here:
http://www.rmi.org/sitepages/pid191.php
Thanks for the energy committee link. The goals there are admirable. Let's just hope congress can actually act on these.
- Acceleration : 0 to 60 in about 4 seconds
- Top Speed : Over 130 mph
- Range : Over 200 miles
- Battery Life : Useful battery life in excess of 100,000 miles
- Full Charge : As short as 3.5 hours
You can recharge at night in your garage, and you can drive more than 200 miles on that charge the next day. Even a completely empty battery would take less than four hours to recharge, while after a 100-mile trip you can fully recharge it in under two hours with an EVSE system installed (operating at 70 amps). But you don't even need that, as it comes with a mobile-charging kit that lets you charge from any standard electrical outlet, e.g. in case you get stranded with an empty battery. The 200 miles radius is achieved partly with regenerative braking that stores energy produced when braking.
As you say, there are many financial reasons why to buy such a car. If you charge it at home and have off-peak charging rates with a time-of-use meter, you'll pay just 1 cent per mile to drive the Tesla Roadster. If you may recharge for free at your place of work, you'll be even better off, in fact you may be able to sell a surplus back to the grid at peak time at home and recharge again at night at cheaper rates, which will turn your car into a money-spinner. There may be further employer incentives.
Furthermore, you may also benefit from:
- Single-occupancy access to all carpool lanes
- Income tax credit (awaiting new legislation)
- A luxury car that's fully exempt from the luxury car tax
- Free parking at charging stations at LAX
- No parking meter fees in an increasing number of major metropolitan areas
http://www.teslamotors.com/performance/charging_and_batteries.php
On those terms, it already makes sense to buy an electric car right now. Imagine what a shift could be established by the combined system of taxes and subsidies that I propose!
While each of the above arguments makes economic sense on their own, the strongest argument in favor of the proposal is the imperative to act on global warming. The option of doing nothing is unrealistic and irresponsible. Basically, there are four different policy options: 1. setting stricter standards, 2. taxes on emissions, 3. auctioning off permits to pollute, and 4. geo-engineering schemes to mitigate climate change. Whatever mix of measures is chosen, it will cost money. The socialist view that the poor should not be "punished" by extra taxes is not helpful in regard to global warming, in fact it is countereffective. Taxing fossil fuel and giving the proceeds to the poor, supposedly to help them carry this tax burden, will have an overall effect that little or nothing would change in regard to global warming. It's the combination of using the proceeds of this tax on fossil fuel to subsidize local supply of clean and renewable energy that makes this proposal so effective, much more effective than any other option.
Appreciate you excellent response!
You've obviously put a lot of thought and time into this and I commend your effort and article. I'm just not at the point where I can agree that this would be the best route to go.
Any action which will be "successful" in slowing global warming significantly, will, by default, severely damage our economy and force alteration of our life style to a major degree. Therefore, the problem is getting enough people willing to have this supposed "cure" thrust upon them and a congress willing to do that.
While I accept the global warming as very real, no one has convinced me that man either caused it or can actually alter it in a significant manner. I do believe that the problems is real and that, for the sake of those who will follow us, we are obligated to try, even if our efforts are futile.
We have arrived at the point where we think we can control nature, and we have, to some extent. But our ego tells us that we can manage things that, in the end, we can only ride out and survive. Just like hurricane Katrina, preparedness is our best line of defense.
Moreover, the biggest justification for any short-term pain and effort is the urgency to take action on global warming. Apart from being prepared for extreme weather conditions, we should also be prepared to take responsibility for the pollution we have caused and are still causing. We stand accused and you can act as if didn't carry any blame, but in that case you better take out a liability insurance, which - I'm convinced - will cost you more than the 10% tax that I propose on fossil fuel and which will also give us cheaper alternative energy.
Followed your link to the Tesla car, interesting! If I had the money I'd go for a hybrid at this time. I think they offer more in that they can go far more than 200 miles and never have to be plugged in, while delivering anywhere from 40 to 70 MPG. I saw an article on TV the other night about the plug in hybrids but I don't see any significant advantage to them. All our electricity comes from hydro-power here rather than fossil fuel but that is going to change because they can't build more dams.
I'm very hesitant to attempt to solve problems by taxing as I've seldom heard of taxing doing that. However, some guidelines and solid planning along with carefully thought out taxes may well be appropriate.
We need to separate two things here, pollution and global warming may be related but they are still two separate things. Not all pollutants contribute to global and I do not believe that global warming is simply the result of pollution. And yes, we are absolutely responsible for our polluting.
This comes back to the fact that there are too many people in this country and in the world. The earth can absorb and recover from a certain amount of damage but when you have three hundred million people in this country alone, that is more than the good earth can bear. We seriously need to get a handle on the population problem and I don't hear anything about effort being made in that direction in this country.
Appreciate the information and dialog, Sam!
You could recharge your car at home at night, taking advantage of cheaper electricity rates. At night time, electricity is more likely to be generated by hydro or wind power. So, not having to buy gasoline will not only save you money, it's also better for the environment.
It also takes time and effort to fill up your tank. Some employers embrace the idea and install solar panels on the roofs of their buildings to recharge cars during the day. In such a case, you can charge at work and feed surplus power back into the grid in the evening, earning top dollars (peak time rates). So, not only will you drive for free, you get paid top dollars and you help the environment as well, because at peak times the power grid is typically topped up by burning fossil fuel. Have a look at Google's initiative on plug-in cars:
http://www.youtube.com/watch?v=oDjSbWTJbdo
Yes, Google uses plug-in hybrids, but it sets a trend away from using fossil fuel. There are many such trends and we should encourage them. More than a year ago, Saab (General Motors Swedish car unit) already showcased an ethanol-electric hybrid car, combining an electric motor with an E85 Ethanol engine.
http://www.forbes.com/finance/feeds/afx/2006/03/23/afx2616065.html
Yes, much electricity is generated by coal-fired power plants. So, what can we do about it? Rather than dictating solutions, I suggest that the market should decide and it's hard to predict what will happen over the coming years in terms of battery technology, hydrogen technology, etc. My proposal is market-oriented in that it's to a large extent technology-neutral, it does tax fossil fuel, but it doesn't prescribe any specific alternative technology, it just urges people to look at alternatives to fossil fuel. Using the proceeds of the tax to subsidize local supply of clean and renewable energy is what makes the proposal doubly effective for the environment. This will make it doubly attractive for employers to install solar panels and for the electricity grid to source electricity from wind farms and the like.
As to whether greenhouse gases constitute pollution, the Supreme Court ruled earlier this year that this was the case.
http://tinyurl.com/2pzngg
Finally, on the issue of whether there are too many people. That may be the case, but if so what can be done about it? China has a policy of one child per family and it nevertheless is set to become the biggest contributor to pollution in the world, if it isn't already, suggesting that such a policy doesn't necessarily lead to less polluting habits. We need to tackle pollution, rather than divert to blame to other issues. Let's introduce a tax on fossil fuel to pay for subsidies of local supply of clean and renewable energy!
A car which can only go 100 miles at a time would mean most folks here would need two cars to do the job of one. If one commutes less than 15 miles one way you could use an electric for the commute. Weekends and other driving would require something like a hybrid for distances greater than 100 miles.
This part of the country has people needing to drive fairly good distances for such things as medical care and to buy a lot of products. It's not all just a few blocks away. When I go to the doctor I may put on over a hundred miles.
A tax on one thing to finance another thing is always a rather iffy proposition. If the tax were 10 cents per gallon that would be one thing as I think most people could live with that. If it were on the order of one dollar per gallon that would be both inflationary and generally prohibitive and I couldn't support that at all.
I guess I still lean more to standards but a combination of standards and some taxes might work well. Without imposed standards you will never get the kind of improvement in fuel economy that is needed.
Emitted greenhouse gasses are pollution and that is what the court said. It did not say that global warming was a result of man's actions. We can only speculate on that but if it is man caused then the effort to change it is probably beyond the capacity of man to accomplish. The United States, Britain, Japan and a few other countries are the only ones who are going to address the problem. China, which is now the largest contributor of greenhouse gasses in the world is not going to change much any time soon and we can take no action to compensate for what they contribute.
Some of the things you mention like lower rates for electricity at night don't happen. Makes no difference what time of day you buy your electricity. And taking an extra battery with you for an electric car is really not plausible. A battery for a hybrid sells for about $2,500 so most people wont be buying an extra. And changing that puppy out might prove to be a trick as well.
I believe we have a moral obligation to do what we can about this problem. I believe that standards are an essential part of doing that. A tax on fossil fuel would be OK as long as it was reasonable. It could be used as you suggest to initiate the delivery of alternative fuels.
You've obviously spent a lot of time researching and studying this and have some very sound ideas but you will need to recognize that it is not going to be done by taxation alone. Our congress is not ready to cram something like that down the throats of the people. Some tax and more standards is doable and wouldn't result in a popular uprising.
Appreciate your knowledge, research and explanation on this subject!
Anyway, I am not proposing a tax on the sale of cars, nor am I advocating one specific technology or one specific type of car. The combination of tax on fossil fuel to subsidize alternatives is the most effective way of achieving a switch from fossil fuel to alternatives, and it doesn't force people into a car that is effectively designed by bureaucrats. Those who want to keep driving their old car will still be able to do so under my proposal, they just have to pay a bit more, in the form of this tax on gasoline, while they miss out on subsidized alternatives.
In my calculations, a mere 10% tax on fossil fuel will bring about a huge switch, not only because it will make fossil fuel more expensive, but especially since the proceeds will go to local supply of clean and renewable energy, which will be able to count on a steady stream of money. There will still be standards - nobody is calling for the removal of, say, health and safety standards for cars. But to deal with global warming, my proposal is simply the most effective way to go, without the hassle and bureaucracy of standards.
Remember that whatever tax you would impose on fuel will create that much added inflation. Virtually everything we buy is shipped by fossil fuel and would be for a period of time.
The $2,500 battery I mentioned will, I hope, definitely be coming down in price but it is made using fossil fuel as well. The point I was making is that no one is going to keep an extra to "throw in" when the first runs dry. Most people with hybrids take out insurance to cover the battery if it fails after the warranty.
I have no idea what an all electric car would require in the form of a battery, do you? That figure is for the hybrid which only will run about six miles on the battery. I still feel that taxes alone won't ever pass congress and that we must use standards as well as taxes.
With the Tesla, you'll be able to drive up to 250 miles on one single charge that will cost you only $2.50 in electricity. There's also less maintenance, since there are very few moving parts; you don't need to change engine oil, filters, gaskets, hoses, plugs, belts, there's no catalytic converter or exhaust pipe to replace. Such cars can be produced using little or no fossil fuel, in fact most things can be produced using little or no fossil fuel, as the switch takes place that the proposed tax seeks to achieve.
Standards are too inflexible to achieve an effective and on-going switch to alternatives to fossil fuel. Standards may force a company like Tesla to add an exhaust and a catalytic converter to the car, purely because regulations required this, while an all-electric car in fact doesn't need an exhaust at all.
Cost is an issue, the Tesla Roadster 2008 model has a pricetag of $92,000 and the battery pack is only warrented for 100,000 km while it does cost thousands of dollars to replace. But these costs are expected to come down in future. At the same time, capacity and performance of batteries is expected to increase over time.
So, how much can we trust politicians to be able to take adequate action on global warming? If we handed the task of dealing with global warming to right-wing politicians, they would propose buying off those who wanted action, resulting in no effective action at all. They are keen to establish carbon trading schemes. The danger of such schemes is that the rich will use such schemes to continue their polluting lifestyle, paying the poor under the pretence that this will solve the problem, but the result is that the problem only increases as the rich don't stop polluting while the poor will use this money to imitate the polluting lifestyle of the rich.
On the other hand, if we handed the task to left-wing politicians, they would increasingly tax the rich for their polluting lifestyle and use the proceeds partly to increase an inefficient government bureaucracy, in which case nothing effective would be achieved either. Since no alternative is made available, the rich will simply continue with polluting activities (because they can afford to do so), while the poor have no alternatives either, so - in line with socialist doctrine - they will be given the other part of the tax proceeds with the argument that they needed help with the increased cost of energy and food, which will only lead to them to continue with or take up further polluting activities.
As said, we should not wait for those who seek to advance a specific political ideology, to articulate the necessary action for us. No, we should all take responsibility ourselves and both take action regarding our own lifestyle, as well as regarding our logic. Because the answer as to what should be done is so simple and straightforward. The best way to decrease emissions of carbon dioxide and other greenhouse gases is to tax emissions of greenhouse gases and subsidize alternatives. In case of carbon dioxide, fossil fuel should be taxed and the proceeds should be used to subsidize local supply of clean and renewable energy, which will make the policy doubly effective. Similarly, the best way to decrease emissions of methane is to tax what's responsible for that, e.g. by introducing a tax on the sale of meat. Again, to make such a policy doubly effective, the proceeds should be used to subsidize local supply of alternative food, e.g. in vegetarian restaurants.
These are only two out of my ten recommendations to deal with global warming, but it goes to show that one can reach conclusions without waiting for answers from politicians. The importance of global warming as an issue is also that it so clearly shows what happens when good debate on such an issue is neglected in society. Indeed, it is precisely because we have failed to think matters through that we're in such big problems with climate change. As you say, it's hard to trust politicians to come up with effective policies - global warming is one of the issues that demonstrates that both capitalism and socialism are dead. It's up to us to articulate the action plan. Global warming as an issue urges us all to think matters through and make sense of why so many politicians have let us down for so long.
Impressive article and thread, especially for the steady way you monitor and respond to it, maintaining your even tone throughout. One thing that I get from all this is that if the tax code were simplified it might make it easier to use taxation to achieve environmental or economic goals, since our current code is so vulnerable to manipulation via exemptions and deductions. Do you see a place for something like the Fair Tax proposal in this question?
Why not get behind the real crisis of our nation and support the War on Terror, I am sure as a Global Warming Alarmist you are most certainly an anti-War on Terror Bush Basher as well, it seems to goes with the territory.
Why not support real energy policies that promote tapping our own resources, God knows every other nation is drilling as legally close as possible slurping up our reserves in the two oceans and the Gulf of Mexico and why not, anti-American self loathing screwballs are keeping our hands cuffed from using our own resources. Let's build new nuke plants and provide all the electricity we possibly could use , or is that just another no no, God forbid we do the smart thing and use our technological prowess to provide cheap clean energy.
No never an answer that solves our needs, just ones that compromise them further.