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Why Carbon Taxes Work

timharford.com

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Re: Why Carbon Taxes Work

#21

Post by Vinnl »

yunohn wrote: post #10
schnitzelstoat wrote: post #5

I agree that externalities should be priced in - but I wonder if in practice Governments would end up footing the bill via subsidies. For example, look at what happened in France with the fuel tax rise which lead to the “gilets jaunes” protests. If people need to get to work and heat their homes etc. then putting a tax on all of that will hit them hard while the rich will be relatively unaffected and can continue pol…

> If people need to get to work and heat their homes etc. then putting a tax on all of that will hit them hard while the rich will be relatively unaffected and can continue polluting. So much this. Here in NL, my heating bill is 70% tax and 30% gas charges (not exaggerating). The government claims to do this to encourage installation of better insulation and other energy saving measures - however, as a renter (like t…

To be fair, the policy was to raise gas taxes while lowering those on electricity in a way that it evens out for most people.

Additionally, while I don't know the numbers of renters vs. buyers, I do know that the vast majority of renters in NL live in social housing, which means the government has some leverage there to get the housing corporations to lower gas use.

Re: Why Carbon Taxes Work

#22

Post by yunohn »

roenxi wrote: post #17
schnitzelstoat wrote: post #5

I agree that externalities should be priced in - but I wonder if in practice Governments would end up footing the bill via subsidies. For example, look at what happened in France with the fuel tax rise which lead to the “gilets jaunes” protests. If people need to get to work and heat their homes etc. then putting a tax on all of that will hit them hard while the rich will be relatively unaffected and can continue pol…

> For example, look at what happened in France with the fuel tax rise which lead to the “gilets jaunes” protests. I think people actually underestimate the effect of a carbon tax. The tax has to be extreme enough that it changes behaviour in the real wold, and something like 70-80% of energy comes from fossil fuels. If people aren't near to rioting because their lifestyle is being forced to change then the tax isn't…

I understand your viewpoint, but if you tax the common man such that they are unable to travel to work in the only car they can afford - the world will stop functioning.

I often wonder why the elites don’t understand what their mistreatment of the proletariat will lead to…

Re: Why Carbon Taxes Work

#23

Post by RobinL »

yunohn wrote: post #10
schnitzelstoat wrote: post #5

I agree that externalities should be priced in - but I wonder if in practice Governments would end up footing the bill via subsidies. For example, look at what happened in France with the fuel tax rise which lead to the “gilets jaunes” protests. If people need to get to work and heat their homes etc. then putting a tax on all of that will hit them hard while the rich will be relatively unaffected and can continue pol…

> If people need to get to work and heat their homes etc. then putting a tax on all of that will hit them hard while the rich will be relatively unaffected and can continue polluting. So much this. Here in NL, my heating bill is 70% tax and 30% gas charges (not exaggerating). The government claims to do this to encourage installation of better insulation and other energy saving measures - however, as a renter (like t…

Most renters still have the option to turn down the thermostat though, so whilst the ability to respond to incentives may be dampened, they should still have an effect.

Admittedly, there are some rentals with bills included. But if gas was very expensive, few landlords would offer it.

Re: Why Carbon Taxes Work

#24

Post by gefhfff »

lovemenot wrote: post #7

Global warming is a global problem. While carbon tax would be levied locally, creating incentives to just shift production to low or no tax locations. Just as harmonisation over Cororate Tax is finally emerging, similar cross-border agreements should be needed for a Carbon Tax.

As a country you also can enforce restrictions/taxes onto the whole supply chain, as a initial measure (can't be done by weak countries though).

Of course, mid term everyone should push for global carbon pricing models

Germany was the only country that seems to have understood this, given they were the only ones that advocated for it at COP.

Re: Why Carbon Taxes Work

#25

Post by yunohn »

elurg wrote: post #15
schnitzelstoat wrote: post #5

I agree that externalities should be priced in - but I wonder if in practice Governments would end up footing the bill via subsidies. For example, look at what happened in France with the fuel tax rise which lead to the “gilets jaunes” protests. If people need to get to work and heat their homes etc. then putting a tax on all of that will hit them hard while the rich will be relatively unaffected and can continue pol…

Is it even possible to make a CO2 tax that is not regressive? The purpose of a CO2 tax is reduce emissions and a lot of emissions are not caused by luxury products and services but simple stuff like growing food or driving to work. Increasing the price of fuel to the point where people switch to biking to work would be very successful from a climate standpoint but extremely unpopular.

> emissions are not caused by luxury products

I think this is patently false; but even more generally, wealthier people and “developed” countries are the biggest polluters.

(https://www.theguardian.com/environment/2020/sep/21/worlds-r...)

Re: Why Carbon Taxes Work

#26

Post by yunohn »

RobinL wrote: post #23
yunohn wrote: post #10

Earlier quoted context omitted.

> If people need to get to work and heat their homes etc. then putting a tax on all of that will hit them hard while the rich will be relatively unaffected and can continue polluting. So much this. Here in NL, my heating bill is 70% tax and 30% gas charges (not exaggerating). The government claims to do this to encourage installation of better insulation and other energy saving measures - however, as a renter (like t…

Most renters still have the option to turn down the thermostat though, so whilst the ability to respond to incentives may be dampened, they should still have an effect. Admittedly, there are some rentals with bills included. But if gas was very expensive, few landlords would offer it.

> Most renters still have the option to turn down the thermostat though

I can’t tell if this is serious? You’re saying that the gov policy’s effect should be the common man freezing during winter? I don’t know anyone who runs their heating for shits and giggles.

> Admittedly, there are some rentals with bills included

I’ve seen very few (<10%) of rentals that come with utilities included. It wouldn’t make sense either, I’d rather pay for my usage. Not the upper limit of usage that the landlord is accounting for while determining rent.

Re: Why Carbon Taxes Work

#27

Post by ajuc »

yunohn wrote: post #22
roenxi wrote: post #17

Earlier quoted context omitted.

> For example, look at what happened in France with the fuel tax rise which lead to the “gilets jaunes” protests. I think people actually underestimate the effect of a carbon tax. The tax has to be extreme enough that it changes behaviour in the real wold, and something like 70-80% of energy comes from fossil fuels. If people aren't near to rioting because their lifestyle is being forced to change then the tax isn't…

I understand your viewpoint, but if you tax the common man such that they are unable to travel to work in the only car they can afford - the world will stop functioning. I often wonder why the elites don’t understand what their mistreatment of the proletariat will lead to…

If you don't stop global warming - it's not going to be pretty either. And taxing rich, while a good idea - won't solve the problem, because there's so few of them that it won't matter, nevermind how exuberant they CO2 emissions are.

So basically choose your poison or hope for magic tech to appear soon.

Re: Why Carbon Taxes Work

#29

Post by tonyedgecombe »

wcoenen wrote: post #18
lovemenot wrote: post #7

Global warming is a global problem. While carbon tax would be levied locally, creating incentives to just shift production to low or no tax locations. Just as harmonisation over Cororate Tax is finally emerging, similar cross-border agreements should be needed for a Carbon Tax.

Which is why mechanisms like carbon tariffs on imports are being designed. https://en.wikipedia.org/wiki/Carbon_Border_Adjustment_Mecha...

That seems like it could become very messy and open to fraud. The nice thing about carbon tariffs within borders is they would be trivial to implement because there are relatively few targets (oil wells, coal mines, etc).

Re: Why Carbon Taxes Work

#30

Post by dougweltman »

That a carbon tax is a source of information about the highest leverage areas we can change is a great framing.

Unfortunately, the main barrier to implementing a carbon tax is how we treat imports, which is the key to getting the whole thing to work. Failing to solve this means importers deindustrialize in favor of countries with more lenient carbon pricing regimes.

“Do I have to spell it out for you? Just implement a border-adjusted carbon tax!” they’ll retort: “that will cause exporters to harmonize their standards with the markets they sell to.”

I can see how this works for plastics (producing PTFE in would have a carbon tax of $2/ton), but what about complex, assembled goods like cars with complex supply chains, like a Hyundai assembled in S Korea with parts from more than 60 countries? The Americans need to trust the S Koreans to tax that, and the S Koreans need to trust the Chinese, Indians, Canadians and Japanese to be implementing theirs properly. Every major component in an assembled good becomes a problem.

Carbon tax works when all countries implement it, but what’s the equilibrium given current starting conditions?

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