Why Carbon Taxes Work

>Prices will adjust all the way down the supply chain

Hitting the poorest most, since rise in energy prices has a cumulative effect on everyday spending. Also "adjustments" can very easily lead to shocks if not done carefully. And don't forget, we are talking about it in a highly inflationary environment. To summarize: small mistakes in introducing such policy can easily lead to a sizable civil unrest.

>Use this huge income source as global helicopter money

So effectively you pay back money to people which they additionally spend due to the increased prices. In the best case scenario, additional spending and such UBI may equalize each other, but more realistically I think the former will be bigger than the latter. And I am not even touching the matter of exports becoming less competitive on global markets against countries which do not implement such policies. So I don't think that most people magically will be able to invest into green projects en masse.

Yes, eventually everything will stabilize and we will have an economy with properly taxed carbon externalities, but my point is that it's very easy to make mistakes on this path with very drastic consequences. And I would advice against magic hand-wavy thinking.

I'm not too versed in the terminology, but my intent with 'offset' was to mean e.g. planting X amount of trees to counter the exhaust of a long-haul flight (or other such activities which can't easily be decarbonised)

I agree that the wood->gas stove example creates perverse incentives. It can certainly be a good investment, but the costs/risks/rewards need to be distributed to the appropriate stakeholders. In this example, I could imagine a setup like:

- Country levies a flat tax on carbon emissions

- Country pays out a flat/progressive dividend, to prevent the carbon tax making the poor worse off

- We can imagine the above balance out, such that person A with a wood-burning stove doesn't notice any cost difference

- Person A now has an incentive to switch to a gas-powered stove (reducing their tax without affecting their dividend)

- Person A can purchase such a gas-burning stove using a loan, paid for by their dividend saving (with some dividend left over to incentivise the switch)

Such a setup would be essentially the same as giving away gas-burning stoves, but the incentive structure is different: the 'potential future emissions' question has to be answered by the people who stand to gain. In the above example, Person A knows how much they spend on wood fuel (including tax); they decide whether a particular gas-stove loan is worth taking; and they gain the dividend savings during and after the loan's repaid.

I'm always iffy when it comes to loans for the most economically vulnerable; but the state can still play a role, by reducing predatory lending practices, etc.

> To actually clean up we would need Direct Air Capture. The cost is 100+x higher than the usual cost of carbon offsets, and supply is very limited.

Whenever I see such schemes I always like to see what happens if we incrementally simplify the setup. For example, we might start with:

- Extract oil -> burn oil -> synthesise carbonate rock (DAC) -> bury carbonate rock

If we use a different DAC system, we can synthesis hydrocarbons instead of carbonate rock:

- Extract oil -> burn oil -> synthesise oil (DAC) -> bury oil

The burning and DAC steps cancel out, saving money and energy:

- Extract oil -> bury oil

The extraction of fossil oil cancels out with the burying of (fossil or synthetic) oil:

- Do nothing

In other words, the simplest, cheapest form of carbon capture is to leave the oil in the ground. In that sense, DAC has two roles:

- Cancel out the burning we've already done

- Decouple energy usage from energy availability, e.g. if some remote location is great for hydro/geothermal/etc., but there's no local demand, we could use that energy for DAC. However, the majority of the time it would be even more efficient to just run electricity cables (e.g. HVDC).

Except who actually pays the tax? Energy consumers, which is anyone who needs electricity or fuel for their household.

You just don't see it in the explanation of why your electric rates went up 50-100%. Or, if it doesn't go up, you start living with brown outs and blackouts like California.

I wasn't talking about Indian (I'll assume we are talking about India) coal plants, who are indeed benefiting from quite a bit of foreign subsidized manufacturing and coal exports by various countries. All I'm saying is that there's no need for any of these countries to subsidize or support that in any way. The Indians of course have some difficult choices to make regarding how they grow their economy and energy sector. Global warming sucks and it is going to hit them hard. There's no need to sugar coat that. We'd like them to stop burning coal and we'd especially like the Australians to stop subsidizing the process of supplying it to them.

Less subsidies would make coal less attractive for India. That kind of is the point. It's only attractive because we subsidize it. They'll need to find cheaper and cleaner solutions. Lots of countries are squeezing the coal sector hard now and it is rapidly disappearing. India will have to adapt. So will China.

The new German government for example intends to move forward the closure of remaining coal plants to 2030 apparently. As I'm writing this, I'm literally looking at one from the train window. It will stop smoking between now and 2030. Lots of wind mills around it. Good riddance.

>while the poor take the bus.

Except in most of America, where the poor have to drive as well, and spend a much higher percentage of their income on cars. Evidently most don't mind or are even supportive, because it supposedly buys them freedom (From what? Disposable income?).