[extropy-chat] Climate skepticism patterns

Hal Finney hal at finney.org
Thu Jun 8 21:08:36 UTC 2006


Robin writes:
> At 01:58 PM 6/8/2006, Hal Finney wrote:
> > From what I can see, emissions reductions do not make economic sense
> >at this time.
>
> Perhaps, but it seems to at least make sense to tax carbon at something
> like its estimated externality cost on others.  A $14/tC tax might be a lot
> less that some people want, an a zero tax might be better than those large
> taxes people want, but the $14 tax would be better than either.  Then
> you'd want to pay people who create those substitutes for reductions at
> that same level, and if they come up with stuff great, if not fine too.

I see two problems with this.  One is the institutional difficulties
in setting up this worldwide tax collection mechanism.  Probably Kyoto
is the closest model, and it is a good example of what happens to
such efforts after passing through the maw of a government committee.
It is full of exceptions and subsidies that make it highly inefficient
at even the modest emission reductions it aims to achieve.  While a
uniform carbon tax would be much better, it is questionable whether our
present global institutions can come up with anything better than Kyoto.
There is always the risk that China and India will prefer to raise their
standard of living today and fix the problem tomorrow, hence there is
enormous political pressure to craft exceptions and special cases.

Nordhaus talks at the link below about the inefficiency of Kyoto.
He agrees with the preferability of a straight carbon tax, but my concern
is that if we limit ourselves to what is politically practical, we will
probably end up once again with something that does more harm than good:
http://www.econ.yale.edu/~nordhaus/homepage/nordhaus_science_110901.pdf

The second problem is that there will probably be ways of solving the
problem for much less than $14/tC, hence charging people that much today
is inefficient.  Wouldn't it make more sense to charge people today based
on the expected cost of the cleanup effort, rather than the expected
damage if cleanup never occurs?  Teller claims that a ONE-TIME set-aside
today of 1.74 billion dollars would generate enough interest in 50 years
to indefinitely fund a stratospheric shield.  Compare to about $60 billion
per year in taxes if we used the $14/tC figure (based on current rates
of carbon accumulation in the atmosphere of 4 Gt/year).  This suggests
that $14/tC could be hundreds of times larger than is necessary.

http://www.llnl.gov/global-warm/148012.pdf

Hal



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