Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Their points claims that Krugman greatly underestimated the price increase impact of a tax on CO2, when he did no such thing.

The studies he quotes may be wrong, but if there are externalities gains that are greater than tax * consumption, then the net result is a gain. That the price impact would be spread over everything we use rather than a single item makes no difference to its macroeconomic value. I think they are doing double counting without realising it.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Fri Sep 26th, 2014 at 12:59:39 PM EST
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If wind turbines and solar panels are sufficiently well made to outlast the time it takes for their output to repay the cost of construction then they serve to cap the cost of energy, as they have no fuel cost, only a maintenance cost. This would be even more impactful were they to be built with zero or near zero interest rate as government policy. With zero interest rate financing there might well be a positive EROEI after ten years. From a financial point of view they would be huge generators of free cash after they had repaid the cost of fabrication and installation.

Then part of that surplus could be used, conceptually, to invest in carbon negative processes, but it also would make the country possessing such infrastructure very competitive against countries still using 'cheap' fossil carbon energy - totally aside from considerations about contributions to saving the ecosystem. After the EU, the UK or the USA had built out their own energy infrastructure sufficiently the same production lines could continue to be used to provide the same equipment to countries unable to build such equipment - both energy generating and carbon sequestering processes. Continue until the possibility of a new ice age appears.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Sep 28th, 2014 at 11:08:01 AM EST
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