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Neolib orgy: coming out of the closet

by Jerome a Paris Sun Mar 18th, 2007 at 09:14:21 AM EST

In a quite stunning display of brazenness (Emissions curbs must be simple), Martin Wolf explained earlier this week how lefties that worry about global warming are really trying to prevent people from having fun and that their proposed solutions are impractical.

This is partly because many on the climate-change bandwagon do not want to leave the market economy intact. “Are you enjoying yourselves?” seems to be their question. “Let’s find some way of stopping you.” It is also because politicians have a strong desire to tinker piecemeal.

And yet, his proposed solution sounds suspiciously lefty. Maybe it's time to help him do his "coming out"?

As he has done in earlier columns, he says we should worry about global warming, but that there is actually a very simple and easy solution: a global tax on carbon.

Let us concentrate on the big issues: any workable policy system must be global; it must create stable incentives; it must be administratively simple; it must include investment in creation and dissemination of new technologies; and, not least, it must allow people to get on with their lives with as much freedom as possible. Uniform prices on emissions – ideally, through taxation – will do most of this job. Almost everything else is unnecessary or counterproductive.

Hmmm... let's see...

  • uniform. Sounds incompatible with the Martin Wolf's very own ideas, from a column earlier in the same week, about the EU and its ideal of "competition among states embedded in a shared institutional framework." Uniform does not let much room for competition, does it?
  • prices on emissions. Isn't that fundamentally making the point of the climate change bandwagon? That emissions are bad and must be reduced (and "fun" limited)? Doing it via a pricing (or "market") mechanism does not eliminate the fact that a judgement is passed on by public authorities on private activity - a moral judgement, one could say. Of course, at least, rationing by prices penalizes the poor rather than the rich, but it's still rationing. How is that compatible with the pro-market liberalism that wold claims to be saving?
  • ideally through taxation. Wow. A pro-market liberal openly calling for tax increases. Worldwide. Sounds like he doesn't want anyone to "enjoy themselves". It's only fair if all the poor people of the planet share the pain of repairing what we have broken.
  • Who will run this?. Left unsaid in that "simple" solution is who will determine the appropriate level of "uniform" tax to apply, and who gets the money. (Oh - and what it's spent on, too.) A world government maybe? A new global bureaucracy? Or some intergovernmental treaty negotiated by politicians beholden to their domestic constituencies, and forced to "tinker" to find an acceptable compromise? Either way, it will be neither simple, not liberal.

The unavoidable fact remains that the West still spews more carbon per head, by far, than the rest of the world, and thus has to show the way towards a lower carbon energy, by showing the example. It does not matter than 3 billion Chinese and Indians, together, emit more carbon than 500 million Europeans. They will not sacrifice the prospect of increasing prosperity - more cars, more appliances, bigger homes - however flawed that prosperity is measured, however unsustainable it is in the medium term, however much pollution they have to deal with in the meantime, however much inequality it generates, until we show that we are serious about restraining our own much more spendthrift ways.

People I think of as my friends – pro-market liberals – are suspicious of what many of them consider the “man-made climate change hysteria”. They are surely right to note that it is a remarkably convenient banner for opponents of the market economy, be they egalitarians or deep-green environmentalists. This time, they fear, Malthusians and socialists may have a politically successful (albeit, in their view, scientifically false) argument in favour of a long-standing desire to throttle the life out of the free-enterprise economy.

Smearing people that first and foremost call for real "markets" (i.e. that would actually price in the reality of pollution and other externalities currently left to the community to bear; that would actually be competitive markets and not oligopolies; that would actually enforce the sames rules on the biggest players as on others) will not change reality, Mr Wolf. And your own prescriptions sound awfully egalitarian (sorry, 'uniform'), deep green (sorry, "pricing all emissions"), malthusian (climate change is a "concern") and socialist (sorry, "global tax") themselves.

Time to come out, maybe?

...except for the brazenness, here's a video of Sarkozy ignoring whether Al-Qaida is shiite and sunni and saying that their "ethnicity" is irrelevant.

But that's not a gaffe, or a stunning display of incompetence in what is supposedly the "fight of our times", right?

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Sun Mar 18th, 2007 at 09:26:45 AM EST
See a transcript here (in French)

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Mar 18th, 2007 at 09:34:56 AM EST
[ Parent ]
You have to admit it makes perfect sense.  There is a general loss of credibility of the PNAC agenda which is being gradually and in a measured way supported by American MSM.  Even MSM nationally sydicated Imus in the morning routinely makes fun of the latest Al-CIA-duh propaganda pieces.

Pelosi,number three in the succession line still endorses the endless global war on terror with passage of HR 1 and fully supports Gore's version of CO2 causing global warming.  The net result is the destruction of America, through this and multiple other operations currently underway in a full steam ahead fashion.

The next call to rally around government comes not as the result of planes flying into buildings but rather the sky if falling.  Something anyone can rally around, but just like the cottage industry of doubt on the true nature of 911 they really have us over a barrel with global warming.  There simply is not enough time to undo that damage as we will be well into global economic depression by then.

by Lasthorseman on Sun Mar 18th, 2007 at 09:36:22 AM EST

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Mar 18th, 2007 at 04:52:42 PM EST
What chance have you got with all the excitement in Finland?

Emissions trading ain't never going to work, no place, no how. If they thought it WOULD work the big boys would never have gone along with it.

We have to address inputs, not outputs, and if we combine a sodding great levy on non-renewables and apply it as essentially free capital to be invested in renewables and associated infrastructure then that might work.

But we'll have to wait a couple of years until the Dollar/Energy breakdown happens...

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sun Mar 18th, 2007 at 06:09:44 PM EST
[ Parent ]
are inputs into the atmosphere, so it's not completely silly to work on that side.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sun Mar 18th, 2007 at 06:27:37 PM EST
[ Parent ]
It is just hard to comment when the facts are so obvious, and you stated them well.

But there are so many who buy into the many memes that the press spins against Royal; the she is making empty statements, that she can't win against <whoever> that her budget is a debt trap.

I tend to agree with the idea that the polls don't know how to evaluate the base she is building...hopefully. And, the way that Sarko is fighting for LePen's voters, he must be seeing that he is in trouble with the center that he is pretending he has.

Never underestimate their intelligence, always underestimate their knowledge.

Frank Delaney ~ Ireland

by siegestate (siegestate or beyondwarispeace.com) on Sun Mar 18th, 2007 at 07:33:18 PM EST
[ Parent ]
The idea of taxing carbon emissions uniformly throughout the world offers some very interesting possibilities, especially for a major economy like the EU or the USA.  

Please allow me a few comments about how such a tax might be ideally structured.  In principle, the following outline could be applied to any form of air pollution, but will be limited here to carbon.

  1. There could be periodic tax on all carbon emissions proportional to number of carbon atoms emitted by each citizen of the world.  The tax would go into a fund and every citizen of the world would have an equal claim on the fund as compensation for damages.  

  2. An additional local tax might be charged that would vary by population density with the charge being very high in large cities and smaller in rural areas.  The citizens of a city would each have an equal claim on the carbon fund for itself, which would be funded by whoever polluted within the city regardless of where they lived.  (A country, or region, could start with these sorts of internal charges as an example to the internaional community of how to administer the charge).

At present no one is doing anything like this so how could the transition work?  If as a pleasant fantasy the USA or the EU accepted such thinking and moved to the mechanics of implementing such a policy lots of possibilities emerge.  Just speaking of the USA, we  might well "owe" China and India a payment because we emit more carbon than they do.  But they are still increasing their pollution rates and might not readily go along with charging their polluters immediatly anyway.  We could:

  1. Withhold what we "owe" while charging their carbon tax on their imports (proportioned to carbon used in production and transport with best approximations) with the offer that the tax goes away if they want to agree to the same uniform rules.

  2. We might offer to pay the citizens of the "other country" directly if they sign up for the program and express their support for it, while the offer would have a termination date if the other nation didn't adopt compatible policies within a reasonable period of time.  The sign up policies could be carried out through trusted institutions within the "other country" or in the case of really troubled countries new institutions might be created, but that might be a strong move too (Think community banks, or appropriate interest groups).  

A few other observations are in order and are quite important.  If, for the sake of argument, the USA, EU, and Japan all adopted stiff carbon taxes we would collectively greatly alter demand for carbon.  some of this tax would probably be "shifted back" onto the rent of oil bearing lands causing oil to be priced at the well head for less than it might otherwise be priced (although the total cost to use oil might still increase).  Therefore the net increase in production costs within the consuming nations due to the carbon tax would probably not increase at 1:1 with the tax.  In essence the carbon consumers could shift some of the cost back onto the oil producers.  Of course, the cost structures within the consuming countries would be greatly altered with many winners and loser.

Just a few quick thoughts.....

by Geonomist on Mon Mar 19th, 2007 at 12:37:55 AM EST
I lost the idea in the last paragraph.  It sounds like and added loop for oil (and gas) lands, when they would be included in the original plan.

Our knowledge has surpassed our wisdom. -Charu Saxena.
by metavision on Mon Mar 19th, 2007 at 08:10:51 AM EST
[ Parent ]
My point is that if we charge a carbon tax on anyone emitting carbon then carbon users will expierence an increase in costs due to their carbon emitting behavior.  In principle, all other things being equal, the carbon users should have a diminished willingness to buy carbon whether oil, coal, or natural gas.  That diminished willingness to buy carbon should show up in lower bids for commodoties such as oil and natural gas.  Eventually, one might expect the price of carbon commodoties to be lower than they would be otherwise at the point of extraction.  

In other words economic rent would be diminished eventually.  Although the carbon emmisions tax would not be structured explicitly to fall on the economic rent of carbon-based natural resourced, the net effect might be that the collectors of such economic rents would have less to collect.  That is what I mean by a "shifing" of the incidence of the tax.

I am speaking from a purely theoretical perspective and there may be something I am overlooking.  Also, I use the word "eventually" because it might take some time for the effects to work their way through the system, but I am pretty sure that want I am saying would hold in the market.  

by Geonomist on Mon Mar 19th, 2007 at 10:08:48 AM EST
[ Parent ]

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