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High oil prices? Tax cars & jet fuel!

by DoDo Thu May 29th, 2008 at 06:08:18 AM EST

This is pretty much the common wisdom on ET. But just the opposite of what we expect mainstream politicians to dare nowadays: they rather advocate tax cuts à la Sarko.

However, Wolfgang Tiefensee (SPD), Germany's Federal Minister for Transport, Construction and City Development just did the 'unthinkable':

  1. He called for an EU-wide harmonisation of car taxes, with rates set proportionally to CO2 emissions - so that "every EU citizen makes the same contribution to climate protection"!

  2. He also called for a tax on kerosene, saying, "there is no reason to continue with tax benefits for air traffic"!


The occasion: the International Transport Forum 2008 started today in Leipzig (the city whose major Tiefensee used to be), with focus on climate change.

Unfortunately, the full version of the interview is so far only available to readers of the paper version of today's Leipziger Volkszeitung, so I can't dig into the nuances. Other papers only note that he doesn't think an EU-only jet fuel tax would be right, because it would hurt the competivity of European airliners (how so, I ask: do other airliners not have refuel when leaving our airports?...)

So I will make a sceptical note only on a related issue. In another interview on the occasion of the World Traffic Forum, with Deutschlandradio, Tiefensee warned of further increase in road transport well beyond old projections, if no further measures to move cargo from road to rail are undertaken.

Nice words, but when just five days earlier, he was waxing lyrical about citizen's free ride over another six-lane highway section he opened in Berlin, one wonders: are mainstream politicians totally clueless about the effect of infrastructure improvements in one sector on traffic volume, or just cynical when speaking about climate protection?

Display:
Now, whatever my reservations about Tiefensee's seriousness, just the fact that a high-profile politician can consider such demands opportune, should be pushed as example to follow to every politician across the world afraid of bringing it up.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Wed May 28th, 2008 at 12:41:58 PM EST
Since the Swedish christian democrats dropped their support for lowering gas taxes, we have the wondrous situation where no party want to lower these extremely unpopular taxes! If that isn't an inspiring lack of populism, I don't know what is.

On the other hand, the PM has mentioned that with the current rise in oil prices, there might be no need to at this juncture raise the CO2 tax (instituted in 1990). On the other hand, the high oil price has increased government tax revenue, so he said there might be more income tax cuts for low and medium income earnes.

It seems someone still knows Keynesian economics... ;)

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Wed May 28th, 2008 at 02:32:52 PM EST
[ Parent ]
one wonders: are mainstream politicians totally clueless about the effect of infrastructure improvements in one sector on traffic volume, or just cynical when speaking about climate protection?
Making connections between two different events, actions or pieces or information is a rare skill indeed.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Carrie (migeru at eurotrib dot com) on Wed May 28th, 2008 at 06:21:58 PM EST
I suspect that it comes from the particular mindset you need to be a succesful politician. I don't think projecting forward dispassionately to a range of consequences, both preffered and is a strong part of their character.

They're seagull managers (fly around, shit on everything, fly off) rather than people who ever have to live with the consequences of activities (beyond the inconvenience of electoral defeat).

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Thu May 29th, 2008 at 09:55:20 AM EST
[ Parent ]
This suggestions are not really new and the reasonable ones won't make it to come through, maybe the kerosene tax, but EU wide harmonisation of gas taxes?

The taxing of cars proportionally to CO2 emissions is wonderful if it would mean taxation proportional to CO2 emissions, but that is of course not what he really means. Fuel taxes are proportional to CO2 emission. Car taxes are never. A gas guzzler driven 25 km a week emits much much less CO2 than a more reasonable car driven 500 km a week. Unfortunately this rubbish is the only thing which Tiefensee really can do.

But the real issue are not gas taxes. The real issue is the lack of taxes on oil consumption outside the traffic sector. Just recently I read, that a representative of the German real estate business said, oil prices are not yet high enough that it would be a good investment to reinsulate older houses. But here clearly the 'ecological movement' has a strong bias against cars. Other waste is doesn't matter.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Thu May 29th, 2008 at 12:28:37 PM EST
I can't speak to Tiefensee's depth or motives, but his proposals are a halting step forward, which is better than most.  I can say he does have a handle on renewable technologies, for i was the keynote speaker at a renewable energy conference he sponsored in Leipzig.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Thu May 29th, 2008 at 12:33:40 PM EST
[ Parent ]
I do think Tiefensee wants to help the environment (in general I assume the good will of any politician unless it becomes impossible to imagine what honorable motive an action could have), but I don't think that he proposes the best possible ways to do it. I think environmental policy should be efficient and targeted on the spot. When I want CO2 emissions to reduce, I tax the emission of CO2, not something which is just mildly correlated with CO2 emissions. If I want people to use less oil, I tax oil, independent of what people are doing with it. If I want something else, too, then I should tell that, too, and accept that the proposal is attacked on the basis of disagreement to these other goals.

The problem of Tiefensee is, that he is caught in traditional environmentalists thinking and this means often ignorance to any side effects outside a specific milieu. But these inefficient suggestions make normal people to think they have done a lot (or enough) for the environment, while the society as whole only creeps to sustainability. And this plays a role. Most people do not evaluate the effects of their actions on the environment for every single action. So the feeling of having done enough, has a lot of impact.

And with regard to his harmonsation dreams, that is really not new. New would be, if a country with lower gas taxes than all his neighbours would propose harmonisation, not when a country that has higher taxes (and therefore loses tax revenue from 'fuel tourism') proposes it. I would be seriously surprised if this becomes some kind of EU legislation.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Thu May 29th, 2008 at 01:15:01 PM EST
[ Parent ]
In Denmark there seems to be two schools of thought among "traditional environmentalists," to use your term. One is to tax and ban based on environmental impact and then separately compensate the lower incomes if the tax or ban is regressive in nature. The other school is to tax and ban primarily stuff based on its pollution relative to its usefulness - which is usually progressive in nature, given that the people who consume most useless crap are, all other things being equal, usually the rich.

Under the second scheme, taxing cars and car fuel higher than heating is perfectly reasonable (for personal vehicles, at least). Cars, after all, are completely unnecessary for at least half the adult population - namely the half that lives in areas with a population density greater than roughly 250 people pr. square km.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu May 29th, 2008 at 01:35:55 PM EST
[ Parent ]
In my opinion it is a very bad thing to tell other people what they have to take as useless crap and what as useful stuff.

And your argument is bad anyhow. What with the people who do not live in such dense populated areas? Why is heating reasonable, when it is possible to reinsulate houses in a way, that they don't need heating at all?
And of course you can live in a huge old villa, which is luxury and needs a lot of heating. There is no reason at all to assume that heating in general can't be as much luxury as car driving.
Therefore the first approach, to tax on environmental impact and compensate for regressivness is much better.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Thu May 29th, 2008 at 02:11:30 PM EST
[ Parent ]
Well, yes, telling people what is useless crap and what is not is not a good way of doing environmental policy. But the problem with the tax-and-compensate policy is that right-wing politicians are all too often happy to play ball on the tax part (because green taxes are usually regressive), but not so much on the compensate part (because the compensation schemes are, naturally, progressive).

So if you go by the former route, you will get better environment (compared to doing nothing) and less inequality. If you go by the latter route, but stop short of adequately compensating the poor who are regressively taxed, you get better environment but bigger inequality, which you will then have to redistribute your way out of.

In the ideal world, where the quid pro quo of the latter policy was clearly understood and accepted by all political actors, that would not be a problem. But in the real world, where we have to fight tooth and nail for any redistribution at all...

As for your counter-examples, there is no reason why car taxes cannot be tied to the location of the car through, for example, fees to enter or park in densely populated areas. Well, that and the fact that there is certainly a case to be made that population densities insufficient to support a rail line are insufficient, full stop.

Similarly, if one were to institute a tax on heating fuel - and an inheritance tax, a wealth tax and a progressive income tax to restore progressivity to the tax system - and use the proceeds to fund re-insulation of houses, then I would have no objection. But in the real world, what is usually proposed is simply heating fuel taxes, full stop, which is inherently regressive. Even worse, it hits tenants worse than home-owners, because the landlord has little financial incentive to improve the insulation (the tenant usually pays the heating bill, after all).

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu May 29th, 2008 at 02:58:32 PM EST
[ Parent ]
Actually fees for entering a zone are something different, if the zone is not too big.

And if living in the countryside would be insufficient, it would turn out faster so, with a fuel tax, compared with a car tax. A car tax hits more people, e.g. driving once a week for buying stuff you can't get locally than long range everyday drivers compared with a fuel tax.

And with regard to political feasability of some progressive countermeasure to regressivity of fuel tax, I would say that a group in the position to implement a tax should as well be in the position to implement a benefit. Either you have legislative majority or you have not. My favourite by-measure would be to pay a unconditional basic income of the fuel tax revenue. Of course still some relatively poor people, e.g. long range commuters will be hit, but in the end one wants those people who use more than the average to pay for what they are doing.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Thu May 29th, 2008 at 03:57:53 PM EST
[ Parent ]
Yes, on the basis of environmental concerns, a fuel tax is superior to a car tax. No argument from me on that. I would much prefer to shift taxes from cars to fuel on an environmental basis. (Let's leave aside other externalities of a car such as congestion, which may justify taxing big cars purely because they are big.)

I would point out, however, that such fuel-taxes will have to be Unionwide, whereas car taxes can be implemented locally: In geographically small countries, fuel taxes can be evaded by "fuel tourism" in much the same way wealth taxes can be evaded by Swiss bank accounts. Cars, on the other hand, can be taxed locally, because cars have to be registered locally in order to be driven legally.

As for the political feasibility of compensating vs. taxing; in theory you are right. And in theory, theory and practise are the same. But take note of the most recent tax downsizings in Denmark: Taxes were downsized for the rich and richer, and the part of the tax downsizing that was financed at all was financed by green taxes. Now, I have nothing against green taxes, but using the income from green taxes to pay for tax downsizings that mainly benefit rich fatcats, that I do have a problem with.

(In the Danish example, a median-income family got precisely zero net benefit from the tax downsizing scheme - I'll leave it as an exercise to the reader to extrapolate downwards in the income distribution.)

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat May 31st, 2008 at 03:54:51 AM EST
[ Parent ]
It's funny how the areas where oil use is actually the most useful and adds the most value and where there is absolutely hardest to find substitutes, cars and chemical factories, are the things which have been the most demonised by the "environmentalists". And of course, nuclear, but that doesn't really matter here.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu May 29th, 2008 at 12:38:01 PM EST
[ Parent ]
Oil use adds much value to nuclear? It obviously adds value to cars, but the value-added of cars to the economy at a macro level is questionable at current levels. We would be better off with a lower volume of traffic (a big share of car drivers included).
by nanne (zwaerdenmaecker@gmail.com) on Thu May 29th, 2008 at 12:53:44 PM EST
[ Parent ]
I explicity said nuclear was not included here. It doesn't have any direct link with oil. I mean that the things that have been demonised are the things where oil is really important, and on top that nuclear has also been demonised, in spite of not having a direct link to oil anymore.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu May 29th, 2008 at 01:38:01 PM EST
[ Parent ]
OK. Your argument is still odd. Oil might add a lot of value to cars and the chemical industry. But environmentalists can rely on good arguments against the added value of cars to the economy (at the level they are driven in western countries), which I'd guess would be your bottom line.

(I don't know about the case WRT the chemical industry)

by nanne (zwaerdenmaecker@gmail.com) on Thu May 29th, 2008 at 01:45:43 PM EST
[ Parent ]
Well, I am not so sure that I agree with you that cars are where burning fossil fuels adds the most value (nor do I agree that they are the most criticised... coal power comes to mind as a likely candidate). I for one can do without a car, but I would not like living through a Danish winter without central heating.

Chemical factories are criticised for other reasons: Mainly that a lot of them churn out substances that have not been rigorously tested for safety and efficacy.

As for nuclear plants, that may well look silly today, where the waste disposal problems have been if not solved then at least substantially mitigated, but do you really think that that progress would have happened if not for a strong lobby against "burn and dump" nuclear plants?

If you do, I invite you to take a look at the hardrock mining industry, where the waste disposal problems have simple technical solutions... But these are only implemented when substantial political pressure is applied. And if after examining that exhibit, you still think that substantial progress would have been made in nuclear waste management and disposal if the industry had been left to its own devices, then I have some $100 oil futures I want to sell.

And, of course, opposition to nuclear power might look less silly when you consider the fact that proliferation of peaceful nuclear technology makes it easier for countries to expand into - shall we say - less benign uses of the atom.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu May 29th, 2008 at 12:55:32 PM EST
[ Parent ]
Coal power is often critisised, but no consequences are drawn.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers
by Martin (weiser.mensch(at)googlemail.com) on Thu May 29th, 2008 at 02:13:51 PM EST
[ Parent ]
Really? No consequences? Then I suppose all those windmills dotting the landscape arrived there by the forces of the market, unfettered by any political aims to move the generation of electricity away from coal?

</snark>

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu May 29th, 2008 at 03:05:55 PM EST
[ Parent ]
From the German perspective he is right. The last Government decided to fade out nuclear power not coal. And German Environmentalists (and Austrian even more so) are rather focused on nuclear energy.
by generic on Thu May 29th, 2008 at 03:34:59 PM EST
[ Parent ]
BUND für Umwelt und Naturschutz Deutschland: Klima & Energie (Main German environmental NGO; part of Friends of the Earth International)
Mehr als 25 neue Kohlekraftwerke sollen in den nächsten Jahren in Deutschland gebaut werden. Allen voran wollen RWE, Vattenfall, e.on und EnBW wieder in die Technik von gestern investieren. Will Deutschland seine Klimaziele erreichen, darf es keine neuen Kohlekraftwerke geben.

Kampf gegen Kohle (Campaign of the German Green Party)

Kohlekraftwerke sind der Klimakiller Nr. 1. Dennoch planen Vattenfall, RWE & Co. mehr als 30 neue Kohlekraftwerke allein in Deutschland. Gruenes-klima.de informiert und bündelt den bundesweiten Widerstand. Hilf auch Du mit und stoppe die Klimakiller. In der Rubrik "Kampf gegen Kohle" findest du die aktuellsten Informationen zum Widerstand, eine interaktive Online-Karte, alle Ansprechpartner vor Ort und vieles mehr.

Being proper greens, the German greens oppose both nuclear and coal. I have to say that the intensity of the anti-coal sentiment has increased a lot since the end of the red-green government. But even in that government, it was the SPD (especially Clement and the economy ministry) that was on the side of coal, not the greens.
by nanne (zwaerdenmaecker@gmail.com) on Thu May 29th, 2008 at 04:43:24 PM EST
[ Parent ]
And that is just the reason I voiced my loathing of Clement so often on ET.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Thu May 29th, 2008 at 04:46:06 PM EST
[ Parent ]
Let's see how many of the coal plants are really build in the end. I bet any time that not more than 5 of the more than 25 planned plants will be stopped. And then they are runnung for maybe 60 years.
But if there is any left party involved in the next federal gov, then nuclear is dead in Germany.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers
by Martin (weiser.mensch(at)googlemail.com) on Thu May 29th, 2008 at 05:12:31 PM EST
[ Parent ]
Let's see. I bet just the opposite: for long I thought that these high numbers of 25, 40 coal power plants are wishful thinking on purpose (you push up market value by predicting expansion, and you gather support for the few projects you actually realise). I expect more news like this  and this and this. And the Greens (as opposed to SPD NRW) are active protesting wherever there is a project.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Thu May 29th, 2008 at 06:14:07 PM EST
[ Parent ]
The vast German power market, controlled by mindless politicians is the wet dream of Swedish power executives. Vattenfall would so love to build half a dozen big reactors in southerns Sweden for the sole use of exporting power to Germany.

The viability of nuclear in Germany doesn't rest exclusively in the hands of mindless German politicians, but also in the hands of mindless Swedish politicians. ;)

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Fri May 30th, 2008 at 02:07:27 AM EST
[ Parent ]
And German Environmentalists (and Austrian even more so) are rather focused on nuclear energy.

Garzweiler II was a defeat, but it was something, I'd say.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu May 29th, 2008 at 04:47:22 PM EST
[ Parent ]
It is a question of proportion. If one compares the cost of a CO2 emission certificate for the industry with the taxes on gas for driving minus a share for street infrastructure, traffic police,... then you still end up with much higher taxation of gas than of coal.

Ok, one could argue that windmill and solar subsidies are 'anti-coal', but I think that big industrial power consumers still can make a deal with a power companies to get electricity essentially at the price as it comes from a coal fired plant, so I wouldn't directly count wind as anti-coal. And nuclear... There were really enough (good) discussions about nuclear in this forum...

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Thu May 29th, 2008 at 04:07:53 PM EST
[ Parent ]
I agree on one thing: the exemptions to "energy-intensive industries" from the Ökosteuer were a shame; but thank the Genosse der Bosse. This resulted in the nice situation that the German Railways pays the ecology tax for its electricity, while E.ON et al don't pay it for their coal power plants.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Thu May 29th, 2008 at 04:58:01 PM EST
[ Parent ]
That is totally ass-backwards.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Carrie (migeru at eurotrib dot com) on Thu May 29th, 2008 at 05:22:52 PM EST
[ Parent ]
Actually !x#&@! Clement, then head of Northrhine-Westphalias state, also had his hand in it. (Just found an old article about him threatening to kill the ecology tax in the Bundesrat, the upper house of the federal parliament that consists of representastives of satate governments.)

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Thu May 29th, 2008 at 06:03:39 PM EST
[ Parent ]
One consequence of activism against coal that you may be too young to remember was the spread of smoke filters in Germany. Presently, the top issue is fine particulate matter, which would need more expensive smoke filters (in power plants - open-cast mines are another thing), so the companies continue to resist. I note Greenpeace, much dismissed by our lovely technocrats, did some actions on that front.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Thu May 29th, 2008 at 05:02:41 PM EST
[ Parent ]
"I for one can do without a car, but I would not like living through a Danish winter without central heating."

But why should others subsidize your choice to live in a place where it's cold?

Furthermore, if I want to have an old car in my garage, which I only drive a few dozen miles a year, why should I have to pay a tax based on its lousy fuel economy?

It seems to me that the taxation system should try to account for externalities like pollution and try to stay away from penalties based purely on subjective bias.

by asdf on Thu May 29th, 2008 at 04:00:44 PM EST
[ Parent ]
Furthermore, if I want to have an old car in my garage, which I only drive a few dozen miles a year, why should I have to pay a tax based on its lousy fuel economy?

Well duh, because whatever the number of miles you drive a year, your emissions are less if you drive a more fuel efficient car. Are we to reduce CO2 emissions or just travel volumes?

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu May 29th, 2008 at 04:44:49 PM EST
[ Parent ]
But that is taken care of by taxing fuel.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Carrie (migeru at eurotrib dot com) on Thu May 29th, 2008 at 05:18:47 PM EST
[ Parent ]
Yes. As long as we assume people as rational economic actors that makes decisions based on cost to won and not just cost to buy. If we on the other hand assume that people make their car purchases based on cost to buy, then placing some of the later societal costs for high CO2 emissions on the buying price makes sense.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Thu May 29th, 2008 at 05:35:51 PM EST
[ Parent ]
I'm still not convinced. If you want to buy an SUV to park it in your driveway and keep it all clean and shiny like a museum piece you should only pay taxes on the impact of building it.

If fuel taxes make you later decide it was a bad idea to buy the car because you didn't take into account the cost to own but only the cost to buy you can scrap the car and you've already paid tax on the environmental impact of building it.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Carrie (migeru at eurotrib dot com) on Thu May 29th, 2008 at 05:44:53 PM EST
[ Parent ]
And if you want to buy some barrels of gas to put in your driveway as a work of art, should you still be taxed on those?

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Thu May 29th, 2008 at 05:50:06 PM EST
[ Parent ]
That's just silly.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri May 30th, 2008 at 02:01:49 AM EST
[ Parent ]
You obviously must be refering to the ongoing debate about what art is, wtih special reference to the Oil Drum Art Movement. I rest my argument on the esteemed professor Richard Shustermans approach to oil drums as art:

"Were those transfigured drum cans art? Though clearly not part of the institutional artworld, they were just as obviously part of an installation work of deliberate design aimed at providing experiences that could be described as meaningful, thought-provoking, and aesthetically provocative. And the deliberative design of this installation suggests that it was obviously "about something" (a condition Danto deems necessary for being art).

I think a pragmatist aesthetic could permit this possibility"

And thus I have taken a stand in that debate too. (No, not really, I just googled up some oil drums as art. This and this was the first thing I found. I doubt either of their drums are filled, but it would not make it less arty if they were.)

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri May 30th, 2008 at 05:04:22 AM EST
[ Parent ]
I refuse to agree that installation art is even art and as we have concluded earlier, my views on architecture and art are close to those of Italian fascists. ;)

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri May 30th, 2008 at 05:41:25 AM EST
[ Parent ]
What, Stonehenge is not art?

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Carrie (migeru at eurotrib dot com) on Fri May 30th, 2008 at 05:45:29 AM EST
[ Parent ]
I thought it was an almanac?

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri May 30th, 2008 at 06:10:38 AM EST
[ Parent ]
Among other things.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Carrie (migeru at eurotrib dot com) on Fri May 30th, 2008 at 06:15:24 AM EST
[ Parent ]
Car purchases, especially a new car, are rather big investments. I think people do really think about the future costs. One can enforce, that every seller of a car has to declare the amount of gas a car needs per 100km or something like that, so that people really know what they are buying, but I think this anyhow already now the case, too.
Then what is a rational decision? Is it a rational decision to go to the cinema on saturday evening? Sure. And in the same way it is a rational decision to buy a car, which has more power than neccessary. When the society decides we can emit the amount X of CO2 next year, then it is the usual way to let people buy shares of this emission rights from the state (that is equicalent to fuel tax, which is readjusted somehow to match the overall target). It is market economy to assume that those who are willing to pay the highest price, are those who will have the most usage.
 

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers
by Martin (weiser.mensch(at)googlemail.com) on Thu May 29th, 2008 at 05:57:38 PM EST
[ Parent ]
No, the market economy assumes that those willing to pay the most are those who have the most money.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Carrie (migeru at eurotrib dot com) on Thu May 29th, 2008 at 06:01:12 PM EST
[ Parent ]
That of course plays a role, too. But the idea, that automatically richer people drive bigger cars is not true. There is certainly a correlation, especially in the lower incomes, but this is only on a statistical basis, not on an individual basis. There are people for which a car has a high status symbol charakter, and those for which this is not the case. So some people buy big cars on credit and some richer buy smaller cars of their pocket.
So for making taxes according to what people can afford there are other places, like income tax or direct payments (or wealth tax or whatever you imagine), but taxation around driving should focus on the environmental impact only.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers
by Martin (weiser.mensch(at)googlemail.com) on Thu May 29th, 2008 at 06:14:18 PM EST
[ Parent ]
How do you factor in the large marketplace for second-hand cars? And how about the many "classic" cars I see in my town, which would be considered junk by most economists but are desired by those with a Porsche, or Jeep, or VW, or Cadillac fetish?

I would prefer to more tightly couple the problem and the cost of the problem. If the problem is the burning of oil, then the tax should be applied to that part of the process, not the device that actually does the burning...

by asdf on Thu May 29th, 2008 at 06:10:37 PM EST
[ Parent ]
Was this implied as answer to my comment? Because you seem to want the same as I do.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers
by Martin (weiser.mensch(at)googlemail.com) on Thu May 29th, 2008 at 06:18:04 PM EST
[ Parent ]
Because "deciding" to live in the high temperate latitudes is not a decision so much as an accident of birth. If you want to move everyone out of the those areas, you will have to move a perceptible fraction of the Europe's population (something on the order of 10-20 %, depending on where you draw the line). Not to mention giving up a perceptible fraction of our available arable land.

Upthread, I entered into a discussion of the merits of taxing environmental externalities purely on the basis of their environmental impact vs. taxing based on both environmental and social considerations.

The short version of my stance is that in the ideal world, environmental taxes should serve environmental concerns and redistributive taxes should serve to redistribute the wealth. In the real world, however, there is a realpolitik argument for not making environmental taxes too regressive and not hitting necessary subsistence goods too hard.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat May 31st, 2008 at 03:39:17 AM EST
[ Parent ]
Martin:

The taxing of cars proportionally to CO2 emissions is wonderful if it would mean taxation proportional to CO2 emissions, but that is of course not what he really means. Fuel taxes are proportional to CO2 emission. Car taxes are never. A gas guzzler driven 25 km a week emits much much less CO2 than a more reasonable car driven 500 km a week. Unfortunately this rubbish is the only thing which Tiefensee really can do.


It works on a statistical level, and it's not as if the measure is regressive (when applied to new cars only). So, big deal if some individuals are over-taxed because of it. If they can buy a Cayenne... Cars are under-taxed in Germany anyway. This in turn leads to pre-tax prices being highest in all of the EU (IIRC).
But the real issue are not gas taxes. The real issue is the lack of taxes on oil consumption outside the traffic sector. Just recently I read, that a representative of the German real estate business said, oil prices are not yet high enough that it would be a good investment to reinsulate older houses. But here clearly the 'ecological movement' has a strong bias against cars. Other waste is doesn't matter.

Nonsense. Most gasoline is used for driving cars and trucks, approximately two-thirds of the total. The gasoline used in homes is negligible in Germany, as most houses have natural gas or electric heating.
by nanne (zwaerdenmaecker@gmail.com) on Thu May 29th, 2008 at 01:05:28 PM EST
[ Parent ]
Negligible? Electric heating is less than half of oil heating as recently as 2003 link
page 76.
And what argument speaks for taxing oil highly but neither nat gas nor coal? Why is one third a non-issue, when two thirds are such a big problem?

And what kind of additional sales taxes are there in other countries?

The measure is not at all regressive, it is progressive, although still selective. And that is a very big problem.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Thu May 29th, 2008 at 02:04:50 PM EST
[ Parent ]
I clearly stated 'natural gas or electric'. Which is obviously true (58%, and if you see that Fernwärme is produced by power plants, 64%). Energy for heating is not a full third of what oil is being used for, it's split with the other uses (like chemicals). In total the use of oil for households is around 20% of total oil energy consumption and 16% of total oil consumption (for transport, that's 65% and 52%, respectively).

I entirely agree that gas and coal (and to a lesser degree, electricity) should also be taxed. They already are, by the way, to a lower degree. As is mineral oil for heating, see here and here.

So your statement

But the real issue are not gas taxes. The real issue is the lack of taxes on oil consumption outside the traffic sector.
is wrong on all counts.

It is most wrong because these are all real issues. And the 'ecological movement' is addressing all of these issues. At least the weatherisation of homes is something I hear about a lot, even from the current German government.

by nanne (zwaerdenmaecker@gmail.com) on Thu May 29th, 2008 at 04:28:53 PM EST
[ Parent ]
Not to mention that

gas and coal (and to a lesser degree, electricity) should also be taxed. They already are, by the way, to a lower degree.

All of these are done by the Ökosteuer, which the CDU used to oppose strenuously.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu May 29th, 2008 at 04:42:56 PM EST
[ Parent ]
Maybe I was unclear what I meant, I didn't mean, that gas taxes are in general irrelevant, but that this is not the place where currently change is needed.

The fact, that the gov speaks about houses is no contradiction to that, but a support. In general I'm not unhappy with the gov's environmental policies, I was talking only about what Mr. Tiefensee said. And it is of course no support for your statement that the 'ecological movement' is addressing all the issues, as the current gov doesn't contain people I would count as part of that, while the previous gov did contain such people, and obviously did not deal with the house insulation issues in a way, that only small changes would be enough now.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Thu May 29th, 2008 at 04:46:23 PM EST
[ Parent ]
obviously did not deal with the house insulation issues

As I write downthread, the current programme started in 2001... and all four ministers of the responsible ministry during Schröder's time (Müntefering, Klimmt, Bodewig, Stolpe) were SPD ministers, so funny thing you think the Greens should have acted.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu May 29th, 2008 at 04:52:10 PM EST
[ Parent ]
Well, if it is an important issue, I think the greens should have acted on that. If you think that is funny, then you certainly will be happy if I put the responisbility of the likely Bahn privatisation mostly on the SPD, because they have currently that ressort?

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers
by Martin (weiser.mensch(at)googlemail.com) on Thu May 29th, 2008 at 05:00:45 PM EST
[ Parent ]
Well, if it is an important issue, I think the greens should have acted on that

I repeat the obvious: the Greens didn't have the ministry to act with.  It was nice enough to have Trittin battle Clement over the responsibility for energy policy, with Trittin controlling the feed-in law. Pressure is another thing, and there was pressure and there was effect - I repeat that that programme started in 2001 -, though it is one thing when the pressure comes from the senior coalition partner and another when it is a small one.

will be happy if I put the responisbility of the likely Bahn privatisation mostly on the SPD

Happy I won't be, but they are deep in responsibility.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu May 29th, 2008 at 05:07:20 PM EST
[ Parent ]
Martin:
And it is of course no support for your statement that the 'ecological movement' is addressing all the issues, as the current gov doesn't contain people I would count as part of that, while the previous gov did contain such people, and obviously did not deal with the house insulation issues in a way, that only small changes would be enough now.

You are really stretching it when you want to suggest that the greens did not want to do more in the Schröder cabinet than what was decided back then (the current programme, as DoDo states). Anyway, this is from their current (awfully titled) 'Energie 2.0 - Die Grünen Maßnahmen bis 2020'.
Gebäudesanierungspaket
  • Verschärfung der Energieeinsparverordnung (EnEV)
  • Energieausweis für Gebäude
  • KfW-Gebäudesanierungsprogramm verlässlich ausfinanzieren
  • Förderprogramm der technischen Gebäudeausstattung
  • Steuerliche Abschreibung von Sanierungsmaßnahmen

You can find the detailed proposals in the .pdf
by nanne (zwaerdenmaecker@gmail.com) on Thu May 29th, 2008 at 05:26:22 PM EST
[ Parent ]
maybe the kerosene tax, but EU wide harmonisation of gas taxes?

I presume you meant car, not gas taxes. I think the opposite: as Tiefensee himself suggests, the idiots won't move on kerosene tax if there is no global move; an EU-wide car tax harmonisation is then more likely.

A gas guzzler driven 25 km a week emits much much less CO2 than a more reasonable car driven 500 km a week.

So what? If you only want to drive 25 km a week, driving a Smart still means less CO2 emissions than driving a H2. These are separate issues. Both fuel taxes targeting absolute emissions and car taxes targeting specific emissions will work towards reduced consumption, and thus I support both.

Just recently I read, that a representative of the German real estate business said, oil prices are not yet high enough that it would be a good investment to reinsulate older houses.

Nice anecdote. However, I recall Germany is a leading country in building insulation, and there were a number of programmes. (I'm now off to watch something on telly, but will look up some sources later tonight.)

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu May 29th, 2008 at 03:14:30 PM EST
[ Parent ]
I didn't have to look for long.

German construction code involves prescriptions on heat insulation since 1978, strengthened successively. In addition, there have been and are subsidies for building renovation, aimed at the 73% of the 17.3 million homes in Germany that were built before. Between 1990 and 2005, despite continuing single family homes expansion especially in the East, these measures led to an overall 13% reduction of CO2 emissions from [heating] homes.

The current program for building insulation is the CO2-Gebäudesanierungsprogramm of the KfW ( = CO2 building renovation program of the Credit Institute for Reconstruction [<-post-WWII origins]). It was started by the Schröder government in 2001, but enhanced in 2006 and 2007. In fact, the responsible ministry is Tiefensee's.

The program isd primarily aimed at homeowners. Budget is presently over a billion annually.  In 2006, €1.5 billion of credit subventions went into credits of €9.6 billion in credits and €11 billion in investments to renovate 265,000 homes. (If you do the calculation, at this rate, it would take half a century to finish with pre-1978 homes. Faster would be better, but already this is respetable; I wonder what other country has something better.)

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu May 29th, 2008 at 04:39:29 PM EST
[ Parent ]
€1.5 billion of credit subventions went into credits of €9.6 billion in credits and €11 billion in investments

...credit subventions went into expenditures of...

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Fri May 30th, 2008 at 01:36:29 AM EST
[ Parent ]
I bring good news folks!

The Federal Reserve Bank of Dallas talking about Peak Oil!

Their conclusion is crazy, but look the title:

Crude Awakening: Behind the Surge in Oil Prices

http://dallasfed.org/research/eclett/2008/el0805.html

It's a steap!

by kukute on Thu May 29th, 2008 at 06:24:14 PM EST
FRB Dallas: Crude Awakening: Behind the Surge in Oil Prices(Economic Letter, May 2008)
Although OPEC's excess capacity has rebounded from its 2005 low, the gains are largely in heavy crude oils that can only be processed in specialized refineries. Those facilities are running full bore, so the added supplies aren't relieving a tight market. The latest evidence also suggests OPEC is now restraining its output.
Aren't they contradicting themselves? They say that the increased production in in heavy crude, where the bottleneck is - at present - the refining capacity. Doesn't that mean that OPEC's increase in spare capacity is not due to voluntary "restraint"?
While some warn that oil production has peaked--or will soon--most industry experts contend that oil resources are plentiful; it just takes time and money to get them out of the ground and into the market.
Can you not agree to both statements? These are not either-or.
So far, new supplies haven't materialized quickly enough to keep up with growth in world demand, largely because various hurdles have slowed their development. Oil resources, for example, are concentrated in countries with state-run oil companies or little economic freedom. Where market signals aren't allowed to work, incentives to boost production may be muted.
How about the possibility that optimal long-term management of finite resources would include not producing full-on in the short term?

The article reads very well, and it discusses both futures and spot markets and the IEA's projections, with a numebr of nice charts that Jerome will like.

Thanks for the pointer.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Carrie (migeru at eurotrib dot com) on Fri May 30th, 2008 at 06:04:51 AM EST
[ Parent ]
Maybe the Dallas FED is part of the legions who don't understand the difference between reserves in the ground and flow rates?

Anyway, I like this graph showing the predictive power of the oil futures market.



Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Fri May 30th, 2008 at 06:09:17 AM EST
[ Parent ]
See A very murky crystal ball. by Colman on Friday May 19th, 2006.

I also like this chart of IEA forecasts.

It almost looks like the IEA was using futures for forecasting.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Carrie (migeru at eurotrib dot com) on Fri May 30th, 2008 at 06:14:46 AM EST
[ Parent ]
That chart looks like a waste of 30 years of energy policy...

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Carrie (migeru at eurotrib dot com) on Fri May 30th, 2008 at 07:39:21 AM EST
[ Parent ]
Precisely.  You nailed it.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Fri May 30th, 2008 at 12:31:26 PM EST
[ Parent ]


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