The Cycle of Global Warming 42

[davefitz]

Outtolunch:

The classic conservative philosphy that you espouse may have been correct in most cases prior to 1900, but it doesn't seem to work in today's modern industrial society, at least in a pure form.

Tax policy has been used to direct industrial or investment decisions at least since 1940 in the US- the primary rationale for most tax deductions used by industry is usually stated as an incentive to invest in certain areas ( although the real reason they were enacted is usually tied to campaign contributions from the affected industry).

Can you support the notion that tax deductions have not had a beneficial effect on home ownership, rental property developement, accessibilty for handicapped persons, investment in heavy machinery, or domestic oil production?

In the rare case where one can unimpeachably predict that there will be known beneficial effect of imposing an add'l tax on ( fill-in the blank), then adding a tax to modify investment or consumption behavior can be supported, even by some conservatives. Basically, a carrot and stick approach- the carrot is the tax deduction ( already common) while the stick is the tax.

 

[epoisses]

Any system of taxation does alter the behavior of those being taxed, whether you like it or not. Even no taxation does (everybody comes to live in your country).

I do think it is a legitimate government role to change the behavior of the people in general, and that specifically taxes are a perfectly legitimate way to achieve that. (How would you otherwise? 3 days of jail for 1 pack of cigarettes bought?)

 

[UcfSE]

The government's job is to provide for the common welfare, but not be parents. Being parents is also not an engineer's job. That seems a bit elitist does it not? Maybe it is time to put our engineering money where our mouth is and run for office and do something instead of type it.

 

[OutToLunch]

"Any system of taxation does alter the behavior of those being taxed, whether you like it or not. Even no taxation does (everybody comes to live in your country)."

You are generalizing too much - the discussion was centered around taxing specific products or services tailored to alter one specific behavior.

I do think it is a legitimate government role to change the behavior of the people in general, and that specifically taxes are a perfectly legitimate way to achieve that. (How would you otherwise? 3 days of jail for 1 pack of cigarettes bought?)"

I see. So what is the behavior du jour that you propose taxing? Today it is smoking - how about we put heavier taxes on hamburgers sold at McDonalds/Burger King/etc tomorrow? Maybe we should start putting heavier taxes on specific food items - cookies, soda, anything with sugar in it? What else do you find socially unacceptable? Do you object to women showing their midriff? Then let's start taxing clothes that bare the midriff. I personally don't think that toes are very attractive - I suggest we increase the tax on open toed sandals by 50%.

It's always easier to try to manipulate behavior through taxes than it is passing a law that prohibits certain behaviors. Most of these laws are failures, anyway (anyone remember prohibition? how are we doing on that War on Drugs?). Backdoor approaches to social engineering are just as wrong as the social engineering is in the first place.

"The classic conservative philosphy that you espouse may have been correct in most cases prior to 1900, but it doesn't seem to work in today's modern industrial society, at least in a pure form."

Just because taxes have been and currently are being used to modify behavior does not make it right or legitimate. This makes no difference whether we are in a more industrialized nation or not.

FairTax, baby!

http://www.fairtax.org

http://fairtax.freestarthost.com/

 

[jmw]

Moltenmetal;
you say the government should listen to engineers.

The problem is they are listenting to someone else and usually do not listen to who you or I might think they should listen to.

Politicians used to listen to their astrologers. These have now been replaced by all manner of gurus talking directly to them or to their significant others.

In the real world you need a few million bucks to put into the campaign funds before you get their attention because however unpopular what you want them to do, they can spend the money to get/manipulate the votes.

If the media and the alarmists have the voters convinced that the sky is green, politicians aren't going to argue because this is their excuse for raising more extra taxes in carbon tax than they spend in tax revenues on windfarms. (they hate hypothecation).

Forget the idea that governments do what the poeple want, if they did we'd all be a lot better of but we be living in the twilight zone.

They do what ever it takes to stay in power and some of them aren't averse to manipulating the law, the media, the facts, the truth etc to make sure this happens.
Politicians generally have an even shorter term view than any one else and it generally doesn't extend beyond the next election (if they still have them).

If pressed, I'd have to say they are part of the problem not the solution.

But if you want an example of just how effective the tax dollar can be, look no further than Norman Belle Geddes' vison (funded by General Motors) which was so influential is sounded the death knell of the railroads and laid the foundations for cities filled with cars. This vision influenced tax dollar spending - not a dollar more on railroads, every dollar on the highways.
So you are right they have the power, but the wisdom is the bit that's always lacking.

JMW

http://www.ViscoAnalyser.com

 

[moltenmetal]

LCruiser: you make the assertion that weaning ourselves from our fossil fuel addiction will necessitate a decrease in our standard of living. In fact, I think if we make the investments to minimize the amount of energy we waste in everything we do, we'll actually increase our "standard of living" as broadly measured. Once you take into account the political, social, health etc. costs of excessive fossil fuel consumption, it's pretty much a no-brainer that reducing the amount of these resources that we currently WASTE will be of benefit. Yes, I freely admit that defining a wasteful use versus a beneficial use is inherently a value judgment, but so too is defining a beneficial use as merely a use that a person can "afford" in dollars and cents!

Of course if you measure "standard of living" merely by partial measures like gross domestic product etc., perhaps you'll be right. But realize that disasters like Hurricane Katrina actually raise GDP because they provide reasons for people to spend money. I doubt too many people would advocate creating more hurricanes to improve our "standard of living", so perhaps GDP isn't as good a measure as the economists would lead us to believe. On that basis, global warming too might inherently increase GDP, while increasing suffering on a global scale.

It stands to reason that our "real" standard of living should improve as we reduce our fossil fuel addiction, considering that most of the nations consuming most of the energy are net IMPORTERS of fossil fuels and hence net exporters of huge swaths of their GDP to other nations. My own nation of Canada is an exception to that since we're at once a major consumer and net exporter of fossil fuels, but we'll benefit from consumption reductions in a different way. Slower consumption will mean we'll have our resources around for a longer period of time, and ultimately we'll be selling them for higher value uses rather than bulk "burning" for energy production.

 

[2dye4]

Outtolunch

How do you feel about tax credits for polution control.
The current US administration would like to allow companies
to buy and sell polution emission credits to enable free
market effeciencies dictating polution control methods.
This is a tax in disguise. You say government should not
tax behavior. In this case should we allow all polution??
Put strict limits, in which case the business is closed if
a violation is discovered.

Lcruiser
To impose living conditions is not the role of government.

Why do we make education manditory for our youth??
Why do we have a seat belt law.

When one persons living conditions cause an effect on
others, does the government have any role.

When population density is high many of these kinds of
rules are necessary because of the neighborhood effects.

In cases where ones behavior affects others negatively
is the only recourse for goverment to pass criminal laws??

 

[jmw]

OK, I have to say both Greg and Moltenmetals posts show a lot of sense being talked and the debate, if lively, is engaging and thought provoking.

Last post by MoltenMetal I have to wholeheartedly agree with the principal that we should strive to reduce waste and that the problem is to identify waste but the way it is now phrased I would be hard pressed not to.

I do suggest the obvious target is not necessarily the right one though or at leas, not the only target.

I think we could many of us agree that recycling aluminium, glass and plastics is a good move.
If ever there were an industry almost single handedly devoted to waste it would have to be the packaging industry.

It would be nice but probably contarversial to have some Greenhouse gas emissions valuations on the amount of packaging as it is produced and as it goes to landfills (methane gas recovery from landfills: is that "carbon neutral"? Is it a "natural renewable resource?"). What is our net balance?

2Dye4 raises the spectre of criminal prosecutions:
This year a ships engineer was given a 6 months jail sentance for a pollution offense. Earlier three crewmen were awarded a $250,000 reward for "whistleblowing" and a recent agreement bewteen the US and France sets a precedent for a whistle blowers charter in Europe where they have passed laws making (marine) pollution criminal offences.

I don't pretend to be au fait with the pro's and cons of emission trading for land based power generation but I think there is a very strong case for it for marine pollution and without it I suspect we have some very shaky legislation.

For useful information visit:

http://www.nera.com/MediaCoverage.asp?pr_ID=1626

and see the public reports area.

So yes, there is a lot we can and should do as a matter of course and for the reasons suggested by MoltenMetal among others, but as Greg points out, it must be paid for and finding what is the price people are prepared to apy is a key issue. More important, it is money that should be spent wisely and here we fall dwon when it comes to Global Warming. There are a lot of genuinely understood problems we can invest our resources in solving where we know our money will do some good.



JMW

http://www.ViscoAnalyser.com

 

[OutToLunch]

"You say government should not tax behavior. In this case should we allow all polution?? Put strict limits, in which case the business is closed if a violation is discovered."

it's amazing how you can link taxation with pollution or whatever your current cause is. Why does it have to be done through tax credits? Why shouldn't there be strict limits? If the goal is to reduce emissions, then why can't it be accomplished through legislation? And why are you so heavy handed that you would suggest shutting a business down completely if a violation is found? How about fines which increase if the problem isn't fixed? How about due process? There are other methods available than taxes.

 

[LCruiser]

I think we should tax bads instead of goods. However, first we have to find out for sure what the "bads" are.

 

[2dye4]

outtolunch

fines-taxation whats the differece ??
If you pollute you write a check to government.

Moving to a free market in polution credits is not my idea.
It is the present administration of the USA.

I don't advocate shutting down a business. I advocate
a government mandated cost with polution emissions
either financially meaningfull fines or charge them for
the right to emit polution.
Either way the government has to use one of two sticks.
shut down or pay up.

I also believe the cost of polution should be gradually
increased.
I also believe that it is acceptable for the economy to
be somewhat damaged by enviromental rules.
Changes will take place in consumption or effeciency
and the economy is better in the long run.

If we do not start looking long run on this planet we
will eventually kill our race.

 

[davefitz]

Pollution based taxes can also be viewed as proxies for real "externality" costs, that is, costs to downstream persons that are not explicitly assigned in the course of normal engineering economic analyses of alternative investment schemes.

As a simple example , let us pretend that it is possible to quantify the present value of the cost to future generations of raising the ocean level by 23 ft , and that this 23 ft rise is 50% due to CO2 emissions. If that cost can be normalized as a $/ton Co2, then one could rationalize a CO2 tax up to that presetn value of that externalized cost.

Rationalizing the CO2 tax on that basis has at least one flase premise, that is, that the gov't which collects the tax is somehow applying the monies to the benefit of the future gnerations that may be harmed by the CO2.

 

[OutToLunch]

"fines-taxation whats the differece ??"

Are you serious? Perhaps what would make you happy is for the government to seize 100% of everyones income and then only hand it back to us in the form of "tax breaks" for good behavior...
TaxMan: "Well, let's see Beav, you only got caught speeding once this year, you get a tax break of $40, here ya go. Ya know, it would have been $50 if you didn't speed at all! Tsk Tsk! No jay walking? another $3 back to ya! Looks like you didn't pee in public this year - that's worth a buck. Now don't spend it all in one place, Beaver!"
The Beaver:"Gee Mr. Government Guy, thanks!"

Tax breaks for complying with law is just as stupid.

If pollution is to be controlled, then do it through legislation and fines, not taxes.

"If we do not start looking long run on this planet we
will eventually kill our race."

Such doom and gloom, but I doubt it.

 

[moltenmetal]

davefitz: the deterrent factor of the consumption tax alone is of benefit, even if 100% of the tax revenue generated by the taxation is wasted. And less than 100% of the tax revenue will be wasted!

Taxing to provide a cost to at least represent the externalities to the basic economic equation is way better than doing nothing, and more effective than unenforced or unenforceable regulations. As Greg points out, current gasoline costs aren't sufficient to make fuel economy a primary consideration for determining which vehicle people choose, even though there are taxes on those fuels. That means car companies are not rewarded in the marketplace for making more fuel-efficient vehicles. But whether you believe in greenhouse gas-induced global warming or not, it's clear that significant externalities exist in the cost of production, refining, distribution and consumption of gasoline, and these costs are borne by everyone in society, not just those who drive fuel-inefficient vehicles. So in a sense, the rest of us are subsidizing the stupid consumption of others. You "free market" libertarians should be offended by this concept every bit as much as I am!

Taxation is the only means we have as a society to enter this economic (in)equation and correct it so that it's closer to equal. I suppose we COULD regulate the industry and force car companies to make vehicles more fuel-efficient, but as Greg correctly states, that's an idiotic proposition if "the market" won't buy them! We COULD just ban SUVs, for instance, but that would punish the guy who lives in the deep woods and needs the 4-wheel drive rather than going after the idiot who drives his SUV in commuter traffic every day. We COULD tax vehicles based on their average emissions, but that would tax the heavy-foot driver with the long commute at the same rate that the old lady who drives to church and back on Sundays. Taxing fuel is far more egalitarian AND more effective than any of these options.

 

[2dye4]

Fines are allright with me.

But that does preclude a market based solution where
business could decide on their own how much polution is
the most cost effective for them. It could be some high
value industries would rather pay a percectage fee on
emmissions over a certain limit. And some low margin
companies find ways to comply.

The free market could work to advantage in this case.

 

[BillPSU]

The reason for taxation is a means of reducing behavior is ludicrous. Just read you phone bill. Approximately 25% of what you pay is fees and taxes. Do these fees and taxes get you to use your phone less? I becomes a cost of doing business.

Diesel engines are supposed to meet current levels of emissions specifically Tier 2 or Tier 3 emissions. There is currently an engine manufacturer who pays a fine for every engine being produced. Who ends up paying the fine? The end user.

 

[LCruiser]

davefitz -

You are making the CO2 case too simplistic and exaggerated. For the sake of argument, let's say sea level does not continue on it's long term (as yet unaccelerated) rate of 1.7 mm per year, but doubles due warming effects from land use changes which decrease transpiration, black carbon increases from China wihc decrease Arctic albedo, and anthropogenic CO2 increases. Note that the first two reasons will also increase atmospheric CO2 due to the warm coke effect. So, let's just give a still simplistic equal valuation to all causes. 1/3 to each of the first three, then 1/3 of the increase of CO2 to each cause. That would be 1/9 of the doubling.

So, in 100 years, we would, under this scenario, have an increase of 1.7*100/9 = 19 mm due to increased CO2.

However, it's not that simple. Increased CO2 increases plant growth, which increases transpiration, which increases the food supply. So what do we have left? It's possible the increase in the food supply will vastly overwhelm the negative impacts of a 3/4 inch increase in sea level.

 

[PSE]

Interesting debates, I'll throw some more grist into the mill.

Although we do not know all the subtleties about "Global Warming", for all essential purposes, we are living in a closed loop system. We do not currently have anywhere else to go. Why then should we as engineers not strive to keep, as best we can, humanity from poisoning itself. Now I know there is much debate on whether or not what humanity is doing is actually affecting the environment. Some will likely debate the issue up to the point where they pass away. Modern civilization is dependent upon or to push to the extreme, addicted to energy. Reduce consumption, not likely, finding a less environmentally destructive alternative, preferrable.

Governmental involvement, though likely necessary to set the "vision" of a cleaner future, can be problematic in an of itself. Governments are addicted to money. Giving them another opportunity to tax feeds the addiction. As a legislative body, they can establish the "rules" by which we are all supposed to play. Taking a Cue from the EU Reduction of Hazardous Substances and other directives, (WEEE), the simplest route would be "if you don't comply, you don't sell here." Protectionism, possibly (definitely if "domestic" manufacturers need not comply). However, it can be relatively simple in execution and effective. No industry is going to want to loose a market.

Regards,

 

[LCruiser]

PSE -
You have illustrated one of the precepts of "Engineering". We should not allow our principles to be compromised to the detriment of civilization - which includes building in flood plains, deliberate transgressions in terms of pollution, etc.

However, it is not at all established that CO2 is harmful to the environment. There are several things shown to modify our climate, including land use changes, black carbon deposition on Arctic ice and snow, etc.

Anthropogenic CO2 from fossil fuels can be argued to be the result of rescuing carbon from the depths and returning it to the biosphere. As such, it is enriching our environment and any detrimental effects need to be adequately proven - which they are not. Enron et al want nothing more than to be able to buy and sell energy - literal power brokers:

http://tinyurl.com/9mdtz

They are pushing this whole "global warming" thing.

 

[davefitz]

BillPSU:
Taxation does work as a means of influencing industrial investment decisions, since they are normally undertaken only after a rational analysis of long term costs. More relevant to this discussion, many US electric utilities are delaying their decisions on building new coal fired power plants simply because of the uncertainty in the application of carbon taxes. Some proposed taxes are as high as $20 usd/Ton CO2, and the evaluated present cost of such a tax would make any utility exec pause.

LCruiser:
Simplifying and exagerating is a conventional means of demonstrating the limits of validity of a proposed approach. In this case, some persons have proposed a carbon tax (eg Carper's bill), and it should be useful to posit what limit such a tax may become if it is to be rationalized by a percieved damage or externality.