A friend of mine sent me an article he saw from The NY Times blog article about what works better: a carbon market or a carbon tax to contain and curtail greenhoues gas emissions? That article deeper links to another one at Reason Magazine. It's an interesting little study. Here's something of my take on the subject.
The difficulties with the Carbon Market in the EU happens to be the lack of a central authority issuing the carbon 'credits'. If every State here in the US were to do that, it'd fall apart too. No single state would want to draw down their economy because their energy cost were higher. The centralized EPA in the US helps with this a lot, especially with the example of how well it's worked for the SO2 emissions market. However, as we are seeing from the fact that asian pollution is now drifting across from Pacific Ocean to effect the US - something the SO2 emissions market cannot deal with - we will still have nontrivial issues with other nations not curtailing their own emissions of greehouse gases.
That's one way that the carbon tax is useful - if you extend it to a tariff. My wife did a paper on the carbon tax that Gore proposed for her business class last semester. However, as our critique on the blog states, you need to use a carbon tariff as well as a carbon tax. You could really, and thoroughly screw the US industry by knee capping them with the carbon taxes while letting China get worse and worse. It would be a form of off-shoring yet again. However, if you were to impose a carbon tariff on the goods from China to the US, it would have some pretty profound effects and even encourage the Chinese to invest in other power sources than carbon emitting ones....even if they play monetary games.
I have to say that I prefer the carbon tax/tariff combo, but I have been looking at this from the point of view from how to cut emissions. This will be inflationary to some extent. Goods from other countries would go up in price because of the carbon tariff and energy costs here in the States would go up, especially for those that are dependent on coal based energy. It would also cause the market to divest itself of coal mining over time: that would have profound effects on certain states economies. The question is with all this revenue coming in, and I assume that it'd be pretty large, you'd want to use it for something or help offset the inflation that the average American might face.
I do like the idea of removing some of the payroll taxes. Nuke income tax below a certain point and reduce it for the rest. Additionally some revenue for health care payments and other major projects that are insanely priced but worthwhile to do.
However, it should be noted that this money will be temporary, even if we have a robust intake from the carbon tariff via China, India and the developing world. The whole point of the carbon tax/tariff is to shift investment from emitting technologies and industries to ones that do not. This means the money is going to be temporary as the market responds - and respond it will with some of the hefty taxes and tariffs that could/would be imposed! The issue is then that over 20-30 years that money will dry up and we will not be able to collect it anymore. Therefore, it's best not to count on it being there for, say, social security except as a temporary measure. I am sure though that my readers will have some ideas on what we could use it on for thirty years that would be self contained in that time frame.
Some of my thoughts are for educational reform. One idea that I have grown fond of was proposed by Carlos Yu of New York whereby we would add a step to the educational process: this would require that everyone get a 3 year, premed degree as a step between high school and college. This could help immensely with education in the ever more important biotech arena and also help significantly with the undereducation of the American public here. it would also help with getting enough people trained to deal with the aging population. Getting it into place initially is damned expensive, and so the question comes to where the money would come from...*beams*points finger above* That seems like a good, but temporary kick-off source of funding to me.
Of course, there's that perenial space exploration bit too. I'd vote for it, but it'd have to be for a smaller percentage than the rest. $5 billion per year could be added to the agency's budget with it earmarked for robotic exploration and another $2 billion for aeronautics research as well. However, since I am guessing that this intake would be somewhere around $100 billion, I doubt that 7% taken off it would cause too many howls. Then again, with the relative pittance that NASA getts now percentage-wise and the still howling fools that are out there, I am probably wrong.
Finally, as part of a grab bag of ideas, I'd also say that I think that a good chunk of this ought to be used to service the national debt. Knock that sucker down a lot. It'd help Americans in a nontrivial way. However, on the lower end of the pay scale, we ought to have a nontrivial payroll tax relief as well.
In wrapping up, the tax vs market debate rages on. The US seems to be headed to a market, even with the issues with the EU's version. The tax/tariff combo seems like a better route to me, and there are some very good places to spend that money. However, that's just my opinion.
The difficulties with the Carbon Market in the EU happens to be the lack of a central authority issuing the carbon 'credits'. If every State here in the US were to do that, it'd fall apart too. No single state would want to draw down their economy because their energy cost were higher. The centralized EPA in the US helps with this a lot, especially with the example of how well it's worked for the SO2 emissions market. However, as we are seeing from the fact that asian pollution is now drifting across from Pacific Ocean to effect the US - something the SO2 emissions market cannot deal with - we will still have nontrivial issues with other nations not curtailing their own emissions of greehouse gases.
That's one way that the carbon tax is useful - if you extend it to a tariff. My wife did a paper on the carbon tax that Gore proposed for her business class last semester. However, as our critique on the blog states, you need to use a carbon tariff as well as a carbon tax. You could really, and thoroughly screw the US industry by knee capping them with the carbon taxes while letting China get worse and worse. It would be a form of off-shoring yet again. However, if you were to impose a carbon tariff on the goods from China to the US, it would have some pretty profound effects and even encourage the Chinese to invest in other power sources than carbon emitting ones....even if they play monetary games.
I have to say that I prefer the carbon tax/tariff combo, but I have been looking at this from the point of view from how to cut emissions. This will be inflationary to some extent. Goods from other countries would go up in price because of the carbon tariff and energy costs here in the States would go up, especially for those that are dependent on coal based energy. It would also cause the market to divest itself of coal mining over time: that would have profound effects on certain states economies. The question is with all this revenue coming in, and I assume that it'd be pretty large, you'd want to use it for something or help offset the inflation that the average American might face.
I do like the idea of removing some of the payroll taxes. Nuke income tax below a certain point and reduce it for the rest. Additionally some revenue for health care payments and other major projects that are insanely priced but worthwhile to do.
However, it should be noted that this money will be temporary, even if we have a robust intake from the carbon tariff via China, India and the developing world. The whole point of the carbon tax/tariff is to shift investment from emitting technologies and industries to ones that do not. This means the money is going to be temporary as the market responds - and respond it will with some of the hefty taxes and tariffs that could/would be imposed! The issue is then that over 20-30 years that money will dry up and we will not be able to collect it anymore. Therefore, it's best not to count on it being there for, say, social security except as a temporary measure. I am sure though that my readers will have some ideas on what we could use it on for thirty years that would be self contained in that time frame.
Some of my thoughts are for educational reform. One idea that I have grown fond of was proposed by Carlos Yu of New York whereby we would add a step to the educational process: this would require that everyone get a 3 year, premed degree as a step between high school and college. This could help immensely with education in the ever more important biotech arena and also help significantly with the undereducation of the American public here. it would also help with getting enough people trained to deal with the aging population. Getting it into place initially is damned expensive, and so the question comes to where the money would come from...*beams*points finger above* That seems like a good, but temporary kick-off source of funding to me.
Of course, there's that perenial space exploration bit too. I'd vote for it, but it'd have to be for a smaller percentage than the rest. $5 billion per year could be added to the agency's budget with it earmarked for robotic exploration and another $2 billion for aeronautics research as well. However, since I am guessing that this intake would be somewhere around $100 billion, I doubt that 7% taken off it would cause too many howls. Then again, with the relative pittance that NASA getts now percentage-wise and the still howling fools that are out there, I am probably wrong.
Finally, as part of a grab bag of ideas, I'd also say that I think that a good chunk of this ought to be used to service the national debt. Knock that sucker down a lot. It'd help Americans in a nontrivial way. However, on the lower end of the pay scale, we ought to have a nontrivial payroll tax relief as well.
In wrapping up, the tax vs market debate rages on. The US seems to be headed to a market, even with the issues with the EU's version. The tax/tariff combo seems like a better route to me, and there are some very good places to spend that money. However, that's just my opinion.
2 comments:
Nice work there dude. Didn't know the whole emissions thing was so hot in the USA as well. I never thought that tariff and tax could be used together, but what would I know! Anyway maybe you should do a post on the EU because things are certainly differnt here - especially now that we have a new constitution being pushed through.
Thanx for the complement. The whole emissions thing is wildly and doubleplusuber hotly debated here in the States. It's in the debates already in the run up for the Presidential election...even for the Republicans.
I would love to do a post on the EU, but I am only partially aware of what I need to be to make a good post about what ought to be done.
Honestly, I find the EU a bit frustrating. It's not that it is a bad idea so much as it seems like there are pains being taken, above and beyond reasonableness, to be the Not-America. Frex, the whole mess about who gets how much int he way of representation in the EU Parliament. Oy. That makes my head hurt. Also the whole thing seems to be an attempt - at least as I see it - to semi-recreate the Holy Roman Empire structurally.
Like I said, the whole thing makes my head hurt. ;)
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