I would be happy to support a carbon tax, as long as the proceeds are held off-books and distributed annually to all citizens equally, with no income or other qualification criteria. Basically a carbon funded pure UBI.
One of the big problems seems to be simply getting supporters to agree on what to do with the money. There are plenty of supporters who staunchly insist the money must be used exclusively for miscellaneous social justice causes.
Give it directly back to the people. Do not allow them to spend it on anything, not even to fund the (hopefully small) beaurocracy necessary to implement the tax.
What this kind of proposal needs is a name the progressive and moderate left can rally around. Something akin to “living wage”.
Mandating a “living wage” makes some things noticeably more expensive: Burgers, rideshares, lawn care, …
A serious, effective carbon tax will make gas more expensive. Maybe 50 cents/gallon.
If the voting public felt the same way about gas prices as they do about the minimum wage—if you can’t afford it your financial model is immoral—an effective carbon tax would be a political slam dunk.
So the guy working in a kitchen that makes $20k a year and bikes to work should be taxed the same as the ceo with a private jet when it comes to carbon production?
A carbon tax just puts a price on carbon emissions. So if the guy bikes to work and doesn't buy gas, he's not paying taxes on carbon emissions, while the CEO in a private jet pays more. If the carbon tax proceeds are redistributed, the guy in the kitchen comes ahead, actually.
Everything in the modern world has the oil/energy needed to create it baked into the price.
Implementing a carbon tax that increases that cost along every step of a supply chain increases the price of everything, not just gasoline.
See: Price of groceries (and all other CPG) in Canada. People will blame the retailers and lazy headlines about record profits, but if you look at their actual margins, the value of CAD, and the fact that the government is increasing the population faster than anything else can catch up… it’s not surprising that they’re posting record numbers. People need to eat. The oligopoly issue definitely plays a part but that’s another can of worms.
Which might work in other countries with a different climate, geography, and population density but until electric tractor trailers or teleportation become a reality it’s just increasing the cost of living for everyone who already can’t afford to “invest in green solutions”.
Unfortunately our current government doesn’t realize that they’re not comparable to California.
Carbon emissions produce externalized costs or they don’t. If they do, it’s the proper role of government to internalize them while ameliorating any inequitable transition costs.
That's the point, to get the market to react. At first the carbon tax is low, but increases steadily so market will have time to react. Just announcing it will get things going
Most serious carbon tax proposals seem to be for revenue neutral taxes. Tax carbon at the source, distribute the tax equally among the population.
Under such a tax the distribution to that $20k a year bike commuting kitchen worker would probably be significantly more than the amount the carbon tax has raised their costs.
That CEO on the other hand would see the costs to operate their jet go up way more than their share of the carbon tax distribution.
Yes. The alternative is having politicians and beaurocrats fighting about all the little details of who gets what.
It’s not about being fair, it’s about keeping the politicians out of it as much as possible. It costs very little money to let the 1% get theirs, because by definition there just aren’t very many of them. Thats a tiny price to pay for the major advantage of less political football.
I'm pretty sure all a carbon tax does is solve for the "demand" side of the equation. Fundamentally you would still need an accounting system for carbon, thus carbon credits of different sorts. Or am I missing something?
You put the carbon tax on the makers of fossil fuels and the importers of fossil fuels. Everyone else just sees it indirectly due to the increased cost for fossil fuels. It shouldn't require a lot of accounting.
This is deeply unpopular with the electorate, and for very good reason.
When the only "solution" to "fighting" global warming is to levy more taxes on the middle class, increase food and construction costs, and cripple developing nations' ability to build industry -- when elites fly around the world on private jets (that spew more CO2 in 6 hours than I will create in 10 years), and "researchers" rake in grant money based on promoting apocalyptic levels of fear -- well... put it like this: If you want right-wing populist governments, that's how you're going to get them.
The right way to do a carbon tax is to refund 100% of the money to the population. Everyone gets a check every month for the entire amount collected, divided by the number of citizens. This way it costs you nothing unless you emit more carbon than the average person, and you can even come out ahead if you emit less. On top of that, it ends up being a net transfer from corporations to individuals, because corporations still pay the tax but only individuals get the checks.
It would also be a very informative trial run for a UBI (though in this case the amount would be smaller).
The "problem" with this is strictly politics: a) It would actually work, so the fossil fuel energy companies hate it; b) There is no opportunity for graft because the money is distributed to everyone and not just the politically connected, so there is no special interest lobby trying to make it happen.
This is essentially the Canadian model. The federal government mandates that every province must put a minimum price on carbon. If they don't the federal program puts a direct price on carbon and rebates the residents of the province directly. About 90% of the money goes directly to residents and the other 10% is directed by the federal government to programs within the affected province, for example in Ontario they used the money for energy retrofits of public schools.
All the money goes to the refund or every part that doesn't is a regressive tax and an opportunity for corruption.
It's also not clear what local deference is buying you here, because this is one of the very few cases of a national issue where the right solution is clear and simple and makes sense to implement uniformly at the national level.
The only sense of doing it at a local level is if the national government fails to act.
The deference to local levels here is simply pragmatic. Constitutionally the environment is a provincial government responsibility. The Federal backstop is only legal because of the "peace, order, and good government" clause of our constitution.
That actually makes sense in a way. If the local government is addressing an issue the national government shouldn't need to touch it. In the US it's basically the opposite (once the federal government gets involved with something the states can't override it), and it's basically terrible because there were originally meant to be limits on what the federal government can get involved in but they've been expanded beyond all reason.
And local control can still "work" even when the same solution should apply everywhere because they can each individually adopt the same solution, the same as different countries can. In theory a province could even counteract the effect of the federal government trying to get them to spend 10% of the money by just distributing it to the population as it should have been, though of course politicians rarely have that much willpower.
Why wouldn't people just use their UBI on buying more things, which, as rudimentary understanding of physics goes, yields more demand for production, which increases C02 output?
Perhaps I'm missing something, but I don't understand how taxing and redistributing the money does anything besides shifts the consumer power a bit???
I mean, wouldn't a better solution just be to have a carbox tax and then destroy the taxed money?
You're neither creating nor destroying any new money.
Bob is average. Bob pays $100 in carbon tax and then gets a check for $100. He doesn't have any more or less money to spend than he did before. He is able to continue his existing behavior and make no change whatsoever, if he wants.
But now he has the incentive to make a change. Because if he installs electric heat pumps instead of heating his house with oil, now he is only paying $50 in carbon tax but still gets a check for $100. If he can get the heat pumps installed for a monthly payment of less than $50, that's what he's going to do. And that's the goal.
Ok, I follow now. I do remain skeptical it would work in practice though in any meaningul way to get people to reduce their carbon footprint. For that to work, the numbers would have to be truly significant. I'm not sure what those numbers would look like, but I imagine if people cant forsee the immediate economic benefit to them in the very near future, it wouldn't work.
They would foresee an immediate economic benefit to them. Many of these technologies are already close to breakeven. The numbers above are a simplified arbitrary example. Try this one.
Bob needs a new furnace. Heat pumps are more efficient and save on energy costs, but also cost more up front than a new furnace. That basically evens out, so maybe right now the heat pumps still cost $5/month more than the furnace, at least in the short term. Until the cost of operating the furnace goes up $50/month because of the carbon tax, in which case he wants to immediately save $45/month.
And Bob is average. Alice is a heavy user. She has a big old house that she likes to keep at 90 degrees all winter, so the carbon tax would increase her heating bill by $500/month, which she can save by switching to heat pumps and installing solar panels on her roof. So she's going to do that right away.
We already collect federal excise tax on fuel. Changing the amount has a trivial cost. We already collect withholding tax from individuals. Changing the amount has a trivial cost (your boss adds money to your paycheck every week instead of removing it if your tax rate is now negative, retirees and people on disability/unemployment have the amount added to their existing social security/benefits check).
There would be a minor one-time cost for the small minority people none of that applies to, to fill out a form specifying where you want the money to be deposited or the check mailed. But the fundamental process of distributing the money would be a transfer of a fixed amount to each citizen with a social security number, which is easily computerized.
This misses embodied carbon in imports and much of the emissions from domestic agricultural and industrial processes, which are surely large enough to not be ignorable.
Obviously the administrative cost of taxing some other emissions source is going to depend on the nature of that emissions source, but if hypothetically evaluating emissions from certain sources turned out to be prohibitively burdensome, that would not be any excuse to avoid doing it for fuels at a minimum, which constitute the majority of emissions anyway.
And a more efficient way to handle imports would be to impose general tariffs on imports from countries that don't themselves impose a carbon tax, rather than trying to calculate the effects of something happening in a foreign country. Which would have a more significant effect anyway, because causing the entire country to reduce its own emissions would be a much bigger win than causing only their exports to do so.
The cost would probably be similar to the COVID stimulus. Maybe they can require the dividend to be distributed using FedNow to drive down the cost somewhat.
This is a very interesting idea. Actually, it's also the only solution I can think of that would incentivise people to emit less carbon, using selfishness as a lever to achieve cooperation - similar to capitalism itself.
You really believe that a within a complex restructuring like this, there would not be any opportunity for graft? Would love to step into whatever fairy tale you're in.
If 100% of the money is evenly distributed to every citizen, there is not a cent left to fund any corruption. Ideally the minimal administrative costs should not even come out of the carbon tax, of which fully one hundred percent should be evenly distributed to every citizen.
Presumably there would be some wrangling about how to measure CO2 emissions in certain harder to objectively measure contexts, but they're still not getting any of the money, they might just sneak in a way to not pay their full share. And we know with low variance how much CO2 is emitted by a unit of motor fuel or natural gas or coal, which represent the bulk of emissions.
> "researchers" rake in grant money based on promoting apocalyptic levels of fear
This is a bad take. We are currently living in apocalyptic levels of REALITY.
The people saying what you just said, but twenty, thirty, fifty years ago, were speaking out against the warnings that--if we'd acted in them instead of attacking the messenger as you did-- could've kept us from global wildfire and heat domes.
No, but I'd prefer not to have to deal with more and more extreme weather events, increased sea levels, etc.
The planet will survive, we as a species probably too, but it's going to get shittier for many of us.
no no, actually the sun will swallow the earth in a few million years so thats why we should do nothing.
(/s but there certainly is a strain of the media/public that blasted right past “it’s not real” to “welp it’s real and it’s too late to do anything about it, let’s do nothing”.)
My more colorful language is beating poor people and the middle class with a rubber hose and hope that solves the problem while ignoring the large frictions present in those people lives.
You want poor people to switch to an electric car? Do what California is doing with car buybacks and grants for new and used EV's. A low income person in some counties can get a couple of grand to trade in his old gas car for a used EV's like a Bolt. That's better because instead of feeling attacked people feel like they got a decent deal.
Many other countries already have excise taxes on things like gasoline though. Gasoline costs more per liter/gallon in Lithuania even though people earn 2-3x less money.
I think this is part of the reason why the EU economy is pretty stagnant, but it is livable. Unfortunately, it also shows that it doesn't make people cut back too much on gasoline use.
