Demented thinking: Copenhagen didn’t work – but taxes will

William D. Nordhaus

This is from a press release embargoed until 00:01 today (it says). I don’t know why, there’s nothing new here, because Nordhaus said the same thing well over a year ago in this Guardian article where he says “taxation is a proven instrument”. Um, well no, it hasn’t been proven with carbon emissions yet perfessor. This fellow’s view rather reminds me of the view of Leona Helmsley, who famously said: “We don’t pay taxes. Only the little people pay taxes…,”

Carbon taxes are the answer to the stalled climate negotiations

London, UK (January 6, 2011) – For global warming policy, the 2009 United Nations Climate Change Conference (Copenhagen Summit) was a major disappointment. Designed to negotiate a successor to the Kyoto Protocol, which expires in 2012, the Summit concluded without a binding agreement because of deep divisions on the distribution of emissions reductions and costs. In addition, the United States failed to take action on a carbon cap-and-trade bill in 2010. Confronting this policy vacuum, leading climate economist William Nordhaus argues in the Bulletin of Atomic Scientists, published today, that carbon taxes are the best approach to achieve significant emissions reductions.

William Nordhaus argues that the cap-and-trade approach used in the 1997 Kyoto Protocol will not accomplish the goals of slowing climate change. As currently designed, it is both economically inefficient and ineffective and should be supplemented or replaced. Additionally, a carbon tax could be a useful means to cut budget deficits while meeting environmental objectives.

Emissions of carbon dioxide are externalities – social consequences not accounted for in the market place. They are market failures because people do not pay for the current and future costs of their emissions.

“If economics provides a single bottom line for policy, it is that we need to correct this market failure by ensuring that all people, everywhere, and for the indefinite future, face a market price for the use of carbon that reflects the social costs of their activities,” Nordhaus states.

He says that it is necessary to raise the price of carbon to implement carbon policies so that they will have an impact on everyday human decisions, and on decision makers at every level in every nation and sector. At present, incentives and levels of involvement vary, and where some countries have implemented strong emission control measures, they only cover a limited part of national emissions. For example, the European Trading Scheme – Europe’s effort to initiate a cap-and-trade structure – covers only about half of EU emissions.

Economic evidence suggests the cost of this limited participation is high. Participation will have to involve everyone by the mid 21st century if the aim of keeping global temperature change within the 2 degrees Celsius target of the Copenhagen Accord is to be achieved.

Given a choice between a cap-and-trade system (such as is embodied in the Kyoto model), and a carbon tax system (such as is used for limiting gasoline or cigarette consumption), Nordhaus favours taxation: “Countries have used taxes for centuries,” he says. “By contrast, there is no experience – as in zero – with international cap-and-trade systems.”

A carbon-tax model also provides a friendly way for countries to join a climate treaty. Countries considering joining under the current Kyoto model have to weigh up concerns about the long-term impacts of climate change with heavy pressures that big countries could apply. Under the carbon-tax model, by contrast, countries would need only to guarantee that their domestic carbon price would be at least at the level of the international norm – a relatively straightforward and transparent choice.

How do we modify the Kyoto Protocol to include tax-type models? Some have suggested a hybrid approach combining both quantity and price approaches. An example of a hybrid plan would be a traditional cap-and-trade system combined with a floor carbon tax and a safety-valve price. The Kyoto treaty might also be broadened, to allow countries to fulfill their treaty obligations if they have a domestic regime with a minimum carbon price attached to all emissions.

One further impetus for climate-tax legislation comes from the need to curb the growing budget deficits in many high-income countries. A carbon tax would provide an important revenue source, and a carbon tax is the closest thing to an ideal tax that can be imagined, he argues.

“The international community should move quickly to replace the current cap-and-trade structure by one in which the central economic mechanism is a tax on greenhouse-gas emissions,” Nordhaus concludes.

###

This title is embargoed until 00:01hrs GMT January 6th, 2011 for a copy please contact: jayne.fairley@sagepub.co.uk

William Nordhaus is a Sterling Professor of Economics at Yale University, CT. He has served on several committees of the U.S. National Academy of Sciences (NAS), including the Committee on Nuclear and Alternative Energy Systems, the Panel on Policy Implications of Greenhouse Warming, and the Committee on Implications for Science and Society of Abrupt Climate Change.

Author contact information: william.nordhaus@yale.edu
Tel: 001 203 432 3598

The architecture of climate economics: Designing a global agreement on global warming by William D. Nordhaus is published today (6 January, 2011) in the Bulletin of the Atomic Scientists Volume 67, issue 1. The article will be free to access for a limited period from http://bos.sagepub.com. The Bulletin of the Atomic Scientists is published by SAGE.

The Bulletin of the Atomic Scientists

The Bulletin is an independent nonprofit 501 (c) (3) organization that publishes analysis and conducts forums about nuclear security, climate stabilization, and safety in the biosciences. Founded by Manhattan Project scientists from the University of Chicago, it links the work of scholars and experts with policymaking entities and citizens around the world. An international network of authors assesses scientific advancements that involve both benefits and risks to humanity, with the goal of influencing public policy to protect the Earth and its inhabitants. The organization’s scientific advisory boards include 19 Nobel laureates, ambassadors, leading scholars, distinguished NGO officials, and public policy experts. The Bulletin is closely followed in Washington and other world capitals and uses its iconic Doomsday Clock to draw international attention to global risks and solutions.

SAGE is a leading international publisher of journals, books, and electronic media for academic, educational, and professional markets. Since 1965, SAGE has helped inform and educate a global community of scholars, practitioners, researchers, and students spanning a wide range of subject areas including business, humanities, social sciences, and science, technology, and medicine. An independent company, SAGE has principal offices in Los Angeles, London, New Delhi, Singapore and Washington DC. www.sagepublications.com

About these ads

86 thoughts on “Demented thinking: Copenhagen didn’t work – but taxes will

  1. I think he’s absolutely correct in thinking that cap-and-trade is total nonsense which will have no effect at all beyond relocating UK steel jobs to India, whereas a world-wide carbon tax could well have the effect he desires.

    That in no way means that the effect he desires is in any way desirable for the sane folk of the world.

    The opening remarks of this article are, erm, remarkable:

    For global warming policy, the 2009 United Nations Climate Change Conference (Copenhagen Summit) was a major disappointment.

    Exactly how do you tell when a policy is disappointed?

  2. So it was never about saving the planet after all, who’d a thought that eh?

    “One further impetus for climate-tax legislation comes from the need to curb the growing budget deficits in many high-income countries. A carbon tax would provide an important revenue source, and a carbon tax is the closest thing to an ideal tax that can be imagined, he argues.”

    The Australian Greens leader said pretty much the same thing, although embellishing the offerings a “carbon tax” would fund (Hospitals, education, transport etc etc), going into the eelction last year.

    We truely are living in the age of stupid (In the name of saving the planet).

  3. “Emissions of carbon dioxide are externalities – social consequences not accounted for in the market place. They are market failures because people do not pay for the current and future costs of their emissions.”

    What exactly are the ‘current’ costs of my carbon dioxide emissions and how do you calculate them? Presumably since my carbon dioxide emissions act as plant fertilizer I should get paid for them!

  4. Unfortunately, taxes probably will work.

    Not to cut CO2 emissions, but to provide a regular cash infusion into the activists and politicians. Can you see a politician of any nationality or persuasion turning down the opportunity to apply a new tax?

    The problem with Carbon Trading is that it only benefitted the bankers. Carbon taxes will benefit the politicians, who are the ones who make the rules….

  5. Sigh, so many professors, so few brains between them.

    I agree with Ceri Phipps. When it is shown that CO2 is harmless, in fact beneficial, will I be paid for the current and future benefit of my emissions?

  6. The good professor has, no doubt, come across the phenomenon of ‘fuel poverty’. Fuel poverty can in part be illustrated as poor pensioners in the colder regions having to choose between heating and food. Carbon taxes raise fuel prices (and all prices through the resultant inflation for all goods and services) pulling evermore people into fuel poverty and dependency on the State.

    That concerns me enormously.

  7. Great idea — it will solve 2 huge of problems:

    1. The retiring baby boomers. A lot of the have no pension to speak of, and the sooner they die off from the cold, the cheaper the welfare bill gets.

    2. The overpopulation of Britain. As the poorer cities will no longer be able to afford enough electricity, theft will become endemic and utilities will no longer be able to police and maintain their installations and entire towns will get taken off the grid and the population there will shrink ‘naturally’ from cold and diseases. This will elegantly solve the problem of there not being enough power stations and thus, power cuts in places where it would cramp ones’ style will be avoided.

    Either way, the above in Nr. 1 is already happening albeit on a smaller scale. Currently the UK has 30k surplus death due to weather killing old and sick folks before their time, and that is before Professor Death and his fellow killers have even started their campaign in earnest.

  8. The last time I read this kind of tripe was in a book on Karl Marx & his Socialism viewpoint on society. The only difference was in the nomenclature. Free-enterprise capitalism is bad, environmentalism is good! Curiously the solutions to all the worlds ills is for these Intellectual Socialist Elitists to be in charge of everyone else, be unelected, undemocratic, unaccountable, & most disturbingly, unsackable!

    Here in the PDREU/UK island province, gas prices are goinf through the roof, petrol/diesel prices are ditto, as is everything else. VAT is up, so will commoditiy prices, I suggest infaltion will be at 5% by end of year at the latest as the public sector workers (many low paid) cannot afford to heat their homes, run their cars, or buy the essentials, unemployment will rise dramatically, etc. Everything is rosey!!! All thanks to a socilaist government not looking where it should have been & chasing Utopia, & the latest bunch of chinless wonders being twice as ignorant! Watch out you chaps ‘n chapesses from the colonies, you’re next! So if you treasure you freedom, give your current White House incumbent a good drubbing come election time. Curiously enough, the price of bagged coal hasn’t risen that much!

  9. I’ve always wondered why a worldwide energy tax, weighed by a country’s GDP, never got any traction.

    I agree a carbon tax could be more efficient than cap-n-trade but the real question is where the money goes. If a non-trivial portion of it goes to effectively reducing GHGs THEN we’re talking about a real solution!

  10. The Professor is right, and that is why what he proposes will never happen.

    Irrespective of whether AGW is real or not, or a real problem or not, the United Nations sponsored IPCC, etc, was never really about curbing CO2 emissions. It was about generating a large revenue stream to the UN and then to the developing countries that control the UN through their majority (of votes).

    Cap and Trade transfers $100 billions to the UN and Developing countries. A carbon tax transfers nothing, because all revenues flow to national governments.

    Which is why the UN and the Developing countries will never accept a carbon tax which will reduce CO2 emissions (as the Professor points out), instead of the current cap and trade, which has little or no effect on CO2 emissions.

  11. I seriously doubt this man has to worry about filling up his car with fuel, or heating his home like hundreds of millions of ordinary people have to do. It costs me over €75 to fill my car up with Diesel, mostly because of tax. People will change to alternatives, but there is none to fossil fuels that is good enough yet.

    There are far more damaging emissions from the burning of fossil fuels that give people cancer. C02 as I believe, is harmless to human health at the levels in the atmosphere. Yet here the emphasis is on C02 emissions.

    Deforestation and industrial pollution of rivers to name a few, is also going to harm the planet a lot more than C02 emissions!

    I’m not a climatologist, but as far as I am aware from this wonderful site is the FACT satellite records show this year is half a degree behind the warmest year, that being 1998, correct me if I’m wrong. IF 2011, 2012+ starts to get cooler and cooler, will we still be told Global warming is causing the cooling like this year?

    There will be no end to it , but one thing I know. Eventually the Global warming debate will be over, and they will find something else to make up, like maybe the possibility of an Alien invasion being the biggest threat to the planet, and we will have to increase tax, Alien invasion tax. We will have to make bigger better weapons!

  12. This particular Nordhaus, I have read, reckons it a good idea to run his economic computer models 1000 years into the “future.” These are the models that our dear politicians and bankers used to wreck the economy recently. We are in the same territory as with the climate modellers, and a closely related insanity.

    Like the Met Office, they seem to imagine that they can defeat chaotic systems by using bigger computers. Edward Lorenz (1963) and Henri Poincaré (1880-something) already knew better.

  13. It seems that for those on the political left, and for politicians of all stripes, the solution to every conceivable problem appears to be a new tax.
    If governments really could solve every problem by taxing us more we should have all been living in Utopia long since.

  14. Carbon taxes are really incredibly naive. What happens when a government taxes? It gets money to spend! And what does it spend it on? On goods and services which consume fossil fuels – and do government’s tax themselves? No!

    Indeed, if anyone really wants to know the real basis of this baloney in is in the endogenous growth theory so espoused by Gordon Brown which led to the decade of debt-financed debt-bubble growth and souring house prices where the economy apparently soared with no obvious means of support — except the global warming type belief that it could soar without real economic means of support (HENCE THE COLLAPSE)

    How is this related?

    Endogenous growth theory, was the theory that you could grow an economy without there being any need to increase material consumption. It all stemmed from the incredible growth of computers which apparently sold items like CDs which contained little material and whose overwhelming value was just the information on the CD (hence Micro$oft). Economists looking at the dot com (bubble) imagined that this was a new paradigm in economics … that from now on economies would grow without the need for greater consumption of material resources like fossil fuel or iron, rare earth metals etc. What a way to get over the impending resource crisis!!

    Likewise the “renewable energy” powered world or “hydrogen economy” is simply an extension of this endogenous growth theory to energy. The idea is that we can create energy without ever having to consume resources to do so. The extension to this on the fiscal front is the idea that if you tax people for consuming real materials, that somehow they will all start to inhabit the fairytale world of endogenous growth theory and hydrogen powered economy where everyone does nothing all day except buy and sell information and watch their “ZERO” carbon house price rise.

    Of course, it is all fanciful nonsense. Take e.g. a windmill (or as those countries that don’t have a viable wind industry call them “windturbines”). Each of them contains hundreds of tonnes of steel. That steel doesn’t come energy free … it requires vast quantities of coal to produce. Then it requires transporting along purpose built roads all of which also consumes energy mainly from coal. Solar panels are likewise energy expensive to produce.

    Even apparent “renewable” energy from farmed plants is nothing of the sort. Farming consumes vast amounts of fossil fuel energy in the machinery, transport, fertilisers, pesticides and even simple things like the energy used to transport the water the farmer uses. Land drainage and even the roads and buildings of a farm all add to the “carbon footprint” of a modern farm which is absolutely massive. The result, I was told, was that a farm producing bio-diesel would need to retain half the crop on the farm for their own use. Add to that the cost of transport off the farm, utilities and the carbon footprint of all those civil servants and there is probably nothing left. I.e. The average farm is probably a net carbon consumer not producer!

    If you really want to wind up the eco-nutters just remind them that the only real source of 100% renewable energy is naturally grown organic material like tropical rainforest trees – or fresh polar bear meat!

    But back to carbon taxes. THEY DON’T WORK! Even if the intention were to displace fossil fuel use by “renewables”, most of that change in behaviour would result in substantial indirect carbon use … after all even people making huge profits from cutting down the Amazon and transporting “carbon free” in bio-diesel powered ships … even they have to spend their ill gotten gains … and what do they do … they buy carbon intensive luxury goods from China!

    There is only one 100% guaranteed way to reduce carbon usage: to reduce the size of the world economy! Either to reduce the per person economic activity or to reduce the number of people in the active economy! Anything else is just displacing carbon usage in one part of the economy and boosting it in another. Money raised by taxes have to be spent … and unless someone suddenly discovers that carbon-neutral economies can produce cheap goods and services, those Carbon Tax $ will be spent on carbon consumptive goods and services from economically vibrant countries that don’t give two hoots for carbon taxes! (Except as a wonderful way to undermine their economic competitors!!!!)

    The real irony, is that China is now becoming a major windmill manufacturer. They are selling this luxury good to pander to the green conscience in the West built from 100% from the Chinese coal-powered economy.

    It’s carbon free in the West … and no unsightly industry (or jobs) to upset the eco-nutters, but its 100% carbon based production from the growing super-power who doesn’t have to worry about home-grown eco-nutters destroying their economy!

  15. A little knowledge is a dangerous thing.

    Unfortunately, as regards the climate, what drives it, what is the ideal temperature for the planet and how conditions will change if there is some warming, we know little and understand less.

    Given this state of knowledge and understanding and given that there appears to have been no significant warming for about 12 years and given the economic harm that will be inflicted on western economies by decarbonising and given that this will all be futile since this decarbonisation will be more than off-set by the industrialisation of developing countries such as China and India such that on a global scale there will be no reduction in CO2 emissions, any sane person would conclude that the best action is to do nothing at this stage, monitor the situation and adapt if necessary.

    The western economies are already in deep trouble due to the financial crisis. The last thing that is needed is more tax. In fact less taxation is what is needed to stimulate these economies and to create growth. Given the need to address the budget deficit I accept that the scope to reduce taxation at this stage is probably limited, however, the idea of increasing it, and the idea that this would be good, is sheer madness.

    If all of this CO2 dogma turns out to be untrue and a scam, there will be a backlash. There is every likelihood that over the next 10 years or so, global temperatures will drop. This will make people increasingly more sceptical and more reluctant to pay green taxes and green subsidies. People will begin to question the waste. As there is evidence that some of the data is poorly compiled if not deliberately skewed to show a warming bias and given that there appears all but no correlation between temperature and CO2 concentrations either on a geological or recent timescale, people will begin to conclude that it was so obviously a bad hoax that they will not accept that the politicians were duped and will not believe the politicians when they say that they thought that they were acting properly and in the best interests of the world.

    It is amazing how much clearer things become with hindsight. For example, it will suddenly become obvious that windmills were a hopeless idea and the people will not accept that the Politicians could ever have concluded that implementing that energy policy was the right thing to do. The people will question the 100s of billions wasted on that project, especially if the lights go out (as appears likely in the UK unless we build some real power stations very soon).

    I think that there will be a lot of problems for the politicians in 10 to 15 years time and I believe that this will also put back the environmental movement. We live in times where there is a lot at stake, and strangely, in times when inaction is the best course of action.

  16. @Ceri Phipps: “Presumably since my carbon dioxide emissions act as plant fertilizer I should get paid for them!”

    Oh, Ceri, you comic genius!

    So, in addition to us all being subjected to a tax to curb emissions of a harmless gas, what the governments need to do is set up feed-in tariffs for CO2 emissions. That is, just as those with oodles of dosh are being paid for installing their own solar PV units on their own property for their own benefit – subsidised by the rest of us – all of us who emit CO2, which benefits all plant-life, can be paid pro rata for doing so.

    You know what, governments are just so stupid they’d do it: they’d tax us for emitting CO2 because to them it’s a pollutant, but they’d also pay us for emitting CO2 because it’s good for plants.

  17. The UK has proven that fuel taxes (which is what a carbon tax is in reality) do not constrain emissions other than by reducing overall economic activity with resulting increase to poverty.

    Over 80% of UK petrol (i.e. gasoline) price is tax. This was achieved by the ‘fuel price escalator’ which increased taxation on petrol by a percentage each year until there was widespread civil disobedience in response. At that point the then government stopped the ‘fuel price escalator’ and reduced the tax on petrol by 1p per litre.

    Yesterday the present government increased tax on petrol again. It remains to be seen if this will induce another round of civil disobedience in response: further tax increases can be anticipated if it does not.

    But, importantly, this degree of taxation (whereby almost all the fuel price is tax) has had no discernible effect on fuel usage. Instead, it has increased the cost of everything that directly or indirectly relies on the use of the fuel. This increased fuel cost has reduced economic activity.

    Simply, fuel taxes only reduce emissions by reducing affluence for all and thus increasing the poverty of the poor. And the UK has proved this.

    Richard

  18. Philip Bradley says:
    “Cap and Trade transfers $100 billions to the UN and Developing countries. A carbon tax transfers nothing, because all revenues flow to national governments.
    Which is why the UN and the Developing countries will never accept a carbon tax..”

    Governments will just funnel the carbon tax revenues to the UN. They’ll find a way.

  19. Since the “do nice things for poor countries” ploy didn’t work, lets switch to a simple appeal to greed… “free money for your government, and you won’t be blamed for the taxes since it’s for their own good and everyone is doing it.”

  20. Demented thinking indeed.
    This person is a perfect example of lunatics wanting to take over the asylum.
    Even Marx didn’t dare to state as openly and clearly that his real target was an utter destruction of the civilisation as we know it.
    Who is paying his salary I wonder. And especially why.

  21. A little knowledge is a dangerous thing.

    Unfortunately, as regards the climate, what dives it, what is the ideal temperature for the planet and how conditions will change if there is some warming, we know little and understand less.

    Given this state of knowledge and understanding and given that there appears to have been no significant warming for about 12 years and given the economic harm that will be inflicted on western economies by decarbonising and given that this will all be futile since this decarbonisation will be more than off-set by the industrialisation of developing countries such as China and India such that on a global scale there will be no reduction in CO2 emissions, any sane person would conclude that the best action is to do nothing at this stage, monitor the situation and adapt if necessary.

    The western economies are already in deep trouble due to the financial crisis. The last thing that is needed is more tax. In fact less taxation is what is needed to stimulate these economies and to create growth. Given the need to address the budget deficit I accept that the scope to reduce taxation at this stage is limited, however, the idea of increasing it, and the idea that this would be good, is sheer madness.

    If all of this CO2 dogma turns out to be untrue and a scam, there will be a backlash. There is every likelihood that over the next 10 years or so, global temperatures will drop. This will make people increasingly more sceptical and more reluctant to pay green taxes and green subsidies. People will begin to question the waste. As there is evidence that some of the data is poorly compiled if not deliberately skewed to show a warming bias and given that there appears all but no correlation between temperature and CO2 concentrations either on a geological or recent timescale, people will begin to conclude that it was so obviouisly a bad hoax that they will not accept that the politicians were duped and will not believe the politicians when they say that they thought that they were acting properly and in the best interests of the world. The people will start asking the politicians why they went a long with this bandwagon when there is no hard scientific evidence supporting the AGW theory or that a warmer world would be a bad thing.

    It is amazing how much clearer things become with hindsight. For example, it will suddenly become apparent that there was no hard scientific evidence supporting the theory, that scientific method was thrown to the wind, that it was patently obvious that windmills were a hopeless idea and the people will not accept that the Politicians could ever have concluded that implementing that energy policy was the right thing to do. The people will question the 100s of billions wasted on that project, especially if the lights go out (as appears likely in the UK unless we build some real power stations very soon).

    I think that there will be a lot of problems for the politicians in 10 to 15 years time and I believe that this will also put back the environmental movement. We live in times where there is a lot at stake, and strangely, in times when inaction is the best course of action.

  22. I think that it’s interesting that the CEO of Exxon-Mobil favors a CO2 tax while the American Petroleum Institute is against the tax.

  23. Follow the money – more snouts in the trough.

    We should remind these clowns, on a daily basis:

    There is no evidence at all that anthropogenic carbon dioxide has in the past, or will in the future, change the Earth’s climate.

  24. You’re kidding me that this guy is a Professor in Economics, aren’t you? I was thinking what Richard said:

    The UK has proven that fuel taxes (which is what a carbon tax is in reality) do not constrain emissions other than by reducing overall economic activity with resulting increase to poverty.

    Indeed. Unless there’s a “clean” alternative (there isn’t), buying behaviour must remain the same.

  25. How can you tax energy while everybody needs it. It is just a tool of control. In The Netherlands the energy tax is higher than the cost of energy itself.

  26. We have to pay for the grants that climate science needs to survive. A whole system that uses waves and proxies and mathematics for formulas in models.
    Not a shred of physical evidence. Any physical evidence is fluffed off as having no meaning. There is a great deal of physical evidence and history to what is happening and why it is happening but there is no funding in looking for the truth.
    So, AGW is a scientifically made crisis through the funding process and “old boys club” peer reviewers.
    There is a definate crisis but by the time the truth comes out, many lives will be lost through unpreparedness, dwindling food supplies, price increases, lack of government involvement, etc.

  27. It was taxes levied by the British on tea centuries ago that lead to the original Tea Party. They want rebellion?–well, let them attempt to tax carbon–something far more benign and beneficial than tea.

    Idiots.

    It is time for a Global Carbon Tea Party! (“GCTP” is a pretty slick acronym.)

  28. BillD says: “I think that it’s interesting that the CEO of Exxon-Mobil favors a CO2

    Bill, what I find incredible is the naivety of people who think oil companies would be against a tax! They know that people are trapped in the modern economy and really have little choice than to keep consuming oil for their basic needs (less a few luxury $ which won’t change much).

    All taxes do is to increase the price of oil — and as oil companies set the price to make a certain percentage on sale price — a higher selling price simply means they can charge more per gallon/litre.

    Or to put it another way: oil companies might pretend to be on the motorist’s side, but at the end of the day what company would say no to making more money on selling less product as they stand to do with carbon taxes on oil?

  29. Regarding That Energy Girl says:
    January 6, 2011 at 3:13 am
    “I’ve always wondered why a worldwide energy tax, weighed by a country’s GDP, never got any traction.

    I agree a carbon tax could be more efficient than cap-n-trade but the real question is where the money goes. If a non-trivial portion of it goes to effectively reducing GHGs THEN we’re talking about a real solution!”

    dear Energy Grirl

    A real solution to an unreal problem. That is unless you know more then the 31,000 scientist and over 9,000 PHD’s who signed this statement:
    ““We urge the United States government to reject the global warming agreement that was written in Kyoto, Japan in December, 1997, and any other similar proposals. The proposed limits on greenhouse gases would harm the environment, hinder the advance of science and technology, and damage the health and welfare of mankind.
    There is no convincing scientific evidence that human release of carbon dioxide, methane, or other greenhouse gasses is causing or will, in the foreseeable future, cause catastrophic heating of the Earth’s atmosphere and disruption of the Earth’s climate. Moreover, there is substantial scientific evidence that increases in atmospheric carbon dioxide produce many beneficial effects upon the natural plant and animal environments of the Earth.”

    All of the general statements below are well documented by very educated people.

    The science of AGW is far from settled.
    The benefits of increased CO2 are known and very large.
    The benefits of warmth are well known.
    The harms are theoretical and have failed to materialize.
    The observations of feedbacks to increased CO2 indicate a negative feedback from the earths oceans, and atmosphere, not the claimed strongly positive feedback which are claimed by computer models.
    The IPCC is corrupt and agenda driven international organizations whose primary goals are political and involve international redistribution of wealth.
    The paleo-climate proxy studies are deeply flawed and successfully debunked in peer reviewed publications. (Michael Mann’s “hockey stick”)
    The peer review process within climate science has been corrupted.

  30. Another ruse, red herring call it what you will.
    Mentioning Tax (new tax) is a guaranteed way of getting “politicos” on your team, even if the reason for the tax does not exist, tax dollars for funding research, my research could be the thrust of this article.
    Don’t you just love these guy?

  31. Anthony,

    There should have been 2 climate science: theorietical and physical.
    The theorietical is studying oscillations(like brain waves), CO2 theories of AGW, temperature annomalies, etc.
    The physical evidence such as windspeeds deminishing, salinity changes, mountain growth, cooling oceans, Ice Age ice recession over time by soil depth measurements, slowing of atmospheric pressure systems, etc.

    A whole different outcome would be seen and understood by everyone rather than the current misinformation and propaganda developed to save a bad theory.

  32. Many governments have already fallen into their trap of more climate loans to be paid by carbon and energy taxes. The Philippines for instance, already has an outstanding climate loans (adaptation + mitigation) of around $1.1 billion, http://funwithgovernment.blogspot.com/2011/01/climate-stupidity-part-6.html

    How to pay these? From more taxes and fees in the future, where else. The WB and ADB are among the worst climate debt pushers, not different from drug pushers, in many developing countries.

  33. “[...] correct this market failure by ensuring that all people, everywhere, and for the indefinite future, face a market price for the use of carbon that reflects the social costs of their activities,” [...]

    One further impetus for climate-tax legislation comes from the need to curb the growing budget deficits in many high-income countries. A carbon tax would provide an important revenue source, and a carbon tax is the closest thing to an ideal tax that can be imagined, he argues.

    “growing budget deficits” largely accumulated by keeping useless academics (amongst others) in the manner to which they have become accustomed at the expense of the productive economy.

    “provide an important revenue source” because as we all know robbing peter to pay paul is a proven wealth creator. Great system though if your are one of those who gets to spend this “important revenue source” on your own pet projects? I can bet that securing government pensions will be on the list somewhere.

    “by ensuring that all people, everywhere, and for the indefinite future, face a market price for the use of carbon”

    “a carbon tax is the closest thing to an ideal tax that can be imagined”

    This ideal tax will presumably be a flat rate tax taking no account of ability to pay – suiting people like Nordhaus (and the rest of the chattering classes) right down to the ground.

    So the tax rate will be international and flat rate such that $1 from an Economics prof will be met by $1 from an affluent Chinese car dealer and also by $1 from a Vietnamese peasant. Hmm …I think I see why you like this route prof.

    Incidentally, will those of us living at higher latitudes be eligible for a tax rebate? I only ask because in my region heating IS NOT OPTIONAL. Surely we will need some mechanism for supporting poor old North Dakota via the heavier taxation of toasty Florida. Hey, the Canadians and Mongolians might actually profit from the whole venture – go team.

    Anyway… isn’t Economics the only “science” with a more abysmal track record than climate science? Hmm.. Let’s see now…

    Economics: Rewriting the past to better reflect the current paradigm, modelling barely understood complex systems and getting future projections so horribly wrong that the world economy almost collapses.

    Climate science: Rewriting the past to better reflect the current paradigm, modelling barely understood complex systems and getting future projections so horribly wrong that the world economy almost collapses. (in fairness they haven’t managed that last bit just yet)

    “The problem with socialism Environmentalism is that eventually you run out of other people’s money to spend.”

    And lest we forget boys and girls… “The reality is, we’re freezing not in spite of climate change but because of it.”

  34. This is showing how a 150 year temperature record trumps a 4.5 billion year history record.
    And temperatures cannot forcast precipitation, wind, etc.

  35. One further impetus for climate-tax legislation comes from the need to curb the growing budget deficits in many high-income countries. A carbon tax would provide an important revenue source

    ah. it’s all becoming clear.

  36. The trouble is – its the old elephant spray salesman scenario. (See below if you don’t know what I’m on about..)
    Supposing our politicians get away with more and MORE carbon taxes – as they will – and in thirty years we discover that the earth hadn’t got any warmer..
    They’ll say: ‘You see..?? Carbon taxes work..!!’

    [Doorstep salesman manages to talk himself into man's house - tells the man that he can have this magic new product for only £9.99 a can - and starts spraying the aerosol round the room.
    'What is it..?' says the homeowner.
    'Anti-elephant spray,' says the salesman.
    'But there aren't any elephants..'
    'You see..? It works..!']

  37. Sixteen Conferences of the Parties (COPs) have not yet resulted in the clear, unequivocal enunciation of a unique GOAL, no less a PLAN to achieve the goal.

    The US Congress’ attempts produced Waxman-Markey, Kerry-Boxer and Kerry-Lieberman, demonstrating once again that “a camel is a horse designed by a committee”.

    The ultimate emissions-related objective appears to be a complete elimination of anthropogenic carbon emissions and other GHG emissions globally; and, possibly also a return to an atmospheric concentration of CO2 of either 350 ppm or 280 ppm.

    The ultimate political/diplomatic objective appears to be the establishment of a global commune of perhaps one billion total population, run by the brilliant administrators who brought us the Iraq “Oil for Palaces, Payloads and Payoffs Program”.

    The transition from current population to a population of one billion might follow the UN’s Darfur Model, essentially a transition to a “hunter-gatherer” society begun by hunting each other.

  38. Dr. Mr. Nordhaus, the way to cut deficits is for the governments to stop spending so much of other people’s money. They’ll simply spend the ludicrous carbon taxes too. You idiot.

  39. Funny story about taxation:
    Previous socialist goverment in the Czech Republic made – pursuing the EU directive – a law in 2005 that they will guarantee subsidizing the solar powerplants so much that they’ll pay from the taxpayers money 5 times more to the solar electricity producer, than is the market price of the electricity.
    Then after several years we have one of the biggest chinese crap solar plants in Europe, often owned by the socialists in a small country where the sun is more or less rare.
    Then somebody made the economic assesment and found out this solar tunnel alone would during the period the law envisions cost the Czech taxpayers on the subsidies almost the same amount of money as is the whole national debt of the Czech Republic. Also the grid administrators found out, that the solar plants start to overload the grid whenever the sun shows, otherwise it produces <0.001% of the electricity, and the main operators announced the significant electricity price rise because of this nonsense.
    There was election last year and the rightists won. Now they passed the law which will tax the solar plants 26% to strongly discourage the further solar powerplants building. Socialists want to sue the state, but their chances are negligible -shortly because the European chart expressly exempts taxation in the public interest from the admissible claims to the right to property they base their (non-)reasoning on.
    So in US, do you have enough Tea partyers in the new Congress to do the same?

  40. Funny story about taxation:
    Previous socialist goverment in the Czech Republic made – pursuing the EU directive – a law in 2005 that they will guarantee subsidizing the solar powerplants so much that they’ll pay from the taxpayers money 5 times more to the solar electricity producer, than is the market price of the electricity.
    Then after several years we have one of the biggest chinese cra.p solar plants in Europe, often owned by the socialists in a small country where the sun is more or less rare.
    Then somebody made the economic assesment and found out this solar tunnel alone would during the period the law envisions cost the Czech taxpayers on the subsidies almost the same amount of money as is the whole national debt of the Czech Republic. Also the grid administrators found out, that the solar plants start to overload the grid whenever the sun shows, otherwise it produces <0.001% of the electricity, and the main operators announced the significant electricity price rise because of this nonsense.
    There was election last year and the rightists won. Now they passed the law which will tax the solar plants 26% to strongly discourage the further solar powerplants building. Socialists want to sue the state, but their chances are negligible -shortly because the European chart expressly exempts taxation in the public interest from the admissible claims to the right to property they base their (non-)reasoning on.
    So in US, do you have enough Tea partyers in the new Congress to do the same?

  41. Mark says:
    January 6, 2011 at 3:18 am

    I seriously doubt this man has to worry about filling up his car with fuel, or heating his home like hundreds of millions of ordinary people have to do. It costs me over €75 to fill my car up with Diesel, mostly because of tax. People will change to alternatives, but there is none to fossil fuels that is good enough yet.

    Do you think for one moment your costs would remain low if eco friendly vehicles are purchased by the masses.

  42. How can a senior academic in a civilised country espouse such egregious Marxist nonsense and expect the citizenry to applaud him?
    A friend once expounded his theory that ‘universities were once physically separated from their nearest town to protect the academics from the townspeople when the academic’s theorizing became too antisocial for the common citizen and the citizens would go on the rampage in retaliation’. I thought my friend was a bit odd at the time or just winding me up (I worked in a university department in those days). After reading accounts of the townspeople rioting and stringing up a few academics in medieval Oxford, I now believe that he was on to something.

  43. Professor Nordhaus is a member of Skull & Bones a famous secret society of Yale University with a rather notorious reputation. Among its member you find people from the rich famous elite such as both Presidents Bush and former president candidate John Kerry.
    You scratch my back and I scratch yours. That’s the way it goes.

  44. Taxes are more than high enough. Especially in the UK!

    Considering that in the UK the price of gas is $7.65 per gallon.

    That conversion came from diesel being £1.30 per litre in the UK so to get the American value:
    £1.30 (cost per litre) X 3.78541178 (the amount of litres in a US gallon) X 1.55395 (the current exchange rate for pounds into dollars)

    Although with extra fuel duties, increases in VAT and the expected increase in global oil prices, the cost is expected to increase to $8.82 per gallon by the Summer.

  45. The same old economist clap trap is trotted out again – market failures, social costs, etc. This is a well known economic principle as it is applied to pollution, where there is a clearly identified social cost of cleaning up or remediation. I live adjacent an old coking works plant which is being cleaned up at a cost of £170m to the tax payer – an excellent example of how a business externalised its costs. However, with CO2, no body has any idea of what these costs are, whether there are any costs or even if there are net benefits.

    Then there’s the appeal to Governments – yes, you can use these taxes to reduce the deficit. Yet if taxes ultimately increase wealth, then why don’t we have 50%, 60% or 70% incomes tax? Why don’t we raise VAT to 30% instead of 20? Surely such massive tax hikes would eliminate the deficit and create loads of wealth?

  46. It makes me laugh when the climate alarmists harp on “deniers” claims about tinfoil hat conspiracy theories that Governments are inventing the AGW theory because they want an excuse to tax and control us more.

    Not a conspiracy theory at all. It is documented political fact that governments want to increase taxes and blame those increases on environmental concerns. So-called “green taxes” are a massive and expensive reality already.

  47. Perhaps a “Climate Change Research Tax” is in order.
    No more grants, they will have to pay to do research.

  48. It makes me laugh when the climate alarmists harp on about “sceptics” claims about tinfoil hat conspiracy theories that Governments are inventing the AGW theory because they want an excuse to tax and control us more.

    Not a conspiracy theory at all. It is documented political fact that governments want to increase taxes and blame those increases on environmental concerns. So-called “green taxes” are a massive and expensive reality already.

  49. “Given a choice between cap-and-trade and carbon taxes” is a false choice. Pick the lesser of two very bad evils and you still have a very bad evil. The real choice is between free markets and government regulation. Markets *always* find the best option because they integrate the will of all the people, even those who choose not to participate directly. Government *always* finds the sub-optimal solution because it moves on the whims of a few who are remote from the real forces in play and subject to external influences out of proportion with their real importance.

  50. Taxes on CO2 will not bring emissions down one bit, when gas prices were approching $ 4 a gallon in 07 people wher still filling up thier SUVs and groaning when full. They started hanging for sale signs in the gas guzzlers and started findings things to cut out of thier budget to fill up ths vehicles hence no money to eating out, Hi-tech toys fancy toys for the kids,etc.. And with oil prices jumping up again here comes the double dip recession because here go again no descretionary income for the fancy things in life, more unemployed because sales go down again, you get the idea. the revovling door of the economy. The professor is right it is nothing more than a tax for the GOV., but the money will not go for what the poli. want they will have to fund the ever increasing unempolyed. This irks me to no end that these polis. have know idea what they are doing up in D.C. except filling thier own pockets. The U.N. wants the GOV. to send them all this money to help the developing countries, but I say we have already done that by OUTSOURING OUR INDUSTIES AND JOBS there so now thier economys go up while ours goes to hell and a hand basket and the world will still expect the US and Europe to buy the crap to keep them up , well guess what they are going to bring all to a stand still . This world is full of IDIOTS and this good Prof. can count himself among THEM. Iam done RANTING now, need to before i trash this computer.

  51. So, Bill Nordhaus and the Chernobyl industry want us to phase out carbon?! Really?

    Did I misread or did he fail to mention cutting subsidies to nuclear and carbon power in favour of ‘greener’ solutions like windmills and perpetual-motion technology?

    Makes one wonder what all this money the world is coughing up could do if put towards a multi-decade plan to transfer solar from orbital height to earth-side doesn’t it? That would sink the big green dream though, and carve a horrible rift between James Hansen and the whirlygiggers. Not to mention the trouble it would cause ‘His -gavinness’ in that he would have to stop playing on his blog and have to do ‘space-y’ stuff again.

    I can just imagine, “What do these Republicans think we are, a space agency?? Grrrr, rant, growl, (insert strawmen and near-endless stream of corresponding faked-up insults). -gavin”

  52. it is that we need to correct this market failure

    Between 1970 and 1974 in the US we built 66 GW of coal fired plant.
    Between 2005 and 2009 we built 8 GW of coal fired plant.
    Summer nameplate capacity of coal fired plants in the US has been flat since 1990 at 330GW. US coal consumption expressed in tonnage has been flat for most of the last 10 years.

    The amount of CO2 being emitted by US coal fired plants has been dropping as the utilities shift from high BTU Eastern Coal to lower BTU Western Coal.(CO2 is a function of BTU’s/lb). The effect is masked in generating statistics as less coal is being burned in older inefficient plants and more coal is being burned in new more efficient plants.

    Nameplate capacity of natural gas fired plants in the US went from 180GW in 1998 to 400 GW today.

    Even if I force myself to believe in CAGW I don’t see a market failure.

    Coal fired generating capacity was capped by market forces 20 years ago.

  53. “He says that it is necessary to raise the price of carbon to implement carbon policies so that they will have an impact on everyday human decisions”
    ======================================================
    Yep, make people mad as hell everyday………………

    With the majority of the population going into retirement age, fixed incomes, etc
    Exactly how will this play out

  54. “BillD says:
    January 6, 2011 at 3:53 am

    I think that it’s interesting that the CEO of Exxon-Mobil favors a CO2 tax while the American Petroleum Institute is against the tax.”

    By having interests on both sides of the ledger, Exxon-Mobil, BP, GE and other multi-national companies will benefit no matter which way the wind blows (literally). However, most of the API is made up of small independent producers. Their focus is oil and gas. In the U.S., thanks largely to federal regulation and control, the their sphere of opportunity, both onshore and offshore is shrinking rapidly.

  55. US Constitution Article 1 Section 8:

    The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

    US Constitution Article 1 Section 7:

    All bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

    ———-

    Somehow I do not see taxes on carbon any time soon.

  56. Dodgy Geezer says:
    January 6, 2011 at 2:52 am
    Unfortunately, taxes probably will work.

    I say,
    SURE, for THEM . . . . !!!

  57. The “Bulletine of Atomic Scientists” was founded by a clique of ultra-left individuals (I believe including Oppenheimer) who were rife with GUILT because of helping develop the atomic bomb.

    In the 70’s, ’80’s and even into the ’90’s one of their primary goals was to destroy NUCLEAR POWER.

    I give them about as much credance as the K.K.K. when it comes to credibililty. They are also strongly associated with the Union of Concerned Scientists. A blatantly anti-nuclear power group which has consistently refused to give out any membership or credentials list.

    You “get what you pay for” with these advocacy groups. Worth ignoring.

  58. Dodgy Geezer says:
    January 6, 2011 at 2:52 am
    Unfortunately, taxes probably will work.

    Dodgy – your response was almost 100% accurate, however you stated it would not cut carbon (CO2) emissions. In that you are wrong. Since the onerous tax would stagnate economies throwing the world into another 30s type depression, CO2 emissions would be cut by default. No work, no emissions.

  59. Since nothing that they propose to do will slow climate change—CO2 does not drive our climate—there must be an ulterior motive.

    “Additionally, a carbon tax could be a useful means to cut budget deficits while meeting environmental objectives.”

    Aha! It’s a brand new revenue stream that generates money hand over fist – a revenue stream for the sake of a revenue stream – and serving no purpose but to fund government spending.

    This goes right along with redistributing wealth, but it hurts everybody and everything as it would raise the cost of everything and every activity. It is the typical punitive incentive program that the liberals love, as it hurts to have (being taxed extensively) and hurts even more to try to solve (alternative, more expensive, less efficient energy) will being concurrently taxed.

    Oops! Even if you go out and purchase alternative energy sources for your needs, you will still be screwed by the higher cost of living (of everything else) and the concurrent lower standard of living (you are visibly poorer) caused by the tax.

    If they had their way, we would just have our salaries direct deposited in toto to the IRS.

    Which leads us to a wealthy, big government with undeserved amounts of spending money. Imagine what favor they can buy with more government programs. Nanny state, here we come.

    But, caution is required:
    Thomas Jefferson, “A government big enough to give you everything you want, is strong enough to take everything you have.”

  60. These are highly complex things climate, eco-social-philosophy and taxation. Sorry boys but just like physics and metaphysics no simple [answer?] to complex questions. Nordhaus and the others should know this. We know many of our numeric models relating to the hard sciences are inadequate or suspect. We also know the models of taxation, economics and all social (soft) science are fuzzy at best and downright wrong at worst. This kind of propaganda and ideology discredit those who espouse it.

  61. In slight defence and clarification of Nordhaus’ positions:
    read this review of his work by another liberal (Dyson), one intelligent enough to reject de-industrialization and the basic AGW science (he says the data is poor or missing, and that even if CO2 is a problem, straightforward changes to agricultural and silivicultural practices would achieve more, faster, and at a fraction of the cost).
    Nordhaus takes AGW as a “given”, but his DICE (and somewhat more advanced regional RICE) models (which he runs for 100 yrs into the future, btw, not 1000, since no significant change occurs beyond 100) soundly reject the drastic Gore-Stern mitigation ideas. Carbon tax comes out slightly positive. Kyoto was mildly negative, about the same as doing nothing.

    Of course, if you remove the AGW assumption, all mitigation schemes are serious net losers. The only one with a major “plus” in all circumstances is the ‘low-cost backstop’, a cheap low-emissions widely available energy source (hypothetical). Dyson figgers that might come from biotech. My money is on mini-fusion (focusfusion.org).

  62. Revealing research Max, nice. The ironies are too deep to ignore though, I think.

    Especially since the UCC took up with the nuclear industry post-Chernobyl and now seem game on the globalization of a nuclear technology, materials and waste at a time when what’s already out there was threatening to, and since has, come back to haunt us as security/terrorism threat.

    Quiet the PR job it’s been for nuclear, makes me wonder if most high-school grads would recognize the name Chernobyl. Being the next cheapest option after fossil-fuels is merely an added bonus, I guess.

    Strange bedfellows.

  63. tume says:
    January 6, 2011 at 6:30 am
    “So in US, do you have enough Tea partyers in the new Congress to do the same?”

    Not yet, but we made a very good start in Nov 2010, in part because the ‘Tea Party’ encompasses many from the fields of engineering, physics, mathematics, economics and the sciences. Add a healthy contingent of ‘balance the damn budgets and get out of debt’ common sense pragmatists from sectors like farming, small business, and partially reformed former liberals, and we have the coalition known as ‘The Tea Party’. Like minded folks from various ethnic groups are showing up at Tea Party functions in small but steadily increasing numbers as well, in counter point to the claims of popular media pundits. The trends are positive, the ‘base’ is widening, and the pragmatists are becoming far more active at all levels in politics.

    Please note: The Tea Party is not a 3rd political party in the US. It fermented and spontaneously fomented in opposition to the Progressive Socialist agenda et.al. that has been driven by the democrat controlled government of the last 4 years. The Tea party functions (currently) as a continual goad and warning to all politicians (Democrat, Republican, Socialist/Communist, and Independent) that the majority of American citizens oppose the Progressive Socialist agenda et.al…. and the next election is coming. It is my fervent hope, and based on my observations at Tea Party functions sincere belief, that it reflects a return to reality based decision making combined with direct, unambiguous communications to the pols.

  64. The good news is: none of this is going to happen in the US (except California, which can serve as a warning to the rest of us). The era of “give us you money and everything will be fine” is over.

  65. If these yo-yos ever succeed in passing their ‘globalization’ legislation, whether cap-and-trade or carbon taxes, I almost hope they end up destroying fiat currency altogether. Then they will get to participate in poverty along with the rest of us.

    Considering that such a situation would require bartering one’s own skills or production to survive, they would also be the first ones to starve.

  66. US Constitution Article 1 Section 8:

    The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

    US Constitution Article 1 Section 7:

    All bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.

    ———-

    Somehow I do not see taxes on carbon any time soon.
    ================================

    Taxes, no, but the Obama Administration can levy huge carbon FEES on power companies, which would then pass those fees on to the consumer. Government has learned the fine art of semantics (“It depends on what your definition of “is” is.”)

    Never forget the level to which they will stoop to attain their goals. Remember, when the Health Care bill was being discussed, the requirement to buy health insurance was promoted as ‘not a tax’. Now that the courts are involved, the same people claim the law is legal because it IS a tax.

  67. “You know what, governments are just so stupid they’d do it: they’d tax us for emitting CO2 because to them it’s a pollutant, but they’d also pay us for emitting CO2 because it’s good for plants.”

    Not likely.
    What they will do is order you to pay a VAT on your exhalations, having added value to the air you breathe by converting some of it to CO2.

  68. Even better, let’s do the [CO2] research on the actual effects of near-current levels on terrestrial vertebrates that do not burrow (where [CO2] builds way up). Then the MURDERS attacking carbon dioxide can be exposed for what they are.

    Several murine and rat studies on extremely high concentrations tell us nothing. I have mentioned several times what happened when I searched more than 20 000 academic references to find studies. I finally tried growth because animal science researchers found vitamins by the growing calf’s or piglet’s requirements. And I finally found two studies on chicken eggs showing that they grow a little better if [CO2] is allowed to build up while they are incubating (so that’s why birds like human-built birdhouses–[CO2] builds a bit in those, too).

    This remains pathetic and we need to do better.

    And tis IS the most crucial issue even if you only care about the attack on your freedoms or pocketbook. It is an emotional thing. Even AGW howlers often understand that CO2 is good for plants. But they think CO2 is bad for people, and many people do not know the difference between CO and CO2. They’ll fight reality as long as they think CO2 hurts THEM.

  69. I think commentators on this site need to read Professor Nordhaus’ papers on the subject of climate change and how to respond to the alleged costs before dumping on him. He was one of the few prominent academics to challenge the economic analysis underlying the infamous and, oft-cited by eco-terrorists, Stern report. He is written numerous papers challenging the view that the “science is settled” and the U.S. (and the world) needs to take draconian measures to curb global warming. He has been one of the foremost proponents of the view that evidence to date does not support any drastic measures to curb carbon emissions. On the other hand, he has argued that there is enough evidence to support a small carbon tax, and to put in place the required structure so that the carbon tax could be increased quickly if evidence mounts that carbon emissions are contributing to global warming. While I think such a strutcure would be dangerous because politicians and activists would soon come up with reasons why carbon taxes should be raised, I don’t think Professor Nordhaus should be condemned without a careful reading of his proposal.

  70. William Nordhaus is a Sterling Professor of Economics at Yale University, CT.

    Here’s a plan. We stop funding all universities and invest the savings in windmills. This should reduce economic activity and so carbon output. We would then bulldoze places like the Yale University and use the rubble to form the foundations of a new carbon neutral housing estate for the poor.

    William Nordhaus can stay at home and so reduce his carbon footprint by negating his need to travel to the university. We would then have a trickle down dribble up win win situation with positive outcomes for all stakeholders.

  71. Mustafa,

    you say you think such a structure as Nordhaus has suggested is dangerous, but he shouldn’t be condemned for proposing it. Do you see a contradiction there?

    BTW, Nordhaus’s proposal is based on two flaws. 1) The concept of market failure. Although this is a well known economic concept it can only be applied when externalities are known and quantifiable. The flaw is in the assumption that CO2 emissions have a large negative externality. 2) He then throws a ‘bone’ into the pot by arguing that in any case a carbon tax will reduce the budget deficit. As an economist he should be familiar with the ‘Laffer’ curve of diminishing taxation revenues. Taxation does not create anything – it merely transfers payments from private individuals to government. If it was possible to reduce deficits with massive tax hikes, we would now be living under massive tax hikes.

  72. No, a carbon tax will not be any more effective than the cap-and-trade approach. China, India, and most third-world countries will never agree to pay a carbon tax. So the effect of a carbon tax on the rest of the world would be to simply move carbon output and jobs to those countries who refuse to pay the tax. No net CO2 reductions would result. But it would succeed in redistributing the wealth, which is what a lot of activists really want to achieve in the first place. Just don’t be deceived into thinking that a carbon tax would be effective in reducing global warming gasses.

  73. Anthony,

    Your mention of Leona Helmsley seems especially appropriate.

    As any kid who’s participated in high school or college debate
    knows, a straight across-the-board tax on goods or services
    is inherently regressive in nature.

    This means the “little” people with their “little” incomes
    pay a higher percentage of their income to government
    by way of the tax to aquire or use the same goods and
    services as the well-to-do “big” people.

    A special “tax” interposes more layers of govenment
    that have to be fed (via that same tax) and slips more
    govenment control into the supply/demand formula
    that produces “fair market values”.

    It sounds like a sneaky way for governments to control
    key industries by limiting consumption within a society
    without calling it socialism.

    If the science behind the 2C goal is dubious, the politics
    hidden behind the curtain of the Nordhaus plan is
    a swindle.

  74. R.S.Brown,

    The 2C is not a goal, it is just a wish, since there is no plan to achieve it. There is not even an identified set of conditions which must be achieved to assure that 2C is not exceeded.

    “A goal without a plan is just a wish.”, Antoine de St. Exupery

    I challenge you to identify the single, specific, clearly defined and enunciated GOAL of the AGW “consensed”.

  75. As an economist, Professor Nordhaus should consider the costs as well as the benefits of such a policy. It will be most effective if implemented in the poor but growing economies like China & India, by denying hundreds of millions of people the aspiration of cars, refigerators, heating and air conditioning. It will reduce the spectacular economic growth in these countries.
    In the rich west, it can only work by reducing living standards, with the poor hit hardest. Moreover it is ineffective for reducing energy consumption – as a tripling of the world oil price in the past decade has been ineffective.

    I explain more on my blog at http://manicbeancounter.wordpress.com/2011/01/06/prof-nordhaus-forgets-some-basic-economics/

  76. Giving the clowns in D.C. any king of extra revenue to work with is just a recipe for an accelerated race toward complete disaster. History has clearly demonstrated that for every dollar of extra revenue they get their hands on, they will find ways to spend a buck and a half. In Reagan’s first term federal tax revenues were about $650 billion and spending was over $700 billion. Now after three decades of caterwauling about tax cuts for the rich, revenues have more than tripled to $2.1 TRILLION but spending has increased more than 5X. And BTW the percent of revenue paid by the upper percentiles of taxpayers has been increasing not declining.

    Since most people have a hard time wrapping their head around large numbers I looked up this old illustration

    http://www.pagetutor.com/trillion/usdebt.html

    I say old, but it is actually from less than two years ago, March 2009. The national debt it shows was than $11 trillion. Today, less than 2 yrs later the number has gone past $14 trillion, an almost 30% increase. You’ll have to mentally insert another six levels of pallets filled with hundred dollar bills to the above image to bring it up to date.

    “Sustainability” has been a persistent meme of the ecofascists and, in a way, I have always sort of agreed with them that we are on an unsustainable path. But, in my view, what is making our society unsustainable has nothing to do with fossil fuels, commodities, food, rainforests, polar bears, pacific smelt, etc. but it is encapsulated quite clearly in the image I linked above.

  77. In reply to Mustafa January 6, 2011 at 10:58 am

    Granted that Prof Nordhaus was one of the few to challange the Stern Review and others. An achievement was to cost up the Stern Review proposals versus Al Gore’s.

    However, having read this current paper the Professor fails on economic grounds. Any policy will impose economic costs, yet will not completely eliminate global warming (per IPCC view). The AGW consensus also says that warming will happen and have very costly consequences. There is meant to be a least cost case of maintaining temperature increase to 2 celsius (CO2 levels circa 600ppm).

    Nordhaus largely ignores
    1. The whole policy is in vain if China is not on board. And China is not. Without it Europe can reduce their CO2 by 80% and make virtually no differance. See http://rogerpielkejr.blogspot.com/2010/08/recent-talk-of-mine.html
    2. A Carbon Tax is ineffective. If it was then fossil fuel use would have fallen already with oil prices having more than tripled in the last decade.
    3. A carbon tax hits the poor hardest.

    So even if you believe that global temperatures will climb 3 degrees in a generation, that famine will break out as harvests fails, than there will be droughts and floods at the same time, that we will freeze in winter and roast in summer, that hurricanes will become more extreme, the Himalayan glaciers vanish and the Amazon rainforests perish- even if you believe all that, a policy that is ineffective, reduces living standards and is highly regressive, may just make the situation worse. That is why you need to take a more balanced approached to policy.

    I examine Nordhaus’s paper more at http://manicbeancounter.wordpress.com/2011/01/06/prof-nordhaus-forgets-some-basic-economics/

  78. Per Strandberg says:
    Professor Nordhaus is a member of Skull & Bones a famous secret society of Yale University with a rather notorious reputation.

    Ah, well. That’s all we really need to know. I’m sure Nordhaus is well aware his ideas are complete BS.

  79. William Naudhouse,

    In a few simple words, will you please explain how the collected taxes will be spent in a way that reduces GHG emissions?

    Can you please cite a study that lists such ways to spens, with estimates of GHG savings for each?

    (The most effective, about the only one that I can imagine to be significant, is moew widesperad adoption of nuclear power, which is already well under way).

    You might like to condiser an alternative economic approach – first, that people are by nature energy-conservative; they do not want to pay excess monies for energy when they could spend it on fun. Second, each person will consume a minimum, quantifiable amount of energy in a lifetime; and third, that attempts to substantially reduce that consumption will cause death.

  80. The ultimate market failure is when the government induces poverty through taxation to combat a nonproblem.

  81. Ed Reid says:
    January 6, 2011 at 2:42 pm (Edit)

    R.S.Brown,

    The 2C is not a goal, it is just a wish, since there is no plan to achieve it. …

    I challenge you to identify the single, specific, clearly defined and enunciated GOAL of the AGW “consensed”.

    The early death of several billion innocent people, and the forced sterilization of the surviving few so that pristine “nature” may again reign pure and supreme in all her glory on this earth without man present to pollute and despoil her surface?

Comments are closed.