The Sanders-Boxer carbon tax will be 15 times costlier than letting warming happen

Inter-temporal investment appraisal of the Sanders/Boxer carbon tax bill

by Christopher Monckton of Brenchley

Standard climatological and economic techniques, combined in an investment appraisal of the proposed Sanders/Boxer carbon dioxide tax (U.S. Senate, 2013), show that even at a zero inter-temporal discount rate the cost of the Bill’s proposed CO2 mitigation if applied worldwide over ten years is 15 times greater than the benefit in the cost of warming-related damage avoided by the intended cut in CO2 emissions, which is here assumed to be – but is in reality unlikely to be – achievable at the stated cost.

Fraction of global CO2 emissions abated: By 2023, on business as usual, U.S. CO2 emissions will be 5589 Tg CO2, 8.5% down (EIA, 2013) on the 6108 Tg CO2 (EPA, 2012) emitted in 2005. En route to Sanders/Boxer’s proposed 2025 cut of 20% compared with 2005, the cut in 2023 will be 18.5% against 2005, or an additional 10% or 611 Tg CO2, representing a cut of 10.9% in 2023 against business as usual. Since U.S. CO2 emissions represent 17% of world emissions (derived from Boden & Marland, 2010 and Boden, 2010), even if the tax succeeds as intended it will abate just 10.9% of 17%, or a mere 1.9%, of global CO2 emissions.

CO2 concentration abated: Without the carbon dioxide tax, CO2 concentration in 2023 would be 422 μatm (IPCC, 2007, Table 10.26) against 397 μatm in 2013 (updated from Conway & Tans, 2011). If the tax worked as intended, CO2 concentration in 2023 would be 422 minus 1.9% of (422 – 397), or 421.522 μatm.

CO2 forcing abated (IPCC, 2007; Myhre, 1998), would be 5.35 ln(422/421.522), or 0.006 W m–2.

A suitable climate sensitivity parameter is multiplied by the CO2 forcing to determine warming over the ten-year term. Garnaut (2008) is one of many who recommend keeping greenhouse-gas rises to 450 ppmv CO2-equivalent above the 280 ppmv prevalent in 1750, to hold 21st-century warming since then to below 2 K. So the implicit climate sensitivity parameter is 2 K / {5.35 ln[(280 + 450)/280] W m–2}, or 0.39 K W–1 m2.

Global warming abated by the tax from 2014-2023 would be 0.39(0.006) = 0.00237 K.

Projected warming over the term: CO2 forcing represents 70% of all manmade forcing (IPCC, 2001, 2007). Thus, warming officially projected for the ten-year term is 0.39[5.35 ln(422/397)] / 0.7 = 0.182 K.

The percentage of projected global warming abated over the ten-year term is 0.00237/0.182 = 1.3%.

The cost of abating global warming via the U.S. carbon tax over ten years is given as $1.2 trillion.

The mitigation cost-effectiveness of the tax, i.e. the cost of abating 1 K global warming by worldwide measures as cost-effective as the tax, is $1.2 trillion / 0.00237, or $507 trillion per Kelvin abated. The cost of abating the 3 K warming predicted by the IPCC to 2100 would exceed $1.5 quadrillion.

Global abatement cost: The cash cost of abating this projected 0.182 K warming over the term, again by measures as cost-effective as the tax, is 0.182 x $507 trillion, or $92 trillion, which, divided by the global population of 7 billion, is $13,200 per head, or, divided by $803 trillion global GDP over the ten-year term (from World Bank, 2011 assuming 3% annual GDP growth from $66 trillion in 2013), 11.5% of global GDP.

Benefit in averted warming-related damage cost: Stern (2006, p. vi), estimates that the cost of abating the 3 K 21st-century global warming expected by the IPCC will be 1.5[0, 3]% of 21st-century global GDP.

The cost-benefit ratio is 11.5/1.5 = 7.7. Accordingly, based on the optimistic assumption that $1.2 trillion will buy as much CO2 mitigation in the U.S. as Sanders/Boxer assume, and taking a zero discount rate, which maximally favors future generations, it is almost 8 times costlier to mitigate CO2 emissions by typical abatement measures such as the Sanders/Boxer carbon tax than to take no action at all and to endure the later cost of climate-related damage arising from the resultant warming.

The bottom line is that if global warming of 0.14 K/decade in the 22 years since 1990 (the least-squares trend on the monthly temperature anomalies in HadCRUt3gl, 2011) continues at half of the 3 Cº central estimate in IPCC (1990), so that only half the benefit in damage costs averted is achievable, CO2 mitigation today will be at least 15 times costlier than adaptation the day after tomorrow.

Conclusion: More complex analysis would be unlikely to change the outcome sufficiently to render the U.S. carbon tax, or any policy to mitigate CO2 emissions, at all cost-effective. Removal of some of the simplifying assumptions would tend to worsen the cost-benefit ratio still further, for most of them lead to understatement of it. Results from other case studies broadly confirm the outcome in the Sanders/Boxer case. Therefore, future adaptation where needed is sensible, but present-day mitigation is unjustifiable. Congress should reject the Bill, which would reduce the current $2 trillion U.S. annual deficit by only $30 billion, or just 1.5%.

References

Boden and Marland, 2010a. Global CO2 Emissions from Fossil-Fuel Burning, Cement Manufacture, and Gas Flaring, 1751-2007. Carbon Dioxide Information and Analysis Center, Oak Ridge, Tennessee, USA.
Boden et al., 2010b. Ranking of the world's countries by 2007 total CO2 emissions from fossil-fuel burning, cement production, and gas flaring. Carbon Dioxide Information and Analysis Center, Oak Ridge, Tennessee, USA.

Conway, T., & P. Tans, 2011, Recent trends in globally-averaged CO2 concentration, NOAA/ESRL, http://www.esrl.noaa.gov/gmd/ccgg/trends/global.html#global.

Energy Information Administration (EIA), 2013, Annual Energy Outlook 2013, from Annual Energy Outlooks 2009-2013.
Environment Protection Agency (EPA), 2012, Inventory of U.S. Greenhouse Gas Emissions and Sinks, 1990-2010 (Washington, DC, 2012 April).

Garnaut, 2008. The Garnaut Climate Change Review: Final Report. Cambridge University Press, Port Melbourne, Australia, 680 pp, ISBN 9780521744447.

HadCRUt3gl, 2011. Monthly global mean surface temperature anomalies, 1850-2011. http://www.cru.uea.ac.uk/cru/data/temperature/hadcrut3gl.txt.

IPCC, 2001. Climate Change 2001: The Scientific Basis: Contribution of Working Group I to the Third Assessment Report of the Intergovernmental Panel on Climate Change [Houghton, J.T., Y. Ding, D.J. Griggs, M. Noguer, P.J. van der Linden, X. Dai, K. Maskell and C.A. Johnson (eds.)]. Cambridge University Press, Cambridge, United Kingdom, and New York, NY, USA.

IPCC, 2007. Climate Change 2007: the Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, 2007 [Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Avery, M. Tignor and H.L. Miller (eds.)]. Cambridge University Press, Cambridge, United Kingdom, and New York, NY, USA.

Murphy, 2008. Some Simple Economics of Climate Changes. Paper presented to the MPS General Meeting, Tokyo, September 8.

Myhre et al., 1998. New estimates of radiative forcing due to well mixed greenhouse gases. Geophysical Research Letters 25:14, 2715–2718, doi:10.1029/98GL01908.

Stern, N., 2006, The Economics of Climate Change: The Stern Review. Cambridge University Press, Cambridge, United Kingdom, and New York, NY, USA.

U.S. Senate, 2013, Sanders/Boxer Climate Legislation, www.sanders.senate.gov/imo/media/doc/021413-2pager.pdf.

World Bank, 2011. Gross Domestic Product 2009, World Development Indicators. http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf.

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55 Responses to The Sanders-Boxer carbon tax will be 15 times costlier than letting warming happen

  1. That assumes the purpose of the Carbon Tax is to reduce global warmimg!

  2. Steve says:

    Brilliant. Using the IPCC’s own assumptions to destroy the meme of this money-and-power grab by politicians and governments.

  3. Vic Socotra says:

    Totally agree, Paul. This is not about reducing carbon dioxide, this is about establishing a new source of tax revenue, which will inevitably be diverted as the current Federal gas tax, social security and the other “lockboxes” which have looted to feed the ravenous maw of the general fund and the relentless expansion of the welfare state. These people are clever in their way, but not subject to reason, Lord Monckton.

  4. Ted Wagner says:

    Of course, the Boxers-Sanders (BS) bill has nothing to do with AGW, it is only about revenue and control.

  5. I get outraged by titles like this one. Warming would be a GOOD thing if it were happening. The Earth is COLD, and temperatures closer to room temperature (22C) would benefit many more living things than would be harmed.

    Paleoclimatology suggests that the Earth was warmer than present for 300 million years straight, beginning with the Cambrian, and that it would not rise above that level. If so, there are feedback on the Earth that make dangerous global warming impossible.

    Neither CO2 nor other man-made greenhouse gases are capable bringing the globe UP to optimum levels, let alone beyond them.

    There IS a threat of excess temperatures and of drought from actions of environmentalists. See the Sea of Azov in Iain Murray’s “The REALLY Inconvenient Truths: Seven Environmental Catastrophes Liberals Don’t Want You To Know About–Because They Helped Cause Them.

    As to CO2, the dear Viscount needs to get up to speed on plant and animal physiology in addition to his many other talents. After all, the well-being of the biosphere is the real concern. Plenty of information on plants can be found on the CO2 science website.

    Information on terrestrial vertebrates is harder to find. I could uncover no studies on longevity in any species, so I used my animal science background to look in another direction, searching for CO2 and growth. I eventually found 3 studies carbon dioxide and chicken embryos (eggs), which found that slightly higher carbon dioxide concentrations led to slightly faster hatching and development. In humans, I found out that the submarine CO2 limit is 100 times the atmosphere average, and that hospitals enrich preemie cribs with 7% carbon dioxide to help their lungs mature.

    I believe we humans live longer with more carbon dioxide in the air. If the super-rich tax gluttons hoping to get more dollars (and pounds and euros) from a carbon tax can be made to understand that they are cutting their own health and their own lives short–we might get somewhere.

  6. Petrossa says:

    I’m with Paul Homewood. These taxes aren’t meant for mitigation, but for control of energy usage.

  7. numerobis says:

    A tax that raises 1.2 trillion is not typically accounted for as pure destruction of wealth, as you’ve assumed here. It diverts wealth from one use to another. The US currently has a moderate structural deficit, which this would help reduce.

    US industry is exceedingly skilled at avoiding taxes; in this particular case, the tax is structured so that tax avoidance achieves a desirable social purpose — unlike, say, corporate profit taxes, which have no direct social benefit.

    I haven’t read the details yet on how it will avoid merely shifting production to lower-tax countries, which is the main worry with carbon taxes in general.

  8. William Astley says:

    Madness! Mass hysteria! Tribal group think! There is no other explanation for public support of these purposeless, economic damaging, green scams.

    The Sanders Boxer carbon tax will be 15 times costlier than letting warming happen, assuming warming happens as predicted by the IPCC.

    The current observed temperature increase and the fact that there has been no increase in planetary temperature for 16 years, supports the assertion that the planet’s feedback response to warming is negative (planet resists the warming by an increase in clouds in the tropics) rather than positive (planet amplifies the warming). The IPCC general circulation models have positive feedback as the response to warming (amplification). If the planet’s feedback response is negative a doubling of atmospheric CO2 will result in roughly 1C warming with most of the warming occurring at high latitudes which will result in an expansion in the biosphere.

    There is no extreme AGW crisis to solve. Science is not on the side of the climate extremists. (See summary and link below.)

    The Sanders Boxer carbon tax will also not appreciably result in a reduction atmospheric CO2 as there is a planned 40% increase in coal fired electric generation in the world, with 77% of the expansion planned for China and India.

    The Obama administration and the Democrat portion of congress need a basic education concerning both the facts of AGW (there is no extreme AGW problem to solve) and the facts concerning CO2 emission in the world. (Hint massive amounts manufacturing has moved to Asia. The Asians are purchasing televisions, computers, fridges, and air conditioning – industrializing, increasing their standard of life.)

    Reality is reality. The carbon tax will be on green scams and bureaucracy to hand out the money. Green scams such as the conversion of fuel to biofuel or the wind farms do not significantly reduce carbon dioxide emission and will significantly increase cost of electric power and transportation fuel in the US, making US industry less completive.

    http://joannenova.com.au/2013/02/who-actually-took-notice-of-the-kyoto-protocol-coal-fired-plants-going-up-everywhere/

    77% of the total Nameplate Capacity of these new plants is just in China and India alone, and hey, I wonder how Rajendra Pachauri feels when he looks at this map.

    See in the left bottom corner the total Nameplate Capacity comes in at 1,401,278MW.
    This link shows the World’s current Nameplate Capacity total for traditional Thermal Power (scroll down and the number is at the bottom right, and this is for all coal fired power), and while this is for end of year 2010, you’ll notice it has been increasing by around 200,000MW a year, so a best guess total for now might be around 3,700,000MW, so the increase shown on this map comes in at an addition of almost 40% extra, on top of existing Capacity.

    http://www.johnstonanalytics.com/yahoo_site_admin/assets/docs/LindzenChoi2011.235213033.pdf

    On the Observational Determination of Climate Sensitivity and Its Implications
    Richard S. Lindzen1 and Yong-Sang Choi2
    We estimate climate sensitivity from observations, using the deseasonalized fluctuations in sea surface temperatures (SSTs) and the concurrent fluctuations in the top-of-atmosphere (TOA) outgoing radiation from the ERBE (1985-1999) and CERES (2000- 2008) satellite instruments. Distinct periods of warming and cooling in the SSTs were used to evaluate feedbacks. An earlier study (Lindzen and Choi, 2009) was subject to significant criticisms. The present paper is an expansion of the earlier paper where the various criticisms are taken into account. The present analysis accounts for the 72 day precession period for the ERBE satellite in a more appropriate manner than in the earlier paper. We develop a method to distinguish noise in the outgoing radiation as well as radiation … …we show that including all CERES data (not just from the tropics) leads to results similar to what are obtained for the tropics alone – though with more noise. We again find that the outgoing radiation resulting from SST fluctuations exceeds the zerofeedback response thus implying negative feedback. In contrast to this, the calculated TOA outgoing radiation fluxes from 11 atmospheric models forced by the observed SST are less than the zerofeedback response, consistent with the positive feedbacks that characterize these models. ….

    …The heart of the global warming issue is so-called greenhouse warming. This refers to the fact that the earth balances the heat received from the sun (mostly in the visible spectrum) by radiating in the infrared portion of the spectrum back to space. … ….However, warming from a doubling of CO2 would only be about 1C (based on simple calculations where the radiation altitude and the Planck temperature depend on wavelength in accordance with the attenuation coefficients of well mixed CO2 molecules; a doubling of any concentration in ppmv produces the same warming because of the logarithmic dependence of CO2’s absorption on the amount of CO2) (IPCC, 2007). This modest warming is much less than current climate models suggest for a doubling of CO2. Models predict warming of from 1.5C to 5C and even more for a doubling of CO2. Model predictions depend on the ‘feedback’ within models from the more important greenhouse substances, water vapor and clouds. Within all current climate models, water vapor increases with increasing temperature so as to further inhibit infrared cooling.

    http://joannenova.com.au/2012/10/man-made-global-warming-disproved/

    Observations show major flaws
    1. The missing heat is not in the ocean 8 – 14
    2. Satellites show a warmer Earth is releasing extra energy to space 15 -17
    3. The models get core assumptions wrong – the hot spot is missing 22 – 26, 28 – 31
    4. Clouds cool the planet as it warms 38 – 56
    5. The models are wrong on a local, regional, or continental scale. 63- 64
    6. Eight different methods suggest a climate sensitivity of 0.4°C 66
    7. Has CO2 warmed the planet at all in the last 50 years? It’s harder to tell than you think. 70
    8. Even if we assume it’s warmed since 1979, and assume that it was all CO2, if so, feedbacks are zero — disaster averted. 71
    9.It was as warm or warmer 1000 years ago. Models can’t explain that. It wasn’t CO2. (See also failures of hockey sticks) The models can’t predict past episodes of warming, so why would they predict future ones?

  9. pat says:

    In actuality the flow that that much money will increase carbon usage. The money itself will not be sequestered. Even if only reintroduced as salaries it will cause significant consumer demand if not for goods originating in America, then manufactured overseas, thus adding to the carbon totality. These people are not economists. Boxer is a dimwit of the first water, Sanders is susceptible to every crackpot scheme imaginable.

  10. tomwys says:

    “Petrossa says:
    February 17, 2013 at 8:36 am
    I’m with Paul Homewood. These taxes aren’t meant for mitigation, but for control of energy usage.”

    Its even simpler, Petrossa! These taxes are for taxation only! The DREAM of politicians is to engineer it so that the public clamors for a tax, and then, with pride, graciously deliver it to them!

    Check out:
    http://www.colderside.com/Colderside/Temp_%26_CO2.html Notice that atmospheric warming has ceased. Try to get Putin and the Russians (50 degrees below zero in Moscow) to agree that cooling the planet is needed, and BTW, the Chinese are in the same (frozen) boat!!!

  11. tomwys says:

    A very erudite posting (at 8:52AM), Mr. Astley!!!
    Well said & Thank You!!!

  12. Jeff L. says:

    I love the math ! I wonder if Sanders & Boxer understand cost-benefit analysis … or for that matter are even capable of following this fairly elementary , fact-based, math-based analysis presented here. Unfortunately, I fear the answer they wouldn’t understand any of this and all their decisions are emotion based.

  13. Dodgy Geezer says:

    The taxes are desired for two purposes – which are mutually contradictory.

    The politicians desire a justification for taxes so that they can build up a large ‘government’ balance, which can then be spent on public largess to buy popularity at election time.

    Unfortunately, each service provided to the electorate requires funding and staff to run it. Thus, as politicians offer the public more and more services to buy votes, they must tax at higher and higher levels. This is most obvious in parts of Europe, but the US is not so far behind. The politicians’ only hope is that the wealth-creating part of the economy will expand faster than the tax burden, if new technologies and increased productivity can be achieved.

    The activists, on the other hand, desire taxes BECAUSE they threaten productivity. In their eyes, industrial advance is bad, and should be halted. They support CO2 taxes because practically every energy interchange generates CO2, and therefore suppressing CO2 output is an effective way to close down the industrial world we live in.

    These two operate a precarious alliance, with claims that somehow suppressing CO2 and insulating will make us MORE industrially capable. It is often claimed that lowering CO2 output means that you are operating more efficiently, so you must be making more money…. But this is a confused and incorrect argument, and will surely collapse as the truth becomes apparent…

  14. glenncz says:

    Don’t just take Monckton’s word for it. Uncle Sams also agrees with his assessment.
    Middle column.
    http://epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=57cadd3c-afb0-4890-bae5-3d6a101db11f

  15. Gail Combs says:

    Petrossa says:
    February 17, 2013 at 8:36 am

    I’m with Paul Homewood. These taxes aren’t meant for mitigation, but for control of energy usage.
    >>>>>>>>>>>>>>>>>>>>>>
    It is worse than many realize. It is not just about controlling energy usage but about driving the cost of energy so high that what few manufacturing plants are left in the USA will shut down and move overseas and along with them our real jobs, actual wealth creation and economic security.

    February 19, 2004 A Nation of Shopkeepers
    …If the United States, however, continues its free-trade-induced trend towards “a nation of shopkeepers” (courtesy of NAFTA, the WTO, PNTR for China, and the newest round of free trade agreements with Jordan, Chile, Singapore, Morocco, Australia, the Andean countries, and Central America), it will continue to lose the advantages – similar to those of the rising British Empire – which had put it on top of the world in the 20th century. The Bush Administration, not to mention most of the Congress, has yet to grasp what is happening economically, even as it tries to defuse some of the political consequences of free trade agreements….

    January 22, 2013 Recent Manufacturing Slump Dragging On
    …More major evidence of ongoing and even worsening competitiveness problems in domestic manufacturing has emerged recently – principally the three record monthly trade deficits amassed by the sector since August, and rising import penetration, as just documented in a new U.S. Business and Industry Council study (available at http://americaneconomicalert.org/USBICImportPenetrationReport2013Final.pdf).

    The brightest face that can reasonably be put on this news is that U.S.-based manufacturing is starting to look like the rest of the American economy – barely slogging along. More than four years after the financial crisis’ peak and despite the trillions of dollars’ worth of stimulus provided by the President, Congress, and of course the Fed, it’s a pitiful level of bang for buck – not to mention indebtedness.

    Meanwhile electricity bills will skyrocket.

    Obama’s war on coal hits your electric bill
    The market-clearing price for new 2015 capacity – almost all natural gas – was $136 per megawatt. That’s eight times higher than the price for 2012, which was just $16 per megawatt. In the mid-Atlantic area covering New Jersey, Delaware, Pennsylvania, and DC the new price is $167 per megawatt. For the northern Ohio territory served by FirstEnergy, the price is a shocking $357 per megawatt…. The costs will be passed on to consumers at the retail level.

    This means down the road Ohio will go from $160/month for power to $3570/month for power. Who in heck can afford that?

    However Mayor Michael Bloomberg has the answer.

    The ‘Micro-unit’ Mini-apartment Building is Coming to New York City
    ….the mayor launched a pilot program that his administration has dubbed adAPT NYC, …Interested developers are being asked to submit proposals to develop a residential tower, at least two-thirds of which must be dedicated to miniature apartments of between 250 and 350 square feet in size…

    Cities like London, Barcelona and Boston have embraced similar housing designs.

    Jonathan Miller, President and CEO of Miller Samuel Inc., said he’s appraised a number of apartments under 200 square feet in size, the smallest of which was a miniscule 130….

    10ft by 13ft isn’t an apartment it is a broom closet! (A California King size bed is 6ft by 7ft or more than a quarter of the space.)

    Meanwhile in California Planners want to herd millions into densely packed urban corridors… adopting plans that would require most new housing to be built at 20 or more to the acre, which is at least five times the traditional quarter acre per house. State and regional planners also seek to radically restructure urban areas, forcing much of the new hyperdensity development into narrowly confined corridors.
    That is a plot of land of maximum size of 40ft X 50ft per house. (A builder’s acre is 200ft X 200ft)

    As if that was not enough zoning regulations are now being used to “Clear Land” that is already occupied.

    Jun 23 2011 L.A. County’s Private Property War
    …Many residents insist a clearing-out is under way in these 2,200 square miles of arid land an hour north of L.A….

    …Tough code enforcement has been ramped up in these unincorporated areas of L.A. County…
    L.A. Weekly found in a six-week investigation that county inspectors and armed DA investigators also are pursuing victimless misdemeanors and code violations, with sometimes tragic results. The government can define land on which residents have lived for years as “vacant” if their cabins, homes and mobile homes are on parcels where the land use hasn’t been legally established. Some have been jailed for defying the officials in downtown Los Angeles, while others have lost their savings and belongings trying to meet the county’s “final zoning enforcement orders.”

    Some top county officials insist that nothing new is unfolding. Michael Noyes, deputy in charge of code enforcement for Los Angeles County District Attorney Steve Cooley, says, “We’ve had a unit in the office through the ’70s and ’80s.” But key members of the county NAT team say that “definitely, yes,” a major focus on unincorporated areas was launched in 2006.

    Many residents insist a clearing-out is under way in these 2,200 square miles of arid land an hour north of L.A., a mountain-ringed valley at the western tip of the Mojave Desert named for elegant pronghorn herds that were all but wiped out by an 1884-94 drought.

    Now that would not be Antelope Valley would it…..

    June 22, 2012 First Solar gets L.A. County go-ahead for massive solar site

    The nearly $1.4-billion Antelope Valley Solar Ranch One project was put on hold as the county checked that the thin-film solar panels being installed met certification, health and safety requirements….
    The 2,100-acre property is located in the northern part of the county and situated on land previously used for agriculture and without threatened or endangered species, according to First Solar.

    Welcome to Obama’s “Science Czar” John Holdren’s De-Development of the US

  16. DaveG says:

    The Sanders-Boxer carbon tax will be 15 times costlier than letting warming happen.
    Thank you Lord Monckton.
    I can’t think of 2 dumber idiots as Sanders-Boxer – Playing with our lives like evil kids in a Sand-Box. Destroying the economy with their ill thought out tax scams. the America people must be dumbed down to the max to entertain this wealth destruction insanity.

  17. davidmhoffer says:

    One wonders how many complete absurdities a good quality troll can intertwine into a few sentences. Below we have a fine example. Let’s deconstruct it line by line.

    numerobis says:
    February 17, 2013 at 8:49 am
    A tax that raises 1.2 trillion is not typically accounted for as pure destruction of wealth, as you’ve assumed here. It diverts wealth from one use to another.

    What it does is force the use of an expensive commodity to replace an inexpensive commodity. The only diversion of wealth is from the pockets of the general public who must now pay a higher price for everything into the pockets of those who provide (at a profit to themselves) the higher priced commodity. This is called stealing from the poor and giving to the rich. Further, as such a tax raises the price of everything the only possible outcome is for a reduction in economic activity. Someone how can just barely afford a new car now can’t, and so on and so forth through the entire economy. The loss of taxation due to reduced economic activity is massive, far greater than the tax revenues you seem to think are simply free, That is of course without even counting the economic activity lost to other countries that simply use the lowest cost resource to produce the same goods.

    The US currently has a moderate structural deficit, which this would help reduce.

    If by “moderate” you mean technically bankrupt, sure. But the notion that increasing the cost of absolutely everything (which is the only possible consequence of replacing low cost energy sources with high cost energy sources) will have no negative impact on over all tax revenue is simply beyond naive.

    US industry is exceedingly skilled at avoiding taxes; in this particular case, the tax is structured so that tax avoidance achieves a desirable social purpose —

    Why is increasing the price of everything desirable? Particularly when the cost of doing nothing is a tiny fraction of that? Or do you consider making poor people even poorer, middle class people poor, and rich people richer a desirable social purpose?

    unlike, say, corporate profit taxes, which have no direct social benefit.

    No tax has a direct social benefit based on where it comes from. If you tax corporate profits and build a hospital, the social benefit is the hospital. If you tax personal income and build a hospital, the social benefit is a hospital. If you tax property and build a hospital, the social benefit is the hospital. If you tax low cost commodities to force the use of high cost commodities, there will be less corporate profits, personal income and property value to tax, and hence less hospitals. Or were you thinking that diverting money into the pockets of billionaires who own wind mill companies and solar companies and bio-fuel companies is a social benefit? Oh, yes, yes, I know, the employ thousands of people. The tens of thousands who lost their jobs due to the new economy in which the cost of everything is higher will be glad to know that.

    I haven’t read the details yet on how it will avoid merely shifting production to lower-tax countries, which is the main worry with carbon taxes in general.

    Haven’t read? How would you read the details of something that is impossible? Do you surmise that there is something that Boxer et al can do to raise the cost of everything and at the same time ensure that everyone simply keeps buying the same things from the same suppliers when foreign suppliers are less costly? Never mind haven’t read the details yet how about explaining how such a thing could possibly be accomplished by any means at all?

  18. Justthinkin says:

    15 times,eh? And 14 times will go to Boxer-Sanders,their cronies,and the eco-cultists. The USSA is SO screwed.

  19. glenncz says:

    In the above linked document the EPA states that US greenhouse gas reductions, using IPCC models, is going to have the effect to reducing earths temp.’s by about ..1C (1/10th of a degree C for those with bad eyesight!) and will stop the seas from rising by about 1 cm. This will occur because CO2 will be reduced by 3ppm! Some would say at least they are trying. The US creates about 20% of the world CO2 emissions. I suppose that we are to be the leader by example, so if the entire world acted like in the 2010 EPA regulation, world temp would by .5C less in 2100. Of course, a Nina or Nino could throw the world’s temperature much more than that in a matter of a few months.

  20. glenncz says:

    Very big oops on my part! At this age I have trouble reading the screens myself. Above that is .01C NOT .1C, the effect of US reduction in greenhouse gas emissions. 1 100th of a degree C.

  21. oldfossil says:

    The person who controls the spending controls the people. You think it’s your taxpayer dollars at work but you’re only getting what you put in less admin expenses and less their “take.”

  22. Jimbo says:

    The cure is worse than the alleged disease. Bloodletting at its finest.

    They know full well this tax has absolutely nothing to do with trying to control the climate.

  23. crosspatch says:

    The headline is somewhat misleading because we would end up with BOTH! The carbon tax will have no influence on global climate, it just won’t make enough of a difference to be noticed on a global scale. So we end up with the climate doing whatever the climate is going to do anyway PLUS a carbon tax. It’s just insane.

  24. Bob Tisdale says:

    Christopher: Consider Forbes.com for a cross post of this.

    When are you going to be on with Dennis Miller again? I’ll try to call in then!!

  25. DavidG says:

    Unfortunately, Barbara Boxer is my Senator and she is one of the stupidest people in Congress, she is just carrying the flag for the unidentified ‘geniuses’ who thought this one up. So No, Jeff L. She is not capable of doing a crossword puzzle, much less anything else that requires thought.

  26. Keitho says:

    These guys are crazy. It’s almost like they hate humans.

  27. Eve says:

    I don’t think we are humans to them. We are a revenue stream. This whole scam was always about getting more tax money out of the public. Surprisingly or not, many people believe it. I ask them to turn off their main breaker then. And they don’t do it. They want to be forced into it.
    From the surprisingly cool Bahamas, 64 F and no heat.

  28. Jon says:

    The Australian carbon tax has raised virtually nothing, and the government responsible is now plumbing new depths of unpopularity. Perhaps that may act as a warning to others…

  29. Latitude says:

    Isn’t the tax revenue around $2 1/2 trillion?…..and they haven’t been able to stop one thing global warming is supposed to make worse, not one earthquake, volcano eruption, tsunami, meteor, or comet….

  30. Neal Kaye says:

    Dream Debate:

    Lord Monckton vs. Algore. What a slaughter that would be.

  31. A.D. Everard says:

    We’re going to have to just keep plugging away, getting the truth before more and more people until there are enough numbers to rage against every nuance of Green – not just those in power, but every leaflet they produce, every bullying message telling us to sacrifice our way of life to “save the planet”, every poster torn down, every light bulb changed back, every windmill destroyed. It’s rage that’s going to do it. People are angry and fed up and if these green terrorists don’t get pulled back into line, demoted and their funding stripped from them, that rage is going to vent.

  32. Neville. says:

    This graph from the EIA easily tells the true story of future emissions of co2 until 2035.

    http://www.eia.gov/forecasts/ieo/emissions.cfm
    The OECD will nearly flatline while the non OECD ( China India etc will soar) The USA has been heading south towards 1990 emissions because of cheaper gas.
    Anything the US or OECD does will not make a jot of difference to the climate or temp by 2035 or by 2100.
    That includes a difference to tornadoes, bushfires, hurricanes/ cyclones, SLR etc. Although Lomborg claims a postponment of 4 years by 2100 if every country were to sign up to Kyoto.
    So do ZIP and you have the same temp and climate by 2100 instead of 2096. At a cost of endless trillions of $ for a zero return on our investment.

  33. TimO says:

    The problem is they don’t CARE if the tax is more expensive.
    They want to be absolved of their sins, not actually accomplish anything….

  34. Lil Fella from OZ says:

    The old quote, Ah, all is not gold that glitters.
    No but all who participate in the foolishness of global warming will get the gold. That is except the people of no consequence. US!

  35. manicbeancounter says:

    The bottom line is that the cost-benefit ratio is 8 or 15. For a project to be worth doing the c-b ratio should be less than 1.

    The cost-benefit ratio will rise if :-
    1. The costs of a given amount of warming are overstated. That is, if the climate does not become as extreme as Stern assumed, or if people adapt to the changing conditions.

    2. That the likelihood of extreme catastrophic global warming is over-stated. (For risk-neutral people, a 10% loss of $100 is treated the same as a the certain loss of of $10. For risk-averse people they might be willing to pay a premium more than the average expected losses, but never more than the maximum loss.)

    3. The policy is not as effective in reducing emissions as proclaimed. This could be through:-
    (i) Over-stating the theoretical capabilities of the carbon tax (stuff like elasticities incorrectly estimated and opportunity costs not being recognized)
    (ii) The policies effectiveness being watered down and costs increased through the horse-trading that is required to get a Bill through both Houses of Congress.
    (iii) The tax is not being optimally adjusted for CO2 reductions (rather than tax revenue maximization) – with adjustments made as conditions change.
    (iv) That when the tax really becomes effective, with people can no longer affording to heat their homes properly, or have to use their cars less, that the politicians will not do a U-turn.

    In summary, the cost-benefit ratios that Lord Monckton calculates are too low (making the policy justification appear better than it is) if catastrophic consequences of global warming are over-hyped, the economic theory is over-hyped and politicians are less than perfect at delivering exactly what they promised. For economic theorists, the cost-benefit trade-off can expressed graphically, the elements of GW costs listed, and the policy issues are analyzed here.

  36. Al Gore says:

    It might be 15 times costlier than doing nothing, but going along with this will grant monopoly to the leftist ideology national and globally?

  37. Ian H says:

    This analysis assumes that the IPCC are completely correct with regard to every detail of the science and as many here have pointed out, that is a massive assumption. What is interesting is that even with this handicap; allowing the alarmists their every conceit and letting them push every number beyond the limits of plausibility; the economic case for a carbon tax remains completely ridiculous.

    This argument by Christopher Monckton is the economic equivalent of winning at wrestling with both arms tied behind your back while wearing a tight kimono. Imagine how strong the argument would be if he were to take the kimono off!

  38. lenbilen says:

    I maintain the increase in CO2 is highly beneficial, leading to higher crop yields and making more land suitable for farming since photosysthesis needs less water with increased CO2. In the temperate region it also increases the growing season by a few days.

  39. numerobis says:

    davidmhoffer: Thank you for your kind reply that is completely in accordance to the politeness requirement of this website.

    Any tax is going to hit real people, of course. The income tax does, sales taxes do, import tariffs do. But the government isn’t then just burning the money; it’s building bridges and roads, invading far-away countries, providing health care to the elderly, etc. We can talk all day about the cost-benefit of those activities; it seems rather off-topic for this website.

    So now we have a proposal for a different kind of tax, one expected to raise $1.2 trillion over ten years. Lord Monckton is, as is quite reasonable, trying to evaluate it.

    Unfortunately, his analysis is too simplistic: it ignores that the $1.2 trillion is going to be used to pay for things the government is doing.

    The main point of a carbon tax (or a cap-and-trade system) is to make it so that the private sector figures out how to reduce carbon emissions for as little cost as possible: a company might spend up to $20/ton to reduce its emissions, but if it can spend $1/ton, it will. The direct cost to society at large then is not directly the revenue the government expects (that’s just a transfer), but the money companies will spend on reducing emissions.

    A more involved analysis should also compute further effects: for example the effect of some less efficient manufacturing lines in say Michigan closing, firing all their workers, and perhaps being replaced by a modern plant in South Carolina that employs half as many people. It’s a tax, so it changes where the money is, and some things will become too expensive to continue doing. Yes, that has deleterious consequences; let’s count them up.

  40. D.B. Stealey says:

    numerobis,

    There are no credible arguments for a “carbon” tax, for the simple reason that CO2 is harmless. In fact, more is better for the biosphere. There is no downside to the rise in CO2. Therefore, a carbon tax is simply a money grab promoted by scientific illiterates.

    Yes, a carbon tax will cause companies to do what they can to avoid the new tax. And the primary way to avoid it is to send manufacturing overseas. So a carbon tax would not only raise unemployment, it would cause CO2 to be produced in areas which do not have nearly the pollution controls of the U.S.

    Lose-lose.

  41. John Whitman says:

    First, in the 1960s and 1970s came the meme that mankind is a disease due to industrialization caused by capitalism.

    Then came the past 25+ years of IPCC supporting research which was intentionally biased to toward showing alarming AGW by CO2. Without that research and the IPCC’s favoritism toward it then there would be no proposed Sanders/Boxer carbon tax.

    Now Christopher Monckton’s economic case study on the cost-benefit of the proposed Sanders/Boxer carbon tax bill clearly shows it is cost-ineffective thus yielding a reasinable conclusion that the “future adaptation where needed is sensible, but present-day mitigation is unjustifiable”. Ny take is The carbon tax cannot work to mitigate carbon.

    The sales pitch for the tax requires alarming carbon scenarios from the biased IPCC thus appeasing some radical fundamentalist environmentalists, but the proposed carbon tax usefullness itself is not primarily carbon reduction but it it provides a more urgent purpose of the welfare state to keep its present welfare programs above water and fund welfare expansion.

    So I sort of partially agree with Paul Homewood’s comment on February 17, 2013 at 7:47 am. But only in the context I gave.

    John

  42. Crispin in Waterloo says:

    @numerobis says:

    >Any tax is going to hit real people, of course. The income tax does, sales taxes do, import tariffs do. But the government isn’t then just burning the money; it’s building bridges and roads, invading far-away countries, providing health care to the elderly, etc.

    Are there taxes that hit unreal people? You have provided a good analogy, numerobis. It really is like burning money! It is taking sums of money that now perform the useful work of providing energy for the manufactuer of products and the operation of the economy, and raises its absolute costs while providing no additional goods or services.

    100% of that tax money comes from customers. No company is going to ‘find’ trillions of $$ in their back pocket to hand over. They will be forced to charge more for their products, raising the cost of absolutely everything by exactly the amount of the carbon tax, plus the additional (and totally unproductive) fees paid to banks and the carbon traders to monitor outrageous ‘offset’ programs.

    The taxes will not save or improve anything at all in the way you hint. It will be used to pay for subsidised boondoggle wave generators, windmills and 8-hour-per-day solar installations built by companies that have their snouts buried deeply and permanently in the public feeding trough. It is no different from a Command Economy of the Soviet Union, where conceptually, at least, jobs and wealth can be created out of thin air.

    Engineers are trained to get the maximum benefit for the minimum cost in materials and money. They are trained in multiple sciences to be able to accomplish this ever-more effectively. And they are good at it. The tax proposed merely takes us back several generations in terms of productivity and output, as viewed from an engineering perspective. That an entire Western and modernised country stands on the brink of economic self-immolation as measured by all the common terms of the Industrial Revolution is surely one of the most awful, breathtaking and stupid things ever countenanced by any civilisation in history. The ultimate cost of goods is the cost of energy. Increasing the cost by 8-fold is nothing other than reducing the producivity of the whole population. All those thousands of trillions of Dollars will ultimately have to be borrowed, or printed.

    >We can talk all day about the cost-benefit of those activities; it seems rather off-topic for this website.

    Clearly you not aware of the core purpose of this website which is science education.

    There are no benefits whatsoever to deciding to terminate your own economic and manufacturing system – not for the citizens, at least. I have no idea how dumb Americans are, but I think we in the rest of the world are about to find out. If the US population cannot learn enough about its own economy to save itself from the fraud that is CAGW fear-mongering, I fear the US will get what it asks for. The collapse of the American empire will be faster and more complete than that of the Romans, driven into the ground by a societal disinterest to learn enough about climate and economics to know when they are being handed a cup of Jonestown Climate KoolAid. The odd part is we know who the culprits are, and they receive praise for it! This is astonishing.

    Cannon to right of them,
    Cannon to left of them,
    Cannon behind them
    Volley’d and thunder’d;
    Storm’d at with shot and shell,
    While horse and hero fell,
    They that had fought so well
    Came thro’ the jaws of Death,
    Back from the mouth of Hell,
    All that was left of them,
    Left of six hundred.

    C’est magnifique, mais ce n’est pas la guerre. C’est de la folie.” (It is magnificent, but it is not war. It is madness.)
    - French Marshal Pierre Bosquet

  43. Streetcred says:

    Forget the carbon tax, just tax Hollywood 50% of gross on everything … those liberals there are so full of good advice to the rest of us that it would be a definitive indication on their behalf that they actually are acting in the interests of humanity. Electric cars don’t count for anything.

  44. Cecil Coupe says:

    Sadly, this flawed analysis did not include the discount rates and inflation projections from the future. Nor did it include the James Brown Sustainability Multiplier (I feel good, I knew that I would). Those could have been simulated with constrained random numbers and thousands of runs to create a multi model mean which is what real scientists pay attention to.
    /sarc

  45. Bryan A says:

    Many CAGW alarmists state that the world would be better off with a lower level of CO2 somewhere between 330 & 350ppm. Have there been any studies to test the effect of a lower level of ambient atmospheric CO2 on crop yields? I know that enriched levels increase yields and so decreased levels should have the opposite effect. Perhaps several studies are needed to determine the loss of crop production given both a lower level of ambient CO2 and the shortened growing season of the then proposed lower global temperature and the affect it would have on the global food supply.

  46. johnmarshall says:

    Lord Monckton is still convinced that CO2 has some input into global warming. I am afraid he is wrong because it cannot. CO2 cannot violate the laws of thermodynamics by heating the surface by back radiation. CO2 can reduce heat reaching the surface from the sun but not the reverse. If the GHG theory was true then deserts would be colder than rainforests. The reverse is true!

  47. richard verney says:

    crosspatch says:
    February 17, 2013 at 10:26 am
    ////////////////////////////
    Absolutely.

    And to the extent that it succeeds in reducing CO2 levels on a global level. not to forget that we may be depriving ourselves of the benefits of what even more CO2 would have provided for food production and the like.

  48. richard verney says:

    Crispin in Waterloo says:
    February 17, 2013 at 7:54 pm
    //////////////////////////////////
    Couldn’t agree more. The citated poetry is apt. Madness, sheer madness – but that is politicians for you.

  49. Crispin in Waterloo says:

    @richard v

    I lived for many years in Africa and one of the things that always amazed me about the brutal and repressive regimes that pop up here and there is how there is never a shortage of people willing to collaborate and serve as henchmen for the leaders. Politicians are always the butt of harsh comments but they could not implement their hare-brained schemes without a coterie of willing hench-people, content with their relative security, confident of their impunity, serving the classic role of ‘useful idiots’. I have read a great deal on the subject of Climate Change and the number of useful-idiot-hench-people serving to propagate evident lies exceeds my wildest expectation.

  50. numerobis says:

    Crispin: I don’t think you understood what I wrote at all. Otherwise, you’re arguing that government-built bridges have precisely zero value. And you’re arguing that discussing the cost-benefit of medicare has something to do with science education. Neither argument makes any sense.

  51. Niff says:

    Numerobis, methinks you are understood better than you understand your own rhetoric. Best to cut and run.

  52. TomVonk says:

    Numerobis
    .
    Crispin wrote :
    100% of that tax money comes from customers. No company is going to ‘find’ trillions of $$ in their back pocket to hand over. They will be forced to charge more for their products, raising the cost of absolutely everything by exactly the amount of the carbon tax, plus the additional (and totally unproductive) fees paid to banks and the carbon traders

    This is perfectly correct. What is hard to understand there ?
    A carbon tax is just inflation and there is no benefit in inflation. Inflation destroys savings and purchasing power. It drives the amount of money in circulation up.

    I suspect that you are both scientifically and economically illiterate.
    Don’t you see that the carbon tax is a ZERO sum game?
    If the state ressources increase by 10% because of the carbon tax AND at the same time the prices of bridges increase by the same 10% because of the same carbon tax, it is obvious that the state will not build MORE bridges.
    It only means that the value of the money will decrease by 10% because the state will have to print 10% of money more.
    Unfortunately a normal citizen has not that privilege.

    There are taxes based on goods’ and services’ production and taxes based on savings and individual earnings. The latter are “redistribution” and are generally considered as a necessary evil provided that they stay modest. However the former are just inflation drivers making EVERYBODY poorer.

    So when on top of that one notices that the benefit/cost ratio is 1/14 one would have to be an utter moron to see anything positive in it.

  53. numerobis says:

    “This is perfectly correct. What is hard to understand there”

    What’s hard to understand is that it is a restatement of my first paragraph, but given as if it was in opposition to what I wrote. It’s hard to argue when you take my words to mean the opposite of what I meant them to mean, then say that I’m the illiterate one.

    Here’s a third attempt at my claim: (1) Taxes are a drain on everybody. (2) Government uses money to do things that have value. (3) If you are going to do a cost-benefit analysis, and you take the revenue as a cost, then you have to account for the benefits paid for by the revenue. Alternately, you can ignore the benefits paid for by the revenue and compute just the cost incurred by companies trying to avoid paying this tax.

    I thought I’d argued all that clearly before, but twice I’ve gotten point (1) thrown into my face with a claim that I’m some form of idiot since clearly taxes are a drain on everybody. Crispin seems to go one step further and claim that bridges and police in fact have zero value.

  54. D.B. Stealey says:

    Crispin in Waterloo says @ 7:54 pm:

    “The ultimate cost of goods is the cost of energy.”

    What a wonderful, prescient post! Crispin knows what’s going on.

    ~ D.B. Stealey [aka: Smokey]

  55. Peter Lang says:

    Lord Monckton,

    Is there a mistake in this: ”

    Garnaut (2008) is one of many who recommend keeping greenhouse-gas rises to 450 ppmv CO2-equivalent above the 280 ppmv prevalent in 1750, to hold 21st-century warming since then to below 2 K …

    I think Garnaut and others are saying atmospheric CO2-e concentration must be kept below 450 ppm, not 450+280 ppm.

    I haven’t read the comments on this thread so this may have already been asked by someone else.

    By the way, using Australian Treasury figures, I estimate the Australian CO2 tax and ETS will cost at least $10 for every $1 of projected savings: http://jennifermarohasy.com/2012/06/what-the-carbon-tax-and-ets-will-really-cost-peter-lang/. However, the projected savings are unlikely to be achieved – they depend on the whole world participating in a global carbon pricing system.

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