Guest Post by Willis Eschenbach
I’ve spent the last week in the Solomon Islands, which is northeast of Australia. It’s a wonderful place for me to come back to, even if only for a week, as I lived here for nine years. It’s a curious place, one of the UNs “LDCs”, the “Least Developed Countries.” It is the most rural country in the Pacific, with about 90% of the people still living in small scattered villages on hundreds of islands. Most people from outside the Solomon Islands have never heard about it until I say that the capital city, Honiara, is on the island of Guadalcanal.
I wrote my last post from here in the Solomon Islands, about how energy and GDP are different ways of measuring the same thing. I got to thinking about the Solomons GDP ($1,600 per year, tied for 187th out of 225 countries with countries like Chad and Tajikistan) and the energy use in the Solomons. Here’s the Solos’ energy consumption by type of fuel:
Figure 1. Energy Use by Fuel Type, Solomon Islands. Photo Source
As an aside, looking at that chart, you’d think that the Solomons should be the poster child for alternative energy. Three-quarters of the country’s energy comes from biomass, what’s not to like?
What’s not to like is trachoma and lung disease from cooking over open fires, plus lots of unburnt hydrocarbons and brown carbon from wood smoke, huge inefficiency losses, and other issues. But I digress. Looking at that graph, I was reminded that we mark the dawn of human civilization by a single act – the domestication of fire.
Fire was our first use of a concentrated energy source, our first step towards a GDP greater than what humans can do unaided. Unfortunately, for much of the Solomon Islands, it remains the only energy available in concentrated form. Three quarters of the energy used is plain old garden variety fire. In addition to household use, it provides the energy for two of the very few ways that the rural islanders can make money – copra (dried coconut meat) and cocoa. Both require heat for drying.
Now, given the general equivalency of energy consumption and GDP, what does that mean for the Solomons? It means that this lovely environmentally correct bio-fuelled country will never climb out of its poverty without more energy. Fire is not nearly enough to fuel an economy in the 20th century.
What about the petroleum fuels? What are they being used for in the Solomons? Here is the breakdown:
Figure 2. What the Fossil Fuels (diesel, petrol, natural gas, kerosene) are Used For in the Solomon Islands. Photo Source
The main thing that sticks out is that, in great contrast to the US situation, more than half of the Solomons fuel is used for transportation. This is a consequence of the way things are transported here … mostly by outboard canoe. There are perhaps a hundred miles of paved road in the entire country. Everything is moved by boats large and small. The big boats take things to the provincial centres (such as they are), and people go to buy them in their small canoes powered by outboards.
The good news in the graph is that electricity sector is 100% diesel-powered, so at least there is hope there. The islands are steep and rainfall is abundant, and there are some good hydropower sites. That means some substitution is possible.
Overall, once again we see that development in Solomon Islands is a function of energy, and that as long as they are relying on fire and a handful of petrol, they will never fire up the economy in any significant manner.
Now, I started this whole island travelogue with a very specific point in mind. It has to do with a pet peeve of mine. This is the pernicious idea that the way to solve the “energy problem” is to make fuel more expensive through taxes, so people will use less of it and become more efficient in its use. (As an aside, I don’t see the “energy problem” as being people using too much fuel, but as being people who don’t have affordable fuel. But hey, that’s just me.)
There’s two problems with that “tax our way to energy freedom” idea. First, in the Solomons, a trip from Gizo Island to Kolombagara Island in a particular boat might take, I don’t know, call it ten litres of fuel. If fuel prices go up and the operator can only afford eight litres, he’s stuck. He can’t economize and get more efficient like the theory says he’s supposed to, the outboard engine burns so much an hour. And he can’t just use the eight litres he can buy, it will leave him marooned in mid-ocean. He’s stuck in port, and out of the game.
There’s a worse problem, though. This is that taxing energy is taxing the wrong end of the production process. This slows the whole production process down before it can be started. I saw this in Honiara when fuel prices got high in 2008. For a while you couldn’t buy fish in the market of the capital city. Why? Because fuel cost too much, so it wasn’t worth it for the guys to go out fishing … and a significant chunk of the fuel price in the Solomons is taxes to the Government.
This is taxing the wrong end of the production process. Countries should tax the outputs of production (in this case the fish) and not the inputs (fuel, fishing gear, and boats). You want to encourage people to fish by making the entry cost for production inputs as low as possible.
There’s also a more subtle problem with taxing the wrong end of the production chain. Output prices are typically some multiple of the price of production. This means that adding a dollar on the input side often leads to a two dollar jump in the final price … not good.
Then, when the boats can go out and fish because the cost of inputs is low, the country should tax their output. Tax the fish in the markets. It will perhaps make the fish slightly more expensive for the customer … but at least there may be fish in the markets, instead of empty boats tied up by the markets. When the fuel prices were so high in 2008 and fish were either wildly expensive or unobtainable, the health of the kids suffered because fish is a main source of protein in the islands. That’s not a direction that I want to go.
In summary:
1. Taxing energy to force people to economize and become more efficient can be very counterproductive at the poor end of the economic spectrum. People are already using as little energy as they can possibly get away with, because from their point of view energy is already very expensive. In addition, they may not be physically able to economize or increase their efficiency.
2. If a country decides to use taxes as a (very blunt) instrument of energy policy, it should tax the outputs of production, rather than the inputs to production. This allows production to increase, instead of crippling it.
3. In the absence of often unavailable changes in efficiencies (see outboard motors above), forcing people to use less fuel through taxes means lowering the GDP. For places like the Solomon Islands, that’s the last thing we want to do, lots of folks there are way out on the economic edge already.
Finally, in the very best Solomons fashion, this is being written while I’m waiting for the departure at the airport, because the plane is two hours late. Or as they call that here in the Solos, “right on time” … wish me luck, when and if the plane arrives I’m bound back to Nowherica.
w.
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Grey Lensman says:
November 17, 2010 at 10:29 pm
‘How many acres of sugar cane do they have to grow to produce ethanol for all their outboards. This produces work for farmers, work for process people and work for fuel sellers. Cuts the imports of fuel and utilises a resource that they have.’
To grow cane for ethanol production there are two essential inputs. A subsidy from Government to make it economic and a lot of ammonium nitrate to make the cane produce enough sugar. (Enough power and water availability to make irrigation possible would also be nice). Production of AN requires a lot of electrical generating power. In Zimbabwe in the early eighties, when electricity capacity was still ample, ethanol was produced from cane and added to petrol (gasoline) at a nominal 16%. This was not to lessen costs, which is totally impossible, but to save a small element of scarce foreign currency reserves. This produced high octane, lead free fuel, at a price. The nominal permissible percentage was abused periodically and as it crept over the 20% mark one’s car stunk from twenty feet away and in the hot sun the vehicle was prone to stall due to the fuel evaporating in the carburetter. For a couple of years I rode around with a heavy hammer by my side with which to smack the top of the carb. to free the float.
We rarely hear from farmers on this site. I would like to hear from one who can argue that it is possible, somewhere on this planet, to grow sugar for ethanol without benefit of subsidy. Substitute maize for cane if you like, but that worsens the numbers. For those who do not like economic conundrums, take a look at the energy in energy out equations.
Willis, I missed this article and instead made a few inane comments on others that deserved it much less! I totally agree with your analysis that energy and GDP appear to be two flip sides of the same thing. They may not be identical but then there are many various measure of GDP which are not identical – even money has many definitions even within one economy (do you include just cash, near cash like bank accounts, or items like bonds which are replaceable by cash – until you have a banking crisis!)
However, the point you were making is that economic growth (aka prosperity) necessitates growth in energy consumption. I would like to explain why this is necessary.
We in a slave society
Yes! We are a slave owning society, except those slaves are not like the Roman or American slave: human! The slaves we have in our society eat carbon, they are the cars which move us from place to place instead of carrying us on seats through the city, they are the TVs which provide the entertainment instead of throwing slaves to the lions for fun. They are the tractors which dig the fields, the ships which travel the oceans instead of galleys.
We are a slave society in which I guess something like 9/10 “people” do not eat food … these mechanical slaves eat fossil fuels.
That fact we can run a society where 90% of the work is done by slaves who do not compete with the “masters” for food, means that an awful lot of people can get an awful lot of work done to allow an awful lot of us to live in the kind of luxury only the most opulent in Roman society could dream of.
Once you understand that GDP as a measure of opulence, is really a measure of the amount of work being done by none-human agencies in society so that on average we humans have to do less and less percentage of the real work leaving the rest to the fossil-eating machines, you start to understand why GDP rises as a consequence of more and more consumption of fossil fuel.
You can’t run tractors, cars, diggers, computer servers etc. etc. without energy and the more work you want from non-humans the more you need fossil fuel.
In historic terms, this is very much like a small country like Rome taking over more and more client states wherein they have slaves to provide the resources to feed back to the Romans and maintain the “masters” in a state of luxury at the expense of many many “slave” societies controlled by Rome.
That is why we must try understand human development using a new terminology which understands the basic energetics of our economy, or as I term it: enerconomics. To put it simply: enerconomics is the use of scientific terms like joules to describe the size of an economy in a way that can be applied to any economy at any time irrespective of the form of money or other value system in place. As energy is conserved, there is no inflation, so obviously you can compare historical societies with modern in a totally transparent way without having to apply arbitrary rules about the inflation rate.
I do not see how taxing diesel use can be blamed on Keynesian economics.Economists today see taxation as a way of restricting things that have a negative impact on society,I don’t agree with these taxes.I think that people should be taxed on their income and not what they spend and a democratically elected government should decide what these taxes are spent on, I realise that the people in the Solomon islands are poor and might rely on foreign aid to advance their lifestyle and I have no problem helping to pay for that.
Sorry willis: I should add that obviously in an enerconomic analysis you have to treat food energy consumption as being equal to fossil fuel or any other fuel including wind and wood.
Also, it should be pretty obvious, but you have to track the entire energy in e.g. producing an item including energy consumed by those involved in its production, the costs of producing materials like steel, the costs of transport.
The inference would be that the market price of any good is proportional to the total energy consumption related to its production, although it would a lot safer to talk about overall systems as in: the total energy consumed by an economy is proportional to GDP.
@Willis
On a happiness scale of 1-10 where one is very unhappy and ten is very happy how would you rate the average native inhabitant of the Solomon Islands? Then compare that to places in America that you’ve lived.
I’ve never really lived for a long time anywhere outside the U.S. but inside the U.S. I’ve lived in both poverty (which is of course a relative term because U.S. poverty is nothing like third world poverty) and plenty. It’s a tired old cliche but I’ve found that “money can’t buy happiness” is a basic truth at least in the U.S. If anything it might even have the opposite effect. It’s difficult to measure happiness objectively and directly but I think the reciprocal of suicide rate is a good proxy.
If you haven’t looked before check this out:
http://en.wikipedia.org/wiki/List_of_countries_by_suicide_rate#List
There are no surprises there for me but that’s only because this isn’t the first time I’ve looked into the question of whether happiness is correlated to per capita income.
Take a good look at it and see if you can see any correlation between income and happiness. I sure can’t.
I am keeping on point with Willis re the energy/GDP equation and how it effects the Solomon Islands and how they can practically address it. Here are two conflicting stories on the Biofuel deebate
http://www.sustainableethanolinitiative.com/Sve/Standardsidor/Filer/Myths_vs_Facts.pdf
http://www.liv.ac.uk/~jan/teaching/References/Walker%202009.PDF
For the Islander the scientific debate means little. If he can grow it and reap an income, he is happy. Sugar cane clones and hybrids with allied organic technology can increase yields substantially and require little or no fertilizers. You can argue till the cows come home re subsidies hidden or not. The question is “does it work”
An American with his prized mercury outboard would be horrified how the third world treats an operates his pride and joy. A bit of tinkering and they will work well on ethanol mixes.
My folks (retired a few decades now) use a combination of wood and oil for heat (not at the same time, of course…).
If anyone gets the idea of raising taxes on the oil and taking a bigger chunk out of their very, very fixed income, well, they have 100 acres of northern Canadian woodland to help lower the oil to wood ratio (and heating cost). Although, of course, there are rumblings that woodlots will also be taxed. Nice.
I can’t imagine that burning more wood is doing much to lower carbon emissions, though. Not sure if this is the intent, but it certainly would be the consequence.
Then again, they can’t be that smart, they aren’t climatologists, after all.
Dave Springer says: “It’s difficult to measure happiness objectively and directly but I think the reciprocal of suicide rate is a good proxy.”
Well how would you respond to the fact that of the 180 or so countries listed, each and everyone has a higher rate of suicide by males (except one where the rate is 0.0 which looks like an error)
What are we to draw from this figure?
a) Men are much less happy than women?
b) That for all the talk of sex equality no one cares that men are a lot less happy than women?
c) That men die earlier, so why on earth should anyone care if they give nature a hand?
Warren says:
November 18, 2010 at 3:05 am
Well said… and well written… thank you.
If they want to produce at least some of their own fuel, without sacrificing precious land, then they could close off a few shallow atolls/ tidal lagoons (the region around Vonavona and Kohinggo Islands looks promising from satellite pics.) to form ponds in which to produce oil from algae. Depending on the species, environmental constraints and the sophistication of the setup, production of oils from such is about 7 times greater per unit area than from agriculture. Agitation to maximise productivity can be wind-powered with bio-fuelled diesel backup.
Islanders could e.g. use a small tanker to transfer the waste water from Honiara and other larger settlements to “feed” the ponds with the trace elements required; brought in via the bowels of tourists. 🙂
Useful by-products include pharmaceutals stock, fish food for aquaculture in other atolls, stock-feed for farm animals, etc. and fermentable solids to produce the small amount of alcohol necessary for esterfication of the lipids extracted from algae.
There are some useful FAO and NASA analyses and technical papers (from the 1960’s to 1980’s) on this means of producing bio-fuel. NASA investigated it for sustainable, deep-space travel (taking years) and for the colonisation of planets.
Dave Springer
November 18, 2010 at 6:15 am
This is a bunch of Marxist garbage. I haven’t seen to many happy poor people, except in socialist mythology. I sure was not very happy trying to figure out how to get enough food to feed my son every night, or how to cook a meal without electricity.
Voters expect elected politicians to work for their benefit. So where do politicians get the idea they can work against the interests of the people.
My guess would be from their political party and the benefits of special interests.
The folks of the Solomons should do what many want in the US. Festoon the islands with wind mills. Get the boats off petrol and put up sails. (Yes I know getting back from whence you came may take a while.) 🙂 sarc
Electricity costs about $.10/kwh, depending where you live. Imagine you were able to reduce this to $.01/kwh in your local community, what would be the effect? Imagine that instead you increased the price to $1.00/kwh in your local community, what would be the effect?
Would the quality of life in your community be better if electricty was $.01/kwh, $.10/kwh, or $1.00/kwh? Where would there be the most opportunity for people to create wealth and opportunity?
@ur momisugly Dave Springer says:
November 18, 2010 at 6:15 am
“……It’s a tired old cliche but I’ve found that “money can’t buy happiness” is a basic truth at least in the U.S. If anything it might even have the opposite effect. It’s difficult to measure happiness objectively and directly but I think the reciprocal of suicide rate is a good proxy…..”
=======================================================
Hmm, while I understand each of us draw relevancy from what is important to us, and I agree with your thought, I don’t think we’re talking about individual economic success, rather, the general economic success of a population. In this respect, the U.S. doesn’t have the luxury of the Solomons. We must remain economically viable, in order to keep our way of life.
I believe Alexander Hamilton stated it best, “Let us recollect that peace or war will not always be left to our option; that however moderate or unambitious we may be, we cannot count upon the moderation, or hope to extinguish the ambition of others. … The best we can hope for concerning the people at large is that they be properly armed.”
It isn’t about happiness, but rather self preservation.
About taxes for the general conversation. Taxes are always to be assumed to have a negative economic impact. Taxes on income discourages personal achievement and withdraws disposable income from the economy. As noted by Willis, taxes on energy raises the cost of production, and in many cases make production prohibitive. Taxes on the end product raises(a sales tax is an example) the cost to consumers and inhibits economic activity. Property taxes are the most insidious of all, because it flies in the face of the commonly understood laws of ownership. For those that doubt this concept, try not paying your property taxes and then come back to me about how much of what you actually own. (You’re really paying a form of rent.) Capitalism without the ability to accumulate property and wealth is doomed to failure.
In a capitalist society, taxes must always be viewed as having a negative economic impact in any form. Taxes, nonetheless are necessary. They provide for the common defense, properly used they help maintain an infrastructure that facilitates economic activity, and may be used to provide for the less fortunate.
@warren
Now that’s a nice article.
So, a local $5.75 = US $0.70 per kW-h for electricity in the Solomons if I’m doing that conversion right. That’s something like 3x the cost of diesel-electric as in the US (not including distribution cost)? That cost is not that outrageous given their small demand and lack of participation.
It sounds like they need capital investments like roads, schools, malaria control & hospitals and that they lack buying power in the first place. I agree that it would be nice to cut their electric bill by 5x with coal or geothermal power. HOWEVER, every time I hear about such sad conditions, there is always a story of corruption and missed opportunity to go along with it. From what I have read of the Solomons, that is true.
Going back to Willis’ point on taxation of energy; there are so many problems with this economy, I’m not sure that the type of tax matters. Since they are producing so little salable goods, taxing fuel may be the only hope the government has of raising money, even though it is probably the wrong thing to do economically because the people are so poor. I think Willis is being dogmatic in saying that these up-front costs are always bad.
But this is not an academic question. Why not write a letter to their legislature asking them to move the taxation to production? See what their answer is. They don’t seem to be a dictatorship. I’m sure it’s been debated.
Out of curiosity, how much fuel tax relative to cost are they being asked to pay?
Mike Haseler says:
November 18, 2010 at 5:51 am
enerconomics. To put it simply: enerconomics is the use of scientific terms like joules to describe the size of an economy in a way that can be applied to any economy at any time irrespective of the form of money or other value system in place.
Mike, I always enjoy reading your insights. But don’t give ’em too many ideas. Thy were already planning on taxing us by energy numbers when they launched the 4m resolution co2 measuring satellite the other year. Thankfully it nosedived into the southern ocean.
🙂
I endorse LazyTeenager’s question about the potential of the Solomons (or any remote islands) as places for modern economic development.
The Solomons have the additional burden of a miserable health environment that is not susceptible to amelioration.
But Willis’ economic thoughts in this post apply generally, not just to the Solomons.
Reading this article triggered thoughts of Maslow’s hierarchy of needs. Without going into the whys & wherefores of differences between individualistic & collectivist societies, the use of fuel is implicit at every level.
For Physiological needs, food must be transported at some stage. Safety needs have to do with people’s yearning for a predictable orderly world in which perceived unfairness and inconsistency are under control, kept so by mobile security. Love & Belonging requires contact & travel, likewise a need for a stable Self-respect and Self-esteem, as people need to engage themselves to gain recognition and have an activity or activities that give the person a sense of contribution.
Self-actualisation is realised in many ways such as being a “good enough” parent or an artist or anything that one is capable of becoming. For a clear understanding of this level of need one must first not only achieve the previous needs, physiological, safety, love, and esteem, but master these needs.
So, everything that makes us human requires fuel. Thus, I am led to conclude that green socialist progressives are seeking to dehumanise the planet. They are a bunch of genocidal maniacs.
Interesting you should point out our abundant ‘energy slaves’ Mike Hasler while Willis leads us to consider places like the Solomons with so few of them at their dispoasl by all accounts. Essentially it is the abundance of those energy slaves that allows their owners to be less predisposed to giving up some of them or at least some of their output for communal investment. Now leaving aside the interminable debate as to how much of their output should be invested in that way (ie the overall level of agreed taxation) it’s then possible to consider how exactly we go about taxing them and what effect that may have (ie positives and negatives). What if we gave the warmenistas their maximum nirvana? Namely abandon all forms of taxation to be substituted for complete reliance on CO2 equivalent taxing. ie we simply scientifically rate the various fossil fuels and rate and tax them accordingly on the basis of their most technically efficient burning energy per unit of CO2 output. Brown coal gets taxed greater per tonne than black and a barrel of oil gets similarly apportioned and so on. Now you can see that is the maximum price/income substitution effect that could be achieved without raising the absolute level of taxation, albeit we all need to put aside the interminable squabbles between the various tiers of Govt (Federal, State and Local) as to which tier would raise it, a serious political hurdle in itself.
Therein lies a hypothetical challenge for you all. Are you just a bunch of conservative naysayers sticking to what you know and are comfortable with or can you reasonably conceive of a different constitutional ‘free’ marketplace brought about by the very way in which we collect the agreed level of communal taxation, if that’s ever possible? What’s your essential objection to giving these warmenistas their maximum head, while keeping your hair on?
James Sexton says:
November 18, 2010 at 5:17 am (Edit)
Willis, a question. Are your thoughts on energy and economy now just being developed or are you simply expressing thoughts already cemented in your mind?
Both …
Bernd Felsche says:
November 18, 2010 at 7:47 am
Except for the facts that nobody on the planet knows how to do this in an economical way, and that turning world-heritage class reef and lagoon systems into green algal soup might offend the local inhabitants (both human and otherwise), and that the machinery to do it all wouldn’t get maintained, this is a wonderful plan. In fact, it could serve as a poster child for all of the you-beaut totally nonsensical plans schemed up by do-gooders half a planet away …
Here’s the first of the many things your plan overlooks, Berndt. You know the old saying, “What goes around … comes around?”
In the Solomons, the saying is “What goes around … stops.”
w.
PS – I finally made it to Brisbane, hours late, to find out that because of the late hour and a convention in town, there wasn’t one hotel room in fifty miles. I had a charming and refreshing series of naps. It is now tomorrow. I’m almost awake.
re posts by: Richard says: November 18, 2010 at 2:32 am
and: Warren says: November 18, 2010 at 3:05 am
and others, including Willis on the algae lagoon idea…
Thanks for adding facts on problems and costs associated with biofuels, geothermal, etc. possibilities there in the Solomans.
Folks all too often fail to consider the practical issues involved in trying to actually accomplish these sorts of things – including not looking at the complete big picture and what outcomes have occurred where these things have or are actually being tried.
Trying to implement them in a society that is barely scraping by…. too many who mean well just don’t seem to get the fact that barely scraping by means literally the difference between life and death, not the difference between having a cell phone or not.
Even so it is fascinating to learn about and ponder various possibilities that might be able to help folks in this sort of situation.
Malaria control sounds like a huge issue there – I had no idea it was endemic and so prevalent.
Willis, this likely pie in the sky – but the Solomans, being isolated, sounds like it might be a prime location to try something like the sterilized GM mosquitoes just released in the Cayman’s. Huge drawback for the Solomans I’d imagine, that there are so many islands so strung out…. Pro’s, they already tried it for an island area for dengue carrying mosquitoes – but I have NO idea if the island was charged or how the economic side was worked, free, cost, ??
Anyhow, I wonder if it might not be worth a call to those dealing with the sterilized mosquitoes to see if they would have any interest in experimenting in the Solomans…. http://www.popsci.com/science/article/2010-11/mutant-mosquitoes-nearly-wipe-out-their-population-and-diseases-they-carry Lord knows it sounds as if the Solomans would be a very easy area to quickly see how effective these sorts of efforts would or wouldn’t be, and could be a huge benefit to the population there.
Willis, thanks for your replies to my queries. Its fascinating to know that you’ve fished the Bering and have practical experience that way in something that is so difficult tho also potentially quite lucrative (it sure ought to be for the risks taken!).
Anyhow, not that it matters but I’m glad you’ve seen and enjoy “Deadliest Catch” as I do – I was surprised and intrigued when I first happened on it and watched a few episodes. I’ll be sure to check out “Bristol Bay Brawlers.” I can only watch and imagine – and have no doubt it is a lot more fun watching than doing…. but doing would be a real challenge and something I could have gone for in my 20’s. I’d sure pass on it these days tho!
@ur momisugly Keith Minto, @ur momisugly Willis Eschenback
Minto: “Also in an informal economy like that, adding a tax at the market end would be difficult, cash registers are few and far between in ‘wet’ markets, it is a lot easier to tax the fuel in an unsophisticated economy.”
Eschenbach: “You are right, it’s much easier to tax the fuel … and much more damaging.”
Me: This is a classic debate, where both of you are right. The debate arises from the conundrum that taxes are necessary, but every tax is distortionary, and comes with a dead-weight loss. In the real world, governments have to settle on theoretically “bad” taxes. Imposing a small turnover tax on every market stall would be a relatively “good” tax in theory, but the cost of collection would be greater than the amount raised –> the “good in theory” tax becomes a “bad in practice” tax.
A common solution in developing countries is to tax big things that can’t be moved, like mines. Another favourite is taxing luxury goods, or essential inputs whose import can be monitored (like petrol). What am I saying – even first-world countries end up settling on that sort of solution. We all the know the disadvantages of those approaches. If a mining tax is too high, foreign companies can decide not to invest in mining in that country. Luxury goods and petrol can be smuggled to avoid the taxes. The trick is to set these taxes at some reasonable rate that still manages to raise the revenue that government needs.
That said, I generally appreciate the real life perspective that Willis brings to the debates here. In the real world, most people still don’t have enough protein, and their lives are shortened by things like smoky cooking fires (whether wood, kerosene or coal). An extra cost of a few cents a day means the difference between life and death for many – young children, sick people, anyone. We need to remind ourselves of that every time we get sidetracked by an angels-on-the-head-of-a-pin argument about the relative merits of bio-diesel, geothermal, and all that.