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
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.
Well, at least he pulls the mask off the charade. It’s never been about anything other than taxes.
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.)
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?
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.
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?
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.
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.
“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
socialismEnvironmentalism 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.”
In good ol’ times of Huckleberry Finn, charlatans and thieves were tarred and feathered.
http://images.nypl.org/index.php?id=814291&t=w
Why not going back to the roots?
This is showing how a 150 year temperature record trumps a 4.5 billion year history record.
And temperatures cannot forcast precipitation, wind, etc.
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.
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..!’]
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.
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.
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?
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?
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.
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.
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.
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.
Would he by any chance be a descendant of King George? Just sayin.
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?
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.
Perhaps a “Climate Change Research Tax” is in order.
No more grants, they will have to pay to do research.