The SCC drives war on fossil fuels but relies on faulty analyses that ignore carbon benefits
Guest essay by Paul Driessen and Roger Bezdek
The Social Cost of Carbon is the foundation for numerous Obama-era energy policies, regulations and programs. Under complex SCC metrics, agencies calculate the “hidden costs” of carbon dioxide emissions associated with fossil fuel use, assigning a dollar value to each ton of CO2 emitted by power plants, factories, homes, vehicles and other sources.
Originally, in 2010, every ton of U.S. emissions averted would prevent about $25 in global societal costs allegedly resulting from dangerous manmade climate change: less coastal flooding and tropical disease, fewer droughts and extreme weather events, for example.
Within three years, regulators increased the SCC to around $40 per ton, the better to justify the Clean Power Plan, Paris climate agreement, and countless actions on electricity generation, drilling, fracking, methane, pipelines, vehicle mileage and appliance efficiency standards, livestock operations, carbon taxes, and wind, solar and biofuel mandates and subsidies.
The Trump Administration is challenging this climate cataclysm edifice – prompting activists to launch campaigns asserting that the SCC is so rooted in solid science and economics that any attempted rollback would fail.
In reality, the social cost of carbon is little more than junk science and Garbage In-Garbage Out forecasting. That’s why the House Science Committee’s Environment and Oversight Subcommittees has held an investigative hearing on the subject.
First, the supposed bedrock for the concept is the shifting sands of climate chaos theory. New questions are arising almost daily about data quality and manipulation, the degree to which carbon dioxide affects global temperatures, the complex interplay of solar, cosmic ray, oceanic and other natural forces, and the inability of computer models to predict temperatures, sea level rise or hurricanes.
Meanwhile, as the 2015-16 El Nino dissipated, average global temperatures have fallen back to their 1998-2014 level, according to Britain’s Meteorological Office. That means there has been no measurable planetary warming for 18 years.
The very notion that U.S. emissions impose significant climate costs is increasingly indefensible – and developing nations are burning fossil fuels and emitting CO2 at many times the U.S. rate.
Second, the SCC scheme blames American emissions for supposed costs worldwide. It incorporates almost every conceivable cost of oil, gas and coal use on crops, forests, coastal cities, property, “forced migration,” and human health, nutrition and disease.
However, it utterly fails to mention, much less analyze, tremendous and obvious carbon benefits.
That violates a 1993 Bill Clinton executive order requiring that federal agencies assess both benefits and costs of proposed regulations. It is also irrational, completely contrary to human experience.
Fossil fuels created the modern world and lifted billions out of destitution and disease. They supply over 80% of the energy that powers United States and other modern civilizations, and will continue doing so for decades to come. They generate up to $70 trillion in annual global GDP.
Using readily available data on global living standards, economies, disease, nutrition, life spans and other benefits – and the government’s own SCC cost figures and methodologies – we estimate that carbon benefits exceed costs by orders of magnitude: at least 50 to 1; as much as 500 to 1!
The U.S. Energy Information Administration forecasts that fossil fuels will provide 75-80% of worldwide energy through 2040 – when the total amount of energy consumed will be at least 25% greater than today. That means these notable benefit-cost ratios will continue.
The SCC ignores all of this, too.
Third, SCC schemes likewise impute only costs to carbon dioxide emissions. However, as thousands of scientific studies verify, rising levels of this miracle molecule are “greening” the Earth – reducing deserts, and improving forests, grasslands, drought resistance, crop yields and human nutrition.
No matter which government report or discount rate is used, asserted social costs of CO2 are infinitesimal compared to its estimated benefits.
Fourth, government officials claim they can accurately forecast damages to the world’s climate, civilizations, economies, populations and ecosystems from U.S. carbon dioxide emissions over the next two to three centuries. They say we must base today’s energy policies, laws and regulations on those forecasts.
The notion is indefensible, even delusional and dangerous. The rate of change in energy generation, communication, medical and other technologies has become exponential over the past several decades, with forecasting ability declining at an equal rate. Uncertainties over natural forces and climate change during the coming decades and centuries are equally colossal.
Amid all the other SCC assumptions, methodologies, fabrications and omissions, injecting such predictions into high-speed computer models simply paints scientific varnish over a phony endeavor.
Politicians, bureaucrats, activists and corporate rent-seekers certainly welcome the intellectual special effects and facades. But we taxpayers and consumers should be wary of the power that the SCC gives them over energy, economic growth, livelihoods and living standards.
Eliminating the social cost of carbon and programs implemented under its aegis requires little more than applying the same rules and standards that government regulators have imposed on Volkswagen, Fiat and Wall Street dishonesty.
However, rooting out this government deception is far more important, because the scope, impact and cost of the agenda-driven SCC chicanery are infinitely greater, affecting every aspect of our lives.
Congress, President Trump and EPA Administrator Scott Pruitt need to review, rescind and defund the scheme – and replace it with honest, objective cost-benefit analyses.
Roger Bezdek is an internationally recognized energy analyst and president of Management Information Services, Inc. Paul Driessen is senior policy analyst for the Committee For A Constructive Tomorrow and author of articles and books on energy, climate change, carbon dioxide and economic development.
Published in Washington Times, March 1, 2017
http://www.washingtontimes.com/news/2017/feb/28/war-on-fossil-fuels-depends-on-social-cost-of-carb/
The phony social cost of carbon: The war on fossil fuels ignores carbon’s benefits
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The author really should look up what the social cost means before going public with this sort of stuff.
“However, it utterly fails to mention, much less analyze, tremendous and obvious carbon benefits.”
The social cost does not ignore social benefits. It does ignore benefits (and costs) that are already included in the price since these are not social benefit by definition.
If we take something like a hat, the costs and benefits are pretty much included in the price. If hats cost $50 we know that the benefit to the purchaser is more than $50 (or he would not buy) and the cost to the seller is less than $50 (or he would not sell). In the absence of externalities there is no social cost.
The benefit to the buyer is significant – more than $50 – but there is no social cost. The market will ensure that the efficient number of hats are bought and sold such that any other number would lead to people being worse off.
Now assume that making hats caused some pollution. This goes downstream from the hat factory and causes $10 worth of damage. In an ideal world the hat factory would compensate the people harmed by the pollution. This would increase the price of hats, which in turn would lower the number of hats sold (and made). Again the market would ensure that the optimum number of hats were made. This number would be less than the number of hats in the world without the pollution. Again there is no social cost because the hat factory compensated the victims.
However, lets assume that the hat factory cannot compensate the victims because the transactions would be too complicated. We know that there is neither social cost nor social benefit of hats when the price is $50 with no pollution, and no social cost or benefit when the hat factory compensates the pollution victims. But now we have hats at $50 and some people not compensated. We now have a social cost of $10 per hat.
It is wrong to say “But hats are very useful. The social cost ignores the benefits of hat use”. It does not ignore such benefits. Such benefits are economic benefits not social benefits and are outside the scope of social costs.
Please try to separate the two when discussing social costs.
As a solution, a tax of $10 per hat (the social coat) on the factory would restore the optimum level of hat manufacture we had when the factory compensated the victims. Thus production is restored to the efficient levels, although the benefits no longer go directly to the victims.
That last bit should read “social cost” not “social coat”. Getting carried away with hats and coats perhaps.
seaice1:
You say
NO!
You really should read the thread before posting twaddle that has already been refuted in the thread.
I refer you to my rebuttal above of the post from Tim Hammond which presents the same (deliberate?) error as your post. To make it easy for you to find that rebuttal, this link jumps to it.
Richard
Richard.
I have read that reply and I don’t think it is a rebuttal. Can we explore this in the spirit of trying to reach understanding? Maybe you can persuade me to your view.
Are you saying that if you buy fuel for your truck and deliver something to someone using that fuel they have derived a positive social cost (a social benefit) from that fuel? I think this is the crux of the matter.
Another pet peaeve socials don’t get damaged, individuals do.
Bob, did you not read what I wrote? The individuals downstream were damaged. I was talking about individuals. What part of that do you not understand? The social cost of the pollution in that example was the damage to those individuals.
seaice1:
You ask me:
OK. The issue is simple and if you can and do state your problem then I will address it.
Please explain what you do not understand and/or dispute about these clear and undeniably true statements in my rebuttal.
Your assertion
And
And
And
And
Please note that I have quoted each and every sentence in my rebuttal of your idiotic twaddle.
If you cannot state what you fail to understand and/or dispute about any of my quoted sentences then you will have demonstrated to yourself that you are too stupid to understand why your twaddle is fallacious.
Richard
Richard. I see you have no interest on exploring the issue as all you have done is repeat you previous statements. The reason you are wrong is because all the things you say could be true yet there could still be a social cost to carbon. Those things you describe are economic benefits that are included in the price. We expect development and trade to make us better off.
Your problem is you do not want to use the term “social cost” in context. There is a difference between “social benefit” in the economic sense and “benefit to society” in the general sense. If you simply conflate the two without consideration it is not surprising you end up with the wrong conclusion.
seaice1:
You really ‘take the biscuit’!
You have demonstrated that you are either being obtuse or – more likely – you are too stupid to understand my repeated comment that
“Your assertion is misguided because it assumes the costs and the benefits of fossil fuel usage are applied to different people when, in reality, those costs and benefits are obtained by everybody although not in the same amounts.”
And you attempt to excuse your (deliberate?) stupidity by saying to me,
But I did put ” “social cost” in context” and I did differentiate it from “benefit to society” when I repeatedly wrote
Being alive is not an economic benefit to an individual but it is a social benefit that most individuals have from use of fossil fuels, and it outweighs any social cost he or she may have from the use of fossil fuels.
Furthermore, it is YOU – not me – who is confusing “social benefit” with “benefit to society”: if the provision of fossil fuel usage is taxed then that provides no direct benefits of any kind to any individual although use of the taxes may provide benefit to society as a whole.
Richard
Richard, the concept of social cost is very well accepted by economists. It is very well accepted that it applies to carbon. That does not make them right, but it should give you pause before saying that someone who disagrees with you and agrees with the economists is too stupid to understand your point.
You did not answer my question. Do you think the person receiving goods delivered by someone using fuel have derived a social benefit from that fuel?
You say “But I did put ” “social cost” in context” and I did differentiate it from “benefit to society” when I repeatedly wrote
The use of fossil fuels has done more to benefit humanity than anything else since the invention of agriculture. Almost everybody has net benefit because the use of fossil fuels has increased life expectancy, health and wealth while reducing poverty and starvation. Therefore, almost everybody has a net social benefit from the use of fossil fuels.”
I will go thorough this.
“The use of fossil fuels has done more to benefit humanity than anything else since the invention of agriculture.”
Yes possibly true, yet has nothing to do with social costs. You describe economic benefits. This link will describe how welfare is increased through markets. http://www.economicsonline.co.uk/Competitive_markets/Consumer_and_producer_surplus.html
In outline, some consumers would be willing to pay more than the price. They get a consumer surplus. Some manufacturers would sell at less than the price. They get a producer surplus. Add up producer and consumer surplus you get total welfare increase. This is economic gain and there is no consideration of externalities in this analysis.
“Social cost” is private costs plus externalities. In the analysis above we have not considered externalities.
You say “Almost everybody has net benefit” but I have shown above how this can be the case whilst there only being private benefits, not social benefits. We can all get better off without any social costs or benefits. That is because we can all get better off without externalities, but social cost is private cost (benefits) plus externalities. Your argument here is wrong.
You could argue that these benefits are externalities but you have not done so.
“But I did put ” “social cost” in context” and I did differentiate it from “benefit to society” when I repeatedly wrote“. Actually you specifically did not differentiate the two, but you conflated the two. You say “Almost everybody has net benefit because the use of fossil fuels has increased life expectancy, health and wealth while reducing poverty and starvation. Therefore, almost everybody has a net social benefit from the use of fossil fuels”
Almost everybody has a net benefit therefore almost everybody has a net social benefit. That “therefore” shows that you think the net benefit is the same as the social benefit, but you are wrong. Social benefit is private benefit plus externalities.
seaice1:
Why do you ignore everything I write for you and pretend I say other than I do?
You say
YES! I have not and I do not dispute that.
I point out that the social benefits of fossil fuel usage are so great that they outweigh the social costs. Therefore, it is idiotic to waste time money and effort calculating the social costs unless you can identify any individual who has net social costs (it is hard to imagine how such an individual could exist).
And you go on
There are as many economic opinions as there are economists so it gives me no “pause” that you agree with a daft notion of some of them.
And your refusal to answer anything I have written for you demonstrates as I said
And you continue that demonstration because you have still not answered that basic point.
Importantly, I repeat that it is YOU – not me – who confuses social a economic costs and benefits.
In hope that you will read it this time, I repeat
And you pretend that I don’t understand “Social benefit is private benefit plus externalities.”
Yes, it is and I address externalities but you don’t: as I said, being alive is an externality that is a benefit provided to most people by fossil fuel usage..
Richard
Richard
“And your refusal to answer anything I have written…” Except for the very detailed answer I just made to one of your points. That you apparently have not read and certainly not understood.
I have not answered the point you keep banging on about because it is senseless. ““Your assertion is misguided because it assumes the costs and the benefits of fossil fuel usage are applied to different people when, in reality, those costs and benefits are obtained by everybody although not in the same amounts.”
Applying them in different amounts to different people is exactly what I have assumed. All the costs and benefits are not felt by the people making the purchasing choice. Your so-called point is meaningless.
If I pollute a stream the people downstream are damaged. They are still damaged even if they buy some of my products.
Richard. One more thing. “Yes, it is and I address externalities but you don’t: as I said, being alive is an externality that is a benefit provided to most people by fossil fuel usage.”
Being alive is not an externality, it is a result f the economic benefits of fossil fuel use. If people were to burn more fuel without any economic activity attached to it, it would not help more people to live. Whereas if they were to burn more fuel with no economic activity it would still produce all the effects of an externality.
Another good description if all this is here.
https://saylordotorg.github.io/text_microeconomics-theory-through-applications/s17-02-externalities.html
One thing I am pretty sure of is that you won’t go and read it.
seaice1:
For the benefit of others, I yet again state my basic point that I have repeatedly put to you and you have studiously avoided.
Your assertion is misguided because it assumes the costs and the benefits of fossil fuel usage are applied to different people when, in reality, those costs and benefits are obtained by everybody although not in the same amounts.
I have answered and refuted each and every of the daft points that you have clearly provided as an attempted smokescreen for the simple fact that you know SCC is fallacious pseudoscience presented for blatantly political reasons which you want to promote. And I take umbrage at your pretending I have not refuted each and every of your assertions when – in reality – you have refused to address anything I have written for you. Indeed, in one post to you I listed each of my points and asked you to say which of them you could not understand and/or disputed, but you refused to answer any of them.
You are a pest whose posts only serve to bother me and to waste electrons. Clear off!
Richard
Richard – I dealt with that comment you keep repeating. You have ignored my response.
You suggest that there are many opinions aiming economists and you don’t care if I agree with some. In this case it is all economists. You will not be able to find one economist that agrees with your analysis. Go ahead and prove me wrong of you can. I can provide you with a long list.
troll posting as seaice1:
Not content with refusing to address my main point that I have repeatedly put to you, you now have the gall to write this
I HAVE IGNORED NOTHING YOU HAVE WRITTEN IN THIS THREAD!
If you have “dealt with that comment” on what blog did you write it and what did you say?
Richard
seaice
I only eat antarctic sea snails, but the CO2 I make when I drive my car is making corn cheaper for you! When are you going to pay me for the benefit?
The tax going to the government is going to be spent politically not in a response to the cost created so it is not an economic exchange and there for is a political exercise nothing more.
To achieve your results it would be easier if government just assumes all of the manufacturing responsibilities and all of the cost social or otherwise, this would be much more “fair”. Oh wait that already has been tried and if I am not mistaken the social cost got just a little bit out of hand.
Just so you know the law that Obama used when crafting his regulations based on SCC requires that the government look at both sides of the ledger so your assertion is flat out wrong anyway.
Bob, this comment is incoherent. if you mean that the CO2 you produce when you drive your car is fertilizer for plants then that is included in the social cost of carbon.
In my example the tax on hats restored the economically efficient level of hat production. Ideally this would be spent on compensating the victims, but it will be spent on something. The point is that the level of hat production is now optimum whatever it is spent on.
“To achieve your results it would be easier if government just assumes all of the manufacturing responsibilities and all of the cost social or otherwise, this would be much more “fair”. Nothing I said remotely suggests such a thing. All the costs and benefits are included in the price, except the externalities. The market is the best way to sort out all those other costs. Nothing I said suggests otherwise.
“Just so you know the law that Obama used when crafting his regulations based on SCC requires that the government look at both sides of the ledger so your assertion is flat out wrong anyway” What did I say that makes you think I suggested anything other than this? Social benefits are of course included as well as social costs. What assertion do you imagine your statement makes flat out wrong? Certainly nothing I said.
seaice
“In my example the tax on hats restored the economically efficient level of hat production. Ideally this would be spent on compensating the victims, but it will be spent on something. The point is that the level of hat production is now optimum whatever it is spent on.”
In your mind maybe, this is a blatant misrepresentation of how economics work.
“The market is the best way to sort out all those other costs. Nothing I said suggests otherwise.”
You have no idea how a market economy works, your just spewing socialist drivel.
“Why would you assume taxing is simpler? I specifically said that direct compensation is ideal. Only in the absence of this does tax become a second best option. I don’t think you have understood anything I have said.”
Again just drivel the only way to achieve what you suggest is to have a government command economy.
What you are defending is having a bunch of pin heads sit around and making up imaginary cost and charge for them before any true cost has been created through taxation and regulation with the intent of driving the supposed social cost creating entities out of business with no evidence of harm being done, who is going to pay for the real social cost of all the jobs lost trying to avert social cost that don’t even exist? In your example there is an actual event that causes actual harm to actual individuals.
Bob Boder, you have clearly not understood what I said as they are just repetitions of your previous non sequiturs and insults.
seaice
“Now assume that making hats caused some pollution. This goes downstream from the hat factory and causes $10 worth of damage. In an ideal world the hat factory would compensate the people harmed by the pollution. This would increase the price of hats, which in turn would lower the number of hats sold (and made). Again the market would ensure that the optimum number of hats were made. This number would be less than the number of hats in the world without the pollution. Again there is no social cost because the hat factory compensated the victims.”
And to make everything much simpler let’s tax them before they actually pollute the stream that way we have the money ready to go!
Why would you assume taxing is simpler? I specifically said that direct compensation is ideal. Only in the absence of this does tax become a second best option. I don’t think you have understood anything I have said.
Seaice
I don’t understand what you have said? You have ZERO idea of how economics work and what your are advocating for has nothing to do with your example. Show the loss, present an individual that has been harmed, the taxes and regulations are already being paid, is all the tax money being saved to help the individuals that might be harmed? There is no such thing as a social cost, if there is a cost actual people pay it not imaginary groups or organizations.
You are playing games in your head and have no clue the damage caused by such ridiculous over simplifications of what damage regulation and taxation do. Every action the government takes distorts the economy and causes real people to be hurt, so you better damn well know what your are doing and why you are doing it and you better be able to sleep with the consequence. There is zero evidence that AGW has done or will do any real harm and there is plenty of evidence that it has been a big benefit, yet there are large groups of people who have had the lives turned upside down by the clueless actions taken by people in power on the advice of clueless people that think like you do.
The basic concept of social cost does include positive benefits.
However when making these calculations the CO2 warriors assume that there aren’t any.
It does ignore benefits (and costs) that are already included in the price
============================
that is nonsense. the hat manufacturer pays taxes based on those sales. that is a social benefit that neither the buyer or seller have a share in. And it is these taxes that need to be added as a social benefit.
All of us, businesses and citizens, come with a social cost. It costs real money for society to provide necessities of life. Police, firefighters, judges, armed forces, civil servants, roads, bridges, etc., etc., etc. And we pay these social costs through our taxes.
As such, the SCC is double taxation. It is nothing more than a money grab on after tax income.
OK Ferdberple, you think that introducing tax removes the principles I have demonstrated. That is wrong. I am not denying that tax has a dead weight cost, but that is an entirely separate thing.
Imagine we had a 10% tax on hats. This increases the cost of hats and we have a new level of hat production based on a cost of $60. This level will be less than the economically optimal level we discussed previously with the cost at $50, but the level of production will be optimal given the 10% tax. Now we introduce an external pollution cost of $10 per hat. We still have exactly the same situation. There is a social cost unless the hat maker compensates the victims or we tax the hats at $10 each. Either way we get back to the optimum level of hat production given the existing tax. The social cost is exactly the same.
seaice
“his level will be less than the economically optimal level we discussed previously with the cost at $50”
There is no such thing! a company survives either by reducing the cost of producing an item and thus reduces the price to the consumer and increasing sales volume or by innovating and increasing the value of the item and increasing the price to generate revenue, which it then spends on its operations to expand. There is no optimal cost in a market driven economy, this is a fiction in your head, you should actually try running a business some day, trying to balance innovation, profit, the ability to compete with your competition without going out of business those harming all of the people that depend on you to make the right decisions so they can feed their families. You have ZERO!!!!!!! idea of how an economy works.
Bob Boder – you are talking about optimum costs, I am talking about optimum levels of production. I did not mention optimum cost. Before accusing me of ignorance it would have been good to check that you were not criticizing something I never said.
By optimum level of production I mean the economically efficient level of production. If you do not know what economic efficiency is I suggest you look it up, but basically it is that level at which any change will make more people worse off than it makes better off. It is the same mechanism that determines price using supply and demand curves. It is one of the first things you come across in an economics course.
Seaice
“By optimum level of production I mean the economically efficient level of production. If you do not know what economic efficiency is I suggest you look it up, but basically it is that level at which any change will make more people worse off than it makes better off. It is the same mechanism that determines price using supply and demand curves. It is one of the first things you come across in an economics course.”
Maybe you should get out of the economics class and get into the business world. Again there is no such thing it is socialist none sense. There is no set optimum level of anything in a market economy there is just change and adaptation, it is ridiculous notions like this that are bankrupting the west.
Just so you know when you tax or regulate something somebody has to pay for it out of their pockets and it ain’t the business your taxing. Business don’t pay taxes the consumer pays the tax in higher prices, so when you are taxing a business for your made up social justus bull shit it is joe schmo that pays for it in higher prices and lower wages.
Out of the frying pan and into the fire with the hat analogy because hats can stop melanoma or catching flu which all have social benefits too. Otherwise why would my Gummint spend dough on Slip, Slop, Slap campaigns?-
http://www.cancer.org.au/preventing-cancer/sun-protection/campaigns-and-events/slip-slop-slap-seek-slide.html
That’s the argument with even trying to guesstimate any theoretically cute notion of social costs and benefits. We say warmenistas inflate the social costs of a plant food (they call it carbon instead of oxygen for example) and deflate the social benefits and in doing so then foist unreliable electricity on us for starters.
Don’t tell me otherwise because I live in South Australia where a bunch of oxymorons are trying to disprove a fundamental axiom of engineering that you can build a reliable system from unreliable components and yet these are the same people who in the next breath will support lemon laws for simpler car systematics. Oxymorons is too kind to them.
Observa – thank you for providing an example of a positive externality from hats, which demonstrates my point admirably! The Government recognized that hat wearing provided a benefit to the wearer that the wearer may not have considered when he bought the hat. This is a positive externality – that is a benefit that is not included in the price. As a consequence the Government thought that “too few” hats were bought and sold -too few being less that the economically efficient amount. As a consequence they subsidized the hat makers by providing free advertising, which increased the number of hats sold. An excellent example that proves my point very clearly.
Whether or not they were right, The Australian Government believed that there was an external benefit to hat wearing, and so spent public money to increase hat use. They could have done it by subsidizing hats, but instead they chose to use advertising.
I can understand people thinking we have calculated the social costs of carbon wrongly. I cannot understand people thinking the whole concept is wrong.
seaice1:
You say
NO! The notion of net social costs from use of fossil fuels is an expression of insanity, and you are pretending you don’t understand that.
Your blatant pretense is revealed by our above discussion of your deliberate stupidity.
Richard
Richard, I don’t have a problem with you disagreeing with me. I do have a problem with you repeatedly calling me stupid because I disagree with you. Especially after I have provided several references that would educate you if you bothered to look.
seaice1:
I have a problem with your deliberate stupidity. Stop it!
Richard
We know that there is neither social cost nor social benefit of hats when the price is $50 with no pollution
=========
wrong. pollution is NOT the only social cost. the manufacturer could not do business without all the infrastructure society provides in which to do business. try selling your hats in Syria and making a profit.
those infrastructure costs are real costs and they are huge. And the manufacturer pays taxes on their profits, which is a huge social benefit. And what about the payroll taxes the employees of the manufacturer pay. Another huge social benefit
So if you tax the pollution and drive the manufacturer out of business (look at Detroit and much of middle America) then you lose the social benefit of the taxes the company pays and the social benefit of the taxes the employees pay, and the infrastructure you have build at great cost goes to waste because no one can make use of it.
ferdberple. Look up marginal analysis. We imagine the hat market consists of a large number of hat firms. Some will be more efficient and make more profit than their less efficient counterparts. There will be some that only just make enough profit to stay in business-these are the marginal suppliers. We introduce a pollution tax resulting in a price rise. These marginal firms will be unable to survive so will go out of business, or quite possibly they will switch their production to something else that they can make a profit on. Either way they will no longer produce hats and those resources that were going into hats now go into something else. This means that hat production will decrease. This will happen if the price rise is due to a tax or any other increase in cost. This is very standard supply and demand.
This is the key point that you have missed. Those manufacturers that stop producing hats are exactly the same ones that would have stopped producing hats if the compensation were paid directly to the pollution victims. They now switch their production to something else, which is exactly the same result we would get if the pollution victims were compensated. They are now making something socially more useful than the hats they would have made. If we add up the winners and losers, there are more winners with the pollution tax than without the tax.
There are complications, but you have not raised any.
Seaice
You do realise that when those businesses go out of business there are now less people with incomes to buy the hats right and there is less money to pay the taxes? You also realise that when the taxes go to the government the money does not compensate anything it mostly just turns into political capital?
“and the infrastructure you have build at great cost goes to waste because no one can make use of it”
The infrastructure costs are sunk. There is no suggestion in my analysis that any infrastructure be removed or anyone be prevented from using it. Let the market decide. If it becomes uneconomic that is just the way of the market, as perhaps the infrastructure of stables became uneconomic when cars replaced horses or the infrastructure of hand-loom weavers became uneconomic with industrialization. Nobody mourns the loss of these infrastructures. It is slightly absurd to suggest that we structure our lives around providing a use for infrastructures when it ought to be he other way around.
I am certainly not against using tax revenue to assist areas blighted by industrial progress. I am against producing stuff uneconomically when resources could be better used.
Social cost of carbon is an oxymoron that does not exist. A social cost can only exist if the substance causing it can harm society. Carbon dioxide or any other form of carbon demonstrably does not do that. Attributing greenhouse warming to carbon dioxide by IPCC is simply false. At no time during the last 500 million years has there been any connection or parallelism between carbon dioxide and global temperature curves. There is none today either as can be verified by plotting the global temperature record and the Keeling curve on the same graph. Global temperature goes up and down and even has some cooling in it but there are no corresponding changes in in the carbon dioxide curve. Atmospheric carbon dioxide is in fact beneficial because it acts as a fertilizer for our food crops. Its association with global warming is based upon false computer predictions. There is no warming where IPCC computers say it should be. The warming they do show is obviously a false attempt to wipe out the alleged hiatus at the beginning of the century. Part of the background they have changed into warming contains an apparent hiatus that goes over into cooling between tears 2002 and 2012 according to the UAH monthly records. After that the temporary warning of the 2016 El Nino controls the record but when it is over we expect additional cooling to follow. When I say prediction, I mean the average of a bundle of illegitimate computer runs that are presented to us as as well as to politicians a “prediction.” It is a false prediction and immediately disqualifies itself Such falsehoods must not be used as part of any scientific observation. It follows that the social cost of carbon is a fantasy lacking any scientific backing. Collectively, all these facts require removal of any reference to carbon as a cause of SCC.
Arno, you are simply arguing that the social cost of carbon is zero or negative, not that it cannot exist. The social cost can be negative – that is a social benefit. The same analysis applies. If the social cost is negative we should consider subsidies as less than the economically efficient amount would be produced. We should consider subsidies for things that produce more benefit than the producers of the good receive, just as we should consider taxes for things that produce more costs than the producers of the good bear.
seaice1 March 7, 2017 at 4:34 pm — No I am not – it simply does not exist. You have an obnoxious talent for nitpicking but despite your erudite remarks about negative SCC you cannot restore it to life. I guarantee that no one would ever have invented it had they not found it useful for advancing the pseudoscience of AGW. And by the way, I do believe in global warming, Why? Because it is controlled by natural forces and not by the imagination of some warmist hooligans who invent things like the SCC.
Arno, are you saying that social cost cannot exist for anything, or just for carbon?
seaice1:
As part of your attempt to promote SCC you ask Arno
Don’t be silly. As I have repeatedly explained to you above (here), the social benefits of fossil fuel usage are so great that fossil fuel usage provides net social benefits and not net social costs.
Unless and until you can identify anybody who has a net social cost from fossil fuel usage then it would be insane to waste time money and effort on calculating social costs.
Richard
I don’t know why or to where that vanished. I will try again.
seaice1:
As part of your attempt to promote SCC you ask Arno Arrak
As I have repeatedly explained to you above (e.g. here), the social benefits of fossil fuel usage are so great that they outweigh the social costs. Therefore, it is idiotic to waste time money and effort calculating the social costs unless you can identify any individual who has net social costs (it is hard to imagine how such an individual could exist).
Richard
Lorcanbonda,
Can you show us a photo of the 2 decimal place thermometers you use in chemical engineering,
and for comparison, a photo of the thermometers used in weather stations to generate data?
Also, to measure the temperature of your freezer, you need to put you thermometers INSIDE the freezer, not outside as you suggested. (I can’t believe you didn’t know that) You will find that a thermostatically controlled freezer doesn’t haven’t a stable temperature – it’s always changing.
Lindzen explains here why the “global average temperature” doesn’t mean much:
You should listen and learn.
“Global average temperature” is just a propaganda tool: it has no predictive utility.
It didn’t predict any of the weather pattern changes I annotated in my 3rd paragraph, all occurring within the the so-called “pause” period. I note that you ignored those climate changes in favor of defending a useless mathematical abstraction.