Guest essay by Eric Worrall
Apparently carbon taxes are not punitive, because anyone who wants to save money on carbon taxed gasoline can always purchase an electric car.
Are Carbon Taxes The Solution To Global Warming?
Quora , CONTRIBUTOR
Opinions expressed by Forbes Contributors are their own.
Am I correct to say that carbon taxes are not a solution to global warming? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
Answer by Michael Barnard, low-carbon innovation analyst, on Quora:
There is a belief that taxes (such as carbon taxes) are punitive or punishing, hence the misconception that carbon taxes aren’t part of the solution set useful for climate change.
This is a common misconception, especially in the USA where taxes have been demonized and cut for decades, and politicians bend themselves into all sorts of silly shapes to avoid putting a tax on something. However, it’s a false assertion.
Taxes are a necessary mechanism for governments to raise money for their actions. They are also a key lever for changing consumer and corporate behavior, along with regulations. In behavioral economics, there’s something referred to as induced demand. This is a directly observable behavioral trait of groups. If something is cheap, people will figure out how to use it and more of it will be used. You can see this with building new roads which become congested almost immediately and you can see it with dumping sewage into rivers instead of treating it where that is allowed by lack of regulation and penalty.
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Let’s look at a couple of examples.
A couple are considering the purchase of a car, the second largest single expense most people have after their home. They want the most car for the money, they need to balance status with practicality, they need to balance her desire for an insanely fast corner carving beast with his relative timidity behind the wheel and the like. The price of gasoline and projected future price of gasoline is part of the conversation. A 20 mile per gallon car might cost a couple close to $1,600 in annual gas bills at $2.40 a gallon. A carbon tax might raise that to $3.00 a gallon which would increase their annual gas costs to perhaps $2,000, about $400 more. Meanwhile, a 50 mpg PHEV or a full electric car could drop their annual gas expenditure substantially. Filling up with electricity is half as expensive as filling up with gas at $2.40 a gallon on average in the USA, and closer to a third as expensive at $3.00. That means that buying an electric car might save them $800 without a carbon tax or up to $1,200 with a carbon tax. $1,200 is $100 a month. For most couples that’s material. They’re more likely to make a decision to buy a Chevy Bolt or a Nissan Leaf or a Tesla Model 3 instead of a gas car. They have a choice and are incentivized to make one choice over the other. This doesn’t penalize them, but it does shift behaviors to preferential ones.
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Read more: https://www.forbes.com/sites/quora/2017/06/19/are-carbon-taxes-the-solution-to-global-warming/
Why didn’t we climate skeptics think of that? Poor people won’t suffer from high carbon taxes, all they have to do is dump the $500 jalopy and produce USD $22,000 or so to buy a cheap electric car, and whatever additional money is required to replace the electric car battery every few years.
Magical Thinking.. if you/me/anyone gets into a depressed mental state – easily done simply through eating a diet high in carbohydrate. me/you/anyone will dwell on a subject (almost any subject) for so long – it becomes true. Me/you/anyone effectively hypnotise and brainwash ourselves.
So it is here.
Motor fuel tax in the UK, certainly Europe. Why so high. Its *always* been high.
To build new roads and repair old ones they will say. But what about motor vehicle road tax. Motor vehicle insurance tax.
Such a huge revenue stream and a fraction is spent on roads,
There is, not far from me here near Sherwood Forest, one or two oil wells.
I kid ye not. Nodding donkeys, pipes, tanks, rusty metal fences. The Complete Kit.
Ang o near that fence and its actually in very good repair, with razor wire around the top and huge chains and padlocks on the gate(s)
And on the gate, a big notice. Its from Her Majesty’s Revenue & Customs (HMRC)
AKA The tax man.
It does not mess about. There is ‘instant response’ CCTV watching the place and if anyone is seen in any way touching anything there, they will be in sooo much sh1t you could not believe it.
At a poxy little oil well, in a field, miles from anywhere, the major concern is that someone might break in and steal something (crude oil presumably) Hardly any mention of Health and Safety as there usually is at similar places. The tax-man is scared sh1tless about losing a few ££ of oil revenue.
CO2
Warmists and bedwetters are quite pleased about CO2 emission reduction from power stations burning natural gas rather than coal.
So, I suggest, burn Nat Gas in motor vehicles.
The delivery infrastructure is all there, existing engines would need minimum modification, CO2 emissions would halve and the soot/smoke problem would completely disappear.
But ‘they’ cannot can they?
Not least as some enterprising Chinaman, on ebay probably, would start selling little compressors that would fill people’s cars at home, from the same supply the cooker in the kitchen uses.
And the epic tax stream from road fuel would vanish almost overnight so, It Won’t *Ever* Happen, not in the UK or Europe. Despite the huge advantages to ‘The Environment’ The tax stream (the $$$$ ££££) is more important.
Back on topic – do we presume that controlling people is more important than the planet, the polar bears, the grand children, coral reefs, pika etc etc etc. let alone Griff’s state of mind (and the ice)
Letting road transport fuel itself with nat gas would be a huge win win for everyone, except the tax man, so lets see what happens…..
“Peta from Cumbria, now Newark June 21, 2017 at 9:09 am
But what about motor vehicle road tax.”
It is this tax, or the road fund license, that is supposed to be used for road building and maintenance. Of course, like in any other country I have lived in, it goes in to a consolidated fund and disappears. When I moved to New Zealand in 1995, the UK road tax on private vehicles alone raised the equivalent of ~75% of GDP, or roughly NZ$75bil. Very little of that was actually spent on roads that you. The tax numbers for car use in the UK are enormous.
Failing to recognize that CO2 has no significant effect on climate is an egregious mistake but is dwarfed by the potential disasters of what actually does.
The still-rising water vapor is rising about three times as fast as expected from water temperature increase alone (feedback). The rising WV coincides with rising irrigation, especially spray irrigation on fields and lawns. The warming (WV is a ghg) is welcome (countering the average global cooling which would otherwise be occurring) but the added WV increases the risk of precipitation related flooding. How much of recent flooding (with incidences reported world wide) is simply bad luck in the randomness of weather and how much is because of the ‘thumb on the scale’ of added water vapor?
“We can ignore reality, but we cannot ignore the consequences of ignoring reality.” Ayn Rand
Near as I can tell, it’s all punitive and does very little to change behavior.
Nietzsche — ‘But thus I counsel you, my friends: Mistrust all in whom the impulse to punish is powerful
Incentivize electric and hybrid vehicles…then give them a special tax because they hurt gas tax revenue. Ah, government.
electric cars are stupidly designed. They should carry 2 batteries. One empty use the other one to reach a station. And do not load batteries, change them by precharged ones.
If taxes aren’t punitive, then they aren’t high enough to change behavior.
To me, this is the heart of the matter, wrapped up in two sentences –
Taxes are a necessary mechanism for governments to raise money for their actions. They are also a key lever for changing consumer and corporate behavior, along with regulations.
I agree, taxes are needed to pay for governments actions. Of course, the question then pops into my mind as to who determines what actions governments must do? But the second sentence is what burns my butt. WHY is it necessary for government to change consumer and corporate behavior? Best I have always been able to figure is given the opportunity, “behavior” settles out on its own without government pontificating and “levering” anything. We really aren’t “cattle” and need to be herded anywhere.
Bottom Line: Taxes should make sense, and so to incentivize non-production of a something that poses a non-threat is nonsense.
If forcing people to do what you want this way is OK. Then taxing members of the democratic party is OK because they can always quit and join the libertarian party.
By the way Oregon taxes electric car drivers extra because they don’t pay fuel taxes for roads. So logic fail all around.
Mainly, new taxes are a way to more the Ruling Class closer to having it ALL. Until the economy collapses again…
A “low-carbon innovation analyst”? How much is the taxpayer being dinged to pay the salary for that fake job? The world would be a lot better off if he learned how to swing a hammer instead of analyzing low-carbon innovations.
/snark
So, you say they are going to tax you every time you say “carbon” ?
When Australia brought in the World’s Biggest Carbon Tax, my view was and remains: Terrrible policy, but at least we pay the tax to ourselves. No corrupt kleptocrats in Russia, Uganda, or Australia. It’s just a tax – to be spent in Australia. Not given away like a global ETS.
QUESTION: Could I get a tax break, if I held my breath at intervals throughout each day?
It’s always the plots of professional activists to try to destabilize the societies they’re in.
This is the foundational tenet of political understanding. No matter what the excuse, most high energy activism is the spawn of an obsessive troublemaker who just happens to land on the right political, note,
that everyone starts feeling like dancing. That note is untouchable power to maintain undiminished wealth.
Political operatives who latch onto some scientific principle then begin bilking others in fraud are the original national poltergeists.
They start their lives out learning to mimic and thrill youth by attending universities and colleges, learning the basics of herding human beings,
then go into jobs where they fully feel entitled to never, ever suffer a financial setback. There won’t be any firings, there won’t be any competency checks, there will be free money, power, and privilege.
The entire Western world was shocked to it’s core to find the Environmentalists of the world extorting millions in faked ‘research’ grants: when they’d had congressional grants rules changed to include ”theoretical physics” grants.
That was what Hansen achieved so that he and his government climate organ administrators could simply steal at will.
This is not going to get better either. A large portion of the national population has realized that if they all refuse to obey the law together, they ARE the law: and YOU’LL pay or YOU’LL be attacked.
It’s a simple story of criminality throughout an entire civilization: fostered by part of it’s leaders to try to diminish the influence of those they disagree with.
So to avoid paying a carbon tax, I would buy a new electric vehicle and make payments I can’t afford (because I’m barely making ends meet now) that won’t do what I need it to do like a gas powered car will.
What university degree do you need in order for this to make sense?
Gas is already much higher priced than that here in Canada but hardly anyone drives electrics. Only the rich can afford them because you need a fossil powered car for anything other than short trips.
Contrary to the claim of this article, carbon taxes will definitely impact the consumer and the less discretionary money you have, the harder it will hurt. Carbon taxes will increase the cost of EVERYTHING, not just the gasoline you put in your car. Everything takes energy to make, move or use… including food, clothes, toilet paper.. you name it. It will all be affected negatively by the increased cost of energy. Add on top of that the billions of dollars the government and their Cronies like Al Gore will skim off and just about anyone with an IQ higher than 30 can easily figure that the claim in this article is absolute Progressive BS.
I addressed this in an analytical piece six years ago by looking at change in transportation fuel consumption rates in the United States over time compared to change in transportation fuel real costs, and came to exactly the same conclusion. I summed the argument up as follows:
If the bulk of transportation fuel purchases are indeed effectively non-discretionary, then there is only a very limited extent to which consumer behaviour patterns vis-à-vis transportation fuel consumption are subject to alteration through the imposition of artificial price increases regardless of how they are accomplished; direct taxes (like carbon taxes levied at the pump) or indirect taxes (like price increases resulting from trading in carbon credits purchased by petroleum distillers, with costs passed on to consumers), even if enormous, will not have the desired effect. This is the difference between a luxury and a necessity. If the price of caviar goes up, chances are you’ll eat less caviar; and if it goes up enough, you might well phase it out of your diet. Nobody needs caviar, after all. If the price of wheat goes up, though, chances are you’ll still buy bread; you’ll just have to adapt by reducing consumption in areas that are more discretionary. You’ll see fewer movies, put off buying that X-Box, or not purchase the sofa you’ve been saving for. You don’t really have a choice about buying bread, you see, because the alternative is starvation.
And as the data demonstrate, you largely don’t have a choice about driving your car. The little discretionary things – like that trip to Disney World you wanted to take the kids on – will disappear. But that’s less than 10% of the gas you’ll buy in a year. And a 10% reduction at the margins of consumer behaviour will have a negligible impact compared to much larger effects – like the massive reduction in fossil fuel consumption imposed by a crushing economic crisis; or the massive increase in fossil fuel consumption occasioned by increasing demand for fuel in the growing economies in Asia.
When 90% of your purchases in a given sector are non-discretionary, you’re an addict. So the bottom line, I guess, is that for all practical purposes, we ARE addicted to fossil fuels – at least in the sense that price changes do not appear to significantly impact consumption patterns (looks like I agree with Obama on something. Somebody write the date down). Which is why trying to modify behaviour through price manipulation won’t work. Forcing consumers to pay higher prices for largely non-discretionary commodities like transportation fuel will not lead to a significant reduction in fuel consumption; it will simply lead to a lower standard of living by forcing them to make sacrifices in discretionary areas. Spending an extra $700 on gas simply means that the family won’t be able to afford the nice-to-haves, like sending little Johnny to hockey practice. Which of course means that Mom won’t have to drive him there, which means that she’ll save the expense of the fuel that would have been consumed, which in turn means a concomitant reduction in those greenhouse gas emissions Obama was talking about when he advised that Pennsylvania man to buy a hybrid to transport his 10 children in.
Of course, any family that is having difficulty affording a $700 increase in annual fuel costs probably isn’t in a position to spend $40k on a Prius. But, hey…details.
But, if that mandated $700.00 (or that $2,400.00 a year, or that mandated $4,800.00 a year) in energy costs don’t go to “paying the oil companies” (which actually goes to the oil-producing national governments worldwide) but go to “paying a refundable carbon tax to the US government” then the US government can re-distribute that new tax revenue to the “deserving citizens” as it sees fit – ie, to the low income voters who “deserve it”. And who don’t pay the energy tax, but who do vote democrat-socialist-communist.
climate alarmism and related energy policy may easily be interpreted as a revolt of the elites. A regression to a feudal society with very few very rich and many poor: their servants. Definition of poor (slaves) : no money left after paying for basic needs. Basic mental drive is the fear for energy and resource shortages. It also is the result of little faith in human ingenuity.
This… hrm, Anthony doesn’t allow such language.
Carbon taxes are only part of the “Green” agenda. A very small part, at that. Let’s take a look at a couple in Australia – a “leader” in the drive towards complete “renewability.” With policies that, without their recent setback, would undoubtedly have been forced onto the US.
http://joannenova.com.au/2017/06/shocking-electricity-price-rises-coming-in-australia-not-a-failure-of-energy-policy-but-a-complete-success/
Any rational couple would take one look at their new electric bill, realize that this is going to happen every year from here out (assuming they have electricity with which to charge their EV) – and say “IC, all the way, that’s the ticket for us!”
Taxes on alcohol, tobacco and petrol does not seem to change behaviour. What it does is allow Govn’ts to INCREASE taxes on stuff people use.
I don’t think the person “Michael Barnard” knows the meaning of what he said “This doesn’t penalize them, but it does shift behaviors to preferential ones.” .. ooops or she, it, them, they….. or whatever noun pronoun combination he prefers. So if people don’t look of it as a tax penalty on their bad behavior but look at it as offering to give them back some of the money that was a tax penalty for bad or unapproved behavior, its a win-win. wow….. just wow!
Cheers,
Joe
I’m sorry to say this but … they are economic morons.
Induced demand, or latent demand, or supplier-induced demand, is the phenomenon that after supply increases, more of a good is consumed. It has nothing to do with a price effect. It has not come from the behavioural economics field.
Why is it even being given air-time?
Wouldn’t it be easier to lower the price of gas to save money, i.e. lower taxes.