- The world emits about 35 billion tons of carbon dioxide each year (this is from a warmist site).
- The US “contribution” to this amount is about 6 billion(this is a high end estimate).
- US emissions have been flat for two decades.
- The highly reliable IPCC estimate is that a ton of CO2 does about $30 in damages over the course of the next century. Remember this is already a Present Discounted Value. This is not an annual value but rather an aggregate one (Professor Stavins is not exactly a free-market ideologue).
Which leads to some observations/questions:
- If you are part of Professor Mankiw’s “Pigou” club, which I am not, this suggests that a $30 per ton tax on CO2 emissions would, if NO ONE changed their behavior, generate $180 billion in carbon tax revenues.
- This amount is about half of current corporate income tax payments.
- This amount is less than 20% of the total amount of estimated dead weight losses inflicted on our economy from how poorly our tax system is structured.
- Can anyone, anywhere, show me the $180 billion in other taxes that the US would be willing to reduce in order to make this tax carbon neutral? Or would folks be willing to see annual Medicare, Education, Social Security, etc. benefits fall by $180 billion.
- Supposing highly inelastic demand for carbon generating activities, and complete ability to monitor and track CO2 emissions and complete ability to actually collect all of the taxes needed to do this, the idea is that this $180 billion would be made available to “pay for” the damages done by the CO2 emissions. This is sort of how a court system would work, but when a court awards damages, we are guaranteed (actually, scratch that, the lawyers take a bunch) that the “victims” actually get compensated. Do you think that the tax revenues will actually be used to compensate the climate “victims?” I’m 7 feet tall too. I can’t wait to see the establishment of a government sponsored agency that would specialize in creating carbon tax backed securities, would anyone want to bet me on that?
- Assuming away 5, would “paying for” $180 billion worth of “climate change damage” be ANYWHERE NEAR the way you would want to spend $180 billion to deal with ANY problem of your choosing? Where on the list would climate change damage prevention actually fall? Ahead of working on the problem of antibiotic resistance? Ahead of suicide prevention? Ahead of automobile safety? Ahead of efforts to upgrade ancient sewers and water treatment facilities? Or to think globally a bit, ahead of providing clean burning and reliable fuels to poor countries? Ahead of helping 2 billion people gain access to clean water? Or better yet, ahead of doing something to end to utter tragedy that is taking place in South Sudan and Darfur? Again, I’ll be on board with your world if you tell me that paying for CO2 emissions is more important that putting an end to the slaughter of thousands and thousands of human beings. And no, climate change has not, and will not, lead to the slaughter of thousands and thousands of human beings.
And maybe my biggest question, which will of course get crickets like all of the others. Suppose we do implement a rather aggressive carbon tax policy, designed and implemented by all of the “experts.” Once it is passed and is operating, what is the probability that “this is it?” Do you think we’d see a call for the end of electric car subsidies? A reminder that in the presence of the tax people will all find their own ways to adapt? You can all stop laughing now.