Taxes: Still the Best Bet

I'm not by any means fanatically opposed to reducing greenhouse emissions through non-tax methods, especially if -- as seems likely -- this is more politically feasible since it conveniently hides hosts, but I remain persistently unconvinced by arguments that non-tax approaches are superior on the merits to simply implementing a carbon tax. Kevin Drum, on the other side, notes that the price elasticity of gasoline consumption is low (people use about one percent less gas when prices go up ten percent) so even a hefty carbon tax is unlikely to produces substantial reductions in transportation-related emissions.

The problem here is that we need to ask ourselves why that is. The answer -- it seems clear to me -- is that there aren't a lot of ways, in the short run, for people to reduce gasoline use and the people most able to reduce their usage (car owners living in walkable urban areas) don't use much gas in the first place. But what alternative do we have? Kevin gets his stat from Daniel Sperling who argues instead that we should "require oil companies and other fuel providers to reduce carbon and other greenhouse gas emissions of transportation fuels by at least 10% by 2020." But here's the thing. Sperling himself notes that a carbon tax "would not induce drivers to switch to low-carbon alternative fuels because virtually none are available." But, of course, were such an alternative available, taxes would induce switching. And a carbon tax would make the development of such a fuel potentially quite lucrative.

It goes like this across the board. It takes years for higher CAFE standards to really make an impact since the newer, more efficient cars only displace the older ones over time. But by the same token, a high carbon tax would over time cause people to consider investing in more fuel efficient engines. Most of all, though I know people from southern California don't like to hear about it, it's totally crazy to put forward a plan to reduce carbon emissions that doesn't do anything at all to encourage people to drive their cars less at the margin over time.

UPDATE: Wait, sorry. The other thing is that a carbon tax (or something similar where you auction emissions permits) does do one thing in the short run, namely generate revenue. That revenue can then be spent on supplementary measures -- subsidies for hybrid trade-in programs, mass transit construction, alternative fuel development, renewable electricity generation -- of the sort Kevin's talking about.

Photo by Flickr user Bear69Designs used under a Creative Commons license.

Comments

A carbon tax has the additional benefit of allowing the market to choose between alternative fuels and means of power generation which should result in faster progress and a more efficient outcome than forcing these things to rely on government subsidies. And as you mentioned, it rewards even incremental improvements.

Posted by David | June 21, 2007 1:53 PM

I know you're making a technocratic argument, but since we have democratic system, it's silly to overlook the obvious political problems with that particular three letter word.

An auctioned cap and trade system could have most of the benefits of the carbon tax, but is much more likely to be acheivable. Plus, from an environmental standpoint it is better since it's a "defined carbon" system rather than a "defined price" system. In other words, we don't actually know how high the rate would have to be to achieve the reductions we need.

Posted by AJ | June 21, 2007 2:05 PM

Another thing you could do with gas-tax revenue is go around and buy up old, fuel- and emissions-inefficient cars and crush them. Usually it is the cars in the bottom 5% of the fleet that are the worst offenders [1] and removing them from the pool makes a big difference. This is essentially what the Japanese started doing around 1965 (the call it the "5-year safety inspection" but the result is the same) to drive their auto industry to improve.

Cranky

[1] There could be a bit of a problem because the 1986-1992 cars were more fuel-efficient than today's equivalent models (oil shock, CAFE, and all that). But I think the net effect of a newer fleet would be positive.

Posted by Cranky Observer | June 21, 2007 2:07 PM

In the longer run (5 years or more), higher gas prices dos result in lower gas consumption. People chnage behaviour: buy more fuel efficient cars, re-jig commutes, learn that buses aren't just for poor people, etc.

So price-elasticity needs to be looked at in the appropriate time frame.

Posted by Anon | June 21, 2007 2:11 PM

Also, it wouldn't be a very progressive tax.

Posted by JP | June 21, 2007 2:18 PM

To counter AJ, it seems to me you could sell a carbon tax on a patriotic, support the war on terror type grounds. I don't know what polls say on this issue, but it's hard to tell from current polls what public support you could generate with a campaign like that. There are side benefits to such a campaign from a progressive point of view in that, if successful, you may marginally reduce the political antagonism to that three letter word. If some people on the margin begin to see taxes more as a patriotic duty (which I think it is) rather than an evil to be avoided at all costs that's a good thing. The effect may be small, but every bit helps.

Posted by Led | June 21, 2007 2:20 PM

Price-elasticity over what time frame? In the short run -- yeah, very inelastic.

Over time, as people re-jig commutes, buy new small cars -- very elastic. Over the very long run, as cities build transit lines and new subways, and telecommutting takes off --extremely elastic.

Posted by ponon | June 21, 2007 2:23 PM

they should be part of the solution, but, you make a good point - CAFE standards actually *encourage* driving on the margin, not discourage it, by making each mile driven cheaper than w/o the standards.

pay-by-the-mile auto insurance and car registration fees seem like no-brainers to me. unlike taxes, half of drivers (well, not exactly, but whatever) can come out ahead in these policies, yet, they provide serious disincentives to driving.

Posted by josh bivens | June 21, 2007 2:27 PM

As someone who lives in Southern California, I couldn't agree with you more. Indeed, there are huge quality of life reasons, apart from the climate change issue, why we need to pay much more to drive alone than we currently do. Southern Californians may love their cars, but they won't do them any good when you can't get anywhere anymore-- and we're getting to that point. Rush hours are lasting all day, traffic snarls even on the weekends, etc.

Gas taxes, road tolls, anything to get people to pay more to use their cars is a good idea. Then funnel the money into alternative fuels, energy-efficient cars, and mass transit.

The thing is, we Southern Californians may not want to talk about this, but we are only delaying the inevitable-- anyone who really thinks that they will be able to live in the exurbs in a big house and commute 55 miles to the city 20 years from now is living in Fantasyland.

Posted by Dilan A. Esper | June 21, 2007 2:28 PM

Look, are rising fuel prices convincing people to buy more efficient cars now? To drive less? To support public transportation infrastructure? To do any of the types of things a carbon tax would encourage?

No. If anything higher fuel prices are convincing state legislatures to REDUCE the gas taxes they already have in place. Because it's one thing that the legislators can do that will impact the price that their angry constituents have to pay at the pump. If we had a carbon tax in place we'd already be seeing the Congress working on legislation to scuttle it to save their political asses from being canned.

Higher CAFE standards and top-down pressure/incentives for states to implement mass transit are much more likely to change behaviors and have real, positive environmental impact than any kind of carbon tax levied on fuel prices will ever be able to realistically manage. If your economic models don't take into account in inherent weakness of politicians to do the easy popular thing instead of the difficult "right" thing, your models are flawed.

Posted by NonyNony | June 21, 2007 2:31 PM

I agree that the cap and trade may be more politically feasible than a carbon tax, but I think this is due to the cowardice of politicians. I'd think that if a major candidate actually campaigned on it and explained why it is better, people would get behind it (people have responded well to requests for sacrifice in the past).

As for the environmental superiority, it depends on the way it each is phased in. If the the cap and trade is applied broadly (rather than just to heavy industry/utilities) then the "defined carbon" and "defined price" would be equivalent for some schedule of emissions decreases. Since the optimum schedule isn't obvious ahead of time and the phase in will likely be linear, I'm inclined to think that steadily increasing price will be less disrupting in the short term and will achieve greater gains in the long term. I fear a cap and trade will do the opposite.

Posted by David | June 21, 2007 2:33 PM

NonyNony

There was a Hybrid craze last year where year-old Priuses were going for over the MSRP of new ones, which were back ordered for months. And the prices and popularity of SUVs have dropped significantly. So I think people have responded rationally to the gas price increases.

Posted by David | June 21, 2007 2:37 PM

The problem for legislatures is that gasoline taxes ironically incentivize governments to encourage driving. Any budget analysis of proposals to increase public transport options will always demonstrate that not only will the proposal itself cost money in terms of capital outlay, but that the government will lose revenue if people drive less.

Increasing gas taxes as a means of encouraging alternative transportation simply assumes that the governments are more virtuous (or less able to respond to financial incentives) than the average consumer. The ideal for a state government from a revenues perspective seems to be that everyone owns a car (registration fees), and everyone consumes as much gas as possible sitting in traffic (gas taxes + minimizing expenditures on road and highways).

The solution? Cut gas taxes to zero and build a public transportation system whose fares include a sales tax that goes directly to the legislature's general fund. Earmark transportation subsidies for the public transit system from other sources. That way, any proposed increase in public transit ridership will at least appear to increase some piece of the budget.

Posted by Tyro | June 21, 2007 3:09 PM

There are multiple aspects that need to be taken into account when attempting to reduce emissions. One that I haven't seen here (but may have missed) is that municipalities need to enact better (i.e. more mixed and more dense) land-use policies. Public transportation programs don't have low ridership because communities don't invest in them...they have low ridership because the communites they are in don't have the land uses to support them. For example, if a bus stop is more than 1/4 of a mile from either the origin or destination of your trip, odds are you won't use it.

Posted by gus | June 21, 2007 3:19 PM

OK, seriously, how many of you are willing to bet the next four years in the White House that Americans are going to be willing to pony up for a gas tax large enough to reduce carbon emissions and subsidize alternative fuels? Because one can bet that Romney/Giuliani/Thompson will be telling them that they don't have need it.

The marginal differences in efficiencies between cap and trade and the carbon tax, assuming a decent design for each, just aren't that much. Carbon taxes make prettier white papers and graphs, but no one knows actually what the elasticity curve looks like, short or long term.

Posted by AJ | June 21, 2007 3:24 PM

> Carbon taxes make prettier white papers and
> graphs, but no one knows actually what the
> elasticity curve looks like, short or long term.

If peak oil theory is correct and gasoline heads toward $15/gal in real terms(*) in the space of a few years I think we can make a good estimate of the demand curve and its elasticity in that region.

Cranky

(*) Admittedly deciding what "real terms" would mean as the price went over $5/gal and started affecting the entire economy down to the core is a bit difficult.

Posted by Cranky Observer | June 21, 2007 3:28 PM

The simple fact (reflected in the relatively low price elasticity of demand for gas) is that it is cheaper to reduce carbon emissions in non-transport areas (eg, moving away from coal) than it is to move away from oil. what's wrong with that?

Posted by Chris | June 21, 2007 3:31 PM

Tyro, why not instead why not have the federal government tax the gasoline? This would provide both an incentive for people to stop driving (which your proposal wouldn't do) and for local government to increase investment in public transit. This way legislatures can increase revenue and provide a competative alternative to driving.

Posted by Jack | June 21, 2007 3:37 PM

I think that the time-frame argument is correct. I seem to recall that Paul Krugman made this argument some years ago in his NYTimes column: in the short run, raising the costs of energy has little effect on utilization because people have gotten themselves into a situation where they have no choice but to pay. Over a period of several years, though, as people replace their cars and appliances, change their residences, etc, the energy costs get factored into these decisions and ultimately usage goes down. As Prof. Krugman is a professional economist, I assume that he has hard data and models to back up his columns.

That said, it seems to me that there has been a sustained run-up in average fuel costs in the last 7-8 years, and I would be interested in knowing whether that had any impact on utilization or whether the long-term empirical elasticity is as poor as the (presumably) short-term 10%-1% ratio.

Posted by PT | June 21, 2007 3:49 PM

Matt:

"The other thing is that a carbon tax (or something similar where you auction emissions permits) does do one thing in the short run, namely generate revenue."

The other other thing about taxes is that they give the government an incentive to keep whatever is being taxed in business -- see, for example, the tobacco industry.

"Kevin Drum, on the other side, notes that the price elasticity of gasoline consumption is low (people use about one percent less gas when prices go up ten percent)

Even if the price elasticity is that low, because the price of gasoline fluctuates over such a large range that high prices do effectively limit demand. For example, here in NJ, over the last year or so, gas prices have been as low as $1.90-something and as high as $3.15+ (other states have significantly higher gas prices, but may have a similar range). Normally, I just fill up my tank when it's empty at the station in my area that I know from experience has the lowest prices; I don't think much about reducing the miles I drive. When gas gets over $3 per gallon though, I start thinking about it. I doubt I'm the only one, because the pattern seems to be that as gas prices push up to about $3.15 here (and correspondingly higher prices in other states) demand falls, and then gas prices start falling in fairly short order.

Posted by Fred | June 21, 2007 4:02 PM

Another element big plus for the carbon tax is that entrepreneurs know what the value of their carbon reducing inventions will be over many years. Venture capital firms will be more confident in funding if they know roughly what the market will look like. With cap and trade, there would be a large uncertainty in the price in the near future.

Cap and trade is better than nothing, but a carbon tax is far superior to an equally well designed cap and trade.

Posted by David | June 21, 2007 4:37 PM

1) The comments here show why armchair social engineers , lacking in knowledge and analytical ability, shouldn't be allowed to influence public policy.

You are ALL so eager to shit on the common citizen -- instead of influencing the big corporations who actually design,shape and decide the environment in which we live.

2) As I've noted, the REAL cost of Middle Eastern gasoline is already $41 per gallon --when you take into account the roughly $38 per gallon we spend on military operations to grab oil deposits and to keep Big Oil's foreign investments secure. I've already posted the detailed accounting several times here.

3) To encourage alternative energy development you need to TAX BIG OIL for the costs of protecting their big investments. A "Middle East Oil Protection Tax" -- at $600 BILLION per year.

4) Big Oil will try to pass that cost on to the pump --which is good. Because as the TRUE cost of oil becomes evident to the market, venture capitalists will raise $TRILLIONS to develop alternatives. The artifically low pump price and discourages free market investment in alternatives -- because the $38 /gallon subsidy that Big Oil gets from the federal government is hidden in the income tax (and in the theft of about $4 TRILLION from the Trust Funds for Social Security/Medicare )

Posted by Don Williams | June 21, 2007 4:53 PM

I wonder whether spending more money on mass transit would ultimately pan out. It's not clear to me that American culture is such that people would suddenly start using mass transit significantly more if the option were to become available. If you build it, they won't necessarily come, in this case.

But maybe that could evolve over time, in a generation or two. But in the meantime?

Posted by live | June 21, 2007 4:54 PM

"I'm not by any means fanatically opposed to reducing greenhouse emissions through non-tax methods, especially if -- as seems likely -- this is more politically feasible since it conveniently hides hosts, but I remain persistently unconvinced by arguments that non-tax approaches are superior on the merits to simply implementing a carbon tax."

#1) Gas taxes are already too high but car use hasn't decreased. People need to drive in America in a way they don't need to drive in Europe.

#2) If the idea is that consumers will pressure industry to develop alternatives to gas guzzling SUVs why punish the middle and working class on behalf of your political agenda? Why not go straight to the source and require automakers to produce plug-in hybrids and plug-in electrics? They already have the technology to build these cars. Why not go straight to the source and require utilities (which account for 40% of US c02 emissions per year) to upgrade their power generation facilities? It isn't as if we don't know what kinds of power generation produce less c02.

#3) Are we going to tax the cows too?

#4) Building lots of new and more efficient cars, buses, and trains may generate more c02 just in the production phase than the current vehicles on the road.

Posted by Linus | June 21, 2007 5:07 PM

Don Williams:

1) Calling others "armchair social engineers , lacking in knowledge and analytical ability" isn't a very good way to influence their opinions. Rather, it makes you sound like an ass.

2) The whole point of a carbon tax is to price in the environmental impact of burning carbon fuels. You seem to be advocating pricing in the security costs as well. This is a reasonable argument, but your prescription is the same as what many of us are arguing for.

3) I think that a $38/gallon tax on gas would cripple the economy and lead to a large black market (and a lot of crime). Perhaps a better strategy would be to scale back military action in the Middle East? That would cause the security and volatility to be priced in anyways, and would save some lives.

Posted by David | June 21, 2007 5:15 PM

> 4) Big Oil will try to pass that cost on to the
> pump --which is good. Because as the TRUE cost of
> oil becomes evident to the market, venture
> capitalists will raise $TRILLIONS to develop
> alternatives.

So you are simultaneously arguing that taxes cannot be used to influence choice sets and outcomes through the market, but that the very same market will work perfectly to conjure up alternative energy sources?

I will stand over there with the armchairs if you don't mind...

Cranky

Posted by Cranky Observer | June 21, 2007 5:24 PM

The short-term/long-term problem is exactly why the proposal for a graduated gas tax put forward almost two years by Ray Magliozzi of NPR's Car Talk ago makes so much sense:

http://www.cartalk.com/content/features/gastax/

If you know you're going to be paying over $6 a gallon in 4 years, it will affect your car purchase (or exactly where you decide to move to) next year or the year after. If car manufacturers know that you'll be looking for more efficient vehicles and city planners know that more people will be deciding to use public transportation in 4 years, it allows them to begin planning for those changes as well. And people looking at alternative fuels that today look far too expensive have a chance to plan for a day when they will become more cost effective.

Posted by Steve | June 21, 2007 5:28 PM

The Drum argument that demand is inelastic doesn't make any sense as a reason to prefer cap and trade over taxes. Inelastic demand would mean that even a small reduction in quantity would lead to a huge price for permits, which would be exactly the same outcome as having a very high tax. The incentive effect and short term costs would be the same since you're just choosing a price-quantity point on the demand curve.

Also, cap and trade seems distinctly inferior as a way to generate revenue from a tax. If you really want funds in the short run just borrow some money and don't wreck havoc on the cash flows of companies. Not only would a tax create a better incentive to maintain and enforce the policy, but there's also no risk of the problems of the government handing out pollution permits like they did in Europe (generating no revenue).

Posted by Kyle | June 21, 2007 5:42 PM

Matt should be praised for actually understanding basic economics. It puts him several cuts above the likes of Drum and (ughhh) Ezra Klein.

Posted by ed | June 21, 2007 6:06 PM

What David said. It's not about changing people's behaviour in the short term. It's about moving to an economy where the environmental costs (and potentially other externalities) of goods are priced in. In the long run, this will have an impact on consumer behaviour and on the kinds of goods that are developed.

Posted by Ginger Yellow | June 21, 2007 9:20 PM

Re: The other thing is that a carbon tax (or something similar where you auction emissions permits) does do one thing in the short run, namely generate revenue.

Yes, but from the wrong people: people who can least afford it. What is it about this topic that causes otherwise sensible progressives to completely forget the meaning of the phrase "progressive taxation"? Good grief.

Re: There could be a bit of a problem because the 1986-1992 cars were more fuel-efficient than today's equivalent models

With aging engines "were" is apt to be the operative word here: they are not more fuel efficient in their current condition.

Re: they should be part of the solution, but, you make a good point - CAFE standards actually *encourage* driving on the margin, not discourage it, by making each mile driven cheaper than w/o the standards.

Hmm, How about a tax on gas guzzling cars then? Anything over the target would be taxed, with the tax rising steeply as fuel efrficincy falls off. And a steeply rising tax credit for the cars that exdeed the target. Surely that would induce a fair number of people to purchase more fuel efficient cars, and also create a strong incetive for new transportation technologies entirely while enabling people to afford those technologies.

Re: I agree that the cap and trade may be more politically feasible than a carbon tax, but I think this is due to the cowardice of politicians.

It's not political cowardice, just reality: they WILL be voted out of office and the public will elect rightwing demagogues in their stead, and the results of that will be a lot worse than just some extra CO2 in the atmosphere (case in point: the Bush administration). Again, what is it about this topic that causes normal progressive common sense to fly out the window?

Re: For example, if a bus stop is more than 1/4 of a mile from either the origin or destination of your trip, odds are you won't use it.

But if there are too many bus stops people also won't use the buses, because the bus will take an absurd length of time to travel anywhere. As a rule I tend to think buses are not effective alternatives, except in limited situations where large numbers of people are traveling from point A to point B and there are few or no stops in between. High speed rail (for city-suburb movement) and subways (for in-city travel) make more sense.

Re: Over a period of several years, though, as people replace their cars and appliances

Um, what happens if the tax (which most people here think would have to be fairly high to have any effect) is so devastating to people's finances that they can't afford to move or replace their cars, etc? Many middle class people are barely hanging on as it is. Again, common sense first, people!

Re: As I've noted, the REAL cost of Middle Eastern gasoline is already $41 per gallon --when you take into account the roughly $38 per gallon we spend on military operations to grab oil deposits and to keep Big Oil's foreign investments secure

Ironically though a major factor in the run up of the cost of gas has been those very military operations. Had we not invaded Iraq I'm guessing gas would not be much over $2 a gallon. So far from "securing" anything, we've actually screwed ourselves; oil traded on the open market with no American bulls in the casbah china shops of the Middle East would be cheaper!

Posted by JonF | June 21, 2007 10:29 PM

Car Talk! Love those guys.

Posted by JP | June 21, 2007 10:37 PM

Re "1) Calling others "armchair social engineers , lacking in knowledge and analytical ability" isn't a very good way to influence their opinions. Rather, it makes you sound like an ass."
----------
And I think that imposing heavy regressive taxes on poor people --for the transportation they NEED in order to get to work -- does NOT make you sound like an ass.

Saying that this misery and "sacrifice" you are inflicting on the common citizen is intended to COERCE their behavior into the channels you consider proper also does NOT make you sound like an ass.

What it does make you sound like is someone is just begging for an ass-whipping from Rush Limbaugh and Bill O'Reilly.

Instead of focusing upon how you can bring about useful changes by IMPROVING the lives of common citizens, you will drag your policy proposals over a cliff --and the Democratic Party with it -- because of your pose as an unelected philosopher king who knows what's best for everyone.

This is supposed to be justified because of global warming? The Democratic leadership itself has shown --by its ACTIONS not words -- that it thinks global warming is a crock of bull. That Al Gore is a deluded fool. That global warming is a fantasy.

Else why promote massive transfers of technology and capital to China? Why encourage 1 billion + Chinese to turn in their bicycles in favor of SUVs? Why preach the boundless benefits of globalization while covering up the huge malign costs?

Why encourage massive immigration to the USA -- with the result that US population has increased by 60 MILLION people in the past two decades. From 240 Million to 300 million and climbing.

Does that sound like our leaders are concerned about environmental degradation?

You should instead sell restrictions upon carbon emissions as government regulation arising out of international treaties -- and show that such treaties were negotiated to restrain China and India from turning Texas into the Sahara.

Reduce emissions by cutting down on massive traffic jams -- and sell it as giving people more free time. Anyone who has lived in the Washington DC area knows what a miserable shithole it is. Many People waste 2+ hours of their day commuting to work --even more if you count personal shopping trips,errands etc. Why not ask Bush why we can spend $Trillions in the Middle East but have such crappy infrastructure here at home?

DON'T try to coerce or tax the common citizens -- Republicans will make them hate you for it and
you will lose votes/support. Instead, deal with corporations -- and citizens will accept the resulting changes without complaint because they are resigned to being screwed by the Fortune 500.

You should not have to tax the common citizen --rather you should be able to give him a sizable tax cut by reducing the enormous subsidy that Big Oil gets and by moving to far more efficent technology. Developing that technology will provide lots of high quality jobs and will yield an asset that will pay returns for a century.

Start by showing people how badly they are being screwed by Big Oil -- compare the $3 Trillion that Bush/Cheney have stolen out of the Social Security Trust Fund with that $400 Million reward the retiring CEO of Exxon received. Then point out the deceit of Bush in appointing that CEO to be in charge of government programs to develop alternatives to Big Oil. Note how we are spending $38 /gallon to protect Big Oil in the Middle East. Plus 6000+ lives and thousands more crippled for life.

Your proposals should NEVER have to be imposed upon people -- they should instead be improvements in our lives that will be eagerly adopted.

Has anyone here ever lived in Rome near the Spanish Steps? Ever strolled traffic free streets at night --lingering at sidewalk cafes, visiting monuments like the fountains and talked with strangers? Compare that to our suburbs where you have to drive 6 miles just to get a pizza. And 40 miles round trip if you want to look at a piece of art.

Anyone ever enjoyed reading the paper while riding on the train? How does that compare to driving around the DC beltway in fast, erratic heavily crowded traffic?

Posted by Don Williams | June 21, 2007 10:40 PM

Sorry for some of the overlap with JonF's post -- He put his post up while I was composing mine and I did not notice that he had made some of the same points until after I had submitted mine.

More points: To deal with emissions, the federal government is going to have to knock some heads in the state governments. Because much of our massive traffic jams across the nation result from local and state zoning /development decisions.

For example, Quality of everyday Life is far better here in the Philly Main Line compared to Northern Virginia outside Wash DC -- because residental housing and employment centers are intermixed --people live closer to where they work , transportation infrastructure keeps pace with growth, and the Main Line Septa railroad gives convenient access to Center Philadelphia.

But much of the Northern Virginia misery is the result of Virginia STATE government -- power has been tightly concentrated in Richmond since at least the Byrd Machine and Richmond thinks Northern Virginia is a cash cow whose taxes should go to build roads elsewhere in the state.

It has always been easy for Northern VA developers to overturn local zoning by lobbying in Richmond -- if legislator from Roanoke is getting a donation from a Northern Va developer, he doesn't really care what malign effects the developer will cause in Prince William county outside DC. Come to think of it, he really doesn't care about carbon emissions either.

Posted by Don Williams | June 21, 2007 11:00 PM

Wouldn't an increase in US taxes on oil just signal to OPEC that they've set oil prices too low? That's an easy problem for them to fix!

That is, why should consuming nations extract so much profit from this largely emerging nation resource?

The first age of oil was a structural glut, as the world's large fields were discovered before demand for them was created. During this time distribution was the part of the business, and the developed nations seized most of the profits from oil production thru oil company profits and consumption taxes.

We appear to be entering a new age, one of structural scarcity. Oil exporters are nationalizing their resources. Oil technology is widely available, contracted for on a fee basis rather than in exchange for part ownership (you don't put your plumber on the house deed). And oil exporters aggressively probe for the highest feasible price.

However appealing the “free lunch” of oil consumption taxes – money and socially good! -- their time may have passed.

It's a finite resource for these nations, and perhaps only right that they obtain the income from it.

Posted by Fabius Maximus | June 22, 2007 7:47 AM

This is all just rearranging the deck chairs on the Titanic. There is no marketplace solution to the problem of CO2 emmissions, even with heavy government interference.

It is too late for public transportation to solve our problems. The changes to the infrastructure, and urban planning necessary, if implemented with any thing close to the promptness we need, would destroy the value of the largest investment many Americans have made - their homes. It is just not politically feasible to implement anything like that. It is too easy to sell people the idea that global warming is fake when the alternative is eliminating their life's savings.

If you try to tell someone that their $400,000 house with $300,000 left on the mortgage is going to drop to $100,000 value because it can't feasibly be served by public transportation.In addition, the reason their house dropped in value is that people only want homes served by public transportation because gas is now $15 per gallon, which they will have to pay to drive to their job from now on. They will shove their prized copy of "An Inconvenient Truth" down the garbage disposal and suddenly realize that Al Gore must have been wrong.

Higher CAFE standards won't cut it either. The highest number I've heard kicked around was 35 MPG, arrived at by annual 4% increases. That's negligible, but still will probably be abandoned.

You must also keep in mind, that whatever we do is for naught if developing nations can not follow suit soon after. China and India will not solve their emissions problems with CAFE standards. We need to develop a solution that can work for them. We will need to find a way to replace the energy that the Chinese are getting from coal burning power plants. We need fusion reactors. Other measures may buy us time to develop fusion power, but no other measures can solve the problem without it. It may not be possible to develop the technology in time, but it is the only solution to our carbon problem that will make a difference in the end. I've read that it is still 100 years away. If so, we better hope that the majority of global warming predictions are wrong.

If we can't solve our problems with fusion energy, we are going to solve them with fusion weapons, by sending every other significantly carbon-emitting nation back to the stone age. It is horrid. It is immoral. If the alternative is that the US grain belt becomes a dessert, that Florida and New Jersey become submerged, that the entire Gulf Coast becomes uninhabitable due to hurricanes, which way do you think we'll go?

Posted by Njorl | June 22, 2007 9:51 AM

> This is all just rearranging the deck chairs on
> the Titanic. There is no marketplace solution to
> the problem of CO2 emmissions, even with heavy
> government interference.
>
> It is too late for public transportation to solve
> our problems.

I have worked on several 10-year, multi-billion-dollar constructions projects. They all started with 6 guys in oranges vests carrying survey poles around, followed a bit later by 2-3 people with a small backhoe and dump truck. Eventually they got done. But if those 6 guys hadn't started crawling through the weeds on foot the projects never would have been completed.

Is 35 mpg CAFE the final answer? No. If we don't start now will we ever get to where we need to be? No. I suppose we could sit around waiting for a magical unicorn pony to give us a magic wand that *poof* solves the problem (or a cold fusion-type technology breakthrough, which amounts to the same thing). I don't find that line of thinking useful.

Cranky

Posted by Cranky Observer | June 22, 2007 10:01 AM

"I suppose we could sit around waiting for a magical unicorn pony to give us a magic wand that *poof* solves the problem (or a cold fusion-type technology breakthrough, which amounts to the same thing). I don't find that line of thinking useful."Cranky

Who said anything about cold fusion? I was talking about real fusion.

The problem with the other proposed solutions is that if we implement them all to the best of our ability we will still fail. If we get more from wind, solar, hydro, nuclear, switchgrass, corn, tidal, geothermal and conservation than we even hope for, it will mean that the world temperature will rise because of other nations instead of us, but rise they will. That isn't a worthwhile goal. I will not feel satisfied telling my children "You're fucked, but it isn't our fault."

Posted by Njorl | June 22, 2007 11:09 AM

I agree with Njorl but the US Government strongly discourages our brightest kids from going into physics as a career.

And it kneecaps any attempt by entrepreneurs to develop advanced energy sources.

The DOE, DOD and NRC do have a ..er.. "catalytic" effect upon innovation -- everything they touch turns to shit.

Posted by Don Williams | June 22, 2007 12:49 PM