This is why we want a damn carbon tax

Leave post at the bottom of rural drives to save the environment, climate change tsar says
Royal Mail should leave letters and parcels in private post boxes at the end of rural drives to save money and the environment, Lord Deben the chairman of the influential Committee on Climate Change says

So that we don’t have pissant little shits trying to micro-manage our lives.

Just change one price in the entire economy and let people adapt their behaviours, naturally, to that one price change.

Without the pissant little shits.

32 comments on “This is why we want a damn carbon tax

  1. You can have a carbon tax, but it won’t stop the little turds still trying to micro-manage your life.

  2. Global warming and a carbon tax are part of Tim’s blind spot. He makes arguments for them that he would ridicule on any other subject.

  3. Being that the carbon tax only increases the amount of oil pumped out of the ground, very blind spot.

  4. Give them a carbon tax and they’ll comeback for something else. They are turds, to be fought every inch!

  5. Tim, just recently on this very blog you expressed frustration that we effectively already have a carbon tax, yet the pissants are still delivering fuckwittery galore. Your blind spot even extends to areas you can see.

    The only way a carbon tax could be “one change” to prevent other government actions would be if it was hard coded into a written constitution, with a hyper-majority needed to amend it. If you have an unwritten constitution with a parliament unable to limit a subsequent one, then forget it. You’ll have a carbon tax along with all the other shite.

    Your technical economic point about the merit of a carbon tax is acknowledged, but is irrelevant because the idea relies upon people being something other than they are. It’s ideologically naïve.

  6. When Tim comes round on climate we should all stand him a beer.

    There is no need for a carbon tax or any other anti-CO2 measure. They are unnecessary and abslutely ineffective. It is becoming clearer by the day.

    Let’s bribe him with beer, lads and lasses (can I stil say that?)

  7. What everyone else said. But also: why does Lord Deben want to drive the Royal Mail out of business?

    I’m sure UPS, TNT, Hays DX, City Link and co would be delighted if Royal Mail was no longer allowed to do its job.

  8. It is odd to see Cameron lecturing the Iraqis and other states on what they should or should not be doing. As he can’t seem to get anything done at all. And worse, he seems to have the deep ambition to be Lord Mayor or every little village in Britain.

    How the British government has shrunk! Lords whose forebears ruled a third of the world, now lecture rural post men about where their routes should go.

    Petty little men sitting in the robes of giants pursuing petty little issues.

  9. SMFS has said it perfectly:

    “How the British government has shrunk! Lords whose forebears ruled a third of the world, now lecture rural post men about where their routes should go.”

    We should have that in mind every time one of our politicians opens his mouth.

  10. Tim should bear in mind the analogous progress of the antismoking lobby, from banning it in public places to removing therights of smokers to fostering plus the crusade against vapers. The movers and shakers behind carbon pricing don’t simply want to reduce carbon emissions, they want us to deindustrialise and return to the Dark Ages.

  11. Why not a window tax, easier to administer and makes as much sense?

    O please sir I have an idea, let’s just get rid of the whole climate change scam.

  12. Ljh,

    I am in total agreement with you. Tim’s obsession with a carbon tax is ruining the flavour of his otherwise excellent blog. As James Delingpole commented, if you mix a tub turds with a tub of ice cream you don’t improve the flavour, but end up with two uneatable shiity tubs of poo.

    And the anticipation of hearing Tim drop his carbon tax plea gives one the same satisfaction as waiting to hear the plop when crapping on a long-drop!

  13. I’ll buy Tim a beer unconditionally if the opportunity ever arises. The persistent carbon tax thing is amusing and doesn’t ruin the blog at all for me. No need to agree on everything.

    “How the British government has shrunk!”

    In stature but certainly not in size.

  14. Lord Deben is a toss-pot and Tim is crediting him with more importance than he merits by even suggesting an alternative to the eco-lunacy coming out of that tu*ds mouth.

    Tim, AGW is bunk. No temp rise in 18 years, despite gazilions of carbons. When will the world wake up?

  15. So UKIP policy is higher postal charges in rural areas? Splendid. Might have to stop mocking them.

  16. Out of interest, do any households in Europe – with the exception of the UK – get to-the-door postal deliveries in rural areas? We had a roadside post box in the Midi-Pyrenees & for the mountain place in Spain, there simply aren’t any postal deliveries outside of the town. Everyone rents a post box at the post office & collects mail from there.
    Does Tim have a letterbox in his front door?

  17. Just for once, Arnald, you’re a welcome intrusion.

    My case on the carbon tax on at least oil based energy is this:
    One only has to look at two factors. Consumer demand. Producer pricing.
    At the consumer end, a carbon tax does indeed tend to raise the price of fuel & reduce demand. But at the producer end, there’s only a weak relationship between volume of production & cost of production. For the oil exporting nations the crude is essentially free & the price is set by their desire to maximise their income. They’re also somewhat short-term time preferenced because those governments are more interested in revenues now than in the long term. They may not be around in the long term.
    So their reaction to falling demand at the consumer end is to reduce the crude price at the producer end, To increase demand & maintain revenues. And they actually have to increase overall supply to achieve this. So a carbon tax increases total oil consumption.
    I’d be interested to hear either Tim’s view on this theory. But so far, no luck.

  18. It’s a possible outcome. Depends on elasticity which in the short term is very inelastic, so in that short term it’s entirely possible. Long term, not quite so much. And it’s coal which is the real problem anyway, not oil.

  19. Well yes. But it was actually oil based energy we were talking about here. Fuel in PO vans.
    Yes coal’s the problem. But again, coal’s much more a developing world energy source, these days. A CT’s hardy going to influence China because the State’s at both ends of the energy supply/consumption chain. It’s simply a book-keeping transaction, as far as they’re concerned. Wouldn’t India be much the same?

  20. b(n)is: I think your conjecture is wrong, for any plausible shape of the demand curve. Producer price cuts would not increase demand enough to compensate for the loss of revenue from selling at a lower price. Rather, since in the short term at least demand is not very elastic, producers could maintain revenue by increasing producer prices.

  21. @Paul
    Then that leaves you to explain why the producers’ prices are are not at that level already.
    Can we ignore short term in-elasticity, for a moment. We’re actually discussing CT as a long term solution to a long term problem, not as a short term tax raising measure.
    For the oil producing nations, crude is essentially “free-stuff”. The price is set by a purely arbitrary calculation. Maximising revenue. So if they could maximise revenue with a price rise, they would have maximised revenue with a price rise. It doesn’t really matter to them what volume of crude is being extracted as long as it produces the desired amount of revenue. So the net effect of a CT will tend to result in an at-the-pump price at or below what it would have been without a CT.
    There’s another Pigou Tax Tim espouses, behaves exactly the same way. Congestion charge. Without CC road users are constrained by a calculation: cost to road user of congestion/benefit of using road. Stick a CC on & it simply prices certain road users off the road. They’re replaced by those pay the CC to use the road space. Because the demand for road space is, for practical purposes, limitless. Set CC high enough & roads would be used solely by Chelsea Tractors, Premiership footballers, Russian oligarchs, Special Political ADvisorS, whatever. But would still be governed by that cost of congestion to user/ benefit of road use calculation. Albeit at a much higher level. But the same degree of congestion.
    I’d advance a theory:
    Where one of the factors is open ended – supply of crude, demand for road space – a Pigou Tax cannot do what Tim was suggesting in the post. Reduce an activity. It simply results in a wealth transfer to the taxation authority.

  22. @Tim
    “so in that short term it’s entirely possible. Long term, not quite so much.”
    I’d say you’d got that exactly the wrong way round. If not, crude prices would be insensitive to demand & could only rise.

  23. b(n)is: start with a simplistic mode in which the total money consumers spend on oil is fixed, so demand is inversely proportion to consumer price, and there are no taxes. Then producers get all the money available to be spent, whatever the oil price.

    Add a unit tax (i.e. proportional to volume not price). In that case, the producers get all the money spent minus the tax revenue. Now it’s in their interest for prices to be high and demand low, so as to minimize tax revenue.

    Add inelasticity of demand – in reality, when oil prices go up people still drive to work. In that case, producers can increase their revenues by increasing prices, since for the fixed part of the demand revenues are proportion to producer prices.

    Add some cost of production. In that case, producers can increase their revenues by increasing prices so they have to produce less.

    So why aren’t oil prices higher than they are? The main reason is that OPEC is not a perfect cartel. Some oil producers (including Russian and the USA) are not OPEC members, and some OPEC members sometimes cheat.

  24. @Paul
    It’s the simplest model I’m trying to start with. So ignore in-elasticity
    At the consumer end, demand is responsive to price. Increase price & consumers will tend to reduce consumption. The whole justification for CT.
    At the producer end, the imposition of CT produces a market signal indistinguishable from a normal reduction in demand. Looking at it from the consumer’s end, it’s had exactly the same effect as if the producers had raised supply prices by that amount. So to gain equivalent revenue, the producers must reduce supply prices by an equivalent amount.
    ” Now it’s in their interest for prices to be high and demand low, so as to minimize tax revenue” has to be a fallacy. It was already included in the price before the tax was imposed. The only effect higher prices will have is to further reduce demand & thus producer revenues.

  25. You can’t ignore elasticity in that manner though. It’s the driving force of the whole thing.

    If prices are inelastic (all are in the v. short term, all become less so in the long) then a reduction in price causes a loss of revenue as demand doesn’t rise (very) much as a result of the price fall. Also, demand doesn’t fall much as a result of a price increase: our commute, in the case of oil prices, is not something we can change overnight. But over months to years we can change our behaviour. Move, buy a smaller car, change jobs. Meaning that elasticity is greater over the long term, and it is long term demand that changes with prices. What we know about oil is that demand, in the short term, is very inelastic. A change in price doesn’t move demand hardly at all over weeks and months (maybe years).

  26. b(n)is: “to gain equivalent revenue, the producers must reduce supply prices by an equivalent amount”. That doesn’t work. It creates the same sales volume, but less revenue.

    In most markets, elasticity of demand gets larger (more negative) as prices increase. It’s well known (and mathematically easy to prove) that in such markets gross revenue is maximized at the point on the demand curve where elasticity is -1, in other words where a 1% increase in producer price results in a 1% reduction in demand. If we were currently at that maximum point, and then added a unit tax, the revenue-maximising producer price would increase. This is because the unit tax reduces the proportional effect on consumer price of a given producer-price increase.

    In the real world, elasticity of demand for oil is much smaller than -1, which implies that the current price is well below the revenue-maximizing price.

  27. @Tim
    Note, it’s *in-elasticity” I’m trying to ignore. I’m trying to treat the whole thing as totally elastic for simplicities sake & only looking at the long term effects.
    @Paul
    “That doesn’t work. It creates the same sales volume, but less revenue.”
    Well quite. Hence my contention that to return to where he started, the producer has to reduce pricing to the level where increased demand cancels that out. That a CT increases the consumption of oil.

  28. Call producer revenue R. R = PQ where P is the price and Q is the number of sales at that price.

    Then dR/dP = Q + P dQ/dP = Q (1 + P/Q dQ/dP)

    P/Q dQ/dP is called “elasticity”, e. Demand elasticity is usually negative

    so dR/dP = Q (1 + e)

    usually, e is small for very low prices, and gets gradually more negative as price increases. Producer revenue increases with price so long as dR/dP is positive, ie so long as e > -1 . The revenue-optimizing price is therefore at the price where e = -1 .

    Now impose a unit tax T. The same demand function will operate so long as we include the new tax in our price P.

    But producers do not receive the tax, so now their revenue R = Q(P-T)

    dR/dP = Q + (P-T)dQ/dP
    = Q (1 + P/Q dQ/dP (P-T)/P)
    = Q (1 + e (P-T)/P )

    Since (P-T)/P < 1, dR/dP will fall to zero at an elasticity larger than -1, so at a higher price (including tax) than before.

    So if the current price is revenue maximizing, imposing a new unit tax will make prices rise and demand fall, as producers seek, in so far as possible, to maintain revenues.

    In practice, the oil price is well below the revenue-maximizing price. So a production cartel could increase revenues by increasing the price, carbon tax or not.

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