Lord Stern, that high priest of the international warmist establishment, proposed that Britain should raise an extra £15 billion a year in “green taxes”, on petrol, flights and domestic energy, to punish people with a “high-emission lifestyle” for the damage they do to the environment.
The thing is, if you actually believed and went along with the Stern Review itself, then you would be agreeing that we should have Pigou Taxes.
And if you believed the Stern Review you would also agree that we\’ve got the price at which that tax should be levied. $80 a tonne CO2-e.
And we also know the tonnage of UK emissions. OK, well, we can argue about that a bit: should we include emissions embedded in imports? In which case we should not include emissions embedded in exports. Which, sadly, the higher estimates of emissions do not do, subtract the exports that is.
But a reasonable estimate is 500 million tonnes CO2-e. Which gives us, with a bit of rounding, around £25 billion a year in taxes we should be paying.
And, if you believe the Stern Review, that\’s all we should be paying. A Pigou Tax solves it all: that\’s again something which the Stern Review makes clear. We end up with the correct amount of climate change that way: people will only be doing things where the benefit of doing them is greater than the costs of doing so. Yes, including all that discounting of the future and so on. We can gain maximal human utility by imposing that £25 billion of taxes upon ourselves.
Please note, you can or cannot believe this, entirely up to you. But that is the argument of the Stern Review.
So, how much do we currently pay in such green taxes? Well, when you add up the fuel duty escalator (imposed entirely to meet \”our Rio committments\”) and the effects of the EU\’s cap and trade system and the landfill tax and the Air Passenger Duty and the Renewables Obligation Certificates and……well, we get to a number of £25 billion and more.
So, according to the Stern Review we\’re done. We have imposed the correct amount of taxation upon ourselves to get to the optimal amount of climate change.
People who argue otherwise, people who argue that we\’re paying too much in tax and charges, people who argue that we should be paying more in taxes and charges: they don\’t believe the analysis of the Stern Review.
Among which number it appears that we have to include Lord Stern.
And if he doesn\’t believe his own report then why in buggery should anyone else?
This could be a good time to mention that this is thoroughly discussed in my new book: