Today, according to the government, is ‘Green Day’, when they make clear the next stage in net zero plans.
So let’s make in thing clear. There’s no new Treasury cash announced today.
Saving human life on this planet is not, apparently, worth spending money on.
Might be worth spending money on, might not be. We are, after all, trying to change the behaviour of 8 billion people. So, what’s the best way of changing the behaviour of 8 billion people. Spending? Exhortation? Tax?
As it happens the two major studies, Stern and Nordhaus, both recommend tax. Charge people out of polluting behaviour. So what’s the need for more spending then?
Irony. Comment on Green Day from a basket case ?
Green Day, huh?
OK… Put on Dookie at 11… 😉
“We are, after all, trying to change the behaviour of 8 billion people.”
No, they are. I wouldn’t have the sheer brass neck.
“So, what’s the best way of changing the behaviour of 8 billion people”.
Once again, you demonstrate you have drunk the Kool-Aid (I know it wasn’t Kool-Aid but you know what I mean) and believe that the behaviour of 8 billion people must be changed.
Please show me and the rest of us with enough cognition to see that it’s all bollocks, the real world, empirical (so no economic ‘theories’, ‘Just for the sake of argument’ or fucking computer modelling – have you forgotten Neil Ferguson already) evidence proves the madness you continue support is something we need to be taxed on.
Like other commenters here I have significant doubts about Pigou taxes to deal with externalities. Tim’s argument seems to be that the tax will encourage changes of behaviour to lessen the externality. Others seem to suggest that the tax pays for the cost of the externality, but who bears the cost, and does the tax recompense them directly?
Also the effect of a tax will depend on the price elasticity of the thing being taxed. Experience suggests that fuel use is very inelastic to fuel taxes/duties so a Pigou tax is next to useless. Also the tax is almost never used to directly offset the externality. Despite Stern’s effort we still have little idea of the real cost (or benefit) of increased CO2 and probably won’t for decades or even centuries.
Both offsetting and compensating aren’t the point at all. There are many things in life which have both costs and benefits. When the two happen to different people this is a problem. Becasue one’s benefit is another’s cost. The person benefiting doesn’t pay the costs of the cost.
So far so good. So, change prices so that the costs are included in the prices – incentives if you prefer – of the one who benefits.
That’s it, that’s all it is.
For then there will be the right amount of this thing. Onnly those things where the overall benefit is positive will therefore happen.
Let’s assume CO2 is indeed bad and we need to cut emissions to save gaia and our future. In that case, what use is a carbon tax unless it is imposed globally? Either all CO2 emissions are bad or none of them are.
Unilateral decarbonisation is just stupid. We can see the results in the UK. We exported our emissions to other nations, making zero difference to the global picture and strangling UK growth.
Guys…. The “adults” have assessed the damage and will receive payment. Either we reduce or modify our behaviour or we don’t. We are poorer. That’s it. For what it’s worth, I bet that India, China, Brazil etc will not pay the taxes. It’s like the Catholic idea of buying indulgences. It’s all remarkably pointless
For then there will be the right amount of this thing. Onnly those things where the overall benefit is positive will therefore happen
Sorry but that strikes me as a rather naive view. Consider a factory emitting super black smoke, as I remember as a child. So someone comes up with a cost of that. To whom, society? So the bloated plutocrat factory owner pays the tax and continues to emit super black smoke. To whose benefit is that transaction? It doesn’t strike me that there’s an overall positive benefit. Some government, or dictator, gets a shedload of tax income to fritter away on generally useless projects. We know this because governments, and dictators, are overwhelmingly incompetent.
You assume that the bloated plutocrat will spend the money putting scrubbers in his chimney and contracting with someone to take the soot away rather than paying the tax. If the externality is actually costed accurately, the costs of doing either should be equal, but paying tax out of opex is going to be easier than bumping up the capex on scrubbers, and pissing about with ROI and NPV calculations.
Who? Whom? (V I Lenin)
Me or you, or them, or generations yet unborn?
In the smoky chimney example someone else can come along and make the same product with putting scrubbers in and so not paying the chimney emissions tax. Priced right the new entrant’s profit margin is the same. Free market and liberal planning presumed of course.
People being nice are going to buy from the new entrant but they don’t have to.
Fat plutocrat pays the new tax and sweats his asset till it wears out and then closes down his business.
25 years into the future or whatever the environment is cleaner.
William Duc de Normandie abolished slavery in GB not by banning it but by taxing it if you did. Well that’s what my Al Murray history book says.
If it’s unprofitable – people won’t pay for it – making the stuff the clean way then it shouldn’t be done.
If it’s unprofitable in the UK because of pig-out (© BIS) tax, UK consumers will import it from somewhere where the existing technology isn’t taxed.
Of course one could legislate for certificates of origin for imports and impose excise duties and employ lots of civil servants to ensure everything is inefficient, expensive and open to fraud but let’s not give the Tories any ideas.
Such a pity that the real world doesn’t chime with the theory
The whole concept seems remarkably naive. Governments don’t give a flying fuck about pollution. Unless it’s an electoral matter & there’s lost votes in it. They don’t give the same FF about whether companies are profitable or consumers get goods at affordable prices. Unless there’s votes in it. They do care about revenue because revenue buys votes.
So it’s very simple. Give government an opportunity to tax & the tax will be set at the maximum rate they can get away with. So how you think that’s going to result in the right amount of this thing beats me. You’re almost guaranteed to get the wrong amount.