Snippa’s now in opposition to every economist:
At its core the reason why I dislike both those notions is that they miss the point of the climate crisis. What they presuppose is that we can price our way out of an emissions crisis that we now know threatens the future of life on earth. And the simple fact is that we can’t do that. There is no way we can be priced out of this issue. We can only solve the emissions crisis by stopping emissions. And taxing them won’t do that, any more than taxing tobacco has ever stopped smoking. Other measures – like bans – have been needed to make progress on that goal. That is even more the case for carbon.
The core claim there is that prices don’t change consumer behaviour.
Second, this assumption presumes that we, as consumers, know as much about the products that we buy as those who sell them do. It is presumed, therefore, by the proponents of carbon taxes and carbon trading that we can make rational, informed decisions on this issue after tax is added to a price.
Sigh, the change in price is the information.
The ideas behind both carbon taxes and carbon pricing are, then, wrong. But carbon tax is also wrong in practice. First, that’s because there is no one who denies that these would be regressive, because all consumption taxes are and this would have to be a consumption tax. Second, that’s because this would mean that any carbon tax would have to be matched by redistribution through other tax and benefits mechanisms, largely neutering its impact and making the whole thing a folly.
The actual proposal has always been to do that very redistribution. The most common one being to raise the personal allowance for NICs (or other worker paid social security contributions the name depending upon the country).
Carbon taxes also shift the whole blame for carbon consumption from the manufacturers, who willfully create the carbon outputs, to consumers, who are offered few or no alternatives to polluting products.
In addition, carbon taxes, by shifting the blame to consumers, put no responsibility for innovation or change on manufacturers. The result is that they will still sell polluting products, knowing they will still be bought.
The price changes, demand changes. So does the opportunity for new suppliers to produce now lower cost alternatives. Is there no beginning to this man’s ignorance of market processes?
Of all the ways to tackle climate change these ideas are, then, just about the worst way to go.
Gonna be interesting when this meets an actual economist, isn’t it?
Jeez, why doesn’t he go read the stern Review? Which explains it all rather nicely.