The Free Market Case for Green

[Sam_Stone]

@Kendall Jackson

As Richard Parker has already pointed out, both methods are capable of efficiently internalizing the costs of pollution. Economically speaking, both methods are identical in outcome. It would help the discussion if you would learn some public finance before you shoot off with ignorant opinions.Read your own cite.

And before you get insulting, you might note that this forum is not appropriate for personal attacks. You might also want to make sure you’re right about my supposed ignorance of Cap and Trade and carbon taxes before going personal.

Cap and Trade and carbon taxes are in no way the same thing. Saying that they are the same because they both internalize the cost of pollution is quite beside the point. Their implementation is completely different, and they have pros and cons. One of the commonly cited problems with cap and trade is that it requires government to set caps, usually based on emissions outputs at the time the regime is put in place. This can have the effect of rewarding those companies who haven’t already spent money and effort to clean up their acts, and therefore can have unintended consequences.

Cap and trade systems in which the total amount of emissions is reduced regularly also puts power in the government’s hands to set new annual caps, and this often makes them subject to manipulation from vested interests.

They are also quite different in that cap and trade does not set prices, but sets quotas and lets prices float. This can be good and bad - good in that at least they are letting prices work, but bad in that if the governments set the cap too low and no one has credits to sell, or the demand for credits is much greater than the supply, the price can skyrocket and cause energy prices to be more volatile. The result is more lobbying with the government, and more pressure on the government from the public to lower prices when they spike, thus defeating the system. Cap and trade is also more susceptible to cheating and gaming the system, and to manipulation through political influence.

Carbon taxes are generally less interventionist, and they have the advantage that the price is stable and known to all parties so they can plan more efficiently. Applied evenly to all energy sources based on carbon output, they are less distorting of the market, and can be priced more accurately to pay for the externality (if the cost is known).

For these reasons, I believe carbon taxes are an economically superior way to deal with the problem. However, they are more difficult to implement politically, because the price is getting directly added to the consumer by the government. Cap and Trade is generally the preferred method of government, since the regulation is applied to industry, and the government does not get blamed when industry passes the cost on to the consumers.

Still want to tell me I need to learn something about this before commenting?

Despite the misleading title, once we actually read what Al Gore has to say, we get this: “[W]e’re seeing consequences that scientists have long predicted might be associated with continued global warming.” I added emphasis since you appeared to miss it the first time: Might be associated with global warming.

Ah. So invoking global warming when a catastrophe happens is not scaremongering so long as you add ‘might’ to the statement. Is that your contention?

If a person is found murdered, and the chief of police, who is trying to get funding for a serial killer unit in his department, says, “This -might- be the work of a serial killer”, he’d be factually correct. But if he has no reason to beleive that a serial killer was involved, would you not agree that this is fearmongering?

There is no question that when Gore trots out the spectre of Global Warming every time there is a hurricane or tornado somewhere, he is fearmongering. There is no evidence that global warming contributes in any way to short term extreme weather phenomenon. No reputable climatologist would blame a hurricane or tornado on global warming. But Al will.

Or how about this: “It’s also important to note that the emerging consensus among the climate scientists is although any individual storm can’t be linked singularly to global warming – we’ve always had hurricanes,” Gore said. “Nevertheless, the trend toward more Category 5 storms – the larger ones and trend toward stronger and more destructive storms appears to be linked to global warming and specifically to the impact of global warming on higher ocean temperatures in the top couple of hundred feet of the ocean, which drives convection energy and moisture into these storms and makes them more powerful.” Appears to be. Nothing definitive, but there does appear to be a link.

Everything he said is totally true.

Can you provide a cite to that effect? One that links global warming to such effects today, and not to potential increases in such activity 50 years from now?

Of course some people disagree, and your obviously biased cite managed to find one of them. All hail the great CNN meteorologist! Al Gore might indeed be wrong. But he’s not out there by himself. I’ve come across pop science articles myself (no mention of Al Gore) that come to the same conclusion: GW might be resulting in greater storm intensity.

Wow, did you notice the irony of your claiming that the guy in the show gets his information from CNN (while he’s actually a Ph.D), and then in the next sentence you appeal to ‘pop science’ articles you’ve read?

He’s not making things up, and he’s not overstating his case.I agree entirely that he was pretty fair all around. He didn’t acknowledge the scientific consensus that anthropogenic factors are most likely the leading cause of today’s warming (he stated the opposite), but even so, even though he was mistaken about the consensus, he still came to the same conclusion.

I tend to not read ‘pop science’ articles on global warming, but to go direct to qualified sources.

For example, here’s the conclusion of the National Oceanographic and Atmospheric Administration:

1. New WMO/IWTC Statement on Tropical Cyclones and Climate Change

Given the high degree of interest in the possible relationship between climate change and tropical cyclones (including hurricanes and typhoons), a new summary statement on the topic has been developed by the global community of tropical cyclone researchers and forecasters as represented at the 6th International Workshop on Tropical Cyclones of the World Meteorological Organization (November 2006). A more comprehensive statement was also developed at the workshop.

The summary statement notes the following: "The surfaces of most tropical oceans have warmed by 0.25-0.5 degree Celsius during the past several decades. The Intergovernmental Panel on Climate Change (IPCC) considers that the likely primary cause of the rise in global mean surface temperature in the past 50 years is the increase in greenhouse gas concentrations…

…Some recent scientific articles have reported a large increase in tropical cyclone energy, numbers, and wind-speeds in some regions during the last few decades in association with warmer sea surface temperatures. Other studies report that changes in observational techniques and instrumentation are responsible for these increases."
Consensus statements by the workshop participants

"1. Though there is evidence both for and against the existence of a detectable anthropogenic signal in the tropical cyclone climate record to date, no firm conclusion can be made on this point.

2. No individual tropical cyclone can be directly attributed to climate change.

3. The recent increase in societal impact from tropical cyclones has been largely caused by rising concentrations of population and infrastructure in coastal regions.

4. Tropical cyclone wind-speed monitoring has changed dramatically over the last few decades leading to difficulties in determining accurate trends.

5. There is an observed multi-decadal variability of tropical cyclones in some regions whose causes, whether natural, anthropogenic or a combination, are currently being debated. This variability makes detecting any long-term trends in tropical cyclone activity difficult.

6. It is likely that some increase in tropical cyclone peak wind-speed and rainfall will occur if the climate continues to warm. Model studies and theory project a 3-5% increase in wind-speed per degree Celsius increase of tropical sea surface temperatures.

7. There is an inconsistency between the small changes in wind-speed projected by theory and modeling versus large changes reported by some observational studies.

8. Although recent climate model simulations project a decrease or no change in global tropical cyclone numbers in a warmer climate there is low confidence in this projection. In addition, it is unknown how tropical cyclone tracks or areas of impact will change in the future.

9. Large regional variations exist in methods used to monitor tropical cyclones. Also, most regions have no measurements by instrumented aircraft. These significant limitations will continue to make detection of trends difficult.

10. If the projected rise in sea level due to global warming occurs, then the vulnerability to tropical cyclone storm surge flooding would increase."

(Bolding mine)

Sam Stone, my problem isn’t with this guy. My problem is people like you.

Yeah, I get that a lot around here. The thing is, I don’t really care.

If I judged this industrialist as harshly as you judge Gore, and with as little evidence, then I could’ve ripped a few out-of-context quotes from the interview to make it look like he was saying things he actually wasn’t. And you would rightly jump on my ass for misrepresenting this guy’s positions, which are (on the whole) quite reasonable. In fact, just based on the first impression, I might even agree that this guy is more reasonable than Gore. He’s obviously given a lot of thought to the situation and is knowledgeable about the available choices (even if he is prone to ridiculous hyperbole about “Big Brother”).

So let me get this straight - you’re criticizing me for claiming that TJ Rogers seems to have a reasonable attitude towards global warming, and that Al Gore takes a more unwarranted, unreasonable stance towards the topic. Then you claim that in fact TJ Rogers seems pretty reasonable, and in fact he may be more reasonable than Al Gore.

Am I missing something?

So yeah. This guy is pretty okay. But now what? It mostly isn’t the left standing in the way of solutions, it’s this guy’s colleagues, the other big businesses that take handouts and subsidies and stand in the way of sensible policies.

We don’t need to convince the left to do something. They already want to do things, even if they’re confused about what’s the best solution. We need to convince the right. So what now?

There’s plenty of blame to go around. Sure, there are lots of businesses who are not helping. That’s precisely my point - that you’ll never solve the problem if you’re expecting businesses to act like altruists. You need capitalistic solutions because any solution which demands that businesses voluntarily forego profit or that politicians campaign on a platform of hurting their constituents economically will simply not fly.

And if you’re blaming business for accepting handouts and subsidies, shouldn’t you equally be blaming the government that offers them?

But plenty of blame can be heaped on environmentalists as well. For their previous scare tactics which makes the public skeptical of anything they say. For their blind resistance (now finally changing among some) to nuclear power. For their willingness to sacrifice the good in pursuit of the perfect (for example, by opposing large wind farms because they may pose a risk to some birds, or by demanding regulatory standards that actually stop power plants from upgrading their efficiency and pollution scrubbing mechanisms).

[Sam_Stone]

@RTFirefly

NO.

15-20 years ago, this could be considered an unintended consequence. Since then, the proponents of CAFE standards have been trying to close the ‘light truck’ loophole.

It WAS an unintended consequence. The point I was making was that the original CAFE standard created the unintended consequence of killing the station wagon and creating the whole sub-class of SUVs.

They have been blocked, at every turn, by the opponents of CAFE standards. The growth of the SUV market (and of SUVs themselves) must be regarded as a deliberate consequence of the actions of the obstructionists.

Why is this a fault of ‘those who try to block the standard’, and not a fault of government? People like me who oppose government intervention point to ‘regulatory capture’ as one of the undesirable side-effects of government regulation - whereby companies learn to manipulate the regulations to their own benefit rather than to the benefit of the consumer or the environment.

Take the latest round of CAFE standards, for example. Are you a fan of them? Do you think they are a good thing? They result in a pretty large increase in average fuel economy, right?

What if I told you that the new CAFE standard would act as incentive for auto makers to make larger cars? In fact, this is exactly what they’ll do. The new standard has a sliding mileage scale that is determined by wheelbase. So smart cars get punished, and 7 passenger SUVs rewarded. Talk about perverse. Any bets that domestic auto makers will stand to gain from this, and the import cars stand to lose? That’s what happens when vested interests arrange standards with politicians behind closed doors. And in fact, based on the current fleet, Chrysler will only have to hit an average of 33.6 mpg, while Porsche will have to hit 41.3 mpg. For trucks, GM will have to increase from 22.5 to 27.4 (not that big a change - add a hybrid truck or two to the mix, and they’ll do it), while Suzuki has to reach an average of 33.7. So Suzuki, who makes fuel efficient vehicles, will get punished and GM, which makes some of the biggest gas hogs on the road, will gain a comparative advantage.

In what world does this make any sense?

A much better idea would have been to simply impose a carbon tax on gasoline.

As Kendall Jackson points out, the left agrees that these problems need to be dealt with. It’s the right that’s blocking things. So how do you change that - besides calling Gore a ‘scaremonger,’ that is?

The left blocks plenty - nuclear power, for example. The Altamont wind power station. Regulations that force power companies to recertify when they want to do minor upgrades, which forced them to not upgrade at all. Feel-good regulations like CAFE which merely lock in the status quo and have perverse effects. Blocking of power plant permits, which has pushed power companies into using more gas turbine power. General interference in the market, which inhibits capital flow and research. Demands for subsidies of technologies they think are ‘winners’, which has the effect of suppressing development of other technologies.

The left was widely responsible for pushing for ethanol in the U.S., which has been a disaster. Of course, the left’s interest happened to coincide with the interests of big agri-business, which meant government was all too happy to jump on board with market-distorting subsidies.

One of the biggest problems with the left is that they tend to tie their environmentalism to left-wing economics and other policies. The answer is always bigger, more intrusive government, more regulations, and casting business as the bad guy. This turns off a huge segment of the public and makes them deaf to real environmental issues. That’s one reason why TJ Rogers is such a refreshing voice.
He’s making the case for environmentalism on solid economic, capitalistic grounds, which means he’s got a far better chance of getting the corporate world on board than does Greenpeace.

There’s plenty of blame to go around.

[Sam_Stone]

@RTFirefly

The fundamental problem with free markets and global warming is that there’s no cost whatsoever associated with dumping carbon dioxide and other greenhouse gases into the atmosphere. Free resources will be exploited as long as they have value, and having a free place to dump one’s CO2 has considerable value.

The only reliable way to prevent global warming is to associate a cost to that dumping that will be high enough to reduce CO2 dumping to the required level.

Right. You nailed it. So one solution would be to simply impose a carbon tax to recapture that cost, then leave everyone the hell alone.

It’s always possible that the free market will come to the rescue, and come up with means of energy production that create more energy, with less CO2 output, than present means. But expecting it to is a fool’s game, as long as there’s no cost to dumping CO2. Any such result would be accidental, not market-driven.

No, you can expect it to because CO2 is not the only cost of the current power structure. Even absent CO2 taxes, the cost of oil has already risen past the cost of several alternatives. And they are starting to make inroads into the market, and that will increase.

In fact, the market is the ONLY possible saviour at this point, because only the free market is capable of being innovative enough and flexible enough to make the change. Carbon taxes would help accelerate the process perhaps, but the process is continuing regardless.

I’d say that it’s the people who expect to be able to cast a vote and have government solve their problems are the ones who are naive and playing a fool’s game. You go ahead and try to pass a law that gets China to cut its CO2 emissions. Good luck with that. The only answer is the market - make alternatives to fossil fuels more profitable, and you won’t have to convince anyone to switch.

[Hellestal]

@Sam Stone

And before you get insulting, you might note that this forum is not appropriate for personal attacks.

Would you mind pointing out one single personal attack? I called your opinions ignorant, but I said nothing about you personally. If you believe otherwise, report my post.

@Sam Stone

Cap and Trade and carbon taxes are in no way the same thing. Saying that they are the same because they both internalize the cost of pollution is quite beside the point.

Beside the point? It was my post you were responding to, and so I think I’m better qualified to say what I was talking about. I was trying to evaluate the two programs, and what you say was “beside the point” was, in fact, my entire point. They both work to internalize the externality. I freely admit that my first choice of phrasing was poor to the point of incorrectness, but when you responded that they were “in no way” similar to each other, that was total bullshit. They have identical goals.

My concern is fixing the problem in an economically efficient way. Both programs do so.

I’m glad you’ve given such thought to the implementation of the programs. But TJ Rogers emphatically did not, and his apparent ignorance of their important similarities (their goals, remember?) was my original point.

As for the rest of your blathering (again, characterizing your posts and not yourself), you go on to prove that people like you are, in fact, the problem.

@Sam Stone

There is no evidence that global warming contributes in any way to short term extreme weather phenomenon. No reputable climatologist would blame a hurricane or tornado on global warming. But Al will.

@Al Gore

…any individual storm can’t be linked singularly to global warming – we’ve always had hurricanes…

The statements you attributed to him are unequivocally false.

That’s also not a personal attack. I’m not calling you a liar. I’m just saying that the words you typed on the screen are so obviously contrary to fact that it took less than 30 seconds of cutting and pasting to prove how wrong you are. I’m also going to use this moment to point out, yet again, that you have demonstrated twice in a row that you didn’t even bother to check the facts of your own citation.

That doesn’t help this discussion.

Al Gore is dealing with possible consequences. He is trying to educate people about possible consequences. I don’t agree with everything he says (far from it), but the goal of informing people on global warming is worthwhile, even if some of the possible consequences are frightening to you.

Now, you are technically within the dictionary definition to call Al Gore a “scaremonger”. But then, I could just as easily level that accusation against you and TJ Rogers. Who are the people crying up a storm about how our response to AGW might be “trashing the economy”? Who are the people complaining about “Big Brother”?

It’s not helpful to this discussion, Sam, because accusations like that can be leveled against both sides. And then where are we? I realize that you feel your own “scaremongering” is justified enough that you don’t deserve the label. Well, I agree. I think it’s very possible that we might over-react to the problem in a disastrous way. But I also think that not responding could be equally disasterous. Does that mean we should accept both sides’ scaremongers? Or does that mean you should cut Al Gore some fucking slack?

@Sam Stone

One that links global warming to such effects today, and not to potential increases in such activity 50 years from now?

Really? You need a cite for this?

According to the 2007 Fourth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC-AR4), it is “more likely than not” (better than even odds) that there is a human contribution to the observed trend of hurricane intensification since the 1970s. In the future, “it is likely [better than 2 to 1 odds] that future tropical cyclones (typhoons and hurricanes) will become more intense, with larger peak wind speeds and more heavy precipitation associated with ongoing increases of tropical [sea surface temperatures].”

Is that proof? Hell no, it isn’t. “More likely than not” is even flabbier than your arguments in this thread (your arguments, not you). But yes, it does appear right now that warming has increased the intensity of storms.

@Sam Stone

So let me get this straight - you’re criticizing me for claiming that TJ Rogers seems to have a reasonable attitude towards global warming, and that Al Gore takes a more unwarranted, unreasonable stance towards the topic. Then you claim that in fact TJ Rogers seems pretty reasonable, and in fact he may be more reasonable than Al Gore.

Am I missing something?

Pay attention, or you might miss it again.

1. I never criticized you for thinking that TL Rogers is reasonable.

2. I criticized you for fabrications about Al Gore.

See the difference? I can admit the reasonableness of your guy, but you can’t admit the reasonableness of Gore.

It doesn’t help when every fucking thing you cite supports what Al Gore was saying. To take your two bolded passages: “No individual tropical cyclone can be directly attributed to climate change.” That is exactly what he said. And the second? “recent climate model simulations project a decrease or no change in global tropical cyclone numbers in a warmer climate”. The open question is not the number of cyclones; it’s how strong they become after they get started.

I do read the highfalutin stuff, too, on occasion. And I also happen to make sure it agrees with my points whenever I try to cite it.

@Sam Stone

There’s plenty of blame to go around. Sure, there are lots of businesses who are not helping. That’s precisely my point - that you’ll never solve the problem if you’re expecting businesses to act like altruists. You need capitalistic solutions because any solution which demands that businesses voluntarily forego profit or that politicians campaign on a platform of hurting their constituents economically will simply not fly.

Businesses will fight against solutions, even “capitalist” solutions (like cap ‘n’ trade and carbon taxes), if they hurt the bottom line. 90% of the time, they cannot be trusted.

@Sam Stone

And if you’re blaming business for accepting handouts and subsidies, shouldn’t you equally be blaming the government that offers them?

Sure.

But the thing is, if there’s one party that wants to regulate business, and another party that doesn’t, whose side am I gonna be on? I will choose the side that regulates business. Every. Single. Time. Because when I tell Democrats about smart market solutions to regulation, they’re all ears. When I tell Republicans, they complain about Al Gore (and yes, I know you’re Canadian).

@Sam Stone

But plenty of blame can be heaped on environmentalists as well. For their previous scare tactics which makes the public skeptical of anything they say. For their blind resistance (now finally changing among some) to nuclear power. For their willingness to sacrifice the good in pursuit of the perfect (for example, by opposing large wind farms because they may pose a risk to some birds, or by demanding regulatory standards that actually stop power plants from upgrading their efficiency and pollution scrubbing mechanisms).

Yes, there is definitely blame that can be placed at the tree-huggers feet. I totally agree.

But it’s a time honored tactic to dismiss a person entirely when they make some mistakes. So, Greenpeace was wrong about nukes twenty years ago? They’re right about nukes now? Then let’s congratulate Greenpeace and celebrate that they’re starting to see sense. Instead, Rogers makes fun of them for having been wrong once in their lives. Again: That’s not helpful.

It’s similarly unhelpful when you misread Al Gore and then call him a “scaremonger” when you are personally susceptible to the exact same label. If you actually “don’t care” about that, then I will try to stifle whatever hint of surprise I may have had.

But frankly, I think you should care. It’s not your ideas that are the problem. I probably agree with you more than I agree with Al Gore on the vast majority of issues. It’s your tactics that suck ass, and those tactics include dismissing other people with a derogatory label when they nevertheless have useful things to say. Well, fuck that. When you unjustly slime Al Gore, I’m gonna step up for the man, even if he’s still not quite as reasonable as the average solar industrialist.

[Sam_Stone]

I’d just like to point out that you’re the one who made Al Gore an issue in this thread. I was more interested in talking about positive ideas for fixing global warming. You’re the one who decided to ignore any of the substantive stuff and bring up Al Gore, who was only mentioned in one section of one part of a five part series.

I would have thought people might be more interested in things like TJ’s assertion that we’re only five years away from a halving in cost of solar power, which at today’s energy prices could bring an ROI of 1.5 years. If he’s right, we could be on the verge of a major solar revolution, with solar cells on the top of most homes and businesses.

[elucidator]

Depends on who’s Gore is oxed, I guess…

But the swipe at Gore was pretty much uncalled for, especially that part with the, ah, artful quotations. As for global warmings effect on catastrophic weather, thats mega-duh. You put more energy into the air, the air does what it does more energeticly, it can’t do otherwise. And what does the wind do, children? It blows!

To believe otherwise, we have to have a mechanism by which energy added to a system causes that system to “calm down”.

[Liberal]

@Kendall Jackson

But profit is not the highest fucking good.

Actually, it’s the highest fucking economic good, and according to the Austrians, it goes to both the seller and the buyer.

Consider, for example, that you have a widgit and I have a dollar. The only way there will be a voluntary economic transaction between us is if two things hold true: (1) you believe my dollar is worth more than your widgit; and (2) I believe your widgit is worth more than my dollar.

If I thought your widgit was worth the exact same as my dollar (or less), then why would I trade with you? I’m not interested in parting with my dollar until something comes along that, in my mind, is worth more than it is. Likewise, there’s no reason for you to part with your widgit if you think it’s worth the same or more than my dollar. Why would either of us go through all the time and effort required to obtain our dollar/widgit and then just let it go?

So, it is in asking the question “how does this profit me” that a volunteer decides whether he will trade or not. The equation changes, of course, if the economy is not voluntary. If a third party forces you to buy or sell something or devalues what you’re buying or selling or subsidized them, then the dynamics change drastically. The profit is earned by the decision maker or central planner who is forcing the exchange, usually in the form of taxes, fees, or special favors (like assured employment after leaving office, for example.)

[MrDibble]

I could also believe that you are better off with my dollar than I am, even if I do not believe your widgit is worth a dollar, and that your widgit is still something I’d like to have even if it isn’t worth what I paid for it on the open market. cf. “Fair Trade” goods.

[Liberal]

@MrDibble

I could also believe that you are better off with my dollar than I am, even if I do not believe your widgit is worth a dollar, and that your widgit is still something I’d like to have even if it isn’t worth what I paid for it on the open market.

But — as I said — it takes two. If I think my widgit is worth more than both your dollar and your opinion about my well being, you’ll have to come up with something else. This has all been thought out quite thoroughly. Honest.

[MrDibble]

@Liberal

But — as I said — it takes two. If I think my widgit is worth more than both your dollar and your opinion about my well being, you’ll have to come up with something else. This has all been thought out quite thoroughly. Honest.

No, I get that - what I’m saying is that you may think my dollar’s worth more than your widgit to you, so you’re happy to trade, but I may also think the same, and still give you my dollar, voluntarily, not because I think your widgit is worth more than my dollar, but because you with my dollar and me with your widgit is worth more to me than me still with my dollar and you still with your widgit, if you see what I mean? I mean to say, I may *know *(or feel) that your widgit isn’t worth a whole dollar, maybe I can evaluate it as worth 90c, but there’s more to it than that? What I’m trying to account for here is a deal that isn’t just charity, since I want the widgit, as a widgit, too, but I’m willing to pay a premium.

I suppose you could say I’m de facto setting the worth of the widgit at more than the dollar, but I wanted to capture the nuance of a transaction with a charitable component, which seemed glossed over by your 2 conditions you said “the only way”, and I don’t think that’s accurate.

[RTFirefly]

@Sam Stone

Why is this a fault of ‘those who try to block the standard’, and not a fault of government?

It’s both at once. It’s a fault of the people in the legislative branch of government who blocked the attempts to close the original loophole.

People like me who oppose government intervention point to ‘regulatory capture’ as one of the undesirable side-effects of government regulation - whereby companies learn to manipulate the regulations to their own benefit rather than to the benefit of the consumer or the environment.

Well, yeah. And if you don’t have one party that sees its mission in life as aiding and abetting those people, government works a lot better. If you do have such a party, it’s right and fitting to blame them for their contributions to regulatory capture.

It’s not like it’s a force of nature. There are actual human beings and institutions involved, that direct responsibility can be assigned to.

Take the latest round of CAFE standards, for example. Are you a fan of them? Do you think they are a good thing? They result in a pretty large increase in average fuel economy, right?

What if I told you that the new CAFE standard would act as incentive for auto makers to make larger cars? In fact, this is exactly what they’ll do. The new standard has a sliding mileage scale that is determined by wheelbase. So smart cars get punished, and 7 passenger SUVs rewarded. Talk about perverse. Any bets that domestic auto makers will stand to gain from this, and the import cars stand to lose? That’s what happens when vested interests arrange standards with politicians behind closed doors. And in fact, based on the current fleet, Chrysler will only have to hit an average of 33.6 mpg, while Porsche will have to hit 41.3 mpg. For trucks, GM will have to increase from 22.5 to 27.4 (not that big a change - add a hybrid truck or two to the mix, and they’ll do it), while Suzuki has to reach an average of 33.7. So Suzuki, who makes fuel efficient vehicles, will get punished and GM, which makes some of the biggest gas hogs on the road, will gain a comparative advantage.

In what world does this make any sense?

In the same world where you shift blame from the guys who are actively trying to make things worse, to the guys who are trying to make things better, but should have anticipated that they’d be undermined to some extent by the guys who are actively making things worse.

A much better idea would have been to simply impose a carbon tax on gasoline.

Everyone agrees with this, except for the guys who are actively trying to make things worse, and the wimps in the middle who are afraid to challenge them.

If you could get the GOP to stand behind your “much better idea,” then you’d be right to excoriate the Dems for settling for some convoluted attempt at raising the CAFE standards. But in fact the Dems’ convoluted attempt - assuming it’s as bad as you’re describing - is that convoluted because that’s what it took to get enough GOP support for them not to filibuster it.

Credit where credit is due, please.

The left blocks plenty - nuclear power, for example.

I see nuclear power around here.

The Altamont wind power station. Regulations that force power companies to recertify when they want to do minor upgrades, which forced them to not upgrade at all.

I’m sure the left’s track record hasn’t been perfect. So what? Does this amount to an argument?

Feel-good regulations like CAFE which merely lock in the status quo and have perverse effects.

Yeah, it had the perverse effect that we were consuming no more oil in 1993 than we were in 1979.

Shame about that.

Blocking of power plant permits, which has pushed power companies into using more gas turbine power. General interference in the market, which inhibits capital flow and research. Demands for subsidies of technologies they think are ‘winners’, which has the effect of suppressing development of other technologies.

Again, how does this recitation of alleged wrongs amount to an argument?

The left was widely responsible for pushing for ethanol in the U.S., which has been a disaster.

Made sense, long before we knew there was even a CO2 problem, let alone that it would have a negative carbon footprint and would eventually be one factor in the squeeze of world food supplies.

You want me to list the right’s idiocies over the same time period? The Internet is barely big enough, and my fingers would be worn down to nubs by the time I got back as far as 2005, let alone to when we were proposing ethanol in gasoline. But what would that have to do with anything?

One of the biggest problems with the left is that they tend to tie their environmentalism to left-wing economics and other policies. The answer is always bigger, more intrusive government, more regulations, and casting business as the bad guy.

You know, this isn’t making a case; this is just right-wing trash.

[RTFirefly]

@Sam Stone

I’d just like to point out that you’re the one who made Al Gore an issue in this thread.

You called Al Gore a ‘scaremonger’ in the OP.

Unless you’re saying that’s a factual statement that’s too plainly true to merit rebuttal, you’re the one who’s made Gore an issue in this thread.

[RTFirefly]

@Sam Stone

Right. You nailed it. So one solution would be to simply impose a carbon tax to recapture that cost, then leave everyone the hell alone.

No. To the extent that persons have no alternative to carbon-intensive activities, all a carbon tax will do is make their lives more expensive.

The best example would be commuting. You can make carbon pollution as expensive as you want, but unless people have alternatives to driving long distances to work, they’ll continue to do so; they’ll simply be poorer. There needs to be public transportation as an alternative.

No, you can expect it to because CO2 is not the only cost of the current power structure. Even absent CO2 taxes, the cost of oil has already risen past the cost of several alternatives. And they are starting to make inroads into the market, and that will increase.

In fact, the market is the ONLY possible saviour at this point, because only the free market is capable of being innovative enough and flexible enough to make the change. Carbon taxes would help accelerate the process perhaps, but the process is continuing regardless.

No, this is an accident.

The increase in energy prices has nothing to do with our CO2 problem. If peak oil was still 20 years off, the ‘free market’ price increases wouldn’t be happening.

And it would still have been better if prices had increased five years ago due to carbon taxes, than their happening now due to where we are on the oil demand curve. Because we have no control over this ride, we’re stuck with a lot of stranded wealth - dwellings that are absurdly long distances from the places where people work, huge honkin’ SUVs that are suddenly too expensive to fill up.

Eventually the free market will do something with all those resources, I guess.

You go ahead and try to pass a law that gets China to cut its CO2 emissions. Good luck with that.

I should point out that Chinese petroleum demand is still pushing prices up, even after how far they’ve already gone up. Apparently the free market ain’t doing the job either.

[Hellestal]

@Sam Stone

I’d just like to point out that you’re the one who made Al Gore an issue in this thread. I was more interested in talking about positive ideas for fixing global warming. You’re the one who decided to ignore any of the substantive stuff and bring up Al Gore, who was only mentioned in one section of one part of a five part series.

Gore was also mentioned in your OP as an example of someone who is a scaremonger.

My attempt has been to compare standards of reasonableness in order to point out the problems that people always have when discussing this issue. I personally don’t want to call this guy a scaremonger, but I also don’t want others to call Al Gore a scaremonger. I want to be able to discuss both this guy’s ideas and Al Gore’s ideas together. I want to be able to acknowledge their positives and their negatives without labeling one or the other disparagingly.

Let’s see if I can do that now.

@Sam Stone

I would have thought people might be more interested in things like TJ’s assertion that we’re only five years away from a halving in cost of solar power, which at today’s energy prices could bring an ROI of 1.5 years. If he’s right, we could be on the verge of a major solar revolution, with solar cells on the top of most homes and businesses.

This is fascinating stuff. It truly is.

But this means it’s also hard to debate his ideas, since most of them are interesting and well thought out. Solar is nearing profitability? We might be substituting away from the polluting industries simply because of cost? What can I say to that, except: whoo-hoo! If it’s true, then it’s great news.

In my opinion, it’s more beneficial, from a GD perspective, to dig into the stuff where we disagree. And he mentions Gore once, yes, but it’s also one of the few places where I actively disagree with what he’s saying (and also with what Gore is saying, as a matter of fact). Gore’s position? To eliminate payroll taxes (like social security) completely in order to remove the disincentive from hiring new workers. We would then make up for those lost taxes with pollution taxes.

Well, this is an area I haven’t studied specifically, but the general idea is good. If pollution is an externality, and we can internalize that externality with taxation, then we should do so. And if payroll taxes create disincentives that discourage employers from hiring workers, and we can lower those taxes to reduce the disincentive, then that’s also good. But there are, of course, questions. The biggest is: would the tax rate on pollution be too stiff? And I have no answer for that. I simply don’t know. Maybe there’s a middle ground that policy makers can reach on this topic.

I’d say there probably is a middle ground. I actually had a Finanzwissenschaft course in Austria years ago. It was an Austrian school, so to speak (heh). And generally, the best way to reduce the deadweight loss that comes from taxation is to tax as broadly as possible (that is, to tax everything under the sun), but to tax everything at a very low rate. Which means that it might make sense to institute pollution taxes, but it might not make sense to it so drastically. Gore is, I think, probably being a bit unreasonable here. But the theoretical foundation for his idea is solid.

TJ Rodgers’s response, though, completely ignores all of this analysis. He tells an apocryphal WWII story which isn’t relevant (it’s much easier to change tax policy in a single country than it is to redraw the borders in an entire continent), and then he says “I think Al and the government ought to get out of the energy business”. He does make a convincing case for the government butting out, but that’s also a change of the issue. Gore’s taxation idea isn’t about the government intruding on the energy business - it’s about internalizing the costs of pollution.

And this is the kind of discussion that I want. I want to mention people like Gore when it’s appropriate because they’re the ones who are actively trying to change the system, which means they’d better get it right. And I want to convince the people on the right that these problems (like the increasing intensity of hurricanes) do appear to exist (better than even odds).

It might be a bit of a tangent from the OP now (and please let me know if it is), but the reason I’m focusing on the political right is because they’re the ones who have a tendency to misquote and distort the words of environmentalists with the apparent goal (in my personal estimation) of discrediting the ideas of the left entirely.

This is why I said that it’s the political right that needs to be convinced.

I think this industrialist is a pretty good start. But will the right-wing listen? Or will they hear the buzz word “taxes” and immediately shut down the discussion with complaints about those ornery “tax-and-spend liberals”?

Seems to me that this is a natural extension of TJ Rodgers’s interview. If you disagree, though, then we can tackle a different segment.

[Voyager]

@Sam Stone

I would have thought people might be more interested in things like TJ’s assertion that we’re only five years away from a halving in cost of solar power, which at today’s energy prices could bring an ROI of 1.5 years. If he’s right, we could be on the verge of a major solar revolution, with solar cells on the top of most homes and businesses.

I don’t have time to listen to the videos, but I trust that TJ mentioned that he is heavily invested in solar cells? He clearly believes in this statement, but he is hardly an unbiased expert. I’ve heard him speak several times, and I know people who worked with him at high levels, and he is known as one of the more flamboyant CEOs around here.

I hope he is right, but similar claims were made for all sorts of things during the bubble. People who make a fortune on startup 1 crash and burn on startup 2 all the time.

I suspect that there will be nice tax incentives for solar cells to meet California’s aggressive carbon reduction goals. Did he mention if he was for or against them? They are clearly going to help him. I’ve checked, and they aren’t really a good investment without the tax incentive yet.

[Sam_Stone]

@Kendall Jackson

My attempt has been to compare standards of reasonableness in order to point out the problems that people always have when discussing this issue. I personally don’t want to call this guy a scaremonger, but I also don’t want others to call Al Gore a scaremonger. I want to be able to discuss both this guy’s ideas and Al Gore’s ideas together. I want to be able to acknowledge their positives and their negatives without labeling one or the other disparagingly.

Excellent. Let’s do that, and forget the first half our debate.

In my opinion, it’s more beneficial, from a GD perspective, to dig into the stuff where we disagree. And he mentions Gore once, yes, but it’s also one of the few places where I actively disagree with what he’s saying (and also with what Gore is saying, as a matter of fact). Gore’s position? To eliminate payroll taxes (like social security) completely in order to remove the disincentive from hiring new workers. We would then make up for those lost taxes with pollution taxes.

Okay, but here are the problems with that:

1. Social Security is a benefit to the worker. Why shouldn’t the worker contribute to it? In fact, it’s supposed to be completely financed by worker contributions. I see no reason why this should be eliminated and worker pensions be placed on the backs of companies that pollute.

2. Where does Al get the idea that pollution costs are so high that a proper externality-neutralizing tax could fund the entire social security system? What data does he use to come up with those numbers?

3. A major change to the tax regime like this would hugely distort the economy. It would heavily punish polluters, and reward those who for whatever reason run businesses that don’t emit as much. If all we’re doing is correcting an externality, maybe that’s fair. But if we’re simply saying that pollution is evil, and therefore we should heavily tax anyone that pollutes, then you’re going to do a lot of damage.

4. It’s hellishly difficult to price the external cost of CO2. This is also the biggest problem with a carbon tax. What is the social cost of CO2 emissions? Hell, even the IPCC says that if global warming results in an overall temperature increase of less than 2.5 degrees, there will be a net economic benefit to the world. In that case, companies that emit CO2 are doing us a favor, and we should be paying them. On the other hand, if CO2 emissions at current rates cost 100 trillion dollars in damage over a century, the tax might be pretty high. How do we decide?

Well, this is an area I haven’t studied specifically, but the general idea is good. If pollution is an externality, and we can internalize that externality with taxation, then we should do so.

I agree with this in theory. What if it turns out, however, that after we figure out the external cost of CO2, that the tax will turn out to be not that much? Let’s say we could accurately price the cost, and it turns out that gas should only have a carbon tax of 15 cents per gallon. Would you be satisfied with that?

Also, what of the countries like China and India and Russia who won’t play along? If we tax our emissions and they don’t, they become free riders. Their goods become comparatively cheaper. If we restrict our use of oil and they don’t, the price of oil will drop and they’ll consume more of it. What then? Charging companies to correct for an external cost of their CO2 might make sense. Charging them a tax so that they can subsidize their own Chinese competition’s products while having no effect on CO2, makes no sense. How do we prevent the latter from happening?

Putting some numbers to this, I believe the IPCC’s median projection has world GDP reduced by 5% by 2100 due to the effects of warming. That’s a decline of .02 of GDP per year. That’s not much of a tax increase if you’re truly trying to replace other taxes with a carbon tax. The U.S currently collects about 27% of GDP as tax. Social Security alone is over 3% of GDP. So certainly you’re not replacing Social Security with a pollution tax .

And if payroll taxes create disincentives that discourage employers from hiring workers, and we can lower those taxes to reduce the disincentive, then that’s also good.

Why is that axiomatically good? We’re already near full employment. What makes you think that lowering the cost of workers would be a good thing? Maybe it would just comparatively punish those companies that rely more on automation. Or simply cause wage inflation and subsequent inflation of other goods and services. Or more fundamentally, should we be punishing automation?

But there are, of course, questions. The biggest is: would the tax rate on pollution be too stiff? And I have no answer for that. I simply don’t know. Maybe there’s a middle ground that policy makers can reach on this topic.

And my suspicion is that the middle ground will be “whatever the suckers will stand for”. And the money will go into general revenues. In other words, it’s not a correction for an externality, because the damaged parties are not being compensated. It’s simply a payment from one party to the government. Little Timmy with emphysema is not going to be compensated for his taking. But there will be extra pork money all around for the politicians to use to build monuments to themselves and pay off campaign contributers.

I’d say there probably is a middle ground. I actually had a Finanzwissenschaft course in Austria years ago. It was an Austrian school, so to speak (heh). And generally, the best way to reduce the deadweight loss that comes from taxation is to tax as broadly as possible (that is, to tax everything under the sun), but to tax everything at a very low rate. Which means that it might make sense to institute pollution taxes, but it might not make sense to it so drastically. Gore is, I think, probably being a bit unreasonable here. But the theoretical foundation for his idea is solid.

The most practical application of this tax would be a consumption or sales tax. If you are singling out polluters, then this is by no means a broad tax, and will have the end result of making the productive ability of the country more expensive, and to transfer money from industry into the hands of government and ultimately into whatever projects the people want. Those are the broad strokes of it. So long as a pollution tax only has the effect of correcting for the externality (a Pigouvian tax), and so long as the money was rightfully returned to the local marketplace (say, as tax refunds indexed to the proximity of the polluter or something), the benefits might outweigh the harm.

But if it’s used basically as a cudgel against business, which I suspect it would be, it’ll be a very bad thing.

TJ Rodgers’s response, though, completely ignores all of this analysis. He tells an apocryphal WWII story which isn’t relevant (it’s much easier to change tax policy in a single country than it is to redraw the borders in an entire continent), and then he says “I think Al and the government ought to get out of the energy business”.

I agree with that. I thought it was probably his weakest answer.

Gore’s taxation idea isn’t about the government intruding on the energy business - it’s about internalizing the costs of pollution.

Okay, I’ll wait and see. But I just see this as devolving into a debate over how much pollution costs, and how much we should be compensated for by businesses. After all, we also emit CO2, and we benefit as employees of these companies, and as consumers of their products. The costs of the pollution will ultimately be passed on to the consumer anyway, and therefore it becomes just another way for government to collect money from the people.

I think as soon as we start talking about using the revenue to fund things like Social Security, we’re talking about far more money than what would be reasonable, and we’re making it clear that the money would just be used for general revenue.

And this is the kind of discussion that I want. I want to mention people like Gore when it’s appropriate because they’re the ones who are actively trying to change the system, which means they’d better get it right. And I want to convince the people on the right that these problems (like the increasing intensity of hurricanes) do appear to exist (better than even odds).

It might be a bit of a tangent from the OP now (and please let me know if it is), but the reason I’m focusing on the political right is because they’re the ones who have a tendency to misquote and distort the words of environmentalists with the apparent goal (in my personal estimation) of discrediting the ideas of the left entirely.

This is why I said that it’s the political right that needs to be convinced.

Well of course you’re going to think they are being unreasonable and illogical - you disagree with them.

I suspect I’m pretty close to the political center on this issue. And to me, it looks like there are extremists on both sides, and disinformation aplenty on both sides. For every rightie who chuckles about old predictions of ice ages and says there’s no evidence of warming at all, there’s a leftie running around saying the world’s coastal cities will be destroyed and mega-storms will ravage the land and, worst of all a breakdown of the food chain and mass starvation. Or trying to stop the Cassini mission because nuclear is b-a-d.

I think this industrialist is a pretty good start. But will the right-wing listen? Or will they hear the buzz word “taxes” and immediately shut down the discussion with complaints about those ornery “tax-and-spend liberals”?

And will the environmentalists and leftists who want expanded government listen if it turns out the carbon tax adds only 15 cents to a gallon of gas, and $10/ton for CO2 emitted from factories?

This is all why this problem is close to being intractable if approached as a way to regulate profitable behaviour. We will simply fight about it. Here in Alberta, if you even whisper the words carbon tax they’ll lynch you and throw your corpse into Saskatchewan.

That’s why we need to solve the problem by making better alternatives. If a carbon tax or cap and trade are priced properly and have the effect of allowing us to make rational energy decisions, we’ll probably spend about the right amount of money on alternatives. If we can make energy cheaper with solar, wind, and nuclear, then we’ll stop using fossil fuels without government intervention. And so will China and India.

[Sam_Stone]

@Voyager

I don’t have time to listen to the videos, but I trust that TJ mentioned that he is heavily invested in solar cells? He clearly believes in this statement, but he is hardly an unbiased expert. I’ve heard him speak several times, and I know people who worked with him at high levels, and he is known as one of the more flamboyant CEOs around here.

Oh yeah, his involvement with his solar company was mentioned repeatedly, starting from the opening paragraph of the series. In fact, many of his anecdotes on the show are about his solar company. He’s not hiding it any more than Bob Lutz hides his involvement with GM when he’s making a pitch for hybrid power.

I hope he is right, but similar claims were made for all sorts of things during the bubble. People who make a fortune on startup 1 crash and burn on startup 2 all the time.

I suspect that there will be nice tax incentives for solar cells to meet California’s aggressive carbon reduction goals. Did he mention if he was for or against them? They are clearly going to help him. I’ve checked, and they aren’t really a good investment without the tax incentive yet.

I believe he said that he’s against all government involvement, but one of the problems he faces is that government subsidies his competition heavily (especially ethanol), and puts him at a competitive disadvantage. So he’s conflicted about them.

[RTFirefly]

@Sam Stone

And will the environmentalists and leftists who want expanded government listen if it turns out the carbon tax adds only 15 cents to a gallon of gas, and $10/ton for CO2 emitted from factories?

Who cares about that shit? As long as it reduces carbon emissions to the level needed to stop global warming, I’m not angling for a particular revenue target.

[RTFirefly]

@Sam Stone

Even absent CO2 taxes, the cost of oil has already risen past the cost of several alternatives.

In addition to my response yesterday afternoon, it’s worth mentioning that oil is only one of a number of carbon-intensive fuels. It’s the one that powers autonomous means of transport (cars, trucks, planes), and absent spending on alternative means of transport, the only alternative is to use less.

Oil isn’t used much in the generation of electric power, which is the arena where there is more flexibility. But unless the price of coal (for power generation, as distinct from coking) is increasing enough to make major expansion of non-carbon alternatives cost-effective, then the market isn’t being that helpful.

And while coal’s price has been increasing just in the past few months, it seems to have more to do with things like weather and transport.

Unless, of course, we’re running into “Peak Coal.” While that’s a real possibility (yeah, there’s plenty of coal down there, but much of it is crazy hard to get to), it’s really difficult to tell what will happen with the price of coal over the next decade or two, independent of any carbon taxes or equivalents. Maybe we’ll be lucky in a perverse way, and coal will become scarce right at the historical moment we need it to do so.

But that would be an accident. It would not be the magic of the market.

[Dumbguy]

@Sam Stone

A much better idea would have been to simply impose a carbon tax on gasoline.

I completely agree. Make the market factor in externalities, and our fuel consumption behaviors will change. On the other hand, Congress passing something like this is about as likely as them outlawing puppies.

Barring that, I think CAFE is better than nothing.