Price v. Tax

Interesting quibble over terminology, or linguistic obfuscation designed to soothe child-like sensibilities? Why not both?

Nordhaus: We have set the bar for our aspirations so high. Aiming for net-zero carbon emissions by the middle of the century is a very ambitious target.
In my own mind there is a twin set of policies. One is carbon pricing and one is strong support for low-carbon technologies. Both are necessary if we’re going to reach our goals. Carbon pricing by itself is not sufficient. By itself, it won’t bring forth the necessary technologies. Carbon pricing needs the helping hand of government support of new low-carbon technologies.
The analogue here is the covid vaccines. The private sector has incentives of the patent system to make vaccines profitable for pharmaceutical companies. But we went beyond that with the pre-purchase agreements to make sure a strong market was there and guaranteed in advance; this backstop would help these companies make back their investment. It is an unusual way to structure incentives, but it worked amazingly well.

So good so far, to acknowledge ambition alongside calculation, expediency, and urgency risks encouraging cynicism about solutions, aka bedtime stories in a land right here, right now. But great point about vaccines, and of course one of the tools is framing, whether we like having to tell ourselves certain fictions or not. See also, vaccines.

We can use this to think about climate change policies. We can use similar tools to improve our low-carbon technologies.
Mufson: And one of those tools is the carbon tax?
Nordhaus: I think we should use the word “price” rather than “tax.”
Mufson: That sounds better.
Nordhaus: This is not just a matter of rhetoric. It is fundamental. What we really want to do is raise the price of carbon emissions. If you can get it up to $100 a ton, you’re doing a good job. It doesn’t matter whether you do that through a tax or a cap-and-trade system. Canada has a carbon tax. Europe uses cap-and-trade. Others have mixed regimes. Different ones will work better in different environments.
I think it’s true that the U.S. is sort of stuck somewhere in the 18th century, maybe 19th century, on taxes. The rest of the world is moving ahead and we’re sitting here on an island of fiscal denial. One of these days people will wake up and say, “A carbon tax is a good way to reach our goal effectively.”
It is one of the most effective tools. It raises revenues, lowers carbon emissions and reduces mortality from air pollution. Hundreds of thousands of people a year die from the burning of fossil fuels. We’re just so blindered on this that we can’t see what is good for both public health and fiscal health.

In the land of truthfully dispiriting summations, the one-eyed optimist takes a peek. Saddled with the most resources and the least wisdom in using them, the price of dawdling IS the widely-feared tax. See also, vaccines.

Image: … forest… trees.

It takes place every day

Nietzsche said, “He who has a strong enough why can bear any how.” The primary force of the vague tautology that we must be able to do certain things (simply because of the inherent need to do them), weighed against the true probability of any outcome, helps us get a handle on the most current odds-making on the question of global climate change. In addition, we might ask as we often do, what is the smart money doing?

This is what we usually can see first – the motion of resources – when the top of the chain begins to move, if not thrash about. The impetus to go green remains at its fashion stage, though many venture capitalists have started to put their money into some interesting niche ideas. But the popular uprising remains in its gesture phase. We may prefer this because everything else would seem like panic, and no one really wants that.

Perhaps this fear of panic is holding back the phenomenon from becoming the full blown existential crisis that it portends, on which its sunnier moments are truly based if the full scenario is to make any sense whatsoever. Mr. Gore’s movie terrified many people, but again, our ability to tell ourselves certain things permitted us to move on. There is a dissonance about conditions being severe enough to act, though not just yet. It seems a sort of patrician patience in the service of good form, prudence based on perception in a kind of “Just so, old chap,” way.

We have been here before, however, though in the heights of the Cold War we were also yet able to foster that remove from ever-encroaching oblivion. It didn’t prevent us from lining up for nuclear bomb drills in school (!), but we went on making long term plans just the same, maybe factoring in the odds of annihilation, maybe not, but living with the specter all the same. Maybe we just haven’t gotten comfortable with the idea yet; I even have trouble writing about it because everything sounds like such dooms-saying when all we’re really talking about are big, big changes.

Yet even these are simply about returning to more sensible dimensions in the way we live. When we talk about green this or sustainable that, these are just transitional codes for simple things that used to be common place like knowing where your food comes from or walking to work. To the extent we don’t want or care to do these things, well, they’re that much easier to shroud in Greenery.

I’ve always loved how Camus in L’Homme Revolte explained that Communism was a sickness, a system predicated on the elimination of absurdity in our daily lives. He knew that wasn’t possible and in so many ways, we’ve returned there, struggling to explain and justify some of the absurdities we’ve been living with and on. We can change what we call them, tweak the edges and continue to tell ourselves certain things. But they can’t just be explained away. They are there. And we simply must change them.