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.

A.I., A.I., captain!

Joseph Stiglitz, he of former World Bankiness, haver of the 2001 Nobel Prize in economics who warned that globalization was taking place at the behest international conglomerates rather than “forces,” now comes to light his hair on fire present similar cautions about Artificial Intelligence:

“Artificial intelligence and robotisation have the potential to increase the productivity of the economy and, in principle, that could make everybody better off,” he says. “But only if they are well managed.”

Beyond the impact of AI on work, Stiglitz sees more insidious forces at play. Armed with AI, tech firms can extract meaning from the data we hand over when we search, buy and message our friends. It is used ostensibly to deliver a more personalised service. That is one perspective. Another is that our data is used against us.

“These new tech giants are raising very deep issues about privacy and the ability to exploit ordinary people that were never present in earlier eras of monopoly power,” says Stiglitz. “Beforehand, you could raise the price. Now you can target particular individuals by exploiting their information.”

It is the potential for datasets to be combined that most worries Stiglitz. For example, retailers can now track customers via their smartphones as they move around stores and can gather data on what catches their eye and which displays they walk straight past.

The data farming of which we are all willing seeds know no boundaries, recognizes no politics and sees only profits. Shaded with the camouflage of complexity, it is a winning hand. Are we up for the ‘boring overwhelming’ of taking on the Tech giants? Wait, let me come in again…

Image: Warehouse operated by Amazon, via The Guardian

Birth of a Myth

Leo Hickman in the Guardian explains how climate deniers roll:

Such is the viral nature of information flow on the internet, we can sometimes see myths and memes developing before our very eyes. Just such an example has occurred over recent days with the rather irresistible news that windfarms can “increase climate change“.

The article that really gave this idea a push online was published on Sunday evening on the Daily Mail’s website. It was delivered with the headline: “Wind farms can actually INCREASE climate change by raising temperatures and causing downpours, warn academics.

Somewhat predictably, that headline quickly attracted attention and was being disseminated with particular gusto on climate sceptic sites such as Climate Depot and JunkScience. The news was also reported on Dallasblog.com (“Wind Farms Cause Global Warming, some Scientists say”)

This is all of a piece with Krugman’s dictum, but there’s even more here, how a scientist’s research gets re-purposed, as they say. It’s stupid, really – giant wind farms can alter the weather. But the deniers don’t care about the stupid if it smells like proof; add the possibility of fantastic headlines and presto: a meme is born.

via LGM.