One bad way to fight global warming that both Democrats and Republicans love

If the tax is $15 per ton of CO2 and a gallon of gasoline produces 2lbs of CO2 the tax per gallon would be 1.5 cents, not 15 cents.

While we're at it, why not impose an even higher tax on the folks who are blasting off mountain tops in Appalachia to get a quick hit of coal, without getting their hands dirty?

Your numbers are based on what would happen today. The thing is, technology changes fast. By setting a tax on CO2, we would be changing the shape of the market. Yes, coal would be the first to go. Then natural gas and oil. But what happens when solar and wind get just a little bit cheaper?

The power companies make long-term investments in plants and technologies. If they know all CO2-generating forms of energy will become more expensive by a known amount, it changes the way they plan. That solar plant that just wouldn't pay for itself over ten years /might/ be able to if the price of CO2-producing energy goes up.

If we want to lower CO2 emissions, the best way to do it would be to make emitting CO2 more expensive. It's not rocket science.

Most of the mass in gasoline (or any hydrocarbon) is in the carbon itself. One gallon is roughly 3.6 liters. The density of gasoline is roughly 0.7 kg/L, so one gallon of gasoline weighs roughly 2.5 kg. (Remember the rule of thumb -- "a pint is a pound", based on the density of water.)

I suspect the author intended to say that one gallon of gasoline has approximately two kilograms of *carbon*. At $50/ton of carbon that comes to (very roughly) five cents a gallon.

Don't waste my time with an additional $.15 per gallon tax on gasoline. Make that an additional $4.00 per gallon tax with a corresponding decrease in the payroll tax then you'll have something. I'm absolutely amazed at the cowardice of our political leadership.

Ron and Ted:
Thanks to both of you. Mea culpa. I meant to say about 20 pounds, and have fixed it. But I did in fact mean CO(2), not carbon. Ted, your calculations are right on the dot. 2,5 kilos or about 5.5 pounds of carbon is the carbon content of 20 pounds of CO(2).

Ted F.

In your calculation, you neglected the O2 that is coming from the air. That will almost triple your estimate to be inline with the authors. And Ron, he said it made 20lbs. of CO2 so it is 15 cents a gallon. Stop trying to correct the math.

Seems to me that if this is impemented correctly - revenue from a carbon tax ($15 or $500 per ton) and reduce income tax by the same or similar amount - that this carbon tax is the perfect solution to a market problem that under prices the pollution we create by burning fossil fuels. Lowering income tax also incents hard work, creativity, and investment while the carbon tax...higher the better...clearly is a message to use fossil fuels very efficiently or switch to renewalbles (here again creating a market incentive to develope and use renewables). All these good things from the bad word TAX...oh, how can it be??? Tom

Global warming is getting very serious. I favor a $25/ton tax on CO2 and, a $1/gal. gas tax increase and require 40 miles per gallon or better on new cars. The U.S. is behind Europe and Japan and we can't expect China to limit CO2 release if we don't.

The carbon tax will increase the cost of doing business across all industries, and will also increase bills or all indivduals. The government will get another $80 billion to squander...Sounds like the global warming people are really just former socialists who could get people to pay higher taxes selling their old social programs, so they've used global warming to scare the money out of people. I'd rather drown from melting icecaps than give 1 more penny to these losers in the federal goverment.

The long term trend is towards higher energy use. So either you kill the economy trying to fight this trend or you find something better.

I vote for finding something better. Perhaps instead of throwing $100B a year trying to take over other countries we should invest the money in alternative energy research.

David, I am well aware that there are two ways of measuring carbon release, but the original number wasn't correct for either. I took a guess as to what was intended, did some quick mental calculations, and came up with a correct answer. The revised figure of 20 pounds CO2 is also a correct answer.

I'll correct the math only when it is erroneous.

I think Metcalf's paper is rather opaque, making it hard to use as a basis for an opinion as strong as the one expressed in this paper. "Petroleum products would increase in price by nearly 13 percent....a carbon tax of this magnitude would raise gasoline prices by approximately 13 cents per gallon, assuming the tax is fully passed forward into consumer prices." 13% of 3.00 per gallon is 39 cents a gallon--so what is being passed on to the consumer is a cost, not a percentage. So I think that means that the 13% increase is based on an upstream price of $1.00 per gallon, which then is passed onto the consumer as a fixed cost, not a percentage. The whole analysis is based on taxing the carbon upstream, rather than at the pump. So the price of a fuel requiring more refinement and transportation will be relatively less affected by the tax. Perhaps the problem is not with a carbon tax, per se, but with the upstream carbon tax considered by Mr. Metcalf.

I see no reason to fight global warming.

Global warming is an irreversible problem that will happen even if all CO2 emission sources ceased to exist today. These emissions have sped up the rate at which the planet is warming, but the Earth is going to get warmer no matter what is done.

I believe that reducing waste is a good thing, but global warming is a part of the Earth's evolutionary process. Just like there was an Ice Age, there will be a Sun Age in which the temperature of the planet will rise to unsustainable levels for many regions of the Earth.

The only thing that can really be done is to invent technology that will protect the areas that will be less impacted by the Sun's deadly rays. The best thing that can be done is to invent more efficient solar power technology. Since the sun's effects will become greater, humans need to use the sun as the main source of energy for the world.

Many above have already stated why this tax may not work, so I will not reiterate my feelings on these points.

However, if I read the proposal correctly, the only thing the tax is meant to do is change behavior of the consumer. The tax revenue doesn’t even go into reduction of carbon.

Am I missing something? If the tax is implemented, wouldn’t it be better use of the tax to invest in renewable energy, planting trees, researching clean energy, etc. In that way you get double the value: 1. change behavior and 2. reduce effect of carbon.

I would still be skeptical of its ability to create change, but I might support it more if I knew the money was being used to help solve the problem, not just being added to the general tax coffers.

Yadgyu, there are some serious flaws with your logic.

First, the "sun's deadly rays" are not getting noticeably stronger. (Unless you are referring to the increase in UV radiation that reaches the surface due to the destruction of the ozone layer.) The changing composition of the atmosphere is simply doing a better job of trapping the heat. Global warming won't make solar power any more effective. It may even make solar power LESS effective by increasing the cloud cover.

Second, there is little doubt that human activity has dramatically sped up the *rate* of warming. Nobody knows for certain what the future holds, but unrestrained release of CO2 is like putting the pedal to the metal on the global climate.

The two main alternatives for carbon reductions are carbon taxes or emissions allowances. The problem with emission allowances is that no one has a clue what the allowance prices will be 10 years from now, which makes utility planning very difficult. If allowances are much higher or lower than you project, the company goes broke. Knowing how much the cost penalty is for carbon makes it easier to invest the money to emit less carbon. Also, with taxes you COULD use the money to help people like unemployed coal miners (I am not naive enough to think that is a certainty.) But it is more likely to help the disadvantaged than with allowance trading, where it likely will end up going to NYMEX allowance traders. As for oil use for transportation, demand is very inflexible short-term, but long-term could be different, if people believe higher prices are permanent.

Would the government try to impose this tax on individuals? Remember as members of the Animal Kingdom we emit CO2 with every single breath. It's just a silly tax. The only change that should/could be made is incentive based programs that modify behavior. Taxes do not modify behavior, incentives do. If those incentives need to be paid for with taxes that correlate directly to the desired behavior then so be it. You'll have a double-edged sword, i.e. increase the gas tax while giving tax breaks to individuals who purchase vehicles that average better than 30mpg. Or tax plants that do not have all of the air scrubbers possible to clean exhaust fumes while giving tax rebates to the plants that do. Very simple concepts that carry plenty of weight. Just a thought.

A fixed CO2 TAX is not enough!
It MUST INCREASE by 20% per annum!
It should only apply to fossil based Carbon.

I.E. Something which can be planned for and phased out rather than accomodated in existing pricing structures.

Even with a 20% increase per year, we've got a long way to go before were taxing fossil carbon for the costs it will inflict on society.

The ultimate GW enviromental impact of oil will be around $600 per barrel and coal is around a $1 per pound.

Right now, in the case of global warming, the math is much irrelevant. We can gather experts, and they would come up with a good $$$ amount. It could even be adjusted over time to follow the market’s response. What we must decide is to either treat the global warming problem with the great urgency that a problem of this magnitude deserves or to overlook and pretend that it does not exist. I suspect that we will do the latter because of our never ending desire for instant gratification. What will we get by paying more taxes, missing out on big SUVs, and sacrificing our economy? Maybe save the Planet 50 years from now? If I had to bet my house, I would bet that we will procrastinate until the Global Warming affect’s become too great to be reversed.

effects

"Nobody knows for certain what the future holds, but unrestrained release of CO2 is like putting the pedal to the metal on the global climate."

I know what the future holds.

People are so worried about carbon emissions, but are not worried about what to do when the Earth's temperature reaches unsustainable levels. I am not against cutting carbon emissions. But cutting these emissions will make a negligible contribution to stopping the effects of global warming. An increase or decrease in CO2 emissions will do little to encourage or inhibit global warming at this point.

Global warming is now a self-sustaining process that has no means to be prevented. The planet is going to get hotter and many people will suffer. If you are in doubt, do some research on Australia and Africa. They are already suffering from the brutal effects of global warming.

What needs to be done is to find ways to provide comfort and relief for the areas that will be affected the least. The areas that will be affected the most will become a lost cause until the Sun Age is finished. Global warming will occur for several hundred years. Unless researchers get serious about protecting areas that will be least affected, the human population will die by one-third in 200 years as a result of starvation, dehydration, and heat-related diseases.

If you refuse to acknowledge that expending fossil fuels has at least some negative effects, then naturally you'll label the carbon tax as a "bad idea".
Many economists agree that tax should be shifted away from things we want to encourage (i.e. a lower income tax encourages Americans to work more) and shifted onto things we want to reduce, like fossil fuel use. Pay less tax on work, more on waste. Makes sense to me.

Ron Ritchie, the article says a gallon of gas produces 20 pounds of CO2 - not 2 pounds (at least the version I read). So, 15 cents/gallon it would be.

This proposal would be much more effective in fighting global warming if the proceeds from the tax would be put into a fund used to research and fund the implementation of alternative fuel programs, and to subsidize corporate initiatives on cutting CO2 emissions through capital investment. I do not agree with channeling these dollars through another unrelated government program.

Think of who is going to pay this tax...it's the consumer not the producer.

What you probably are missing is that the additional revenue generated could end up funding and subsidising clean fuel generation facilities and development of technology like fuel cells. All this will eventually lead to reduced emissions, maybe not in the near term but in the long term.

We have a technology that could help address these issues.

www.texascleanfuels.com

A tax on CO2 is totally uncalled for. Do you want even MORE companies to go overseas to do business? Do you think countries like China or Mexico care? (your dreaming if you do) We would be shooting our economy and job market in the foot while making the criminals in Washington richer if this were to pass. Companies would move even more factories overseas where they would not be subject to a nonsense tax (and have LESS restrictions therefore pollute more!). This has NEO-CON written all over it - just another excuse to take more control of our lives and reach down deeper in the pockets of the American People. Excuse me while I fire up my diesel truck and make some CO2.

Brian Mowry wrote: " Remember as members of the Animal Kingdom we emit CO2 with every single breath." This is true, but the source of the carbon in the CO2 is carbon recently fixed by food crops and plants used for animal feed, so there is no net CO2 increase in the atmosphere due to human or animal respiration. It is only fossil fuels--reduced carbon stored over millenia in the Earth--that presents a problem for changing atmospheric concentrations, and it would only be fossil fuels that are taxed.

In the U.S. today there are ~3,000 coal-fired power plants in operation. In China, there are 3,000 NEW coal-fired power plants scheduled to be built in the next 20 years. Any reductions in the U.S. (or Europe) during that period will not help considering our atmosphere is a mixed system that travels the entire earth (duh?). The Only Solution is to implement a global agreement that limits the amount of CO2 emissions allowed (per ton of coal consumed) to make power. We have "clean coal" technology and CO2 scrubbing technology we can implement right now. Regulating cars (or natural gas) is not the answer! We need a global solution that is specifically taylored to regulate coal at the "point source emissions" (i.e. the stacks) as well as processes used to make power from coal. Increased costs on coal will make alternative power schemes relatively less expensive too. It's not rocket science!

Besides an automatically increasing (20% PER ANNUM) fossil fuel carbon tax.

Any country which doesn't levy a similar tax, would have the full cost of tax levied on it's exports.

I.E. Calculate overall fossil carbon usage for country X, calculate percentage of tax to ley on all imports from that country. (Note: Use prior year exports and fossil carbon usage as basis for calculation.)

A general tax on carbon emissions is a good thing because its CO2 emissions to the atmosphere per se, not coal or oil use, that needs to be reduced in favour of alternative kinds of energy. Using oil and natural gas are just a first response phase.

What is being widely overlooked at present is that atmospheric CO2 pollution is having a far more direct and worrying consequence than global warming. Systematic measurements in the last few years show that uptake of atmosheric CO2 by the oceans is significantly increasing their acidity. Unlike global warming, where controlling CO2 emissions may or may not prevent a predicted problem, CO2 environmental acidification is surely going to hurt future generations big time.

David and Mike

The article originally said 2lbs on CO2. The article has been corrected since my first post.

Chris wrote: "The Only Solution is to implement a global agreement"

Then clearly there is no solution. Just look at Kyoto.

Doing nothing while waiting to find an agreement that 'everyone' likes or will agree to is not the answer. Not only that, there is not any ONE solution.

I, for one, am glad to see our legislators thinking about Global Warming as an actual reality and at least discussing options for reduction of greenhouse gas emissions in a somewhat constructive way even if they are still not quite hitting the mark.

The reality is that people tend to do things for two reasons: it benefits them, or it would penalize them. The best combination of solution would be to both effectively incent positive actions and activities while detering destructive actions and activities.

Think of it like a Rewards Credit Card where you are incented (reward points) for using the card (desired behavior) and penalized (fees) for things like failing to pay timely, etc. (undesirable behavior).

Mark, I find it strange that a thinking being can fail to see the merits of the carbon tax. Although you state some good outcomes of the tax in terms of closing coal thremal electricity plants you fail to see the basic principle of an environmental tax.

The aim is to control the behavior of agents in the economy to some desired form buy enforcing the true cost of an action taken by an agent. Externalities is the term used for this indirect costs (or benefits) not included in the actual market price of the action. In this case, the external cost of polluting the atmosphere with CO2, that persumably has the negative effect on the global scale that is estimated by climatologists. So the true cost (if calculated correctly to $15/ton) is transfered from the rest of the inhabitants of the earth (plants, animals, humans) to the polluter.

A much denser description uses morals as its foundation - "Polluter pays principle" cf. Wikipedia

It is perfectly sound that the gasoline user pays the tax (for not changing behaviour) and the coal plants pays not the tax as they no longer pollute.

I don't believe the proposed tax would lower carbon emissions by the consumer. It is too minimal. A larger tax would definitely affect usage (look at europe), but then there are many problems for the consumers with lower income that need the fuel to get from point A to point B to make their minimum wage that won't increase with the tax.

Yadgyu, have you ever thought that we could create a technology in the future that pulls CO2 from the atmosphere? sequestration or complexation to create another molecule that would take it from the air and negate its affect?

By beginning the race to slow, and at some point stop a global increase in temperature, we gain time for our families future generations to attain a way to reverse it. (If we don't run out of water by then)

With a tax on coal to begin with, as it is the worst contributor to G.W. we can begin a plan to implement more taxes within other energy sectors (and to the end consumer). We could even gain leverage against China if we frown upon their lack of reduction and increase taxes on imports on foreign countries. Heck, give them 15 years, but fore-warn them. You would retain companies that planned to leave because it would cost more in the future.

Sun IS THE WAY TO GO, increasing the abilities of capacitors could bring solar energy from greater distances to the cities and make it cheaper than it is now.
Please correct me if you think I am naive to something.

*family's*

Wouldn't it be better to tax what you are trying to reduce -- Carbon released -- than mandating a certain a fixed solution?

It's not JUST coal that we should be reducing -- it's the carbon released. And it's hard to predict HOW the "market" will solve and change the complex system.

Many problems with mandating fixed solutions -- e.g. there may be entrepeneurs that come up with a better way to do it -- money is a great incentive to innovate.

"The pedal to the metal" appears to me to be caused directly by the large increases in the human population. While I know industry and fuel consumption take a toll on the environment, I wonder what the effect would be of encouraging smaller families. Not that I'm a fan of government control but if the environmental concern is so great then why is this not considered. What is "carbon effect" of a single person in a lifetime? Most of the environmental damage I see correlates with vastly increasing population. Increasing the effectiveness of the amount of carbon per ton does not decrease the overall output with a surging world population. It may delay the outcome but it will not eliminate it. The fact of the matter is that this problem needs to be attacked on all fronts but population I believe would be the most effective and the most painful for people to accept. I'm not sure if technology can catch up to the devastating effect of population growth. I don't believe Americans, or most other nations, will deal with this issue proactively to a degree that will have any real effect.

By the way the reason the Republican like this is that if it does shift tax from income or FICA to a consumable our tax structure shift to something more like flat tax with the idea being that consumption would be very similar across the board. This would allow for greater wealth accumulation.

Without the tax money going to environmental programs I see it as more of a camouflaged tax plan.

I think we should tax cancer, murder, hunger, poverty. Seems to be the governments answer to all our problems.

Mark Gimein appears to be completely oblivious to Prof. Mankiw's previous writings on the carbon tax. A year ago in the Wall Street Journal, Prof. Mankiw proposed a $1.00 per gallon increase in the gas tax, gradually implemented over a ten-year period. Here is his proposal:

http://gregmankiw.blogspot.com/2006/10/pigou-club-manifesto.html

However, the elasticity of gas prices is something that Prof. Mankiw should address, but hasn't. So far, the empirical evidence suggests that a $1.00 increase in gas prices does not have a significant effect on people's driving habits.

Jarl,
I see where you're headed. If indeed the point of the tax wasnto cover the costs of pollution--if $15 a ton was the cost of abating carbon emissions and we wanted to collect the money and use it to cover that cost--I don't have any problem at all. But that's not it. The idea is to change behavior. And you can get the same change in behavior with a samller tax.

James,
*You're right, I didn't know that Prof. Maniw advocated a gas tax as well. But John Dingell does, too, so I thought about including this in the discussion. The reason I didn't is one you point out yourself: as far as I know, we don't have solid numbers on the elasticity of gasoline demand. A 50 cent (Dingell) or $1 (Mankiw) a gallon tax might cut gasoline use a lot, or very little. I suspect (as you do) that you'd have to have a very big tax to cut gasoline use substantially. In any case, you can evaluate the carbon tax without the gasoline tax and the gasoline tax without the carbon tax.
*I may touch on your first comment in a later post. I would never say carbon emissions have no bad effects. And I think most folks do get the idea that we might put taxes on things we want to discourage--this is something Mankiw talks about a lot. But if we do that, we should ask the next question--is this the best way (the minimum tax, the greatest change in behavior--to discourage it).
Now, you may have a little more in mind. You might feel that carbon emissions are a bad thing, and we should tax the bad people who do this bad thing just to punish them (and maybe reduce the tax burden on other people). If that's what you're saying, I disagree strenuously. But I'll leave that for a later post.

To my mathematical defenders: Alas, when the story was posted I did in fact say 2 when I meant 20. The original text is still there--you can see it crossed through in the third paragraph.

The reason why higher gas prices haven't affected driving habits is that other goods are becoming relatively cheaper. People can afford more expensive gas because of the increasing cheapness of the crappy products that flow from China like a tidal wave. Since China's industry is powered by coal, it's a double-whammy on the environment - gasoline usage stays the same, and coal emissions skyrocket.

People seem to be waking up, however - every day I see more people on bikes, I see more hybrid cars, I see more gardens being planted. I actually saw a line at the local recycling drop-off center the other day. People are concerned, and I'd be willing to bet that if our government asked, most of the people in this country would be willing to make changes to reduce emissions. The real question is whether our leaders have the guts to make the request.

Less carbon emissions will not stop global warming. It is an irreversible self-sustaining cycle. I believe that a reduction in CO2 emissions will result in less pollution, but less emissions wil not stop global warming. More taxes would just hurt the American economy without giving any benefit to the environment.

Yadyu, you should read the IGCC report on climate change (the product of 1000 scientists), so that you stop trying people to convince people to trust some obscure critic of the facts surrounding climate change. Perhaps the world would be warming slightly due to changes related to the sun. However, the world is warming despite "global dimming."

If you research global dimming you will find that the increased emissions of SO2 and particulate matter associated with growing world economies is causing less of the sun's rays to reach the sun, which would normally cause the earth to cool. However, because of the emissiosn of CO2 and other gasses, the earth is warming during this time. Also, there are great synergistic effects caused by melting ice in the artic, thawing permafrost and SO2 and particulate matter emissions controls in developed, and soon in the developing world, which will speed up the effects of climate change.

We need to to the most we can as fast as we can just to prevent our world from turning into a frying pan. Even targeting 80% greenhouse gas emission reductions by 2050 may be too little too late....

It doesn't matter that most of the gains would come from coal. To say that people's behavior won't change for gasoline but will for coal price changes is to focus too much on short-term elasticities. There's also no sense in which people are being "punished" for using energy. They are only being "punished" for polluting, that is, the tax is only levied to the extent that their particular usage of energy causes global warming.

Also, if what you say is true, I would consider the tax to be a very good tax in terms of small deadweight loss. You claim that some behaviors won't be affected by the tax. That's the definition of an efficient tax. If the revenue is used to reduce income taxes, then we have substituted a tax that creates a disincentive for labor with a tax which apparently creates no disincentives, or to the extent that it does create disincentives, they are positive ones.

"Even targeting 80% greenhouse gas emission reductions by 2050 may be too little too late...."

Some of you are brainwashed.

Completely eliminating greenhouse gases today will not save the planet. People must realize that going "green" will not stop global warming. It may reduce pollution, but global warming is an irreversible self-sustaining cycle. Taxing carbon emissions will just make the average joe poorer. Many corporations can easily move to another country or afford to pay a CO2 tax. Most Americans cannot. This tax would do nothing to combat global warming because there is no solution to global warming.

We must urge the worldwide scientific community to develop technology that will help us in our time of peril. The Earth is going to heat up. Scientists need to find ways to protect us all from being cooked by the sun's rays. If scientists get caught up in the "green" trend and continue to worry about grennhouse gases, many people will die. In 50 years, people will see that I am right. All of these hybrid drivers and recyclers will look like total fools. Stop trying to reduce your carbon footprint. It will not stop global warming.

Yadgyu,
I agree with you that warming of the earth is occurring and will continue to occur. None of us are rebuting that. The RATE at which the earth was, and is warming was increased near-exponentially by humans and our use of fossil fuels of the last ~100 years. By decreasing the rate at which the earth is warming we can sustain life with more favorable conditions on this planet for a much longer time period. Over time, disastors will continue to occur that affect people's view of the future. When New Orleans is flooded again within ____ years(fill in the blank with your estimate) people will see that our options are limited to living within the means of mother nature. In the mean time we have the opportunity attack a problem in order to stop the increase from continuing and even reduce the rate of warming to a level that leaves the earth in a "SELF-SUSTAINING" condition. Which is defined as the condition before the industrial age. As you wrote it, you believe that the increased rate is self-sustaining. I disagree.

Lewis, great point about the tax. I didn't think of it that way. That lead me to now think that incentives could have more affect on consumers.

Hello, I work at this "one European company that is already building a test plant that will burn coal without releasing any carbon dioxide" and I'm happy to see us gaining attention around Oxyfuel technology. However, the link in the blog doesn't work. To reach our pilot plant web site use this adress: http://www.vattenfall.com/www/co2_en/co2_en/index.jsp