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by m12k 1675 days ago
The core problem here is that emitting carbon doesn't cost the polluters much, so helping them or their customers to avoid it doesn't save them money. It's not a pain point, so the only motivation for them to do anything about it would be altruism/"Look How Green We Are!" CSR marketing. That's why the world desperately needs a carbon tax, so emission goes from being an externality (i.e. somebody else's problem) to being priced into the activities that emit. So the producers get a real incentive to change, and throw money at the problem, because it helps their bottom line to do so. So those that can easily change to less emitting techniques will do so. So those that can't will help fund research into tech that will. So there's a market for green tech like this. So consumers will favor less carbon-intensive products, not just if they are hippies, but simply because they value their wallets.

The only way to make a massive, global change like this up and down the supply chain is to give everyone involved - from producers to logistics to consumers - a direct economic incentive to do so. A carbon tax fits that bill, and allows the market to do what it does best.

3 comments

From an engineering/economic perspective, I totally agree. From a sociology/philosophy perspective, a lot of the West was built on cheap carbon emission. Can we realistically take all that embodied energy that represents our current state and expect/demand that developing nations to pay the same price for carbon as we do, starting now?
> Can we realistically take all that embodied energy that represents our current state and expect/demand that developing nations to pay the same price for carbon as we do, starting now?

Yes. Because the alternatives are stark and unwelcoming. And developed nations should enact development sharing to assist at the desire of the developing nations (way more than tokens and pittances).

If we want to go far, we have to go together.

What’s in it for a developing county to not defect? I think to make this work, you need transfer payments from developed countries to developing countries and to have those payments tied to effective carbon taxation.

For that matter, we probably need transfer payments here in the US. Put another $5/gallon of taxes on gasoline and you smack the working class hard. Do that and give every individual (literally everyone) who files a tax return 1000 gallons worth of the tax. Commit to reducing the gallon subsidy by 25 gallons per year per person and increasing the tax by 5% per year for the next 20 years. Evaluate every 5 years and see how you’re doing towards your goals. At the end, you’re taxing gas about $10/gallon in today’s money and subsidizing everyone $5K (in today’s money) to cover some of the increased costs of goods and transport, but giving a painful signal at the pump to incent minimizing gas consumption.

I’ve thought about those numbers for five minutes. Undoubtedly, better numbers can be chosen, but I think we’re going to have to give money in one motion and take it away in carbon taxes in another in order to be able to implement carbon taxes steep enough to change behavior.

This policy is called "fee and dividend", and has a pretty well-fleshed out wikipedia article[1]. IMO it's the best way to implement a carbon tax while avoiding "yellow vest protests" or deepening inequality. A carbon tax will tend to increase the cost of consumption, and consumption makes up a larger part of your income the poorer you are. But with a dividend to give money back to households, you offset this, so a poor household that lowers their carbon footprint enough can even end up ahead.

[1] https://en.wikipedia.org/wiki/Carbon_fee_and_dividend

Washington state voted on a smaller version of that, I-732, but it was opposed by half the environmental groups because they couldn't skim money off the top for themselves. So unfortunately it's going to be hard to pass such laws.

https://en.m.wikipedia.org/wiki/2016_Washington_Initiative_7...

Since the game is long term the strategy space is much more open for punishment and incentive creation.

Long term existence can be a motivating force, but you have to get the citizens to support solving the issue.

Maybe. We’ve made other changes that didn’t have nearly universal support before (Emancipation, Civil Rights acts, forced integration of schools, women’s suffrage, and probably many others).

Sure, I’d prefer to wait a few years if that waiting would bring along willing participation. If we think it would only bring a larger number on the calendar and a slightly worse atmospheric carbon surplus, I’m not as inclined towards patiently explaining this again.

Developing countries get to avoid the mistakes done by developed countries. For example, the amount car dependency in the US is unsustainable. Developing countries could build their cities with higher density, walk-able, and bike-able. It is cheaper, you get higher quality of life without such a high carbon footprint.
Developing countries go with the cheaper option. Is higher density cheaper? No not in low value real estate which is found in developing countries.
> Can we realistically take all that embodied energy that represents our current state and expect/demand that developing nations to pay the same price for carbon as we do, starting now?

It's a false dichotomy.

The US and others can share climate friendly technologies with developing countries on attractive (cheap) terms and at the same time compensate those that developed them out of tax coffers on market terms. Almost all climate related investment can be financed in the capital markets if World Bank, IMF provide guarantees to investors.

In exchange there'd be an expectation that these technologies are deployed on an accelerated timescale and in greater quantities by nations taking up this offer.

Do we have other choices, when the alternative is the Apocalypse?

And it's not like rest of the world doesn't benefit at all. The early adopters always pay more, the late adopters get to leapfrog.

I agree with this, but the gp prolly wanted to brimg up that developed countries will offer subsidies that develping ones cant, just like in agriculture. Imo developed countries need to enact it first, and without subsidies and then pressure developing countries, even though developing countries produce more carbon. From a pure logic perspective thats not the optimal solution, but i think thats the only remotely plausible one that will make a global carbon tax work
A lot of companies think this way, but it isn't necessarily true that excess carbon emissions aren't a financial pain point. Putting aside the implementation of carbon taxes, there are a lot of enterprises out there who could increase their productivity and reduce carbon emission as a side effect.

Agriculture in particular would fit in that category but any manufacturer emitting carbon is basically burning something that they could burn less of and save money.

So I don't think carbon emission reduction is necessarily a good way to market a company. Efficiency and cost savings that just happen to reduce emissions? That's where the focus should be.

Companies use fossil fuels because they have no choice, either because of chemistry or because of the doctrine of shareholder primacy, or because they lack access to credit.

There are no alternatives to carbon-intensive inputs in the offing for many industries. For all of them, efficiency measures require capital investment. Borrowing to install efficiency measures reduces next-quarter returns to stockholders. Companies with low profits have a hard time borrowing.

Yes, it may be a pain point, but it's also a coordination problem (or three).

The cases where efficiency provides a clear benefit? Few and small, on the global scale.

I don't agree with that. Any opportunity to make a 10% reduction in carbon emission that also saves you money should be pursued, and there should be a lot of them out there.
> Efficiency and cost savings that just happen to reduce emissions? That's where the focus should be.

Isn't that where the focus has already been for decades? Which has pretty definitely proven itself insufficient for curbing emissions at anywhere near the scales that we need?

Yes I would agree with that, but that doesn't mean we should stop trying. As an example, the NZ government is currently funding grants to reduce carbon emissions in livestock by 10%, which is an easily achievable target with current technology but the knowledge of how to do it isn't widespread.

A lot of this progress is unfortunately going to fall to governments and grants like this, which is probably where any carbon mitigation company needs to concentrate rather than venture capital. Once the claims about cost reduction can be proved, agriculture will follow soon enough.

Other industries will have similar grant schemes.

IMO that's exactly the argument why wee need a carbon tax. The status quo is that the only people who are really doing anything at all are some governments and the wokest part of the population. That's not nearly enough - we need all the companies and the whole population too. We don't just need to incentivize doing something else, but simultaneously disincentivize doing a lot of what we currently do, so everyone actually starts looking for alternatives. We can't just make emissions illegal without shutting down society, but we can (and should) make them painful.
The issue with a carbon tax is that it is unpopular for a plurality of voters. There are other types of policies that don't engender the same type of aversion. For example incentivizing banks to make carbon negative projects easier and cheaper to finance.