Carbon Tax Best Way to Set Price of Carbon

In order to get on with major reductions in carbon dioxide emissions, within both a still functional biosphere and viable capitalistic system, the price of emitting carbon must be set — and quickly and accurately. There are two primary methods of doing so – the establishment of carbon markets [search] and the levying of carbon taxes [search]. The conservative newspaper Financial Times favors carbon taxes, as does EcoInternet within our Lincoln Plan carbon tax campaign, and today ran an interesting series of articles which essentially find a carbon tax to be easier and more effective in pricing carbon. A recent report likens the individual market in carbon credits to “Offsetting Indulgences for your Climate Sins“. The Financial Times was equally skeptical, as their investigation of carbon credit trading concludes: “Companies and individuals rushing to go green have been spending millions on 'carbon credit' projects that yield few if any environmental benefits.” They found some carbon reductions paid for in carbon offset schemes are never carried out, and others would have been made anyway. The European carbon market which has been in existence the longest and is most established has given out so many carbon credits that very little reductions in emissions were necessary by industry. EcoInternet supports a global carbon market that is well regulated, but not as a replacement for carbon taxes, which we are convinced will address the issue of pricing carbon more quickly, effectively and simply. We concur that “while short-term politics favour markets, taxes would be better in the long term because industry needs certainty for investments… A government committing to painful taxes signals the seriousness of its intentions…”

You may also like...

15 Responses

  1. Cranky Constitutionalist says:

    Here we have it:

    “In order to get on with major reductions in carbon dioxide emissions, within both a still functional biosphere and viable capitalistic system, the price of emitting carbon must be set — and quickly and accurately. There are two primary methods of doing so – the establishment of carbon markets [search] and the levying of carbon taxes [search]. “

    There it is, one of the biggest reasons behind the global warming alarmist position. First they create companies that sell “carbon offsets” then they create a demand… brilliant capitalism except for the part where the government mandates YOUR participation. Funny how it is the legislators mandating participation who are the major stockholders….

  2. dmhm8 says:

    Setting carbon tax accurately: I am just wondering how this could be achieved especially with automobiles. This obviously has to take into account the differences in fuel efficiencies of automobiles. The best method should consider the carbon dioxide that is emitted by an automobile. Basing carbon tax per gallon of gas consumed, as mentioned in one paper, sounds good but is there a mechanism in place to effect this on automobiles yet? This would be helpful in some countries that use engine size as factor in charging carbon tax.
    Globally, is there an effective body that monitors the implementation and continuity of the carbon taxing world wide? If people pay to their governments, have we considered the situation in fast declining economies – obviously they will not revise the taxes frequent enough to keep up with the international value. Should we all pay for the same

  3. Anonymous says:

    Lol, you talk about this as if it's a good idea. It's a terrible idea. In fact, you talk as if global warming is a fact. It's not, it's a THEORY. Did you know that through the 60's there was a GLOBAL COOLING THEORY too? As for carbon, keep pumping it into the air, plants need it, we're made out of it, and it is NOT the major greenhouse gas. That would be water vapor, so if you really want to help 'save' the earth, stop breathing.

  4. ewoc says:

    Anyone with a basic understanding of economics and rudimentary familiarity with public policy discussions over climate change knows that offsets and carbon taxes are two different animals.
    One (offsets) attempts to reduce or “zero out” the carbon impact of the activities of an individual, business, or other form of organization by funding projects unconnected to the original carbon generating activity. This is carried out through the private sector, and is a for profit activity, obviously.
    The other (carbon tax) would tax activities that produce carbon dioxide or other greenhouse gases. These taxes would not be levied by companies; they could only be levied by governments. And they would be completely political unpalatable unless they replaced, in whole or in part, other taxes (payroll taxes, for example). Econ 101 tells us that people would respond by modifying their behavior, just as they do with a range of other behaviors that are taxed. The allegation that carbon taxes have something to do with a specific individual making money from offest companies is a strawman argument. No surprise there, Cranky! But it was a nice try……if a bit polemical and simplistic.

  5. Dr. Glen Barry says:

    Good points ewoc. I just wanted to mention that when I speak of “carbon markets” I am speaking more broadly of the market for carbon credits which includes a wide range of buying and selling including buying by individuals as carbon offsets or may be purchased and sold by institutions such as utilities. All of this carbon offsetting and capping and trading of emission permits is one market in carbon credits with various degrees of efficacy and actual carbon reductions behind the credit. I would contend that smaller personal offsets have been less effective in actually finding activities to reduce carbon emissions that would not have happened in any regard or that work (lots of tree planting of marginal utility for carbon reductions), and that the larger institutional trading has been marred by an excess of carbon credits that were in the European case simply given away to utilities to start. That is, there was an over supply of credits and as such the European carbon market crashed. And then there is the outrage of CDM money – one source of carbon credits – being used to fund such activities as oil palm plantations for biofuels in Europe where rainforests once stood – clearly a carbon negative venture that the carbon market funds. So there have been a whole range of issues on the carbon market that while problematic I do not believe means it should be abandoned, but it is not working as it should or could be or is presented as doing currently. Hopefully the carbon market aspect of reducing emissions will learn from these mistakes as it expands, otherwise it will simply be another greenhwash to allow people to feel good and polluters to continue polluting for awhile more until real action is taken. The point of the original blog posting is that carbon taxes show a resolve and will undoubtedly work in reducing emissions, and are much less complicated albeit politically unpalatable. We need to present this carbon tax policy to the concerned public as a cure for global warming , while yes reduceingother taxes proportionately. I really see no other way than taxing carbon that climate change can be abated in the manageable range while capitalism fo the sort that is desireable and works for the average person remains dominant.

  6. Anonymous says:

    I don't understand how you guys can support something like this.

  7. Cranky Constitutionalist says:

    I did not say that carbon taxes would line a specific person's pocket (besides the already bloated federal budget) or that they were related to offsets in any way. What I said was that when the government mandates the purchase of carbon offsets, it will be lining the pockets of those who have already started their own offset companies… ie: Al Gore. Then guys like good old Al will will sell shares of his company via private sotck offerings to his buddies. Also, what you are refering to when you talk about taxes effecting behavior is called “Social Engineering”. Some try to spin the term by calling it “incentivising”.

  8. ewoc says:

    Something like what? Did anyone propose a specific tax regime with any details? No.
    Unless you are involved in the underground economy, you probably already pay a range of taxes – federal and state income tax, social security tax, state sales tax, capital gains tax on the sale of stocks or real estate, etc. ad nauseum. You may also pay cigarette and booze taxes. You will find folks who object to the whole idea of paying income tax in the first place, and there are those who would say “I don't know how you guys can support something like this” when it comes to the federal income tax. But some of them are in jail at the moment.
    I say the devil is in the details. That assumes you agree that global warming is a serious problem worthy of well crafted public policy solutions. If you don't, why are you wasting your time on this blog?

  9. ewoc says:

    I will bet ya Cranky: the govt will not mandate the purchase of carbon offsets. No one has even discussed that in all of the forums I attend and all the information I see on the subject. It would not make sense from any perspective – either efficiency or efficacy (we need to reduce carbon emissions, not offset them by planting trees). But if it makes you feel good to talk about it, have at it.
    The lastest British Arctic Survey reported several weeks ago their estimates that the Arctic may be ice free in summer within 13 years. I know, I know, they are all leftists in Al Gore's pockets; they are all on govt grants; why does it matter if the Arctic is ice free; climate changes anyway; everyone should just move to ?etc etc. Don't worry – just read Ayn Rand and it will be allright!
    FYI, the right engages in social engineering. It's called family values, imposed on the rest of us through laws.

  10. dbw says:

    As a Chicago MBA / ecnomics graduate – you will toss me out the window as a neoliberal. Carbon taxes are Pigovian (a Mankiw expression) which always can be achieved more efficiently by the market with properly designed policy. There is so much gaming that will go on with carbon taxes and offsets that I think this could be doomed. Incentives are another matter. If we are going to change the structure of the industrial based why not give some tax incentive to those who step up. Some form of carbon trading may work e.g., within regional zones having similar regulatory regimes.

  11. Aaron Baranoff says:

    According to one of the online carbon offset organizations my car uses the following

  12. xo.xo says:

    I TOTALLY AGREE WITH . dhdm8 .

  13. Big Brain says:

    Hey idiots…what uses Carbon Dioxide? Plants! what do plants do with Carbon Dioxide? create oxygen which last time I checked the rest of us need.
    Global warming is a Global HOAX! yes, the earth is going through a warming cycle just like it did when it went through a cooling cycle (remember, glaciers created the great lakes during this cooling period) the sun is responsible for 90% of this warming trend and no damn tax is going to stop the sun from over-heating the solar system. You all are being bam-boozled AGAIN. Use your head, what is a tax gonna do? I'll tell you, it's gonna go in the corrupt corporations and Govt. pockets that's where, hell, these idiots don't spend our current taxes correctly and you all trust these crooks with more of your money? this world is gonna get exactly what ignorant folks deserve…RAILROADED straight to tyranny. Dumba**es.

  14. bishop says:

    to the global warming skeptics, look at some hard data. did you ever trend data in school? did you go to school? maybe a tax won't do anything but pad a few pockets. but at least the owners of those pockets are somewhat ethical. i would rather my money go to them than thugs ie. contractors and the warmongers who bought them.
    in short support ethical products and services large and small.

  15. The European carbon market which has been in existence the longest and is most established has given out so many carbon credits that very little reductions in emissions were necessary by industry.

Leave a Reply

Your email address will not be published.