26 Mar 2015

A Critique of Jerry Taylor’s “Conservative Case for a Carbon Tax”

Climate Change, Shameless Self-Promotion 31 Comments

My latest at IER, though the team helped me a lot with this one. An excerpt, and keep in mind that Taylor is the president of the new Niskanen Center:

Although he doesn’t come out and say it, Taylor’s argument here rests on the belief that the hodge-podge of energy interventions currently exist because the Left really wants to limit carbon dioxide emissions, but gosh darn it those stubborn conservative Republicans are taking the efficient “market solution” of a carbon tax off the table, leaving only direct regulation. Taylor needs such a belief for his argument to work. The only reason we could possibly expect the environmental Left to honor a carbon tax deal, is if they said, “Phew! Now that we have an adequate mechanism in place for bringing emissions down to their socially optimal level as the economists inform us, we can decimate the EPA and tell everybody working at the Department of Energy to get a real job.”

Does Taylor actually believe that? What would William Niskanen have to say about the prospects of getting rid of huge bureaucracies once their apparent mission had been accomplished?

31 Responses to “A Critique of Jerry Taylor’s “Conservative Case for a Carbon Tax””

  1. Josiah says:

    Your section on Rothbard has convinced me: the only libertarian solution is for courts to defend property rights and order the shut down of all carbon emitting activity.

    • Bala says:

      I doubt if ordering a shut down is a libertarian solution, especially if you are talking of enforcing that shutdown. I think filing for damages citing demonstrable property rights violation is more libertarian because it can be implemented by a system of competing PDA’s and insurance firms without initiating force, i.e., through withdrawal of services or raising of prices.

      So if it was snark, I get the feeling it was misplaced.

    • Major.Freedom says:

      Your habit of supporting for state “fixes” have convinced me.

      Everything you support, which when combined with other supporters of state “fixes” results in a bigger state, we should all trust you to also succeed in removing all those obsolete and wasteful departments that you spend totally equal time in researching and politicking for as you to in supporting ever newer state “fixes”.

      It’s like, why states always become more efficient and lower cost under such “progressive” influence.

      Silly us for not being so trusting of what you say Josiah. You’re right, we should mock Murphy and ignore the mess being made under your very nose that you are too lazy to think about.

  2. Mike M says:

    Rep. Barbara Lee (D-Calif.) proposed a resolution yesterday that global warming will force some women into prostitution in order to feed themselves. So yes by all means we need a big fat carbon tax now before the carbon dioxide apocalypse is upon us. Run for your lives!

    Reminds me of the old joke about the world ending and the New York Times headline reads:

    “World To End! Women and Minorities Affected Most”

    • Grane Peer says:

      She probably meant the carbon tax, not global warming.

      • Mike M says:

        No she meant “climate change”. Read the moronic resolution. Our founders would be so proud.

        • Grane Peer says:

          Yeah I know, the (D-Calif) gave it away. I should have done one of these 😉 but I didn’t want you to mistake it for flirting.

          • Mike M says:
            • Josiah says:

              Mike,

              Looks like you suffer from a “sarcasim sensitivity deficiency.”

              • Mike M says:

                My appreciation for the wit didn’t post as it looks blank.

                As for your note I offer

                He’ll be here all week, don’t forget to tip the waitstaff, try the veal

          • Mike M says:
  3. Tel says:

    I predict that in another 10 years only a handful of people will still believe this scam. It’s going through the final throws.

    • Harold says:

      It has proved difficult to get those who believe AGW is a scam to put their money where their mouths are. Galina Mashnich and Vladimir Bashkirtsev put up $10,000 in response to James Annan’s challenge. They bet that 2012-2017 would be cooler than 1998-2003. Average of the three years so far in the later period are 0.09°C warmer. The next three years will have to be much cooler than any year since 2000 for Annan to lose the bet, which does not look likely so far.

      Brian Schmidt and David Evans have agreed $6000 bet in global temperature increases, but it is too early to tell yet as the first comparison period is 5 year average centred on 2017 – we have no data yet. Richard Lindzen apparently wanted 50:1 odds that cooling would occur 20 years hence, even though he said is was as likely as not that the world would then be cooler.

      By and large, given the certainty with which people say it is a scam, there is little confidence to back up the assertions.

      Tel makes a fairly clear assertion – that only a handful of people would believe this scam in 10 years. Perhaps he will clarify exactly what he means by the scam, and how we could measure the belief in it.

      • guest says:

        The burden of proof is on catastrophic AGW believers, not deniers.

        Besides, Global Warmists claim that the rate of warming has and will remain positive (that’s what’s supposed to make it catastrophic) due to greenhouse gasses.

        So, as soon as the rate goes negative, after one trip around the sun, for any region on the planet (it’s not “Global” Warming if any region escapes the warming), then the Global Warming claim will be disproven.

        … Oh, wait. That already happened.

        • Josiah says:

          So, as soon as the rate goes negative, after one trip around the sun, for any region on the planet (it’s not “Global” Warming if any region escapes the warming), then the Global Warming claim will be disproven.

          If you don’t know anything about climatology, then sure.

          • guest says:

            “If you don’t know anything about climatology, then sure.”

            Unless knowing about climatology requires me to abandon some critical thinking skills, then my knowledge was sufficient.

            • Josiah says:

              Unless knowing about climatology requires me to abandon some critical thinking skills, then my knowledge was sufficient.

              If you think climatologists claim that no region will ever cool over the period of a year, then you are just misinformed. It’s not a matter of critical reasoning skills, just factual ignorance.

              • guest says:

                “If you think climatologists claim that no region will ever cool over the period of a year, then you are just misinformed.”

                Regardless of what they claim, this is what they MUST claim in order for them to be right about catastrophic AGW.

                The reason is that “global climate” (no such thing) data is comprised of regional weather data; Climate cannot cause “extreme weather events” because climate *is* weather data (and weather is a regional phenomenon). Weather data is necessarilly prior to climate data.

                One region’s weather can affect another region’s weather, but climate is an aggregate of weather data over time. Also, climate data show’s what weather trends *have been*, not what they should be (as if there is such a thing).

                So, if any region of the planet gets cooler after a year, then the warming isn’t global, and it has not been proven that man is capable of keeping the rate of heat increase positive for all regions.

                Of course, the Global Cooling/Warming/Climate Change scare (same scare in different forms) was never about averting a real crisis, but about averting the non-crisis of wealth inequality by imposing “sustainable development” (which causes poverty). It’s a Commie hoax.

        • Harold says:

          Whatever the burden of proof, why do those who firmly believe it is a scam not take advantage of their insight with a few wagers?

          The argument that one part of the world getting cold at one time refutes global warming is about as bad an argument as I have heard, and there have been some corkers in this area. Global warming is the gradual increase in average global temperature. Global warming does not mean everywhere will get warmer all the time. Global warming predicts more extreme weather – both hot and cold. I fear Poe’s law may have got me again, but it is impossible to know for sure.

          • Grane Peer says:

            If it gets hotter and colder then global warming predicts that average temp is warmer?

            • Harold says:

              I do not understand your question. The global average temperature is a single value at any one time. It cannot be warmer and colder at the same time. If one part of the world gets warmer and another part gets colder, then the average will depend on the magnitudes of those changes. If half the world warms by 1° and half cools by 1° then the average is zero. The global average temperature will fluctuate – it is a noisy signal. From one year to the next it is very difficult to say if the world will be warmer. The year on year fluctuations are much larger than the long term trend. Global warming says the global average is rising – there is an underlying trend that shows itself over decadal periods. Thus even though 1998 was a record breaking year and a super el-nino, several years since have been hotter without an el-nino.

  4. Josiah says:

    I predict that in another 10 years only a handful of people will still believe this scam. It’s going through the final throws.

    Would you like to put some money on it?

  5. Mike M says:

    Tel: I predict that in another 10 years only a handful of people, WITH AN IQ GREATER THAN A HOUSEPLANT will still believe this scam.

    There, I fixed it for you pal.

    • Josiah Neeley says:

      Mike,

      Do you think that most members of the AAAS have IQs greater than a houseplant?

      • Mike M says:

        Josiah

        Apparently you suffer from a sarcasim sensitivity deficiency as it was lost on you.

        As to any members of the AAAS that subscribe to global warming caused by humans, I don’t question their IQ. I do question their ability to engage in objective critical thinking and rational thought grounded in logic and reason

      • Grane Peer says:

        Baldrick, have you found a reliable way to test the IQ of houseplants?

  6. Josiah says:

    I think maybe you mean hyperbole, not sarcasm.

    I am willing to take your money too, btw, if you want to bet.

    • Mike M says:

      Ummmm ….. A houseplant is not capable of IQ, thus you can’t exaggerate it which is necessary for hyperbole. No it was just plain sarcasim.

      Disdain is all I have left for the man made global warming crowd

  7. Harold says:

    You say proposed policies are worse than doing nothing, but at first glance that appears wrong. You also say social cost of carbon using a reasonable long-term discount rate of 2.5% is estimated at $85 / tonne. We must surely compare costs and benefits of doing nothing with the proposed policy. Current carbon capture proposals impose a cost of $88-135 / tonne. At best, the cost is $3 more than the benefit. If we do nothing, we are suffering a cost of $85/tonne. So compared to doing nothing, we gain $82/tonne! It looks like it is better than doing nothing. At worst, benefits are $85/tonne, costs are $135 / tonne; giving net cost of $50/tonne. Still $35 better than doing nothing.

    “and tell everyone at the Dept of Energy to get a real job”
    From wiki: “The United States Department of Energy (DOE) is a Cabinet-level department of the United States Government concerned with the United States’ policies regarding energy and safety in handling nuclear material. Its responsibilities include the nation’s nuclear weapons program, nuclear reactor production for the United States Navy, energy conservation, energy-related research, radioactive waste disposal, and domestic energy production. It also directs research in genomics; the Human Genome Project originated in a DOE initiative.[2] DOE sponsors more research in the physical sciences than any other U. S. federal agency, the majority of which is conducted through its system of National Laboratories.”

    It doesn’t look like most of the jobs there would be redundant after a carbon tax.

    It is interesting to note that the direct investments by DOE has decreased from $10b in 1980 to $3.5b in 2011 (2011 dollars). In 1980, nearly all of that was spent on fossil fuels. In 2011, half was. So far from spending more now than it did, it spends much less. Tax related energy preference costs in 2011 were $2.6B for fossil fuels and $2.1B for renewables. Under current law, fossil fuel preferences are permanent, but renewable preferences will expire. The DOE has not been a gravy train for renewables.

    I think you do not disagree with Taylor too much. If we were to reduce carbon emissions, what would be the best way? From your writings, I think you would say that it would be a tax with the revenue off-set against capital tax. The headline could read “Murphy and Taylor agree on best way to reduce carbon emissions.”

    “Contrary to Taylor, I can think of one proposed carbon tax that is not revenue neutral—namely, the proposal from Adele Morris that Taylor endorsed five pages earlier in his paper”

    The debt reduction scenario is not revenue neutral, but the RFF paper (Carbone et al) you referred to recently concluded: “Finally, we present initial results for a somewhat different approach, which might be described as an early down payment on debt reduction… The results are quite striking: The CO2 tax is consistently better for economic efficiency in this down-payment case than it is in the revenue-neutral case. Indeed, if the CO2 tax down payment results in less need to increase capital taxes later, then the net cost of the CO2 tax is negative (even ignoring any environmental benefits). This shows the substantial efficiency gains from addressing the budget deficit sooner rather than later. ”

    In other words, with combined capital tax and debt reduction we are back with the win-win! Debt reduction is even better than a straight trade off of carbon tax with capital tax!

    • Bob Murphy says:

      Harold wrote:

      You say proposed policies are worse than doing nothing, but at first glance that appears wrong. You also say social cost of carbon using a reasonable long-term discount rate of 2.5% is estimated at $85 / tonne. We must surely compare costs and benefits of doing nothing with the proposed policy. Current carbon capture proposals impose a cost of $88-135 / tonne. At best, the cost is $3 more than the benefit. If we do nothing, we are suffering a cost of $85/tonne. So compared to doing nothing, we gain $82/tonne!

      Harold, not trying to be a jerk, but you don’t even know how to do a simple cost/benefit analysis, when even the terms are labeled for you. I hope in the future you will be less confident in asserting just how wrong professional economists are when they talk about the economics of climate change.

      Using your own numbers: If the government does “nothing” (disregarding all the stuff they’re currently doing to penalize emissions), then climate change damage of $85 on the margin for another ton of emissions. If they use carbon capture mandates then we avoid that $85 in climate change damage, but the economy suffers $88 in damage. $88 > $85.

      So yes, that $3 you got is relevant: It shows how much worse your policy is than the status quo. If the marginal cost is higher than the marginal benefit, you don’t do the action.

      • Harold says:

        Apologies. As an excuse I did say at first glance it appears wrong, not that you actually were wrong. Don’t know what I was thinking – I should have stopped at the cost is $3 more than the benefit since that is the whole point.

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