28
Oct
2014
Focus on “Co-Benefits” Shows Flaw in Carbon Tax Case
My latest at IER. An excerpt:
First of all, consider the title of the new IMF study: “How Much Carbon Pricing is in Countries’ Own Interests? The Critical Role of Co-Benefits.”
I hope the reader’s Spidey Sense is tingling at this point. The IMF study’s entireraison d’étre is that without co-benefits—which we must remember, is a concept enjoying relatively recent attention from the carbon tax crowd—a large carbon tax is not in a given country’s own interest.
I.e., carbon tax is treason.
And, it is the Keynesian money multiplier which makes tax and spend beneficial for a country. Without the multiplier, tax and spend is rightly seen as a loser.
Of course, the multiplier is a convenient fiction.
The money multiplier and the Keynesian fiscal multiplier are unrelated concepts. The money multiplier says nothing about deficit spending or any kind of spending, for that matter. It’s just a theoretical/legal limit on the ratio of commercial bank money to central bank money, and/or the actual ratio at any given time. It having any particular value does not imply anything about the effectiveness of deficit spending.
“climate change—which remember, was itself the new term to replace “global warming”” There is no need to repeat groundless myths – it weakens your position. Climate change and global warming are different – climate change is caused by global warming. However, in non-technical discourse the terms are almost synonymous. Both terms have been used for decades – for example “The Carbon Dioxide Theory of Climatic Change” published in 1956. Both terms are and have been widely used for many decades.
It seems clear that a unilateral cut will not be in a countries best interest if other countries do not follow suit. It is a classic prisoner’s dilemma situation. The best outcome is obtained if everyone cooperates, but the outcome for each country is better if they defect. Perhaps what is needed is for everyone to get together and hire a whipmaster?
I read the IMF study in question. I hope this is not the only thing Bob writes about it, as it seems fairly compelling, and this post doesn’t really address the core of its conclusions.
climate change—which remember, was itself the new term to replace “global warming”
Ah, yes. Who can forget when the UN’s Intergovernmental Panel on Global Warming changed its name to the Intergovernmental Panel on Climate Change?
You guys can play dumb if you want. You know perfectly well the public policy discussion has switched terms, coincidentally when temperatures stopped rising.
Bob,
Ironically, a lot of liberals think the switch from “global warming” to “climate change” was a sneaky conservative trick to make the phenomenon sound less threatening (they typically cite a memo by Frank Luntz where he argues along these lines).
The reality is that people have been using both terms since the beginning. That’s why it’s called the IPCC, and not the IPGW.
Josiah,
The point is that the same people have gone from using global warming all the time, to using climate change once temperatures stopped rising.
If temperatures had kept increasing, we would still be hearing global warming all the time, while the term climate change would be used much less.
Yes, both terms have been used the whole time, but this is the kind of crap we’re talking about:
http://www.google.com/trends/explore#q=Global%20Warming%2C%20Climate%20Change&cmpt=q
Bob, is it really accurate to say temperatures stopped rising? I thought they only look like they stopped rising if you measure the change from 1998, which was an unusually hot year.
Keshav,
If we’re talking about surface temperatures, then it’s fair to say that they stopped rising somewhere around 2002.