With no disrespect intended to you personally, this policy you propose makes no sense. Without putting words in your mouth, it looks to me like “two things I as a progressive like the idea of”, rather than a coherent economic policy.

Carbon taxes unquestionably fall hardest on the poor, as do consumption taxes generally. Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich.

With respect to UBI, the amount of revenue needed to sustain anything other than a token payment is orders of magnitude more than a carbon tax could ever hope to raise. It’s orders of magnitude more than could ever be raised by any realistic tax, actually, but that’s rather beside the point.

It’s fine to like UBI and it’s fine to like carbon taxes, but acting as though either of them would have a significant positive economic impact is completely unsupported by either theory or evidence, and there’s certainly no reason to link them as part of a single policy.

If we are going to have an academic argument – and we really should, if we aren't to just be blabbering off here – we need to see some numbers. We need to know how they are calculated. What's the carbon footprint of these Mexican laborers getting to work 3 to a small-cab truck, or on bicycle, or on BART in the wee morning? And have that compared to the guy in Hamptons with his giant 22-room house here, and other houses elsewhere.

Maybe the Mexican guy's taxes will be close to mine. More than is comfortable. That is fine. Carbon taxes don't have to be the only source of income for the government. But until we can see the actual curves, and the total output per segment, etc., we can't actually crunch out what an effective policy is, and we're writing off what's arguably necessary if we're to fix the problem, because we're probably going to have a hard time cutting back emissions until we associate an economic cost to them.

Doesn't that mean there will be less carbon tax revenue, because we've compelled companies to be more green?

Who pays for the UBI then?

Ideally the carbon tax should fund...nothing! A pure dividend, all monies repaid to everyone. Climate change requires long term thinking, which means it requires an enduring institution, like Social Security. It must not be entangled with the vagaries of the political moment.

You mean... UBI?

But yeah, sounds absolutely perfect, carbon tax plus ubi. Problem is that’s it, it sounds great.

I disagree strongly that the cost for UBI would be untenable in the general context.

For example nordic countries already have UBI in all but name due to all the support the society gives to those in need. We just don't call it UBI because it's split to several parts. And there is political opposition of course based on the strawman that UBI "would make people lazy". Maybe in some "other" cultures it would (I have no idea where, though), but not in the nordics. So no those in need are forced to go humbly from government desk to the next.

"It’s fine to like UBI .. but acting as though either of them would have a significant positive economic impact is completely unsupported by either theory or evidence"

Disagree again. Poverty reduces peoples life outcomes. Having a scheme that reduces generational poverty will improve educational results, thus increasing life time wages, thus increasing consumption and taxes.

" there’s certainly no reason to link them as part of a single policy."

Strongly agreed! UBI and carbon tax should have nothing to do with each other.

(Sorry, I cropped a bit your comment.)

that's basic "social welfare". it's not really universal, it's more for those who qualify. in certain countries you can even opt out of this safety net.

you mentioned "nordic countries", in reality only Finland tried a small UBI experiment that failed.

Finland tried a small UBI experiment that failed.

Failed on what measure? The people in the program reported less stress and more happiness.

The back of the numbers estimates make it sufficiently obvious that the claim that these costs are a miniscule fraction of the additional cost of a UBI for UBIers arguing otherwise to have never attempted to produced a comprehensive overview. Assessing whether people are looking for work is relatively expensive in terms of administrator time, for example. But the administration system ensures that only 2% of the working age public actually get that benefit, not 100% of the population (or even the 20-30% of working age people who aren't economically active but aren't actively looking for work either). There's a reason nobody's doing studies to understand whether you could cover [most of] the costs of paying a benefit to 100% of the population by removing some of the admin staff that check the eligibility of the 2% currently receiving it, and it's the same reason perpetual motion machines aren't tested.

The existence of eligibility criteria ensures that unemployment benefits are, in normal times, paid out to only a small fraction of the population, because only a small proportion of the population is unemployed and looking for work. Eligibility testing admin isn't cheap, but it certainly isn't more expensive just paying everyone. For comparison purposes, according to it's own stats the entire DWP admin bill is in the region of £6b, including all admin for all types of benefit to all ages of people and a typically overpriced new govt IT project. Even if UBI could get that down to zero which it clearly can't, it wouldn't pay for many people to receive a UBI.

And what failed there?

That the people who got UBI did improved on their general quality of life?

Because that is the general idea of UBI and that worked.

In Finland everybody below certain threshold of financial means qualifies. Addict or criminal, no matter what.

"in certain countries you can even opt out of this safety net."

Of course you can opt out. Enforcing a safety net against an individuals choosing would be against basic human rights.

From economic resourcing point of view it's more or less universal and everyone is included unless they really wish to get away from the system. Drug addict or not, criminal or not. Nobody is forced to take the dole, but from resourcing point of view there is no biological poverty (hunger or lack of housing). Nobody can force you to take this aid. And mental illnesses and addiction always create additional problem no high level scheme can likely address.

So it's not a 100% solution to everyone's woes but close to 90% I would say.

"you mentioned "nordic countries", in reality only Finland tried a small UBI experiment that failed."

You are looking this from a too narrow perspective. What I meant was that the social welfare system in Finalnd (my home country and other nordics) effectively already encompasses a UBI scheme. A defacto UBI scheme, in Finland for example, should replace most of existing social welfare schemes except for medical treatment and child allowances.

The basic thesis is this: the society already uses quite a lot of tax funds for social welfare schemes, some of which are administratively complex and expensive. People can have housing and food. Yet they mostly choose to work when they can.

So the typical counterpoints to UBI - it's too expensive and would make people lazy - don't really apply.

The only thing missing in the Finnish model left is to merge the various wellfare schemes into one UBI scheme.

The experiment you commment was not really. It was "the current social system plus some UBI cash". And I would claim it was a success. People said they felt better. This is a tremendous thing! Mental illness problems are becoming a huge issue. Making peope feel better actually helps to combat this, and may even support people enough that they can heal and be able to work again.

Healing from long depression can take years. The UBI experiment was far too short to actively track these individuals.

The social welfare in nordic countries is mostly not income (housing, free healthcare, ...) and is certainly not universal (you lose access to it once you have a job, or you have to pay for it through taxes, and some of the fees are waived for people with low income).

I rally love the social welfare of Sweden et al. but calling that "basically UBI" is missing the point.

"Carbon taxes unquestionably fall hardest on the poor, as do consumption taxes generally."

Yes, but rich people consume and release carbon at a much higher rate than poor people. As a result, rich people would pay into consumption taxes/carbon taxes much more than they would get back in a flat cash payment funded by such means.

If that poor person tax burden is lower than average (even if it's higher percentage of income) redistributive properties of "fee and dividend" scheme would actually lead to increased income.

Let's look at some of some sectors and who would spend more on it.

Energy: the richer you are the more you spend on heating and cooling (just due to bigger homes), some extra appliances, etc.

Food: the most greenhouse intensive type of food is probably meat[1]. The more price sensitive you are the more you will switch to alternatives: either poultry (25% as bad as beef) or more plants.

Transport: unclear: older cars may have worse fuel efficiency, but I would expect more travel with more money

[1] https://www.greeneatz.com/foods-carbon-footprint.html

So while it is a tax that benefits the poor, the poor are also paying a higher portion of their income to support it while the Jeff Bezoses of the world remain largely unaffected, can use this disparity to further widen the wealth gap and—for any carbon tax rate that the poorest half of the population could at all afford—continue eating their beef and heating their houses for an infinitesimally small portion of their income.

Meanwhile, the Jeff Bezoses of the world probably have the best means available to lower their carbon emissions. Their wealth could be used to provide public transportation and green energy developments, so I believe that there are more efficient ways to reduce carbon emissions than consumption proportional carbon taxation. Progressively factor income and profit into it instead, and lower other income and profit based taxes to simultaneously reward successful businesses/people with small carbon footprints and make those that benefit the most from poor people driving to and from work pay for it.

Jeff Bezos consumes and releases way more carbon than the average person. Private jets, multiple mansions, a fleet or cars, a private rocket company. He would pay way more into a VAT and carbon tax than a median American. If the UBI is large enough to notice, Jeff Bezos would definitely be affected by the means to fund it.

Meanwhile a person living near the poverty line would get more back than they had to pay in increased prices. On top of the net transfer, they now have a guaranteed safety net without means testing, application procedures, and waiting times that they would still get even if they have to quit a job due to a crappy boss. They can also move cities/states without the fear of loosing their benefits.

Yes, but again, I don't think his carbon footprint has increased proportionally with respect to his income, which if it holds true generally means that a carbon tax in proportion to consumption is regressive in terms of proportionality to income, in which case the poor would be disproportionately affected.

I don't know why you consider it a red herring. Possibly because you haven't understood the argument for why it can be considered a regressive tax (you certainly haven't acknowledged it), but in any other case, instead consider those only a little richer. For example, I can afford living in a large city, near essential services. I can afford living near my workplace. This means I can afford not having a car at all, and if I wanted to, I could afford an electric car. I can afford conscious consumption. In that sense I have better means to minimize my carbon footprint than someone that lives in a rural community, works several tens of miles away in the city because they can't afford to live near opportunities of employment, can't afford an electric car, can't afford to buy locally produced food etc.

The poor may be getting more back than Jeff Bezos (thank god) but the middle class will clearly be the immediately obvious winners in a scheme like this, funded disproportionately by the poor.

So if the poor get back more than they put in, how can they be disproportionately be funding it?

A carbon tax+UBi is not regressive, if the rich pay in more than they get out and the poor get back more than they put in. That is the red herring.

The break even point should occur somewhere in the upper middle class. If it was just a tax by it self you would be right. But the effective tax discount through the UBI makes it progressive.

Sure, the cost gets passed down, but you can only charge consumers so much. If it turns out that industry can't get costs down enough such that they make profit and consumers can afford it, then that is kind of the point of the tax. They need to "spend" less carbon or die out to businesses that can.

Poor people use less than the average amount of carbon, therefore they come out ahead. Rich people will pay more carbon tax than they get back in UBI.

I would question that very much and guess that overall the opposite is true. I don't however have any data, except national aggregates showing that there's a correlation between GDP and carbon emissions (even before accounting for the fact that arguably quite a lot of the emissions of less wealthy nations come from production of stuff for more wealthy nations). Do you have data?

Jeff Bezos, worth $150B, or the same worth of approx. 1M Americans, does not consume nor release carbon 1M times more than an average American.

Proportionally to his wealth, he's much less affected by a carbon tax.

For the same reason, someone below the average wealth and/or income is heavily affected by a carbon tax.

44.40 million metric tons [1]

Average American carbon footprint:

16 tons [2]

Now, I'm sure there's some inaccuracy here, and it's a bit of a stretch to say Bezos is personally responsible for all of Amazon's emissions, but he's pretty clearly in the same order of magnitude as having a million times the carbon emissions of the average American.

[1] https://d39w7f4ix9f5s9.cloudfront.net/26/7f/e1693ffc45db88d8...

[2] https://www.nature.org/en-us/get-involved/how-to-help/carbon....

the central point of your argument is flawed: the rich use orders of magnitude more carbon than the poor do.

further: even if it were true, the goal of a carbon tax is not to be progressive, but to disincentivize fossil fuel production, and to drive behavior toward less harmful alternatives.

This is the case for consumption taxes in general and carbon taxation in particular. This is not contradictory with the fact that the top income decile emits more per capita in absolute than the lowest one.

This is especially manifest for gasoline consumption: richer households consume significantly more of it, but it represents less than 2-3% of their income, while it can reach more than 10% for poorer households.

Indeed, this can and should be offset with a full redistribution of the tax proceeds - either flat or targeted at lower income households - to compensate the inherent regressivity of carbon taxation.

Source: my PhD was on the distributional consequences of carbon pricing.

a) poor people will end with more money than they paid

b) rich people will end with less money than they paid

c) no change in aggregate demand (although minor increase in velocity) so likely little additional inflation

So it still redistributed from rich to poor while disincentivizing carbon heavy processes.

This page (https://citizensclimatelobby.org/household-impact-study/) has a nice chart showing the fees and where they come from for an average household in each income quintile in the USA. The expected fees for each quintile (under a $15/ton carbon fee) are $173, $219, $252, $292, $381. On another page on the same site, you can find that the expected dividend (which just depends on the number of adults/children in the household) is $288.

If we take a flat percentage of the spending and give everyone the same fixed amount, poorer people will profit more than rich people.

Disagree totally on UBI. A rational UBI plan would recover 25%-50% of the UBI somehow. Income tax, a VAT or other mechanism. In addition, a UBI takes pressure and saves costs of other social programs. Directly reduce poverty. Have less poverty. Spend less on other poverty reduction programs. There is also a strong "stimulus" effect. UBI generates economic activity. That get taxed. Government revenue increases.

Considering the benefits, I think it's a no-brainer for countries with a strong enough economy to support it.

A lot of the benefits are unknown, but I suspect some of the biggest wins will be in some of the most intractable problem areas. A big one currently is the town/city dichotomy. Successful cities are very successful. High salaries. Career opportunities. Low unemployment. Unfortunately, much of that is eaten up by inflation local to these cities.

UBI is geo-agnostic income. The effects on cheap, lower income areas could be very profound. Bear in mind that this problem is a graveyard of failed policies. A lot has been tried. Little has worked. This has much better odds.

Fine. UBI of $1000/mo for 200 million people (2/3 of US population) costs over $2 trillion per year. Recover half of it and that’s still net $1 trillion per year. That’s more than 1/3 of the current federal budget. And there is no possible way that it replaces that much in existing spending.

That's not what I meant. It costs something. I think it's a cost that is worth it, and I think it's a cost that's feasible. Nothing is free.

If you want to get into the feasibility of a specific plan, take a look at Yang's proposal, or some other proposal that has been subjected to (and adapted by) technical criticism and analysis by multiple parties.

I'm not saying you'll reach the same conclusions as me, but even highly oppositional analysis don't come to vastly different estimates of net cost. $100bn ballpark differences, not a trillion.

Note that yang's proposal is for a 10% VAT. Most wealthy economies that have a vat, have a 15%-25% rate. The plan is pretty conservative on the taxation side. Also note that nearly all the analysis uses "orthodox macroeconomics," the mix of keynesianism and monetarism that seems to be falling apart as a consensus atm. A different take on money creation (almost any competing theory to monetarism) yields much better estimates on cost.

All that said, you have to consider UBI an economically transformative plan. If you don't think it is, then you probably won't conclude that it's worth it. Impossible is not a rational solution, IMO.

> Also note that nearly all the analysis uses "orthodox macroeconomics," the mix of keynesianism and monetarism that seems to be falling apart as a consensus atm.

Ah, the old “money printer go brr” theory. I wonder how much 1000 Zimbabwe dollars or 1000 Weimar marks or 1000 Venezuelan bolivars will actually buy you.

I would go as far and say that in the optimal case UBI would replace other social programs.

That's exactly why we would want to link it with a transfer like UBI. If UBI requires too much cashflow for your taste, we could always use an expansion of EITC instead. If tax incidence on unemployed is too worrisome, then we can start shifting the EITC more towards a regular NIT.

And with due respect for your best friend, the consensus is overwhelming among prominent economists that a carbon tax is fundamentally a good idea:

- http://www.igmchicago.org/surveys/carbon-tax/

- http://www.igmchicago.org/surveys/carbon-taxes-ii/

Just last week I read an article about the wealthiest 10% causing 50% of the emissions or some similar figure. It's well known that richer countries pollute huge amounts compared to developing ones, but within a country I think it was also shown and seems to make intuitive sense.

> Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich.

Since when are buses and trains more carbon intensive than cars and jets? Or bulk products versus luxury, perhaps even custom ones? Plus that poor people don't have the time to go on holiday in Fiji for two weeks every year (exceptionally so in the USA with no minimum leave).

what? how? if we're talking about the real poor, they typically don't even have a car, take public transportation, or even walk.

meanwhile the very wealthy have private jets or yachts and would be paying a significant carbon tax when using those. so I'm genuinely curious how you got to

> Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich.

To a fist approximation, the carbon tax you pay will be a fixed fraction of all the money you spend in daily life.

Poor people spend essentially all their income every month. The better off you are, the lower a fraction of your income you have to spend each month.

So a poor person will pay X% of their income, while a well-paid software professional might pay X% of 25% of her income.

That's regressive.

But a carbon fee & dividend, taken as a whole, is progressive, rather than regressive, because the poor receive a dividend in excess of the fee they pay, while the wealthy pay more fees but receive the same dividend.

Also, you are missing the target on the parent comments argument. The carbon tax wouldn't affect the poor as much because the UBI is there to compensate for it, that's kind of the whole point. There's nothing about being poor that forces you to emit more carbon when compared to other people, as far as I know.

ie., c. 4 Trillion USD / yr or c. 20% of GDP (20 T)

The total amount taxed in the US is already at that level (4T).

For the carbon tax to raise 20% of GDP, it would need to raise as much as all present taxes do (income, sales, etc.). Levying that much on consumption (ie., obtaining the present total amount of tax merely from products people buy) would raise prices catastrophically.

Total retail sales (https://www.statista.com/statistics/443495/total-us-retail-s...) is c. 6T.

Assuming that most of the 4T comes from taxing the activity represented by retail sales (a very safe bet), you need to get most of 4T from 6T. Ie., you're basically doubling the prices of retail goods -- including food.

1 US gallon = 3.8 litres

$7.84 per gallon = $2.06/€1.75 per litre

Russia €0.55/$0.65 per litre

China €0.80/$0.94

Spain €1.66/$1.95

Germany €1.29/$1.51

UK €1.21/$1.42

Netherlands €1.67/$1.96

I’m not sold on UBI but it does sound possible

edit: Imagine being downvoted for asking for a legitimate source on HN. Because rejecting UBI by making a simple multiplication is a sufficient explanation instead of researching all the secondary effects that a UBI would bring. Yeah, we've solved it there, I guess! Economists should go find some real jobs /s

Being poor means having less or no choices. Low income, no or negative capital. You practically have to go with the cheapest at the moment, even if it is more expensive in the long run.

So, a low upfront cost gasoline car Vs a more expensive electric car with potential lower TCO.

And that doesn't account for the fact that they have no discretionary spending. If everything becomes more expensive, the rich person can simply buy less.

I still think it's a sensible idea, simply because the currently socialised costs (co2 emissions & poverty related ones) become explicit.

And the reason why gasoline cars are as affordable as they are now is that the carbon tax is not here and cars are heavily subsidized in general. Carbon tax isn't even really a tax, it's more akin to removing a subsidy (you cannot pollute for free anymore and make someone else pay the costs)

It may cause people to not go digital but encourage black money, but if government i.e basically us make a decision that's(non digital translation) are not legal in country. What do you think about it?

I see black money, barter system creeping in but in bigger picture what do you think about it

This form of tax will take people with more spending to tax more, so people who live beyond their means will be taxed more and poor people will be taxed less.

And then you want to turn around and pay that money back to people as UBI? It'll be a slight redistribution of wealth from the wealthy to the poor and that's it. It won't fulfill the role of a UBI.

In an unideal world it will just be gamed to all hell instead. Also, good luck getting people to swallow a doubling of their tax bill even if you give it back.

I agree with your point that a carbon tax would not serve the purpose of a UBI. Now I'm gonna go off topic a bit and focus on carbon taxes.

I volunteer with Citizens Climate Lobby. The bill we're trying to get through the House of Representatives, H.R. 763 aka the Energy Innovation Act, is a carbon tax, but it's not like you imagine, I think. It taxes fossil fuels at the point of production, and therefore allows normal market mechanisms to adjust the prices of everything. No change to individual tax bills. Some things would get more expensive, but we would all get a check in the mail to offset. If you pollute more than average, the check wouldn't make up for the increased prices, but if you pollute less, you'd benefit. The change in prices will shift consumption away from the emissions-intensive goods and services, toward those that are greener.

The poor would disproportionately benefit from this. Not just financially -- carbon emissions and pollution that affects health are of course closely linked, and it's poor people who suffer the most from pollution, because they can't afford to move somewhere else to escape it.

It's not just about individual behavior -- companies would feel the same shift in incentives. Another way to think of the tax, from an economist's point of view, is that it's just correctly pricing a market externality.

The weird thing about a carbon tax like this is that a majority of Americans support it, but most of us don't think that it's a majority! It's already popular, we just have to convince Congress.

Or they may eat farm-to-table and shop at local farmers' markets. On the other side, step into any Wal-Mart or dollar store, and almost everything there was manufactured and shipped from Asian continent.

> It taxes fossil fuels at the point of production

How does it work with fossil fuels refined in Middle East and delivered to China?

> tend not to take public transport as much

The first thing that happened after California approved driver licenses for undocumented aliens is that used car sales surged and public transport dropped (LAMTA and Metrolink specifically). For a lot of lower-income customers buying the car was aspirational and signified the rite of passage. In their price segment they're not typically shopping EVs either.

How does it work with fossil fuels refined in Middle East and delivered to China?"

Because all goods and services are in a value chain.

A 'carbon tax' at the end point of consumption would be like a VAT. If carbon is used in the making of it, then it's X% tax.

That will definitely have an effect on wherever the carbon comes from.

A much, much easier and better form of carbon tax would not be a VAT, but just a tax on the fuel.

So basically just a fuel tax would effectively 'price the carbon in' to products.

If it's a huge tax, then shipping by air because way more expensive, you'll see goods shipped more by sea.

If shipping by sea is too expensive, you'll see goods made more locally.

So it's best to just capture the carbon right at the fuel, and then maybe have a tax for other industrial elements.

" buying the car was aspirational and signified the rite of passage"

It's also practical.

That gets tricky - how much carbon was used in manufacturing an iPhone, a toy truck or that shrimp of questionable origin from a fast food place?

Every participant in that chain has an incentive to under-report their emission to make the final price more palatable. The larger the manufacturing sector, the larger the incentive to under-report and cover up any issues at the national level.

That way local manufacturers aren’t being penalized, while foreign manufacturers can still be more competitive because of lower labour costs. Levelling the playing field.

We can't even do with money ie where it really matters. There are no real generally accepted accounting practices in large swaths of the world. And even then - things get tricky and ambiguous.

No - just tax the fuel and that's it. The fuel gets a harmonisation if it's taxed somewhere else and coming into the country and that's that.

I agree fuel taxes are best. But the issue remains - how will you know that the manufacturer is buying taxed fuel (not black-market, untaxed oil, or untaxed oil that China is importing from Venezuela with a bilateral agreement)? Inspections.

It would be complicated, but the West (US + EU + the rest) are big and powerful enough to make it happen.

The US/EU could feasibly make some kind of trade pact, whereby producers are required to indicate the carbon used in each product, but there is no feasible way to oversee it.

COVID masks are literally being made by people in 're-education jail' in China. Safety and operational standards in many parts of the world are simply non-existent.

This is my main concern. The reason the gillets jaune were protesting was due to taxes that had an outsized effect on low income and rural earners.

Manufacturing abroad is tricky. It takes some creativity to appropriately tax carbon emissions embodied in imported goods.

> Shipping accounts for up to 3% of global emissions and 10% of transport emissions – roughly the same as aviation

Shipping emissions equalling aviation emissions is surprisingly high, to me.

It's hard to interpret this as anything other than maliciousness.

Surprisingly low emissions per amount of cargo transported, yes. But the absolute amount of emissions is still huge and the amount of cargo keeps growing, so I don't think this measure is very relevant.

Cargo ships are better for the environment than shipping the same amount of goods from China to the US via trucks. But as the latter isn't possible anyway, this is not a very tangible benefit.

What would benefit the environment was shipping less goods.

Good point. Rich people who live environmentally sustainable lives are not the problem, in this context. I don't have a problem with them being rewarded.

The way I look at it is, right now, even if you want to reduce your emissions, it's really hard to know how to get the biggest bang for your buck. Should I get a new fuel-efficient car, or drive this one until it dies so as to avoid the emissions of manufacturing a new car? Should I swap out my gas stove for an electric one? Etc. Adding a carbon tax is almost like magic, in how it piggybacks on all the normal price optimizations we do every day. The prices will change to reflect the environmental cost, so you don't even have to try to change your behavior, you'll just adjust naturally.

> How does it work with fossil fuels refined in Middle East and delivered to China?

I should clarify, it taxes fossil fuels produced in America or imported into America. It doesn't solve the problem for the whole world -- if only it were that easy. But it does solve one half of the problem where the US and China can point at each other and claim that the other one should make the first move while the problem gets worse and worse. The USA isn't the biggest polluter per capita, nor the biggest in absolute terms, but it's pretty high up on both, and we've been contributing to the problem for a LONG time.

> The first thing that happened after California approved driver licenses for undocumented aliens is that used car sales surged and public transport dropped (LAMTA and Metrolink specifically). For a lot of lower-income customers buying the car was aspirational and signified the rite of passage. In their price segment they're not typically shopping EVs either.

So... all I get out of that is that people who are not allowed to drive drive less than people who are allowed to. I don't think that is evidence that poor people take public transport less than rich people.

Anyway, we can debate arbitrary points like this, but it's pretty clear from studies that emissions go up as income goes up. See: https://www.pnas.org/content/early/2020/07/14/1922205117 or https://www.lse.ac.uk/granthaminstitute/publication/income-i... That's what matters -- since poor people tend to contribute less in terms of emissions, they will benefit from a carbon tax and dividend, overall.

This is absolutely true, and it misses an important point: lowering emissions not your own is almost always more efficient.

A very tangible real world example.

I invested xxxxx € making my little house super energy efficient. Meanwhile, in Riga, Latvia, close friends had central city heating, but not even a valve for turning off radiators. They'd just open a window at -30°C. I could have bought thermostatic valves for the entire building and made ten times the ecological difference for a tenth of the price!

Even without a carbon tax, that alternative would have made a lot more economical and ecological sense for both myself and a lot of other people!

Everybody, except for people in the poorest and most isolated of developing nations, eats food from all over the world. Most African nations aside from the land locked sub Saharan nations have access to the global food market. Almost all of the worlds cashews come from Vietnam and almost all of the worlds Almonds come from California. Much of the fruit consumed in the US is grown outside the US, especially in South America. Likewise South America imports most of its locally consumed fruit from the US.

I am currently living in Kuwait where fresh fruit is available everyday. If not for a global food supply the only fresh fruit available here would be a single variety of date available during a single 6 week window. Even then those date trees are completely dependent on irrigation to survive.

Growing up in Texas perhaps the only food dependent upon local growers were pecans and watermelons.

Modern agriculture makes local production possible almost everywhere, it's just not as cheap as importing.

If Israel can get 90% of the way there with mostly minor annoyances like what you listed than most countries can probably get even higher (with the drawbacks of higher prices & the rare lack of availability of a non-crucial commodity).

Also keep in mind that the low cost of imports is partially because externalities like pollution are not being accounted for.

> If not for a global food supply the only fresh fruit available here would be a single variety of date available during a single 6 week window.

I guess dates are seriously underappreciated as a superfood...

In any case, there's probably some math / clamping functions you could use to incentivize the general population into doing their part, and that we don't end up in a perverse situation where carbon-burning is incentivized through fuel subsidies. And direct funding into battery recycling. Top-to-bottom this strikes me as a bunch of technology and math problems, which we can do.

A B737 burns about 750 gallons an hour for 200 passengers.

A Lear Jet 45 burns around 165 gallons an hour for upto 8 passengers.

If both planes are full the Lear Jet uses about 6 times as much fuel per person.

If the Lear Jet has 1 passenger and the 737 has 4, the Lear Jet is better.

A Lear Jet gets about 3mpg, with 8 passengers that's 24mpg, a similar fuel efficency to a Ford F150 with a single passenger.

> You could probably sell it just by noting that Larry Ellison burns 50x as much carbon as one of the Mexican laborers who trims the lawn and rides back home on his bike.

A big issue with CO2 per capita is that imports of CO2 emissions often don't count. If China uses 10 tons of CO2 to produce a dohicky which is then sold to a German consumer, that goes down as a China emission rather than a U.S emission.

Slight tangent: 2% globally[1], 3% domestically[2] is big?

[1] https://www.iata.org/en/programs/environment/climate-change/

[2] https://www.eesi.org/papers/view/fact-sheet-the-growth-in-gr...

The reason why a carbon tax works well to efficiently reduce carbon emissions is pretty much the same reason it can't work well to transfer wealth.

EDIT: Another way to understand the relationship is that because consumption increases faster per additional income dollar as you move down the income scale[1], any actual wealth transfer is likely to result in greater carbon emissions.

[1] This paper has some graphs: https://www.lse.ac.uk/granthaminstitute/wp-content/uploads/2...

Another thing to consider, the tax is on the producers of the fossil fuels, not the consumers. And those producers are increasingly competing in markets with non-carbon alternatives. So it is unlikely that they can pass the full cost onto consumers, more likely the tax will be eating into their profits. And what does show up on the consumer side will likely show up as mild inflation. In an economy with an effective UBI, wages are more likely to track inflation as the labor market will have more negotiating power.

FWIW, I have no idea if a carbon tax alone is enough to fund UBI (or negative income tax). But it is certainly one source of revenue that I would fully support tapping into.

Nitpicking: one transatlantic flight emits 2 tons of CO2 per passenger, a human emits 4 tons per year per capita on average.

Why can't airports be taxed based on the CO2 generated by planes landing at them? The airport can recover this from the airlines however it wants, including incentivizing lower polluting planes by charging lower landing fees.

Regardless, thanks for the references. I didn't know actual figures for air travel, it's a bit less than I thought.

So if I understand what you're saying, you're worried that domestic producers will focus more on exports, rather than selling their goods domestically? I think it would tend to shift things in that direction to some degree. Do you feel that that would negate a lot of the benefit of the bill? I feel like there's more to what you're saying that I haven't grokked.

Hopefully, if we import a lot of steal from a country, our border adjustment would be incentive enough for that country to adopt for themselves this very sensible fee & dividend system, after which each steel maker would actually be taxed the appropriate amount.

I think it may be the other way round. Rich people are able to buy locally sourced, sustainable grown groceries, whilst poor people have to settle for cheaper, intensively farmed ones. A good example would be meat. Meat of local, free range animals is way more expensive than meat of intensive animal farming. Same with cloth; poor people aren't able to choose between cheap or ethical/biological fair trade cloth. They have to choose that, which they can afford.

Some pages about forecasted household/economic impact: https://citizensclimatelobby.org/household-impact-study/

The actual text of the bill: https://www.congress.gov/bill/116th-congress/house-bill/763/...

(It's pretty short. If you're a native speaker of english I guess I would allocate 20-40 minutes?)

A signed letter by thousands of economists: https://clcouncil.org/economists-statement/

(in case you like appeals to authority)

What do you do for them?

And why can't HR 763 get any republican sponsors? I vaguely recall this policy seeing more republican support in previous session (though I could be misremembering).

What if they don't, are all exports going to be more expensive now in comparison with countries without this tax?

What if they claim to have a pollution tax but are lying at the state level?

It gets really complicated really fast.

If pollution is taxed at the source how do you calculate how much of a refund to give when exporting? Probably no one can even calculate that for you.

And not giving a refund would destroy exports which is an obvious problem.

A carbon tax is overwhelmingly considered to be the most efficient solution by economists for Econ101 reasons—pricing negative externalities (correcting a market failure is more efficient than doing nothing), and enabling competition and comparative advantage (more efficient than command-and-control policies).

The idea of taxing things we want less of is known as a Pigouvian tax, by the way—and it’s considered a no-brainer even by the most conservative economists (e.g. Mankiw).

> good luck getting people to swallow a doubling of their tax bill even if you give it back.

Not so! Public opinion on climate change has shifted dramatically in the last several years. This poll from last year (and from a top Republican pollster to boot) found that people support a carbon-tax-and-dividend policy 4-to-1. 75% of GOP voters (!) under age 40 support this type of policy. Read all of the results, they are remarkable. It’s a winner in the eyes of both economists and the public. https://www.clcouncil.org/media/Luntz-Carbon-Dividends-Polli...

Alternatively, carbon tariffs: https://www.niskanencenter.org/border-adjusting-imported-pro...

Also not going to happen

https://www.vox.com/energy-and-environment/2017/6/15/1579620...

Here are some facts from (https://openknowledge.worldbank.org/bitstream/handle/10986/3...):

* “As of April 1, 2019, 57 carbon pricing initiatives have been implemented, or are scheduled for implementation. This consists of 28 ETSs, spread across national and subnational jurisdictions, and 29 carbon taxes, primarily implemented on a national level. In total, as of 2019, national and 28 subnational jurisdictions are putting a price on carbon”

* “Of the 185 Parties that have submitted their Nationally Determined Contributions (NDCs) to the Paris Agreement, 96—representing 55 percent of global GHG emissions—have stated that they are planning or considering the use of carbon pricing as a tool to meet their commitments.”

Initiatives implemented or scheduled for implementation:

* National ETSs: Australia, Austria, Belgium, Bulgaria, China, Croatia, Cyprus, Czech Republic, Germany, Greece, Hungary, Italy, Kazakhstan, Lithuania, Luxembourg, Malta, the Netherlands, New Zealand, the Republic of Korea, Romania, and Slovakia.

* National carbon taxes: Argentina, Chile, Colombia, Japan, Mexico, Singapore, South Africa, and Ukraine. Both national ETSs and carbon taxes: Canada, Denmark, Estonia, Finland, France, Iceland, Ireland, Latvia, Liechtenstein, Norway, Poland, Portugal, Slovenia, Spain, Sweden, Switzerland, and the United Kingdom. Subnational ETSs: Beijing, California, Chongqing, Connecticut, Delaware, Fujian, Guangdong, Hubei, Maine, Maryland, Massachusetts, New Hampshire, New York, Nova Scotia, Québec, Rhode Island, Saitama, Saskatchewan, Shanghai, Shenzhen, Tianjin, Tokyo, Vermont, and Washington State.

* Subnational carbon tax: Prince Edward Island.

* Both subnational ETSs and carbon taxes: Alberta, British Columbia, Newfoundland and Labrador.

Note that an ETS (emissions trading scheme, aka cap-and-trade), is effectively equivalent to a carbon tax in terms of economic theory, though their implementations obviously differ.

Still, from the point of view of the consumer it’s “direct” (in ordinary language, not economese). As in: “concretely and transparently makes product X more expensive for me”.

With an upstream carbon tax, it’s unclear how it affects the prices of consumer goods since it has to filter through the entire supply chain first. It’s not like “this pack of gum produced 3.14 pounds of C02, so you—dear consumer—will be taxed an additional $0.42”. That would be a nightmare to administer.

The first is that the size of the carbon tax would be problematic. If you wanted to fund a UBI from e.g. VAT, or income tax, you might need a rate of something like 20%. If you wanted to fund the same sized UBI from a carbon tax, the rate would have to be thousands of percent, because burning carbon is not that huge a proportion of all economic activity. And then that would be very disruptive, because rather than some kind of gradual phase out of carbon, everyone would abandon it immediately to avoid the incredibly high tax.

Which is the second problem. Even if you used a less oppressive rate so that people would phase out carbon over some number of years rather than some number of weeks, that's eventually what would happen, and then your tax base dries up. It inherently can't be a long-term funding source because its purpose is to make carbon go away.

It is, however, a brilliant way to distribute the proceeds of a carbon tax. The "UBI" would then be a smaller amount (or require additional funding from general taxes), but it would effectively moot the entire economic impact of the tax (everyone is, on average, getting all the money back) while still creating a good incentive to be the first to stop burning carbon.

Rich people may not consume more in proportion to their wealth, but they do consume more in absolute terms. WRT carbon tax in particular the rich do consume substantiall more with plane rides, so the tax side would be more progressive than a plain VAT.

Also, they buy their kids cars.

> It'll be a slight redistribution of wealth from the wealthy to the poor and that's it. It won't fulfill the role of a UBI.

Maybe it's not enough but that doesn't make it a bad thing. One could combine a bunch of externalizes taxes (carbon, land, etc.) which together could create a better UBI. Or yes, throw in VAT Yang style too.

> In an unideal world it will just be gamed to all hell instead.

"gaming" is finding ways to maximally consume / Cabon impact. Yes, please game this as much as possible!

> Also, good luck getting people to swallow a doubling of their tax bill even if you give it back.

By definition only the people that consume 2 / punative-rate the average double there taxes. I'm sure these few rich people will raise a fit and have outside political power, but this applies to any progressive tax.

For perspective, US airlines' consumption of aviation fuel is 197 mln gallons a year.

US motorists' consumption of vehicle fuel is 390 mln gallons a day.

https://www.eia.gov/energyexplained/gasoline/use-of-gasoline...

If you go to this[1] page, it buckets all aviation into a category, and shows it accounts for 9.4% of US transportation energy consumption. Still significantly lower than the 54.5% that light-duty account for, but a substantially larger proportion than the gasoline page leads one to believe.

One thing to keep in mind for [1] is that it doesn't differentiate between consumer and commercial usage. And there are a lot of non-consumer vehicles that'd fall into it. A few examples likely to be large contributors to that category due to sheer volume and time on the road: last mile delivery vehicles, taxis, and police cruisers.

[1] https://www.eia.gov/energyexplained/use-of-energy/transporta...

It would probably just be easier to have a general carbon tax that gets paid back to people. Then separately you could have a UBI paid for by capital gains taxes or something along those lines.

But somebody else probably knows more about this.

It gets complicated as direct taxation just encourages moving the dirtiest link in the supply chain offshore.

E.g. manufacture tire in the US and be subject to a high emissions tax, manufacture them abroad and then import them into US - and you're golden.

And then map that to every stock, bond, loan and asset.

and whom you gonna trust for measuring/estimate the carbon produced in the complacent country?

"yes sir we have all these kind of filters and capture schemes"

preemptive reply to "but we're going to check and fine them": Panama Papers happened and nothing was done about them.

You of course need to ensure that any export rebates and import taxes are fair.

I suspect that as the carbon tax incidence of certain groups changes over time they (or others) will lobby for commensurate changes in UBI (or any other similar compensation schemes).

The result will be that both measures will be rendered ineffective.

Maybe a stupid question: But why is it given that a carbon tax is a consumption tax? Why don’t we tax the producers?

Like why not tax the airline companies, as opposed to the air tickets? The gas stations, as opposed to the drivers? etc.

There's some wiggle room (eg maybe some airlines get too much profits and with the right incentives you can get them closer to the market price), but generally speaking, taxes to corporation trickle down directly to consumers.

That's something people don't understand, because they visualize giant mega-corporations as extracting immense amounts of wealth from the poor and giving it to their rich CEOs, but in practice these corporations benefit from economies of scale, and their margins are fairly tight.

It is a gross oversimplification to ignore the perceived difference of an airline raising their price because of a tax, and a consumer having to have to pay an extra tax of their air tickets.

If we need to tax the rich more we tax the rich more. If we can’t control global warming poor people have much worse things than taxes coming to ruin their lives.

UBI is a very powerful tool for aligning the public’s incentives with collective action that may otherwise be intractable.

If tax money is redistributed back to the people why collect it? Obviously it's not evenly redistributed, hence the plunder.

Public incentives and interest don't exist to begin with. My personal interest is to not pay any tax I don't want to (I'd pay some for defense and justice), for example.

1. To counteract the UBI and withdraw money from the economy

2. To use fiscal policy to make certain externalities more expensive, thus making people choose to transition to their alternatives. Collective action problems can’t be solved otherwise.

Probably true, but probably not proportionally so. If you are 10x, 100x or 1000x as wealthy as me, you are probably not emitting 10x, 100x or 1000x more carbon than me. This makes an emission tax still disproportionate in some sense.

A wealthy person could also simply not invest in these businesses. They could invest in nothing at all.

That’s the whole point of a carbon tax — to make carbon unaffordable. While at first that will likely be “regressive” (since most consumption is carbon driven), over time it would lead to decoupling carbon from the supply chain through innovation.

It correlates with green house emissions, it has nothing to do with rich or poor.

FYI rich people emit more carbon and would in fact end up paying more.

It's nowhere near enough to fund a UBI that most people could live on without additional assistance, but that's no reason not to do it. It just means you need to fund your UBI with other sources of revenue too. Really, I think the GP used the wrong word when they called the dividend a "UBI".

And it _really_ is the best policy. Even if it did nothing to reduce emissions, it's a matter of justice. I won't tell you that you can't fly across the country every single weekend or emit a gigaton of carbon mining bitcoin but, if you do, you _really_ should reimburse me and my 2-year-old daughter for the harm you're doing to our futures. Likewise, when I heat my ridiculous suburban mansion to 80F through the New York winter, I'm harming you and your children, so I should reimburse you.

But it WILL have a great effect on emissions (if ever implemented). Probably more than any other policy we might enact.

Some of the comments around here complain about how regressive a carbon tax is. But in fact it is only regressive when not combined with the dividend. The price of a poor person's carbon footprint as a fraction of their income or wealth IS larger than that of a wealthier person. But the fact is that most poor and urban working class people's dividends will be greater than the carbon fee they pay, while people who have giant houses, travel by air a lot, etc will pay more in fees than they receive in dividends.

This page (https://citizensclimatelobby.org/household-impact-study/) has a nice chart showing the fees and where they come from for an average household in each income quintile in the USA. The expected fees for each quintile (under a $15/ton carbon fee) are $173, $219, $252, $292, $381. On another page on the same site, you can find that the expected dividend (which just depends on the number of adults/children in the household) is $288.

Lastly, this policy is currently a bill in the US House of Representatives (https://en.wikipedia.org/wiki/Energy_Innovation_and_Carbon_D...) and is currently "sponsored" (whatever that means) by 18% of the house. Sadly almost all democrats. I think the policy saw more republican support during the few years before the current administration, but I can't find the data too easily at this moment.

This bill and past ones like it include a schedule for the price of emissions to start low and increase over the next several decades. The tax itself is to be collected at mines, ports, and oil refineries, where fossil fuels first enter the economy. Regular people will only see it in the form of initially-very-small increases in the price of goods and services. And they'll get their dividend check or direct deposit every month. I don't think I know anyone who wouldn't love getting that check in the mail.

https://www.businessinsider.com/billionaires-got-565-billion...

what are your thoughts on this video?

Yachts, for example. Or private jets. Or even huge houses. We could tax the snot out of all of these. It would probably make them only more desirable status symbols, and thus stimulate the tax.

If it’s a $10k land value tax, they can construct an ADU on the property and not have their taxes go up. Seems like a good incentive structure to help the housing shortage.

I assume a land value tax would be many multiples of that for a highly desirable plot.

So granny has $900,000 in equity and is facing a $50,000/yr tax bill, so granny has 18 years to burn through it all.

So you'd likely see a $1M plot of land taxed at $100,000+ per year. It would make zero sense to sit on the empty plot or build a single family home. It would incentive someone to building a $10M building on it.

If they sell it won't that just mean they have to pay 800k in taxes on their 1m house and then have to find another house for $1m?

Some things don't really add up.

Ideally, IMO. Simply owning land is not a meaningful contribution to society. Rent from land ownership therefore disincentivizes meaningful contributions to society by creating reliable sources of income to those that don't contribute, disproportionately among the rich (who otherwise have the best means to contribute) because they disproportionately own land from which they can extract rent.

> If they sell it won't that just mean they have to pay 800k in taxes on their 1m house and then have to find another house for $1m?

Well, if land value was taxed on sale, grandma could just sit on the property until she died and not be affected by the policy at all. This is IMO not ideal because much of land value will then be lost until the next generation comes along. LVT should instead be collected on a regular basis.

Ideally, with single-tax LVT, land value is completely consumed by taxes. Any money grandma makes on the sale will be from the value of her own development and the excess value over land value the buyer expects.

That said, I believe that there are important criticisms that can be raised against Georgism. I believe that it would have to be accompanied by strict zoning laws to avoid displacing people and exploiting natural resources. I'm less concerned about grandma's little house than I am about a tax that makes things like fracking or deforestation to extract what makes the land valuable inevitable.

This is trivially solved with a home equity loan. (If this proposal were broadened, non-recourse home equity loans for purposes of paying this tax would need to be expanded.)

You're selling part of the upside. That's the point of the land value tax. Someone who owns a $1mm house from a $100,000 purchase didn't do $900,000 of productive work. Those gains are rents, in the economic sense, not income. Giving those up--or downsizing, as you suggest--isn't ridiculous and is the point of the land value tax.

I would rather we deflate house prices by making it unprofitable to own a home that you don't live in, and have a massive oversupply of new homes.

Whenever I see inflation adjusted prices, I feel like I'm getting robbed.

> You realize millionaires would never vote for that or the politicians that support it?

So? What percentage of the electorate consists of millionaires?

Or more realistically, for every grandma who owns a single-family home in manhattan, there are a million property speculators sitting on vacant lots.

Only calling out the problem with taking someone’s property tax and increasing it 5-10x.

The goal is to make the land unattractive unless you optimize the use of the land and build high density.

That's right and it should be that way. The value of the land is a function of the success of the local community - it shouldn't be captured by a private investor while workers continue to pay income taxes to service and improve that land.

But if your only objection is that elderly/disabled landowners shouldn't be pressured to pay taxes many states already have laws like that in place, eg https://www.state.nj.us/treasury/taxation/ptr/

I agree it sucks to force people out of their primary residence, even if they would be nicely compensated. But residential property should be more focused on the residential part than it is these days.

Otherwise your argument is "children and grandchildren of her everybody else pay $50,000 annual tax so she can keep living in this single family home and god forbid it were a multi-family or apartment building".

You are building equity - maybe your monthly profits are 0 early on, but your total value is increasing m/m. You can sell your rental property once your mortgage is paid off. If you back calculate your monthly profit is essentially ~ (selling price) / months owned.

Also, by all observation, the market is restricting the freedom of people to live under a roof in their own city.

If you believe that it does, you should look further into the LVT proposal.

Population is going up, and inflation is carefully managed to be persistently slightly positive, so you'll need to grow the nominal size of the UBI fund every year. But taxing carbon emissions will result in decreasing carbon emissions; in fact, this is the entire purpose of taxing it! So your revenue from taxes will go down as your outlays go up.

Philosophically, a universal basic income is intended to be a "forever" government program, like Social Security or Medicare. In contrast, we hope to bring our carbon emissions down dramatically and keep them down. Funding a forever program with a revenue source we hope goes away does not seem like good long-term planning to me.

Carbon tax needs to function globally. An UBI scheme will be - for the foreseeable future - a local policy enacted within the borders of a sovereign political entity.

The economic actions of every human being must somehow be encompassed in the carbon tax scheme.

UBI on the other hand, is about how local governments wish to split and spread the dole.

Were you to combine these two into one, it would mean massive capital flows from the rich countries to the poor. It did not work well in the scope of development aid. You could say development aid has only made third world poorer.

If you could give this "global UBI" to people personally it might work better - stimulating local markets and entrepreneurs. Because everybody likes to get rich, and once you have UBI-loaded consumers everywhere, suddenly it makes more sense to offer services and products that were economically untenable before.

So if you could in some non-dystopian scifi future give direct UBI payments to people personally, then maybe this would make sense. But while we are seemingly moving towards a world with unconstrained financial services for everyone, we are not there yet! And we need carbon tax yesterday!

How are we not there yet? Well, according to the Economist, for example only half of the people in Latin America have a bank account. We can imagine that we can leapfrog to a future where everyone has a bank account through mobile banking services, but - not there yet!

By the way, this is already a very standard analysis that economists do, and the Congressional Budget Office (CBO) is well-funded, non-partisan, and is probably the best institution in the world for doing this sort of work.

Obamacare, the Trump tax cuts, tweaks to Social Security, all these proposals get evaluated over a long time frame by the CBO and the results are public (for example https://www.cbo.gov/publication/45447).

Based on those numbers the tax per metric ton would be $105 ($15 + ($10 * 9)) in year 10.

Per capita emissions in the U.S. are about 16 metric tons and slowly declining.[2][3]

As everybody gets paid an equal amount, if consumption remained steady then in year 10 an average family of 4 would be paying 4 * 16 * $105 == $6720 in carbon taxes. Since the expected payout is $3500, they seem to be assuming carbon consumption would drop by 50% to ~8 metric tons.

Even if you tried to make this scheme more progressive, I can't see how you could bring in enough revenue to get anything close to even a mini-UBI, and especially not a UBI that could begin to replace existing government services. After subtracting higher prices from UBI payments, and considering the fundamentally regressive nature of the tax itself, you'd be lucky to get into 4-digit territory per year for an entire family of four unless you did something extreme like only paying the bottom quintile, but then you're effectively adding a hefty tax to the middle class. And at $105/ton consumption already drops by half, so there's no room for increasing the tax to increase revenue.

A carbon tax is one thing; pretending it can fund a UBI seems like a pipe dream.

[1] https://www.fresnobee.com/opinion/readers-opinion/article237...

[2] https://data.worldbank.org/indicator/EN.ATM.CO2E.PC?location...

[3] https://en.wikipedia.org/wiki/List_of_countries_by_carbon_di...

Why? Do you have some minimum dollar amount for mini-UBI? Why isn't $100/year mini-UBI? Would you be ok with a different term (micro-UBI?).

H.R. 763 seems like legislation I could get behind, but not because it's a UBI. It's not even a good wealth transfer of any kind. The payments are just a way to soften the blow of the tax, but the reality is that it would disproportionately impact those lower on the income scale, especially in climates that require significant A/C, or for those in rural areas spending a high proportion of income on automobile travel. And that's before considering issues like delayed remuneration, which also has a strongly regressive effect, even if payments were month-by-month.

A carbon tax is regressive, period. It's a well established fact. There's no way around that. See consumption graphs, here: https://www.lse.ac.uk/granthaminstitute/wp-content/uploads/2... The phrase by definition means it's a horribly inefficient mechanism for wealth transfer. The lower you go down the income scale, the more carbon emissions are created by each dollar spent. That means you pay more tax as a fraction of income the lower your income. And don't forget, there are a ton more poor people than rich. Ultra-wealthy can't help you because marginal carbon consumption basically flatlines at the top. Furthermore, consumption elasticities means it's easier to switch away from high-end carbon intensive goods and services (e.g. sushi shipped from Japan) than low-end goods and services (gasoline, heating), so a carbon tax has the effect of becoming even worse at wealth transfer the better it works to reduce emissions.

If we do institute a carbon tax, and I think we should, we'll need another mechanism to offset the additional burden imposed on the working and middle classes. For example, increasing income taxes.

I'm not saying it's a livable income. I don't think there's anything in in the definition of "income" that says a person needs to be able to live off it. It just means money that comes in. Anyway, the prefix mini should indicate that it's smaller than normal UBI.

>The payments are just a way to soften the blow of the tax, but the reality is that it would disproportionately impact those lower on the income scale, especially in climates that require significant A/C

Why? Wouldn't the poor person use less A/C than the rich person? The the poor person would overall profit from it.

>That means you pay more tax as a fraction of income the lower your income.

Sure, but paying the money back a fixed amount per person leads to an even more extreme fraction of income of money gained by the poor people. You've got a regressive tax (carbon tax), then a much more regressive tax (fixed dollar amount per person). Except the second one is a negative tax, so overall the 2 taxes together are progressive.

I also don't want to imply that the bill in question is primarily concerned with wealth redistribution or UBI. Its main objective is to allow the free market to find the most cost-effective solutions to emissions reductions.

We've had such a carbon fee and dividend program in Canada for 1.5 years now and yes, by and large poor people benefit more than rich people for the reasons outlined by Thorrez.

Was the French gas tax redistributed such that below x (where x > 50%) percentile consumers would come out ahead? The Canadian carbon dividend is the ideal example.

If you want the costs of products to "bake in" environmental costs, it needs to be done at the production stage. Producers need to either spend more money on reducing emissions or more money on remediating their environmental impact, or both, which raises product prices instead of very indirect tax. Trying to do it as a carbon tax doesn't offer producers any reason to change.

Let’s say I own a power plant and I sell electricity to the power company for $X/kilowatt-hour. It turns out the best way for me to make a profit is to burn natural gas in my power plant because I make enough money per kilowatt-hour to afford fuel, and the economics of natural gas outperform nuclear and renewables. I can use renewables during the day well enough, but I’m not gonna buy a ton of batteries to store solar power to sell overnight when I can just burn natural gas instead.

As soon as I have to pay a carbon tax for burning natural gas, my incentives change. Do I build a nuclear plant? Batteries? A carbon capture system to plug into my existing natural gas plant? Or do I keep paying the carbon tax? If the carbon tax is high enough, I will absolutely change my system to save money. The same is true if I own a trucking company: I might buy more fuel efficient trucks, which helps a little, or maybe I become an early adopter of electric trucks, which helps a lot.

Most importantly, those grandstanding nincompoops in DC don’t have to figure out how to reduce carbon emissions. They just put a price on it, and all of a sudden every cold-blooded, cost-cutting bean counter in the country starts doing it for them.

There are lots of ways to do things carbon-neutral these days. The technology exists, or is very close to existing, to maintain our exact standard of living except carbon neutral. There’s just no reason to do so in terms of cost-efficacy because the downsides of carbon emissions aren’t priced in. A carbon tax changes that and provides a very real return on investment for change.

From both an economic, environmental, and political impact perspective, it is significantly more efficient to put the burden of environmental action on producers of products rather than consumers. Don't given consumers an incentive to consume renewables and products made from them, give the producers who would otherwise use less environmentally friendly products an incentive to never create those products in the first place

It deals with the problem at the source, instead of indirectly.

Also none of this helps with a UBI. If we're taxing less responsible consumption or production, that money needs to be used to offset the environmental impacts the 1) are caused by that consumption/productions and 2) the environmental damage already done.

If you think we should have a UBI, that funding would need to come either from raising a purpose-built tax for it, or cutting spending in some way. In the US there are about 15,000,000 households in poverty. Giving them 500/week would cost about $410,000,000,000 per year. However many programs for the poor use income cutoffs between 130% to 200% of the poverty limit to be eligible for benefits. If those people were included in a UBI, the cost could raise to as high as $1 trillion/year, which would be a near doubling of the national budget. Even if carbon taxes were, irresponsibly, diverted from actual environmental remediation, I don't think they cover that bill.

It’s possible the tax isn’t high enough. And it’s also possible that for some applications, people will choose to simply pay the tax rather than change their energy source because there isn’t e.g. a more economical source of jet fuel yet. But having a tax will tip the cost-benefit balance for a lot of people, and if it doesn’t do enough, a higher tax might.

Also, it might turn out in this scenario that building nuclear plants or capturing my gas plant’s carbon emissions end up being cheaper than switching to renewables. The point, from a policy standpoint, is that the government doesn’t care to second-guess how carbon emissions are reduced so long as they are reduced.

In theory, a cap-and-trade system—in which the government simply mandates how much carbon can be pumped into the atmosphere and auctions off tradable permits to do so—would work as well. This is how a lot of emissions are currently regulated in the US. A carbon tax is just a different mechanism to apply the same market forces.

> It also is reactive, rather than proactive. Tax is levied only after environmental damage is done.

I would also favor a carbon tax credit for actually extracting and sequestering surplus carbon from the atmosphere for this reason.

However, I think you’re implicitly missing the whole point of the carbon tax. A carbon tax, like any Pigovian tax, is most successful when it collects the least revenue. The most cost-effective mitigation for climate change is to stop emitting so much carbon. The goal isn’t to make people pay the carbon tax; it’s to make people change their behavior so they don’t have to pay the carbon tax.

> Given "politics", it is also highly likely that the tax might never be used for environmental remediation.

That’s not the point. In fact—since carbon taxes behave like consumption taxes and overwhelmingly impact the poor—many people favor a revenue neutral carbon tax that returns every cent collected to taxpayers in the form of a universal tax credit.

> From both an economic, environmental, and political impact perspective, it is significantly more efficient to put the burden of environmental action on producers of products rather than consumers. Don't given consumers an incentive to consume renewables and products made from them, give the producers who would otherwise use less environmentally friendly products an incentive to never create those products in the first place

Yes, that’s exactly how a carbon tax works. It wouldn’t be paid directly by consumers, except for fairly obvious things like taxes on gasoline or propane.

When I’ve been saying “people”, remember that producers are people too. In fact, producers are often more governed by the sort of bean-counting, cost-minimizing behavior that carbon taxes are meant to influence in the first place.

> Also none of this helps with a UBI.

I agree, for reasons I’ve outlined elsewhere. I don’t really care since I see them as separate issues though.

i.e. polluting cars, red meat, airplane travel, etc... etc...

The problem with 'sales tax' is that are regressive. You are essentially taxing the millionaire and the homeless guy with the same rate.

Well the numbers being off by an order of magnitude is a good reason. The US tax revenue would have to double just to pay for anything that resembles UBI.

The carbon tax would have to be obscene to gather that amount of money (another $25k in taxes on a middle class US family). Even if people survive the initial shock, the rapid drop in demand for anything with a carbon tax now means that UBI has a budget shortfall and has to be cut.

It’s horrendously stupid to tie something we want to be dependable (UBI) to revenue from taxation on things we want to stop.

If instead of letting only these banks create money, if the new M0 money supply was distributed to ~300 million human people instead of ~4500 corporate people, there'd be plenty for basic income. It'd be universal basic income then instead of commercial bank basic income. And banks could just be banks and get by on their actual services instead of being money machines.

... and that's not even acknowledging what the NY Fed have begun doing since October of last year, 10s to 100s of billions a week swapped for worthless items from corporations who can't pay their bills in Reverse Repo operations: a shallow attempt to pretend it isn't just giving money away (https://apps.newyorkfed.org/en/markets/autorates/temp).

Even ignoring that tenuous claim, UBI is not a loan like the money that goes out via fractional reserve banking. The only way it would be similar is if every single entity who received a loan via a bank spent the money and declared bankruptcy.

Those extra productive ideas and businesses generally aren't. It's just that money begets money and then people confuse being wealthy with positive traits enabled by having money, like productivity.

It's interesting to see more and more rigorous analysis of UBI enter the discussion.

Tell me again how this works?

This can’t work for one very obvious reason:

The incentive is supposed to be to reduce carbon emissions, but a UBI funded by carbon emissions has the opposite incentive.

I certainly don’t want to put the idea of carbon neutrality and solving wealth inequality at odds, that doesn’t make any sense.

Sure, some will try to piss less, but I doubt you’d like to swim in it.

For me, that’s the rational excuse to not rely on carbon tax. Instead, make everybody use the toilet.

Yes, taxed CO2 will make things better, but I don't think it will make things good enough, as the CO2 stays in the atmosphere.

I feel like that requires some explanation. I’d say emissions are higher for cheap products, especially food.

Furthermore I really doubt that the carbon emissions of transportation dominate the carbon output of beef production, so the local vs imported beef cost seems irrelevant to the overall correlation of price and carbon output.

Aside from we haven't figured out how to actually pass a carbon tax despite, what, twenty years of trying. I used to be enamoured with the idea, but now I'm growing to believe it's a distraction and a waste of time & effort that just isn't going to happen in any meaningful timeframe.

There are other ways to skin this cat, and the ones we stand a prayer of implementing are the ones we need to focus on.

I also think most environmental problems can be solved with a tax on the product doing the damage, that pays for the cost of undoing the damage.

Just the opposite, it's hard to find any rationality for doing it at all.

If a 'carbon tax' is really just going towards reducing carbon, but not going into R&D for carbon reducing technologies, then it's probably just as efficient to simply limit carbon use in a variety of areas. Taking vast amounts of money from businesses is an indirect way to stimulate R&D on such things.

The simultaneous effect of severely limiting productivity, with a gigantic wealth transfer to those at the lower end of the economic spectrum, would be a 'double inflation whammy'.

A more extreme version would be: "No more cars or busses, and by the way, we're now going to grab your wealth and transfer it over to those people over there"

It's best to consider them as separate activities.

Solve the climate problem with effective technology and regulation, solve inequality by getting people into the workplace and by helping to more evenly distribute surpluses.

In particular, low interest rates are causing massive inequality in wealth due to home appreciation, which is absurd.

I feel like this conflates two issues, and politics should be conducted in all the clarity it can get. Also a carbon tax should probably be used to support the planet, e.g. sustainability projects.

https://en.m.wikipedia.org/wiki/Carbon_fee_and_dividend

(https://clcouncil.org/economists-statement/)

It's nowhere near enough to fund a UBI that most people could live on without additional assistance, but that's no reason not to do it. It just means you need to fund your UBI with other sources of revenue too.

And it _really_ is the best policy. Even if it did nothing to reduce emissions, it's a matter of justice. I won't tell you that you can't fly across the country every single weekend or emit a gigaton of carbon mining bitcoin but, if you do, you _really_ should reimburse me and my 2-year-old daughter for the harm you're doing to our futures. Likewise, when I heat my ridiculous suburban mansion to 80F through the New York winter, I'm harming you and your children, so I should reimburse you.

But it WILL have a great effect on emissions (if ever implemented). Probably more than any other policy we might enact.

Some of the comments around here complain about how regressive a carbon tax is. But in fact it is only regressive when not combined with the dividend. The price of a poor person's carbon footprint as a fraction of their income or wealth IS larger than that of a wealthier person. But the fact is that most poor and urban working class people's dividends will be greater than the carbon fee they pay, while people who have giant houses, travel by air a lot, etc will pay more in fees than they receive in dividends.

This page (https://citizensclimatelobby.org/household-impact-study/) has a nice chart showing the fees and where they come from for an average household in each income quintile in the USA. The expected fees for each quintile (under a $15/ton carbon fee) are $173, $219, $252, $292, $381. On another page on the same site, you can find that the expected dividend (which just depends on the number of adults/children in the household) is $288.

Lastly, this policy is currently a bill in the US House of Representatives (https://en.wikipedia.org/wiki/Energy_Innovation_and_Carbon_D...) and is currently "sponsored" (whatever that means) by 18% of the house. Sadly almost all democrats. I think the policy saw more republican support during the few years before the current administration, but I can't find the data too easily at this moment.

Unless you’re economically literate. Here’s a tip: if you unironically use the phrase “stimulate the economy”, your economic theory is garbage with zero predictive power.