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.