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.
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.