It's an odd leap from electricity prices to carbon tax to basic income. And with free market as a cherry on top! There are better, more effective ideas that are effectively ignored rather than disrupting the economic and financial systems in place and letting "free market sort it out" as if it were ever possible in such a scenario. For one such example, immediately ban or heavily tax the sale of massively polluting vehicles such as SUVs, that as a category pollute as much as UK and Netherlands combined [0], making road circulation safer in the process too, and riding the wave of EV getting more adoption. But this won't happen, since it's a successful industry with a strong lobby behind it. And as per usual, concrete is the major culprit of CO2 emissions. That's where one could look for opportunities (such as reprocessing plants where emissions are redirected) and stricter regulations. Don't increase prices like so many in Germany feel would be the right thing to do, it only impacts those who can't afford better housing (insulation, heating efficiency).

0. https://www.theguardian.com/us-news/2020/sep/01/suv-conquere...

> It's an odd leap from electricity prices to carbon tax to basic income. . . Don't increase prices like so many in Germany feel would be the right thing to do, it only impacts those who can't afford better housing

The "odd leap" from carbon tax to basic income is exactly to address this issue of the cost to the less well-off. In a tremendously simpler, more effective, and freer way than detailed bans of particular uses of energy which also have successful industries with strong lobbies behind them.

I'm all in to ban SUV. But by doing that you're gonna threaten the masculinity and sense of identity of a large set of people. Intelligent politicians will use this to drift the debate into elite green progressists vs working class who just want a piece of the cake. To not get into this minefield lets not forget that corporations acount for a very large part of energy use and that perhaps useless transport of useless goods should be restricted, also restricting putting energy-intensive electronics in gadgets that don't need them.. There are tons of measures that can target corporations that will be easier to control, have more measurable and predictable outcomes and won't contribute to desintegrate the social cohesion and will stop the working class from getting eaten up by the far right.

It's not an odd leap at all. The core problem is that we don't pay for the externalities of fossil fuels. If we fix that, then the next question is what to do with the money, and a simple, efficient, and equitable answer is to return it to the population, equal amount per person. That's why carbon fee-and-dividend is a popular proposal with the support of a lot of economists.

why ban SUVs instead of raising the cost to operate them?

The article sayeth:

> ...as part of emergency measures to ease a crippling energy crisis.

They aren't identifying "electricity is too cheap" as the problem. And it doesn't sound like the climate crisis is on their radar right now.

Increasing the energy prices isn’t a solution. It’d affect to poor disproportionally, while also being greatly destabilizing for society at large. It’s basically a flat tax for heating your home.

Norway recently experienced its highest energy prices ever, in large part because of tighter coupling with the European market. Some people got bills 10x of previous years. Using less energy simply isn’t an option here, otherwise you freeze to death, or damage your home. It led to a massive political outcry that was easily exploitable by populists.

You can’t go back on decades of energy policy in that short a time frame, and you can’t do it without easing the tax burden somewhere else. The current government in Norway is polling extremely low. So low they probably won’t recover by the next election in 3 years. And they didn’t even cause the spike in energy prices here. I dread to imagine what would happen if a government intentionally hiked the enrgy prices just to stop bitcoin miners…

That's why poor (and for simplicity everybody) should be subsidized to counteract the effect of taxing carbon.

Then this tax will only influence economy making ways of doing things that don't emit carbon insanely competitive.

> Pricing electricity so low that bitcoin mining is profitable during peak hours is absurd.

Electricity is not just a discretionary commodity, it serves an essential need enabling our modern society. It makes no sense to increase electricity prices and hike up inflation for the common person in an effort to dissuade crypto miners. If we really wanted to go that way, a better solution IMO is to introduce two electricity rates, one for things that perform useful services (by broad positive impact to society) and one other for PoW crypto mining.

It's not to dissuade bitcoin mining. It's to move us away from emitting carbon as fast as possible. Crypto is just sideshow.

Carbon emission are not priced according to their future impact. We need to price it correctly. And it's better to overcorrect rhan undercorrect. The only downside is that this pricing will propagate into the economy (as it should). When it reaches people that can no longer afford to live we can prevent them from dying by giving them money we got from tax.

>>> We should tax the hell out of every ounce of carbon emitted and use money from this tax to pay basic income so that people are able to live with increased prices. Free market will sort the rest out

Sarcasm?

You give everyone equal amounts of co2 tokens. CO2 pollution costs tokens. You have now democratized CO2 pollution. Every single person gets to decide how much pollution they want in the world. Replace pollution tokens with dollars and taxes and you have the same democratic system.

I don't see why you think this is sarcasm. Sounds very reasonable to me.

I also don’t think it is sarcasm, but I don’t think it is reasonable.

> We should tax the hell out of every ounce of carbon emitted and use money from this tax to pay basic income so that people are able to live with increased prices.

So far so good.

> Free market will sort the rest out

Under free market, the basic income will cause a further price increase, rendering the effort moot.

Subsidizing energy, as Kosovo and Kazakhstan have been doing (resulting in the same consequences on coin mining and crackdown), is necessary, and thus so are the consequences.

No it doesn’t. Example, imagine you currently have a energy bill of $1000p.a. With the proposal above, we’ll move you to a $3000p.a. bill with CO2 taxes. And, we’ll give you $2000p.a. to compensate for the increased energy bill.

Would you really just keep paying more for energy because you have that? The payback period on solar panels just went *0.3, batteries just became a affordable option for day/night balancing, many alternative investments in renewable energy just became profitable.

Many people will use that opportunity to get ahead financially. I think that’s what GP meant with “the free market will sort out the rest”

I’m not exactly sure we are disagreeing.

> we’ll give you $2000p.a. to compensate for the increased energy bill. Would you really just keep paying more for energy because you have that?

In the suggested policy I was replying to, the $2k would decrease if I (and many others) switched to renewable. That loss would muddy the gains, discouraging the switch. Besides, the methods you are describing tend to have high upfront costs.

Hence, the need for subsidizing instead, something very close, but without a negative-feedback-loop incentive.

To be fair, while that is a reasonable policy (and why so many countries enact it), I would favor requiring each company to be individually carbon-neutral, with an exponential penalty. As a result, it is not a tax which could weaken the vulnerable, and yet it forces companies to choose between reducing their negative externalities, and bankruptcy.

But computing carbon-neutrality is hard.

Maybe not that far apart. The challenge with subsidies is the administration and making sure you exhaustively subsidize different options. It’s also infeasible for smaller investments such as radiator foil.

My underlying assumption is that you would reduce the 2k compensation in my example. So the incentive for any saving remains.

On duration: I installed solar for 0.80€ (ex vat) per Wp (which generates about 1kWh p.a.). In NL electricity rates recently spiked to 0.45 euro per kWh. Based on that, payback time is now less than 2 years (that includes everything, panels, inverter and installation, etc.)

but I think we agree the challenge is to find a way to create a good market incentive for consumers and industry to reduce their externalities/CO2.

Well it is either sarcasm or ignorance to say that Taxes, UBI and a Free Market could ever exist in the same economy or be part any economic device.

I'm thinking probably ignorance as the comment also thinks that raising the costs of energy used to produce BTC will somehow make it less profitable to mine when in fact it will simply increase commodity value and most likely drive more interest and increase speculation thus consuming more energy.

How will taxes improve the environment? They will give politicians more power to oppress, snd since governments are the largest polluters in the world the environment will get worse.

Which they will use as an excuse for more taxes.

See the pattern?

——

This comment has two further comments, both of which ask questions. But since this comment is heavily downvoted, I cannot reply to the replies to answer the questions.

In short: no such thing as “negative externalities”, thats just make-believe to whitewash oppression and poverty creation. Taxes are not a market signal by definition. Its interesting how blithely people accept using violence to force others to comply with their wishes.

If you really wanted to reduce CO2 you would support safe clean nuclear. But CO2 isnt causing warming- its historically low, earth started at %100 CO2. Plants evolved to need levels 5 times higher than present. Increased CO2 would improve the environment. We had an ICE AGE at 10 times higher CO2 then now. ETC.

Unfortunately Government propaganda has replace science education.

Taxes infom the market about externalities.

Taxing carbon emission significantly sends price signal to every actor in the market that uses products and services that have carbon emission upstream to maybe reduce usage of such products and services or switch to another.

Governments have a role in taxing negative externalities. What alternative do libertarians like you have? Forgetting whether or not you believe in climate change, if it does indeed exist as a possibility, what would libertarians like you do about it?

Your comment is blatant virtue signalling -- it's taking a moral high ground without providing any alternatives.

[edit] At least you've provided an alternative now: nuclear energy. Then again, you only did it when pushed to.

It's not a free market if we tax it to distort it.

> It's not a free market if we tax it to distort it.

Arguable false.

The freest markets price in all externalities so that the user pays the whole costs and doesn't outsource the externalities to others.

Taxing is one way to help pass on these externalities.

Arguably this makes it a more free market as taxes help make people pay closer to their actual costs and takes part of the burden off those who don't

It’s not a free market if some costs are externalized to society instead of priced in. Like pollution.

There is absolutely no way to set a fair price for something like that. We have no way of knowing the cost, if there is any at all.

Sure there is. The cost of emitting a ton of carbon should ideally be the cost of capturing a ton of carbon. Managed in a free market kind of way.

Same way you pay i.e. for electricity.

If you can get somebody to capture it for 1$, well, good for you. If there are only buyers for -10000$, then that's your problem.

We're not there yet as far as carbon capture goes, but I do think we'll get there.

Which is exactly what I said. We don't know how much it will cost to capture that carbon, so we can't set a price, so it's unfair to set any price.

What if we figure out something good to do with that carbon, and capturing it becomes profitable? Should we return all that money to those it was stolen from?

> What if we figure out something good to do with that carbon, and capturing it becomes profitable? Should we return all that money to those it was stolen from?

Well consider this. We have these things called taxes. Everyone pays them.

Sometimes we change the tax rate.

Once we change the tax rate we don't go back years and give people refunds for the new rates.

Nor do we retroactively go back and charge people more if we raise their tax rates.

Carbon taxes would, perhaps not surprisingly, work the same. At the moment we consider adding carbon to the environment to be a negative event and well tax is as such.

If at some point in the future we decide we really want more carbon in the atmosphere then we can incentivize people to do that, but we generally don't go back and retroactively give people refunds for their old taxes:)

Currently we deem it not desirable, so it's alright to me if we price it very high, thus stimulating investment in this area to bring the cost down or even make it profitable.

We know the price with current methods though. It is prohibitively expensive, so no one will agree with it.

And for the second question: no. Why would we? You pay for the pollution you emit. If a company agree to provide you the means for free, or even pay you to emit this pollution, all the power to you. What happen in the present should have no impact on current taxes.

By pricing in the externalities you turn it into a market. Before that, it was free riding (rent seeking).