The delivery fee being artificially low was a political decision to subsidize utility prices for the poor. Every single utility has step function of pricing for usage fees that works to capture the cost of providing the infrastructure. This is why net metering never made sense to utilities and why they were trying to reject it despite states and politicians seeking to force it on them. The utilities who did go all-in on net metering willingly did so at the generator rates which pissed off a ton of homeowners but that was actually a fair thing to do as that reflected the real price of the energy being provided.

This is why all subsidies should be in the form of cash. Give poor people cash rather than obfuscate prices, which then results in hampering of market mechanisms and results in inefficient allocation of resources.

Aside from the obvious problem (which poor people) it is a very interesting idea to remove all subsidies (explicit and implicit). Terrifying but interesting

The obvious problem is solved by making it universal. You do not need to choose which poor people, just make it everyone, and then collect a marginal income tax. Although, I would prefer marginal sales taxes, but that seems technically impossible with current technology.

The reason why it is not done is because it would lay bare all the inequities in the system, as well as require higher taxes due to not being able to hide the inequities in various forms of price discrimination/segmentation.

Keeping prices obfuscated means costs can be distributed across the population in an unfair manner / benefits reaped in an unfair manner, as well as ability to punt costs into the future.

>>> The reason why it is not done is because it would lay bare all the inequities in the system,

Is that a common justification for UBI? I have not heard it but it would be a big reasons for me to support it - any reading you know of?

It is a personal conjecture. Every time I come across price obfuscation, or not doing the straight forward thing, it is because the seller does not want the transaction to be as transparent as possible.

Tax deductions, credits, student loans, subsidized mortgages, taxpayer funded pensions, Medicaid reimbursing differently (lower) than Medicare reimbursing differently than Tricare, and so on and so forth.

It is always a political decision to reduce total costs, or drive the benefit to certain populations, or use liberal assumptions to present future costs as less than they really are and so on and so forth.

If we want people to have a house, give them money to buy a house. Or a house. Same with education, healthcare, everything. The big problem with this is cash has to be accounted for today, transparently, and cleanly. There is no option to muddy the waters.

I think I heartily agree.

Openness is a great default, and while I will say a lot of things are more complicated than I know, this will at least drive the discussion into the open.

IIRR Fannie Mae originally had explicit anti-Black lending policies. I do wonder how that would have been dealt with in a more open environment.

Even in a single example such as your electric bill, this is absolutely impossible (or, maybe with a team of statisticians and accountants working on each customer's bill each month, and of course their associated costs).

The fact is, the utility does not know how much money you cost them in a given month and it's impossible to say. Some of your electricity is being generated from a plant planned and built 40+ years ago, long since paid for. Is that electricity sold at the cost of fuel and maintenance? Electricity generated from a new plant then has a corresponding capital cost component but how's it portioned out at the customer level? What if they had to go change your transformer 20 years ago but your neighbor's still on their old 50-year-old transformer next door?

Unworkable.

> The fact is, the utility does not know how much money you cost them in a given month and it's impossible to say. Some of your electricity is being generated from a plant planned and built 40+ years ago, long since paid for.

There are generators independent from utilities, yet they figured the pricing out somehow.

The pricing is sometimes based on negotiations which consider the cost of alternative sources of power, the operating cost of the plants, and refurbishments and maintenance it will need over the course of the contract term.

The implicit assumption behind such subsidies is that the poor would spend the cash benefit frivolously (booze, entertainment etc.)

Then there should be utility stamps in the way food stamps/SNAP cards exist, not artificially skewing prices.

"carbon tax" is trouble to enact because you can't expect to rally support for something with the word tax in its name

Then people complain about where will that tax money go. It doesn't matter. The government could burn all the carbon tax money collected (& in fact, this would help against inflation). The purpose is to fix incentives, not find funding

Not only is the "tax" word problematic, but if you call it "carbon pricing" that irks the people who are reflexively anti-market. And no matter what you call it, the sanctimonious environmentalists will fight it because it minimizes the need for heroic personal sacrifice with respect to preserving the environment (frankly, these personal sacrifices probably aren't significant in the first place--the bulk of pollution is industry and transport, especially that which we outsource to China, etc).

> the sanctimonious environmentalists will fight it because it minimizes the need for heroic personal sacrifice with respect to preserving the environment

Any evidence for this? IMO "Sanctimonious environmentalists" only care that consumption reduces. Whether that's voluntary or due to being priced out by carbon taxes is irrelevant. If anything doing it voluntarily, before it was ever needed to make your household budget work, would make them feel even holier.

> Any evidence for this? IMO "Sanctimonious environmentalists" only care that consumption reduces. Whether that's voluntary or due to being priced out by carbon taxes is irrelevant.

The New York Times said that their article pointing out that (most) recycling has higher environmental costs than landfill attracted the most complaints of any article for at least 10 years.

My old professor doesn't get invited to climate conferences anymore because he ran some serious research into whether geoengineering approaches were feasible.

There is definitely a large constituency of hair-shirt environmentalism that cares more about how much you're suffering for the sacrifices you're making than about how big an actual effect you're having.

It's pretty much a tautology--I'm defining "sanctimonious environmentalist" as one who makes showy personal sacrifices for esteem. If emissions decrease because manufacturing processes become more efficient, then their sacrifices were for naught and the lifestyle they've been pushing on others becomes irrelevant (or decreases in relevance).

> then their sacrifices were for naught and the lifestyle they've been pushing on others becomes irrelevant

And I'm arguing the opposite. In the short-term at least, costs will rise and people will be forced to cut back.

I agree that's the short-term effect (although a carbon tax will likely start out small and increase over time so as to minimize unpopular effects), but in my experience this analysis is too sophisticated for most of this "sanctimonious environmentalist" group. I.e., people who tend to believe that the environment hinges on converting people to vegan cyclists are not likely to understand economics well enough to understand a carbon tax. This is a big and unflattering generalization for expedience sake, so I'm trusting readers to understand the larger point and not get mired in "this is a generalization!" counterarguments.

Environmentalists would absolutely not fight it. They've been begging for a carbon tax for 40 years.

I was specifically referring to the subset of environmentalists who believe that salvation lies in converting everyone to veganism and cycling. But there are a lot of people who style themselves as environmentalists who oppose carbon taxes:

* The "personal responsibility" environmentalists described above

* The "anti-market" environmentalists who assume without evidence that markets necessarily make things worse

* The Green New Deal environmentalists who largely want to use the threat of climate change as political cover for social spending ("climate justice").

The last bullet might be too broad--there might be some GND environmentalists who are sincere, but certainly the overwhelming majority of GND policy and rhetoric seem to be more concerned with social spending than decarbonizing the atmosphere. I think there's a lot of overlap between this group and the prior two groups as well.

> it minimizes the need for heroic personal sacrifice with respect to preserving the environment

The dirty secret is that plenty of technology exists that can actually increase your quality of life while lowering your energy consumption. I'm not just talking about EVs, but electric buses and trains, heat pumps, sealing up drafty houses. But these things require changing how we do things, not necessarily how much we consume of things.

Giving the carbon tax revenue back to people as cash payments could help politically.

Canada promised to do that and the proposal was still wildly unpopular and abandoned. If you've build your life around no carbon tax (e.g. you live far from work and need to drive) you will personally suffer from such a change and will vocally lobby against the change. We end up with things like the Yellow Vest movement in France or the political instability that happens when any government tries to reduce fuel subsidies. It seems that voters are more sensitive to the price of gas than any other issue and any political party that causes the price of gas to go up gets voted out of office. Paul Krugman wrote a post recently showing that US consumers' inflation expectation exactly tracks the price of gas. I've concluded that any consumer impacting carbon tax cannot work in a democratic system. We need subsidies (both explicit and hidden) to reduce our carbon emissions.

> Canada promised to do that and the proposal was still wildly unpopular and abandoned. <...> I've concluded that any consumer impacting carbon tax cannot work in a democratic system.

We have a carbon tax in Canada and it's probably not going away any time soon (it is, in fact, scheduled to continue going up), so I'm not sure what you mean here. The provinces can do a rebate/dividend if they want and/or run their own system designed that way but I'm not sure if any have.

I'm not sure if your first statement is just saying we abandoned a rebate, but your last statement implies you think any consumer carbon pricing is impossible regardless of that, while your example says otherwise.

Doesn't that ruin the incentive structure? Your cash payments are higher when carbon use is higher.

In this kind of scheme, you don't get what you paid back as cash, you get something more like a dividend of the revenues (possibly just as a non-refundable income tax rebate or something, or as a dividend check given to all adults, depending on the particulars of your region's tax aversions).

So you're actually incentivized to consume less, because you get more out of it if your tax payments are less than your dividend.

Obviously there might be some perverse incentives to like.. causing a global increase in emissions while keeping your own small somehow but those are probably hard to significantly profit from.