Really excited to see how the CBAM (https://en.wikipedia.org/wiki/Carbon_Border_Adjustment_Mecha...) will pan out.
These carbon permits (also called EUAs) are tradeable as futures and are highly liquid on the ICE exchange. There are even a bunch of ETFs, KRBN being the biggest and highest volume.
Not emitting carbon is always going to be more effective than emitting then capturing carbon.
But most of green tech is a load of green washing (https://youtu.be/Zk11vI-7czE warning long video).
By most I mean non-nuclear, non hydro-electric.
Fact is that battery tech isn't up to task of high capacity highly reusable energy storage.
I also lack the ability to emit that much, but that's not a major issue. In general it's hard to pay for someone NOT doing something without it being scammed.
Sure it will be passed to consumer but there aren't any good alternatives tbh.
Or just don't do anything and pray you aren't destroyed by climate change.
The cheap leather industry comes to mind.
The only ones making money here is the EU governments imposing this.
And it goes to upstream businesses, if exporter Y has a lower tax basis, then they will pay rates approaching current exporter X.
It still penalized polluters and raise the prices of the product producing more CO2 but it is a blank or positive operation for 80% of the population (and negative for the ~20% richest that are the polluting the most).
Look up carbon fee with dividends for more details.
Consumers, of course, but not indirectly, with such a diluted notion of responsibility as it is now (by paying for externalities through general taxes). It will be priced into the products, as it should be.
This way products that are "greener" will be cheaper and people will have an incentive to buy them.
I have no problem with companies profiting off of the products they sell, or end customers paying for the actual cost of the product. It's just that a market without externalities having a price tag isn't a well-designed "free market".
So if a competitor figures out how to do the shipping cheaper due to it outputting less co2 (like trains running on electricity or just less polluting ships) those should over time win on the marketplace and shift the shipping industry to less pollution options.
edit: And the government can redistribute the carbon taxes to the part of the population this will hit the hardest easily by lowering VAT, income taxes at the lower end of progression or just direct subsidies.
In reality governments will create laws which will distribute those money to friendly companies. You can forget right now that it will go back to poor people.
2. Yep, prices for transported goods will surge, which is the intended consequence. If the general price of imported goods raises, then locally manufactured goods become more competitive. This gives an incentive for customers to select products built more closely to their place. It also gives a financial incentive for shipping companies to invest in cleaner transportation if they want to keep business.
3. Overall, yes this is scary, but think about it at a systemic level. This creates opportunities for local businesses and employers to sell more. This lowers the incentive to keep exploiting low-paid populations across the globe, potentially shifting the balance on their side to make social progress. And this reduces the carbon footprint, which we freaking desperately need.
On systemic level this and similar policies are only creating simple onboarding ramp for right wing governments. Look at those stupid liberals how they are making everything more expensive for you! We will cancel it! Vote for us!
Absurdly short sighted.
Left wing can redistribute, which is quite a left wing thing to do. In practice this does not happen. I remember the outcries when VAT was increased in France in 2014. 3 years later, no-one seriously contending for the elections had a program to roll this back, left or right.
Oh and, by the way: the initial plan was made by a *right-wing president*, to raise it by 1.6%, AND THEN carried on by a leftist but only by .4%.
So, I have at least one example for the exact opposite to what you are saying. I don't buy in your argument
> Absurdly short sighted.
I love how status quo and let's burn the planet is not short-sighted in your world view. That's probably the first somewhat courageous and potentially impactful measure I see on the topic, the systemic view says it may work, why not trying it?
Because when things starts to be cancelled do you think that we right wing governments will stop at one law? Decades of green policies will go down the toilet. So yeah slowly turning status quo is better than having a massive rebound.
Fundamentally, mainstream economics does not agree with your point of view. The bedrock of modern economic theory is clear on this: all prices are set by supply and demand.
Consumers pay the full tax burden only in the instance wherein demand is perfectly inelastic. Realistically, the more suppliers try to raise prices, the more consumers will shift to substitutes or demand less.
Ergo these taxes tend to fall on both consumers and suppliers, with the balance depending on the type of good and the market surrounding it.
I'm not sure if you are being sarcastic. This announcement is for shipping companies to currently be rolled into the current Cap and Trade policy framework.
It's like what triggered the Yellow Vests protests in France: a tax on diesel when people have no alternative. It seems that nothing was learnt from that.
A constructive approach would be to invest in developing alternatives then you can tax away to hasten change.
Article says that Europe will look either like a genius or a madhouse depending how this goes... well, track record isn't too good.
A system where emitters can ignore the actual cost of their externalities and push them down onto society at large to handle (through taxes) is broken.
This should also result in more funding around anything green tech related, when you actually have to pay the full price of the currently-used alternatives.
Ideally, there'd be a market with buyers (capturers) and sellers (emitters) (with a negative price, so cash flows from seller to buyer, obviously) for carbon emissions where the price depends on the actual underlying cost of capture, but that will hopefully come in the future, when carbon capture is commercially viable.