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Google 'black market'.

by bodono 6y ago

throwaway894345 6y ago
I'm not sure what point you're making. Even if the tax leads to a small black market for unregulated pollution, the legitimate market would remain regulated and thus our society would reap enormous environmental benefits. Moreover, the effort to thwart the tax constitutes a cost in and of itself, albeit the cost would necessarily be lower than the tax (to the extent that it's not lower, there is no incentive for a black market at all, which is also a real possibility)--this increased cost of pollution will also deter pollution just like the tax itself. Note that we tax lots of things effectively: gasoline, cigarettes, etc, and in none of those cases have a significant portion of the legitimate market moved to a black market--those taxes are quite effective. Lastly, Europe already has its own carbon taxes without the (rather silly) hypothetical consequences raised by critics in this thread.
- acituan 6y ago
  > Anyway, you don’t have a market at all without government That is not true, in fact most of the markets in history operated either without currencies (e.g. barter, farm labor etc) or with currencies that have inherent value (e.g gold, silver). A switch to fiat money implies state backing indeed, but a) it doesn't have to be one particular state (e.g. can do business with US dollars in some 3rd world countries) and innovations like bitcoin enable markets without any centralized currency. > If we decide we want to subsidize India’s pollution or whatever, we can still do that. That is the crux of the criticism you say you find silly. How exactly? Please show your work, because I am curious how we can subsidize China or India's emissions resulting from their domestic economy. > Europe already has its own carbon taxes Again please pay attention to domestic vs imported carbon. Most of the claims of approximating carbon neutrality is much smaller than in reality, because of the increasing consumption of carbon positive goods from developing countries.
  - throwaway894345 6y ago
    Government != currency. In the most general sense it’s just the system that defines, interprets, and enforces property rights. That can be a tribal chief or the US government or the WTO. > That is the crux of the criticism you say you find silly. How exactly? Please show your work, because I am curious how we can subsidize China or India's emissions resulting from their domestic economy Writing them a check would be the most obvious way. > Again please pay attention to domestic vs imported carbon. Most of the claims of approximating carbon neutrality is much smaller than in reality, because of the increasing consumption of carbon positive goods from developing countries. I agree, there needs to be a border adjustment, and claims of carbon neutrality need to be similarly adjusted for imported carbon. I don’t see how that materially changes the calculus. Maybe the argument is that wide-scale border adjustments haven’t been proven out, and fair enough, but let’s maintain perspective: we’re speeding toward a cliff and we can’t be too concerned about bumps off to the left or the right.
    - acituan 6y ago
      > Writing them a check would be the most obvious way. How much the check should be for exactly? This is important because even if we assume we can get perfect compliance if we paid for it, you might find the amount required surprisingly, I dare say impossibly, high. As a thought experiment let's say we are going to subsidize the transformation of China's non-green energy production. For comparison I will use a levelized cost of energy which rolls in capital costs, operating costs, operating capacity efficiency (which is low for renewables) and depreciation. The figures are about 0.1$/kWh for new coal (though most coal already has the infrastructure so will only have non-capital costs) and roughly 0.2$/kWh for solar (similar for other renewables). If you write a check to convert 2019 China's non-green energy production (7000TWh * 70%) the figure we get is $1 trillion, which is roughly the discretionary spending of annual federal budget, %5 of US's GDP and 1.3% of the world's GPD. That is for China only. No political apparatus in a democracy can muster the political will to justify subsidies of this scale.
      - throwaway894345 6y ago
        I’m not arguing that we should subsidize China at all. Frankly we subsidize them too much already, but that’s a separate topic. My only point is that we taxing carbon doesn’t preclude subsidizing them to whatever extent we choose. It seems like you’re arguing that if we pass a carbon tax it will hurt China’s economy because business will move to greener countries (countries who are now competitive after adjusting for pollution, which is what a carbon tax aims to do), and that the US has a moral obligation to reimburse them (China) for that lost business. If I’m misunderstanding, I apologize and perhaps you could clarify; however, if I understand correctly, then I strongly disagree. The West in general and the US specifically has already made China’s economy world class and that at the expense of the environment and arguable to our own economic troubles (particularly inequality). We have no moral obligation to China, IMHO.

Google 'black market'.

by bodono 6y ago

Google 'black market'.

I'm not sure what point you're making. Even if the tax leads to a small black market for unregulated pollution, the legitimate market would remain regulated and thus our society would reap enormous environmental benefits. Moreover, the effort to thwart the tax constitutes a cost in and of itself, albeit the cost would necessarily be lower than the tax (to the extent that it's not lower, there is no incentive for a black market at all, which is also a real possibility)--this increased cost of pollution will also deter pollution just like the tax itself. Note that we tax lots of things effectively: gasoline, cigarettes, etc, and in none of those cases have a significant portion of the legitimate market moved to a black market--those taxes are quite effective. Lastly, Europe already has its own carbon taxes without the (rather silly) hypothetical consequences raised by critics in this thread.

acituan 6y ago
> Anyway, you don’t have a market at all without government That is not true, in fact most of the markets in history operated either without currencies (e.g. barter, farm labor etc) or with currencies that have inherent value (e.g gold, silver). A switch to fiat money implies state backing indeed, but a) it doesn't have to be one particular state (e.g. can do business with US dollars in some 3rd world countries) and innovations like bitcoin enable markets without any centralized currency. > If we decide we want to subsidize India’s pollution or whatever, we can still do that. That is the crux of the criticism you say you find silly. How exactly? Please show your work, because I am curious how we can subsidize China or India's emissions resulting from their domestic economy. > Europe already has its own carbon taxes Again please pay attention to domestic vs imported carbon. Most of the claims of approximating carbon neutrality is much smaller than in reality, because of the increasing consumption of carbon positive goods from developing countries.
- throwaway894345 6y ago
  Government != currency. In the most general sense it’s just the system that defines, interprets, and enforces property rights. That can be a tribal chief or the US government or the WTO. > That is the crux of the criticism you say you find silly. How exactly? Please show your work, because I am curious how we can subsidize China or India's emissions resulting from their domestic economy Writing them a check would be the most obvious way. > Again please pay attention to domestic vs imported carbon. Most of the claims of approximating carbon neutrality is much smaller than in reality, because of the increasing consumption of carbon positive goods from developing countries. I agree, there needs to be a border adjustment, and claims of carbon neutrality need to be similarly adjusted for imported carbon. I don’t see how that materially changes the calculus. Maybe the argument is that wide-scale border adjustments haven’t been proven out, and fair enough, but let’s maintain perspective: we’re speeding toward a cliff and we can’t be too concerned about bumps off to the left or the right.
  - acituan 6y ago
    > Writing them a check would be the most obvious way. How much the check should be for exactly? This is important because even if we assume we can get perfect compliance if we paid for it, you might find the amount required surprisingly, I dare say impossibly, high. As a thought experiment let's say we are going to subsidize the transformation of China's non-green energy production. For comparison I will use a levelized cost of energy which rolls in capital costs, operating costs, operating capacity efficiency (which is low for renewables) and depreciation. The figures are about 0.1$/kWh for new coal (though most coal already has the infrastructure so will only have non-capital costs) and roughly 0.2$/kWh for solar (similar for other renewables). If you write a check to convert 2019 China's non-green energy production (7000TWh * 70%) the figure we get is $1 trillion, which is roughly the discretionary spending of annual federal budget, %5 of US's GDP and 1.3% of the world's GPD. That is for China only. No political apparatus in a democracy can muster the political will to justify subsidies of this scale.
    - throwaway894345 6y ago
      I’m not arguing that we should subsidize China at all. Frankly we subsidize them too much already, but that’s a separate topic. My only point is that we taxing carbon doesn’t preclude subsidizing them to whatever extent we choose. It seems like you’re arguing that if we pass a carbon tax it will hurt China’s economy because business will move to greener countries (countries who are now competitive after adjusting for pollution, which is what a carbon tax aims to do), and that the US has a moral obligation to reimburse them (China) for that lost business. If I’m misunderstanding, I apologize and perhaps you could clarify; however, if I understand correctly, then I strongly disagree. The West in general and the US specifically has already made China’s economy world class and that at the expense of the environment and arguable to our own economic troubles (particularly inequality). We have no moral obligation to China, IMHO.