A Price for Everything (Clean Air Too)

Price is the key reason why the free market is the most efficient and productive economic system. Price not only regulates demand. It also includes thousands of aggregated pieces of information about current and projected abundance or scarcity. No government bureaucracy could gather and analyze all the information that goes into prices. Those that try, fail.

Unfortunately the whole idea of price is somehow counter intuitive and the idea that prices could be determined w/o the intervention of some wise and benevolent authority is beyond the comprehension of many people. Ironically, those who are more intelligent in other ways often have the most trouble with price. They are looking for a system, a mental model, which would explain the millions of subtle and sometimes silent negotiations that go into even the simplest product. They cannot find one, at least not one they can understand.

A simple minded idea about price is the labor theory of value. Marxist liked this one and it is probably more responsible for bringing down communism than the threat of SDI. Simply stated, the labor theory of value holds that price is reflected in the amount of labor that went into something. Like buying lottery tickets, the theory works just enough to keep people believing in it. It does not do a good job of explaining price appreciation of existing assets or the reverse - what something essentially loses all of its value. Try selling your old computer and see if the value of the labor that went into it is worth anything.

The fact is that the fair price is what somebody will pay, absent coercion. This is very important. Proper price setting depends on reasonably free actors. This does not mean someone does not need the product in question. We all need food, but we have some options about what and where to buy it.

Governments affect prices all the time through taxes and regulations. It is safe to say that government can much more easily raise prices than lower them, but what really counts is government's effects on relative prices. Many government policies have the perverse effect of pushing up the relative prices of beneficial products and pushing down those of negative ones. This is because most government programs are aimed at helping powerful or well connected constituencies. A good politician cloaks this in the terms of the public good, but that is what is happening. It is what government does. A good current example is ethanol from corn.

Now for my punch line. We need to master our addiction to oil and other fossil fuels. Many feel good proposals have been made. Most will create large bureaucracies, oppressive regulations and inefficiencies w/o significantly cutting pollution. Smothering micromanagement by bureaucracies and politicians beholden to special interests is not the solution. Our best bet is to influence consumption through the price system. The elegant solution is a carbon tax. We already have a tax system and a bureaucracy to run it. Let's figure out ways to make it work to green our country in all the aspects of the term. We can set the goal and let the market sort out the best way to achieve it. Market solutions to environmental challenges - it is a principle on which Dems like Chris Dodd and thoughtful Republicans like Newt Gingrich can find common ground.

Some things are too valuable to be left price less.

Posted by Jack at May 8, 2007 9:11 PM
Comments
Comment #219859

I like.

Posted by: Max at May 8, 2007 10:17 PM
Comment #219863

Jack
You left out cartels and monopoly price influences.They have effected us much through oil and drug prices for two examples. There are more.
A carbon tax makes some sense and is politically feasable. Still the people that will be hardest hit by a dramatic increase will be the working poor. I realize they are seldom a factor in your equasions but they are a factor in our country. An EIC for gas?
FYI. I recieved an E-mail from The Union of Concerned Sientist. Seems Exxon wants to meet with them. A precondition was that Exxon promises to stop funding global warming contrarian propaganda groups. Should help reduce the flatearther ranks some.
I still like the idea of a tarriff increase on imported oil.Also real efforts at price stabilization for the alternate industry to succeed.
Real question. What possible good do oil speculaters do? Stock speculation at least helps fund industry. The oil industry does not need outside funding. Are the speculaters sheer parisites?

Posted by: BillS at May 8, 2007 10:48 PM
Comment #219867

BillS

I would support a higher EIC. I would not support it “for gas”. We want everyone, including the poor, to change their bad habits. The working poor person who did the right thing would end up with more money in his pocket. The wasteful ones would suffer, just like the non-poor.

Posted by: Jack at May 8, 2007 11:32 PM
Comment #219880

I don’t believe a tax is the way. It is the socialist and democrat party answer for everything, more taxes, bigger government, same old saw.

Try using price and demand in a more creative way. For instance, electricity produced by nuclear power has zero greenhouse gas. Why not build nukes to power cars, transmit that power down our power grid to our cars which we plug in at night. Nice, clean, cheap energy to drive with?

And gee, since nuclear power is so clean, why not build even more nukes and shut down all our oil and coal plants?

Oh, that’s right. Liberals tells us we cannot use nuclear power. breath the fumes, and We have to stay addicted to oil and pay higher taxes and live smaller lives. Or turn our food into fuel raising the cost of our gas and raising the cost of our food.

If we stop letting radical nuts control our energy policies we could power our cars with nuclear power and NOT have to pay high taxes for using them or pay outrageous prices for meat, milk, vegetables, etc because our food is being used for fuel.

Posted by: Stephen L at May 9, 2007 5:05 AM
Comment #219883

Stephen,

Try using price and demand in a more creative way. For instance, electricity produced by nuclear power has zero greenhouse gas. Why not build nukes to power cars, transmit that power down our power grid to our cars which we plug in at night. Nice, clean, cheap energy to drive with?

First, nuclear power is cheap only because the waste and risk issues cost is NOT included in it. Yet. Nobody should bet on the future generation to find a way to make these costs cheap.

Second, uraniun is as limited resource as oil is. If every nation goes to more nuclear power, don’t be surprised the yellowcake price to skyrock. It as already started.

Last but not least, even if nuclear power electricity was actually as cheap as you imagine, electric cars are not yet. Far from it. The demand is simply not there. A fully electric SUV with today technology will have a ridiculous autonomy and/or top speed. Only small car can have today enough electric autonomy to be more than a technology/ecology demonstrator.
Between big but poluting and small but green, people chose the first pratically everytime.
Demand is not there. The American Way of Life doesn’t help, though.

And gee, since nuclear power is so clean, why not build even more nukes and shut down all our oil and coal plants?

Why not building more renewable energy power plants, reduce our energy waste bad habbits *and* shutdown all oil and coal plants?
Putting all your eggs in a nuclear basket seems like pure integrism. And will sadly hide the real issue, postponing it to next generations: energy is, so far, limited. The sooner we learn to do more with less, the better. It’s possible.

Oh, that’s right. Liberals tells us we cannot use nuclear power. breath the fumes, and We have to stay addicted to oil and pay higher taxes and live smaller lives. Or turn our food into fuel raising the cost of our gas and raising the cost of our food.

“Live smaller lives”??? You think being more energy efficient in everyday life is living “smaller”!?
Woa, what a bigger than your syndrom can’t do!?

Posted by: Philippe Houdoin at May 9, 2007 6:40 AM
Comment #219886

Stephen L

The carbon tax is a market based solution. It accounts for the external costs of fossil fuels and then allows people and firms to make choices re the most appropriate responses.

The market and market prices is by far the best system for allocating goods and services and making a country productive. Its weakest point involves costs that can be passed to society as a whole and not the one using the produce. Fossil fuels are like that.

A agree re nukes. Anyone who considers global warming a potentially serious problem and does not advocate more use of clean, carbon free nuclear power is being either short sighted or dishonest. Both nuclear waste and CO2 are problems. If global warming is the bigger challenge, we see which of the alternatives makes more sense.

Returning to the carbon tax, you will notice that it is not as popular among liberals as you at first guess. The reason is that it allows firms and people to choose and make adaptations. Ideally, it would replace - not supplement - existing taxes. It is not a socialist mechanism.

Some liberals are vaguely suspicious that it would go a long way to solving the environmental problem of fossil fuels w/o requiring the wholesale changes in society they would like. You will not find them supporting a carbon tax. Rather, they will demand all sorts of adjustments - to protect the poor or favor their pet projects - that make it meaningless.

Some “environmentalists” prefer the problem to a solution that leave intact the “capitalist” system they so passionately dislike. The horrendous ecological record of the socialist systems of E. Europe and the Soviet Union are fading from memory, so they can more easily blame the market system.

Philippe

We do not have an energy problem. We have a problem with the energy mix. Please see above. I agree with you that we should not just convert everything to nukes. However, nuclear power will play a bigger role than it does now IF we want to reach a carbon reduction. The U.S. gets around 20% of its energy from nukes. If we did as well as the French (78%) we would produce a lot less CO2.

We do not use more renewables now because they cost significantly more than oil or coal. The low price of fossil fuels pushed many promising firms out of business in the 1990s. It does not make sense to burn wood chips or install solar if oil is too cheap. That is again how the carbon tax will change the relative prices. If we tax carbon, renewables are relatively cheaper, so people choose to use them.

The carbon tax is an elegant and generally non invasive way to address the problem of both pollution and CO2. It generally uses existing taxing bureaucracies and allows free choice. We will get a better mix of energy in this way – if we give people the initiative – than if we try to dictate bureaucratic solutions (see corn ethanol).

Posted by: Jack at May 9, 2007 7:56 AM
Comment #219891

Fallacies:

The Free Market does not exist.

So called Free Market mechanisms tend to be slow in responding (see sub-prime mortgage market) and very inefficient where corruption, greed, monopolies, or oligopolies exsist.

So called Free Martket have no social conscience nor obligation. And therefore they have no regard for human beings except in their capacity to be used to increase profitability.

So called Free Markets contain so many variables as to effectively render many invisible and incapable of scrutiny, and even less capable of predictability.

So called Free Markets are constantly subject to unfair and non-competitive comparative advantages, in other words subject to the wiles of thieves and crooks.

These are precisely the reasons that there are no true Free Markets, and why all modern democracies employ a combination of social policy mixed with so called ‘Free Market’ policies, ergo, Mixed economies.

There are many issues of commerce and services which the free market simply cannot manage while maintaining human objectives of a compassionate or highly ethical nature, such as health care. The U.S. is the last hold out of democracies to continue to fight universal health care leaving 47 million people without effective health care.

Posted by: David R. Remer at May 9, 2007 9:00 AM
Comment #219895

Jack, I’m with you on ethanol. Some years ago West Wing dramatized the kowtowing politicians must perform to Iowa primary voters because of ethanol subsidies. In my mind, the jury is still out on ethanol.

I have no problem with a carbon tax in principle.

I would support increased gas taxes over taking no action. I would prefer that we continually require greater efficiency on new cars. We lag behind much of the world on that issue.

I’m not crazy about nuke plants because of the potential hazards including waste storage, but I’m not hardcore here. I think we have plans for something less than a dozen new plants. My real concern is that sheer number of them we’d need to actually make a dent. Do you see hundreds of new nuke plants within the next couple of decades? I don’t. And I agree with the poster who noted that much of the cost of nuclear plants is hidden. For that matter, much of the price of oil is hidden — it drives much of our foreign policy.

I really think the future is in small scale production of energy on the home, mall, factory level, and a suite of clean options for transportation. Adoption and continued development of the necessary technologies is crucial, and decreasing payback time is all important. We need to require more power grids to accept local power pumped into them. Higher gas prices would help, in my opinion.

The political will to achieve much of this has never been greater.

Posted by: Gerrold at May 9, 2007 9:16 AM
Comment #219897

Jack,

We do not have an energy problem.

The whole world is in an energy race already. I’m sure you can see it. It’s everywhere to who want to see it. And I’m confident, unless a new energy show up to be used by everyone, that a few energy crisis will emerge here and there during what could be also called the energy war.

The U.S. gets around 20% of its energy from nukes. If we did as well as the French (78%) we would produce a lot less CO2.

The french nuclear energy amount only for 17% to all energy consumed in France. The fact that we produce 78% of our electricity by nukes doesn’t reduce our CO2 emitted by french vehicule. And transport is, like everywhere in developped countries, the #1 emitter CO2.

We, french, have more to gain, regarding our CO2 emission, from increase car mpg than from building some extra nuclear plants. Maybe you should replace your oil and coal plants by greener electricity power plants, indeed. But your CO2 will not drop as much as if all your cars MPG get a few extra miles, I’ll bet.

Going fully nuclear electricity wont change that much until our most CO2 emitting stuff could actually all run on electricty.
Which they, today, don’t.

We do not use more renewables now because they cost significantly more than oil or coal. The low price of fossil fuels pushed many promising firms out of business in the 1990s. It does not make sense to burn wood chips or install solar if oil is too cheap. That is again how the carbon tax will change the relative prices. If we tax carbon, renewables are relatively cheaper, so people choose to use them.

Here I agree 100%.

Posted by: Philippe Houdoin at May 9, 2007 9:35 AM
Comment #219908

Phillipe, just what are the French doing with their nuclear waste? English Channel perhaps?

Inquiring minds want to know!

Posted by: David R. Remer at May 9, 2007 12:41 PM
Comment #219909

Stephen L, take a look at any of hundreds of nuclear waste stockpiles sites in the U.S. before calling Nuclear Energy clean.

Also, take a look at the bill for the Yucca Mtn. storage facility which hasn’t stored anything yet, before you call it cheap.

Sheesh. You believe everything politicians say? Surely, not.

Posted by: David R. Remer at May 9, 2007 12:43 PM
Comment #219918

We need taxes, as Jack says, and we need government control, as David says.

Here is the difference between the two: Jack wants a carbon tax and the “free market” will do the job. David says the market is not free. So we should have a cap and trade system. Government sets the cap and businesses do the trading.

I like the second system better. It has a little more equity to it. This is what the UN study proposes.

This, too, is not enough. A cap and trade system defines what needs to be done. We still must work hard to make energy use efficient, develop new energy sources and new procedures for living in a sustainable-energy society.

Posted by: Paul Siegel at May 9, 2007 2:17 PM
Comment #219945

Paul

Cap and trade is a fine system. It was very successful in combating acid rain, but such a regime is not easily applied internationally. In the acid rain case, we had one government (ours) that regulated one nation’s industry (also ours). There might be some state to state rivalry, but the whole system could be fair.

In the case of CO2 we are dealing with many legitimate differing interests among countries and with many countries that have poor records of following through on commitments. I would not want my countries economy dependent on a majority vote of the UN. The cap and trade requires an international bureaucracy and regulatory regime that does not now exist and cannot exist in the current political system.

Carbon taxes can be enacted unilaterally. The U.S. (or any other country) can impose a carbon tax. The tax revenues accrue to that country. That country has the choice of lowering other taxes to compensate, or not, but it does not affect its overall competitiveness.

The carbon tax also has the beauty of being difficult for politicians to subvert or cheat. It is also very hard for firms to corrupt. The cap and trade will have to be distributed based on political calculations. Well connected and regarded firms will get more. The carbon tax treats all carbon equally. If you make it, you pay for it.

David

The free market is remarkably fast if given the proper incentive structure. You are advocating the command and control. It is like the difference between a threat and an incentive. If you have a gun, I will do what you want much quicker than if you offer me an incentive. But I will not try to innovate beyond what you directly ask me and if I can, I will get away. An incentive will get me thinking and using my intelligence to the benefit of everyone.

There are times for command and control. If you are trying to tackle something as complex and ubiquitous as carbon emission, however, I think you want some help from human ingenuity and imagination.

Posted by: Jack at May 9, 2007 8:55 PM
Comment #219950

Jack
Another problem the working poor have is all they can afford to drive are older vehicles. Sure they can take a bus,if there is one, but often there is not. Better mass transit would help. More job/housing planning etc. These take time.

Another hurdle to developement of alternates is price stability. It is harder to capitalize when your competition (OPEC) can dramatically lower prices when ever the controlling cartel decides to put you out of business. The fed gov. is the only institution capable of stabilizing the price,perhaps with adjustable tarrifing and or useing the Stratigic Reserve,with expanded mandate and powers, to effect prices. A sort of Federal Reserve. The latter approach would also stop the US oil companies from doing the same thing.
Speaking of,it appears that Big oil is getting on the bandwagon. We need to watch them that they do not attempt to drag their feet . Perhaps a patent to production deadline. Say 3 years for production or the process becomes public domain. I just do not trust EXXON et al. The sign of the double-cross.

Posted by: BillS at May 9, 2007 10:16 PM
Comment #219954

BillS

The carbon tax will help break the power of OPEC and the oil addiction. It means that OPEC CANNOT force th price lower than WE decide.

If we have an earned income credit, we can help the working poor. They still have to make choices. We cannot let compassion for the poor exempt them from choices everybody needs to make.

You know that an old car may produce 25x more pollution than a new car. Not 25%, 25 times. We cannot let “the poor” oppress everyone else. The poor also can make choices and must. The cult of the victim is no suicide pact.

Posted by: Jack at May 9, 2007 10:46 PM
Comment #219965

Jack, the poor have precious few choices as it is. Drive up their costs, and you eliminate any choice at all on some very basic necessities like whether the cost of working exceeds their earnings for working.

This is what political and economic policy must guard against. Losing one’s home, or no longer being able to afford transportation to and from work, is not a choice. It is an injustice.

Posted by: David R. Remer at May 10, 2007 5:19 AM
Comment #219966

Jack said: “The free market is remarkably fast if given the proper incentive structure.”

This is another way of saying use tax dollars to subsidize corporate and business changes, which the Republicans have been so fond of the last 10 years. What it got us in addition to some business change, is record business profits and 3 trillion dollars more national debt.

Republicans, and you Jack, appear to have forgotten that business is supposed to use part of the profits to invest in the changes necessary to remain profitable. Therefore, government fines and sanctions can work just as efficiently without costing the tax payers and the national debt a trillion dollars in subsidies over 10 years.

Bottom line is, politicians depending on corporate campaign donations (Dems from one set, and Reps from another set) yield to lobbyists of these corporate interests and underwrite the changes needed rather than fining them and forcing them to use some of their profits to underwrite the changes that needed.

This corruption of the taxpayer’s hard earned dollars is at the root of why subsidies are so unjust, unfair, and driving the nation’s indebtedness to such lofty levels.

If Democrats in the Senate have their way, they will balance the budget by 2012 and halt the growth of our national debt. If Senate Republicans like Kyl and Thune have their way with their budget amendments on estate taxes which they don’t even pretend to pay for, our national debt continues to grow well out past 2012.

When will Republicans get on the right side of tax payers and do justice by them? Every rise in the national debt is equal to increased taxes on the generation that will have to service that debt.

Wealth gives the wealthy a wealth of choices in making changes and meeting a changed future. The poor have no such wealth of choices or resources to underwrite more costly changes in living. If Republicans ever want to return to power, they will have to accommodate justice for this simple need of the poor in their philosophy and policies.

The poor may not vote, but, the middle class which fears becoming poor at the hands of political policy do. Embrace the middle class and poor, Jack, or Republicans will remain the minority party for decades yet to come.

Posted by: David R. Remer at May 10, 2007 5:41 AM
Comment #219967

David,

What are the French doing with their nuclear waste? English Channel perhaps?

I dunno why we have resisted since 60 years this very tempted nuclear waste disposal option. ;-)

Instead, we vitrify our high level waste and store them in ventilated underground pools under La Hague site.
By 2025, a deep geological reversible storage site should be operational. The HLW are the first to be moved there, IIRC.

For the lower levels waste, we recycle irradiated uranium and plutonium via MOX up to 30%. AFAIK, 20 off our 28 nuclear plants have been upgraded to support MOX as fuel. After the MOX extra cycle, the low level waste is solidified and sealed in containtment cylinders, stored on surface. We have two sites for surface waste storage, one is full since 1992.

Before our SuperPhenix surgenerator was closed, transmutation of waste was experimented. AFAIK, it did work fine as expected, but the total cost of SuperPhenix combined with repeated “incidents” were stopping this possible waste option to reach industrial level.

Posted by: Philippe Houdoin at May 10, 2007 6:02 AM
Comment #219968

Phillipe, thanks for the reply and appreciating the English Channel humor.

Do you have any idea what the costs of the La Hague site and processing, MOX-ifying, and solidifying MOX wastes, and storing them at the two surface site facilities are, in total and how, after factoring in those costs, nuclear power costs compare to fossil fuel energy production, consumption, and environmental costs?

I know it is a lot to ask, and I don’t expect you to necessarily have figures at your ready disposal. As important a question is whether or not ANYONE has done these computations, and if so, where they can be referenced.

My fear and suspicions regarding the nuclear power push in America is, that we are taking the Ostrich approach. In other words, specifically forbidding anyone to do these calculations because the answers would not further the cause. Have the French also their Ostriches in the Nuclear Power industry and Parliament?

It is a vitally important international question?

Posted by: David R. Remer at May 10, 2007 7:13 AM
Comment #219970


David

I support increasing the earned income credit. The working poor could get more total money to spend. They just would have to make choices re how to spend it like the non-poor. Those who made good decisions would be better off and so would our environment.

It depends on which you consider a higher priority. Do you want to avoid additional CO2 emissions or do you want to avoid inconveniencing people, including the working poor.

As I mentioned above, I believe many so-called environmentalists oppose carbon taxes because they prefer the problem of CO2 to a solution that leaves intact what they characterize as capitalism. They are using environmentalism as a tool to push a socialist agenda, but a clean environment is not their highest priority.

Re subsidies - I fail to understand how a tax that is applied to all carbon emissions can be seen as an unfair subsidy. It simply creates incentives to come up with solutions. Do we agree CO2 emissions are a problem? Do we want to reduce them? Doesn’t make sense that those who produce more CO2 emissions should pay more than those who produce less? Doesn’t it make sense to encourage innovation and sound choices?

Everybody, including your poor, has choices.

The “Economist” has an interesting article re the poor in India. The poor in India are really poor. Our poor would be middle class over there. Anyway, the “Economist” found that the poor as a group consumed very little but that they could have an average of 30% more necessities if they made better choices, avoiding tobacco and alcohol, for example. Everybody has choices.

If you consider global warming a big problem, mitigating it is more important than no inconveniencing some people. The whole goal of any program is to change behavior. If you are not willing to do that, you will certainly fail.

The carbon tax makes possible all those alternatives and conservation everybody claims to support. This is a bluff calling tax. Those more interested in the environment support it as a major tool to counter global warming. Those more interested using the environment as a proxy war for socialism will obfuscate.

Posted by: Jack at May 10, 2007 7:49 AM
Comment #219975

David-

I can’t give you specifics to all of your questions, concerning the French closed nuclear cycle, but:

The cost of recycling, short term storage,(LaHague) and Moxification (MELOX) is is priced in. As with the U.S. the long term storage is not.

According to 60 Minutes a few weeks ago, the spokesperson at EDF says they are cost competitive when oil is $45/barrel.

60 Minutes

Posted by: George in SC at May 10, 2007 8:41 AM
Comment #219979

Jack said: “I support increasing the earned income credit. The working poor could get more total money to spend. They just would have to make choices re how to spend it like the non-poor. Those who made good decisions would be better off and so would our environment.”

Thanks for the reply, Jack. That sounds eminently reasonable and sensible to me, as well.

Inconvenience I don’t have a problem with. Putting people out of work or home to accomplish the task is unimaginative in the extreme.

Jack said: “As I mentioned above, I believe many so-called environmentalists oppose carbon taxes because they prefer the problem of CO2 to a solution that leaves intact what they characterize as capitalism. They are using environmentalism as a tool to push a socialist agenda, but a clean environment is not their highest priority.”

I think this is a highly prejudiced and politically spun comment replete with paranoia. The simplest explanation is that there is no relationship between being pro-environment and socialist thinking. Apart from the indisputable fact of course, that reducing green house gases is outside the capacity of individuals and requires a national response funded by tax dollars and shared contribution to the solution by all.

“Doesn’t make sense that those who produce more CO2 emissions should pay more than those who produce less?”

Unless paying more where alternatives to producing more exist, has the potential of altering practice to produce less CO2 emissions. That of course does make incredibly good common sense.

Does a child raised by apes have the same choices as a child raised by a middle class American family, Jack? You cannot logically project that the poor have the same choices at their disposal as the wealthier have. They simply don’t. Choices are a perceptual event. If one has not been trained to perceive choices which others have been, one does not have the same opportunity of choice.

There are many ways to skin a cat, Jack. The most direct route to absolute power for Adolph Hitler was mass murder and subjugation. Often, the most direct route is not the most humane, nor indeed successful in the long run. Putting people out of work or home to effect emission reductions is one alternative, but, by no means the only one available to us. And we have the training to perceive those alternative routes to the same end as your comment regarding Earned Income Tax Credit attests.

Posted by: David R. Remer at May 10, 2007 9:04 AM
Comment #219980

George in SC, thanks for the response. I still don’t have logical and relevant information to support the spokesperson’s statement: “the spokesperson at EDF says they are cost competitive when oil is $45/barrel.”

The reason is because “As with the U.S. the long term storage is not.” That could easily be the most expensive component of all if the cost of Yucca Mtn. is any indication ($53.9 BILLION dollars, 1996 dollars). And the Yucca Mt. facility has not even yet been determined to be safe for its intended purposes.

With long term costs factored in, nuclear may only be cost competitive when oil is $100 a barrel, or even $200 a barrel, or higher when a final and reliable long term solution is found like burial on the moon for example.

Posted by: David R. Remer at May 10, 2007 9:17 AM
Comment #219991

Jack,

I’m amused by your slick rhetorical moves but not disturbed. We need everyone to take climate change seriously, and everyone will need to frame the issue in a way to affirm their core beliefs.

I do think it is funny to cast carbon taxes with the EIC (or similar devices) as a response to socialism. A carbon tax would be a flat tax, and thus regressive, but the EIC is progressive. International emissions trading schemes in which the government doesn’t collect money would seem to be less socialist, if you will. But in the present political environment, eh.

What we need are some models showing estimated impacts of varying degrees of carbon tax. I don’t know of any models; if anyone does, please post sources.

Posted by: Gerrold at May 10, 2007 10:41 AM
Comment #220004

O.K. David but….

U.S. nuclear plants have sold at least 20 trillion Kwh over their life cycle (14 trillion 1980- 2004 and I’m guessing on the rest). I think we can safely say that sales are greater than expenses.

If we say 200b for permanent waste disposal (capital plus operations) you’re only hiding about 2-3% of hidden costs.

And remember, the French reprocess (recycle) which is included in the $45/barrel price point. The U.S. does not and instead stores their spent fuel in-situ. Therefore our break point should be less (hopefully we will reprocess again as well).

This is all unscientific of course, but it’s not the factor 2X or 3X cost increase you are contemplating.

Posted by: George in SC at May 10, 2007 12:57 PM
Comment #220014

George in SC, perhaps, but, until the facts and figures ARE presented, verified as realistic and probably, NO NUCLEAR movement should take place in America.

The backers of the profitability of nuclear energy have lied and deceived the American more than amply to expect the American people to take nuclear safety and cost estimates on their lobbying say so.

If Yucca Mt, is determined to be unfit, the cost for long term storage of 53 billion jumps to more than double that, 1/10 of a trillion dollars, or more, since the 53 billion of Yucca will be lost and whatever proposal that takes its place can safely be presumed to cost at least that much more.

Posted by: David R. Remer at May 10, 2007 2:07 PM
Comment #220026

“The backers of the profitability of nuclear energy have lied and deceived the American more than amply to expect the American people to take nuclear safety on their lobbying say so.”

David, That is exactly what many of us skeptics of global warming think.

Posted by: tomd at May 10, 2007 3:58 PM
Comment #220027

tomd, the world’s scientists have no vested interest in promoting their own taxation spending increases.

WORLD of difference, here. The scientists who study climate change don’t profit from the technologies to try to affect climate change. Well, those not hired by the OIL companies, anyway.

Posted by: David R. Remer at May 10, 2007 4:02 PM
Comment #220034

David, Of course they have a vested interest. Research grants are pretty lucrative. Of course I’m not suggesting that all the scientists are riding the wave of free money, there are many dedicated scientists. The people I’m mainly talking about are the ones trying to sell it to us.

Posted by: tomd at May 10, 2007 5:55 PM
Comment #220042

tomd, you mean the ones hired by Exxon/Mobil to sell us that the rest of the scientific doesn’t know what its talking about, don’t you?

BTW, Exxon/Mobil doesn’t even believe the research they paid for to disprove global climate change. They are now competing for a share of the CO2 reduction market, and advertising themselves as a global warming fighter. How is that for two faced free enterprise, after spending millions to produce false research and lobby against the scientific community consensus.

Research grants for climatologists have already been made. The money to follow now is in energy technologies and climatologists stand to gain nothing from that beyond the a hopefully less severe climate within which to live and raise their children.

Your argument is bass ackwards. You have been led and had by the likes of Exxon/Mobil. Time to admit your error and catch up with your leader’s about face on this issue.

Posted by: David R. Remer at May 10, 2007 7:55 PM
Comment #220047

David
Change brings … change. You cannot both change the basic fuel of the entire country and not have some changes in behaviors. It does not mean that we are poorer in the aggregate or that jobs are lost.

Re choice - everybody has choices. Nobody has the same choices. This is the way the world has been, is and ever shall be. It is actually a good thing. It is diversity.

It is true that some people habitually make poor decisions. Many of them end up poor. What do you propose to do? Take away the ability to make poor choices? What I propose is providing many choices. Most people will be better off in the sense that they will be able to choose more of what they value. The society will be better off because we will be addressing the CO2 problem. Some people will make poor choices and be worse off. Nothing can be done about that. We have safety nets for these guys.

Re profiting from global warming. There IS a significant global warming industry. Scientists make money with studies supporting dire scenarios. The actual science is usually a lot more nuanced. Scientists, BTW, are also beginning to refine their models and the consensus is not as bad as Al Gore thinks


Gerrold

Some things need to be accomplished through government action. The best way to do that is through incentives applied to the market economy. You are right that a carbon tax is a flat tax. It is based on how much a person contributes to carbon emissions. A rich person who was not a big polluter would pay less than a poor person who spewed it out like there was no tomorrow. We need to do that to influence behavior. If the poor person is making the problem, we want him to stop. The EIC is a way to reward work through existing tax structures. It makes no judgments except income. It allows maximum choice. The two together are a good system. The carbon tax addresses the problem of emissions, while the EIC protects the poor against some of its effects, while still encouraging them to use less carbon.

Taxes, BTW, are unpleasant and perhaps destructive, but they are not socialist. The socialism involved ownership or significant command and control of the economy. We have some of that, but we resist pretty well. Government action using market mechanisms is the superior way to create innovation.

For everything there is a season and a time for every purpose. Sometimes we need command and control. It is quick, but not effective in creating innovation. Incentives and the market work better in the long run.

Posted by: Jack at May 10, 2007 8:33 PM
Comment #220053

Jack, I like that response a lot better than just painting opponents as socialists. Anyway, we don’t fundamentally disagree.

Posted by: Gerrold at May 10, 2007 9:36 PM
Comment #220057

Gerrold

I do not think most liberals are socialists. Some are misguided about cause and effect, but they mean well. I do believe, however, that many people who call themselves environmentalists instinctively reach for state directed controls. They mistrust the free market. Of course, they should mistrust the free market. It is run by corruptible people. But their confidence in government, also run by corruptible people but people with secure income sources (i.e. taxes) is misplaced.

Experience shows that the best way to protect something is to give someone ownership rights. People protect what they own and tend to misuse anything they think is free. It is not that these are bad people, but w/o the signal of price they do not know any better. Why should you conserve something that is cheap or free?

Re global warming, I believe some environmentalists are content with the problem. It is a panacea for protestors. It is like the depressed teenager who discovers entropy. They can use it to negate anything positive.

Posted by: Jack at May 10, 2007 10:59 PM
Comment #220063

Jack,

I suppose you could say the same thing about certain members of any advocacy group.

Anyway, I’m not nearly as committed to any particular economic ideology as you are. You say that private ownership is the best way to protect something. Certainly you could list examples just as I could list examples of exploitation, pure and simple.

As far as private ownership goes — well, many people attempt to extract what they can; conservation isn’t always their interest. Look at the ugliness all around us; every corner contains another McDonalds. I live near the Smokies, but rarely visit because I’d have to go through Pigeon Forge or Gatlinburg. Every damn inch of space in which people are allowed to slap up some garish but profitable enterprise is taken. If government didn’t restrict and zone, it’d be far worse than it is. Whenever you do see a well-planned community, it got that way because of restrictions placed on the free market, if you will. My neighborhood has many kids but no sidewalks. Why not? Because when it was built the city didn’t insist on them.

I understand that some property owners do protect their land. But, and no offense, Jack, I think you place too much faith in private owners looking at the global picture. And that’s understandable. People want to take care of their families; it’s hard to think globally when you’re thinking about how much money you can make by selling your acres to some developer who wants to put in another strip mall.

Posted by: Gerrold at May 11, 2007 2:14 AM
Comment #220065

“tomd, you mean the ones hired by Exxon/Mobil to sell us that the rest of the scientific doesn’t know what its talking about, don’t you?”

No, I mean the likes of Al Gore who don’t believe enough in his message to change his own lifestyle.

Posted by: tomd at May 11, 2007 3:42 AM
Comment #220069

Gerrold

You are new here. You probably have not heard my mantra (I wrote a whole post re) that the free market requires rule of law, reaonable regulation and the market mechanism. I believe in reasonalbe regulation of economic activity. Where to draw the line in a problem, but the general rule should be that regulation is applied evenly in the service of a general goal and not done as a way of government management or to advantage any particular group.

In other words, the government builds the road and establishes basic rules, but within that does not regulate who drives on it. Government infrastructure is available to all, but we understand that some will benefit more, but this benefit will be based on their behaviors, not their status.

We went through stages of government. Up until around 1960, I think we were doing okay. The Feds built infrastructure etc. In the 1960s, government got into management on a larger scale. This is when it went wrong. We recovered a lot in the 1980s, but still are suffering from government hubris. We have become too dependent.

Thomas Jefferson said that it is natural that government will grow at the expense of liberty. We have to resist letting government solve our problems, because it does not go away when the job is done.

There is also the difference between local and federal. Local government can do thing the feds should not, becuause it does not have an army and you can move away.

Got to go to work. We can talk more.

Posted by: Jack at May 11, 2007 8:11 AM
Comment #220170

tomd, you want Al Gore to bicycle around the country making his pitch? I am sure that would suit your ends nicely. Would you ask Bill Gates to do the same?

Posted by: David R. Remer at May 12, 2007 4:03 PM
Comment #220172

Jack asked: “It is true that some people habitually make poor decisions. Many of them end up poor. What do you propose to do? Take away the ability to make poor choices?”

No, education. Education provides the widest range of choice regardless of means. Hence, education is the absolute most democratic act any nation can underwrite. I propose quality secular education be mandated as a right for all children. And religious education be a free elective for all, outside the secular educational system.

The health of society depends upon both systems of education. But, individual and community success depend on a lot which religious education does not provide, like math, secular history, domestic and international political science, and classic literature of ideas.

I don’t know of a single skyscraper or manufacturing plant built exclusively on the knowledge provided in the Bible or Upanishads or Koran. I don’t know of a single accounting system for money and trade based on those works either.

Posted by: David R. Remer at May 12, 2007 4:14 PM
Comment #220181

“tomd, you want Al Gore to bicycle around the country making his pitch? I am sure that would suit your ends nicely. Would you ask Bill Gates to do the same?”

No David,
I want Al Gore to travel in a responsible but feasable manner. I don’t understand why he needs to use as much power at his mansion as he does. I don’t understand why Hillary sends an empty jet from DC to South Carolina so she can take another one which she likes better.

I wouldn’t ask someone to quit smoking because I it’s killing me and then round the corner and light a cigar. That’s the feeling I get around the likes of him.

Posted by: tomd at May 12, 2007 8:38 PM
Comment #221404

Jack,

As I mentioned above, I believe many so-called environmentalists oppose carbon taxes because they prefer the problem of CO2 to a solution that leaves intact what they characterize as capitalism. They are using environmentalism as a tool to push a socialist agenda, but a clean environment is not their highest priority.

Just out of curiosity,what makes you think this? Do you have any evidence for this? I mean sure, there are a lot of people who care about the environment and of course some may hate capitalism, but I don’t think I’ve ever seen any organization or representative of the mainstream environmental movement like that. Greenpeace is pretty radical by most standards, yet even they rate different companies and praise ones that are making positive changes. They don’t say corporations themselves are evil, or capitalism itself must be abolished. Al Gore is considered by most to be an environmentalist, isn’t he on Apple or Google’s board of directors? Like you said, people realize marxism is extremely destructive to the environment (China has considered it a capitalist excess).

Of course, obviously people who care about environmental issues tend to dislike corporate exploitation and greed, and don’t have the same value on unregulated free markets when they damage the environment. But I’ve never seen any reason to believe your assertion that they can’t stand capitalism in general, or that they don’t actually care about the environment but just use it as a “cover” for some bizarre conspiracy to take over the world and institute communism.

Posted by: thom at May 27, 2007 2:24 AM
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