NewEnergyNews: CARBON TAX: AN ECONOMIC ANALYSIS

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YESTERDAY

THINGS-TO-THINK-ABOUT THURSDAY, December 8:

  • TTTA Thursday- The Record Of The New EPA Head
  • TTTA Thursday-The Undeveloped New Energy
  • TTTA Thursday-Walking On New Energy
  • TTTA Thursday-Electric Tractor For Emissions-Free.Farming
  • THE DAY BEFORE

  • ORIGINAL REPORTING: Turning Distributed Energy From Threat To Opportunity
  • ORIGINAL REPORTING: Solar Policy Action Heats Up
  • ORIGINAL REPORTING: Maine’s Almost Solar Policy Breakthrough
  • THE DAY BEFORE THE DAY BEFORE

  • TODAY’S STUDY: How To Balance Competing Solar Interests
  • QUICK NEWS, December 6: Sliver Of Hope? Al Gore In Climate Change Meet With Donald Trump; The Opportunity In New Energy; Google Seizing New Energy Opportunity
  • THE DAY BEFORE THAT

  • TODAY’S STUDY: A Way For New Energy To Meet Peak Demand
  • QUICK NEWS, December 5: Trial Of The Century Coming On Climate; The Wind-Solar Synergy; The Still Rising Sales Of Cars With Plugs
  • AND THE DAY BEFORE THAT

  • Weekend Video: Trump Truth And Climate Change
  • Weekend Video: The Daily Show Talks Pipeline Politics
  • Weekend Video: Beyond Polar Bears – The Real Science Of Climate Change
  • THE LAST DAY UP HERE

  • FRIDAY WORLD HEADLINE-Aussie Farmers Worrying About Climate Change
  • FRIDAY WORLD HEADLINE-The Climate Change Solution At Hand, Part 1
  • FRIDAY WORLD HEADLINE-The Climate Change Solution At Hand, Part 2
  • FRIDAY WORLD HEADLINE-New Energy And Historic Buildings In Europe
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    Anne B. Butterfield of Daily Camera and Huffington Post, f is an occasional contributor to NewEnergyNews

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    Some of Anne's contributions:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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  • Who Needs Fake News With New Energy News About Aliens?
  • World Moving To Home Energy Management Systems
  • Aussies Can Do 100% New Energy – Study
  • Big-Name Carmakers Back European EV Charge Network

    Tuesday, September 18, 2007

    CARBON TAX: AN ECONOMIC ANALYSIS

    On the subject of cap-and-trade, Mankiw’s analysis is skewed to make his point. (Why wouldn’t it be? Cap-and-trade is the main competitor with his tax idea as an answer to controlling emissions.) Mankiw seems to assume allowances would be given to power companies and big emitters while it has been proven a portion of the credits must be not given but auctioned. He contends that international trading systems have failed whereas the EU’s system has not yet entered Phase 2, where it will prove itself. His point about the necessity of participation by China and India is correct, though their willingness to comply might change if and when the US seizes the initiative. Why he thinks a global “carbon tax” would necessarily be easier to administer than a global cap-and-trade system is not clear: They would both be massive undertakings. But so is global climate change.

    One Answer to Global Warming: A New Tax
    N. Gregory Mankiw, September 15, 2007 (NY Times)

    WHO
    policy wonks (British economist Arthur Pigou, chief Reagan economist Martin Feldstein and Harvard economics professor/President Bush-Mitt Romney adviser N. Gregory Mankiw) vs. political consultants

    There is nothing simple about a "carbon tax." It works in some cases but not in others. It is probably not politically possible. (click to enlarge)

    WHAT
    Policy wonks advocate the use of a tax on emissions (aka “carbon tax”) as the obvious way to mediate climate change. It is not a politically viable idea.

    WHEN
    Pigou proposed the idea of corrective taxes (“Pigovian taxes”) in the early 20th century. Feldstein proposed a “carbon tax” in 1992.

    WHERE
    - Republican consultants: use “tax” only before the word “cut”
    - Democratic consultants: use “tax” only before the words “on the rich”

    WHY
    - A “carbon tax” would affect everyone who drives a car or uses fossil fuel-generated electricity but wonk Gilbert Metcalfe (economist, Tufts) has shown how the revenues could be used to cut payroll taxes: $15/ ton of carbon + payroll tax rebate on workers’ 1st $3660 earnings.
    - Would a legislated requirement for better auto fuel efficiency work better? Carmakers would pass the cost to car buyers without generating revenues to offset the burden on lower incomes. Fuel cost savings would be dependent on irrational consumer choices and lead to more driving, more road congestion and more accidents.
    - Cap-and-trade is dependent on the handling of allowances and problematic in the absence of participation by China and India.

    There are a lot of emissions trading programs going on right now. Some are working better than others. (click to enlarge)

    QUOTES
    - Mankiw: “Among policy wonks like me, there is a broad consensus. The scientists tell us that world temperatures are rising because humans are emitting carbon into the atmosphere. Basic economics tells us that when you tax something, you normally get less of it. So if we want to reduce global emissions of carbon, we need a global carbon tax. Q.E.D.” (NewEnergyNews: Whenever anybody ends a point with “Q.E.D." it is very likely an oversimplification. Especially in discussions about climate change.)
    - Mankiw: “Mr. Feldstein has devoted much of his career to studying how high tax rates distort incentives and impede economic growth. But like most other policy wonks, he appreciates that some taxes align private incentives with social costs and move us toward better outcomes.”

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