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Carbon Taxes
CARBON TAXES....Will Wilkinson argues that, environmentally speaking, eating food produced in faraway lands isn't really that big a deal:
According to a recent study out of Carnegie Mellon University, the distance traveled by the average American's dinner rose about 25 percent from 1997 to 2004, due to increasing global trade. But carbon emissions from food transport saw only a 5 percent bump, thanks to the efficiencies of vast cargo container ships.
A tomato raised in a heated greenhouse next door can be more carbon-intensive than one shipped halfway across the globe. And cows spew a lot more greenhouse gas than hens, or kumquats, so eating just a bit less beef can do more carbon-wise than going completely local. It's complicated.
There's a lot to be said for this, and one of those things is that it's a good argument for a carbon tax (or a cap-and-trade program, which amounts to much the same thing). Trying to figure out the carbon footprint for everything you do is just too damn hard. In fact, nearly impossible, as Will's example demonstrates. A better solution is to put a tax on carbon, let prices adjust to new levels, and then let the market sort things out. Carbon-intensive products will go up in price and we'll all end up buying fewer of them. Carbon-friendly products will go down in price (relatively speaking), and we'll buy more of them. No muss, no fuss.
There's another side benefit too: guilt reduction. After all, none of us will ever live pristine lifestyles even if we'd like to: maybe you like your SUV and I like my sirloin steak and we really, really don't want to give them up. What to do? Answer: pay the carbon tax and relax. Maybe you'll keep your SUV and eat more tofu, while I'll keep eating meat but buy a Prius. We'll both cut down our carbon use, but we'll each get to do it in our own way. And that way is whatever causes us the least grief. The Prius doesn't bug me much and the tofu doesn't bug you much, so we've both cut our carbon consumption, done it with only modest sacrifice, and held on to the things that we really care about. But despite the collective modest sacrifice, we've cut our carbon consumption.
The biggest problem with all this — and the most powerful argument the climate change skeptics have — is that a carbon tax won't truly be effective unless it's worldwide. Fruit shipped from Chile won't be affected at all, for example, as long as the freighters fuel up somewhere outside the U.S. Ditto for toys made in China and textiles in India, since neither China nor India appears likely to join us in taxing carbon emissions anytime soon.
But this wouldn't be the first time that the United States took a lead in the global sphere and had to wait for others to catch up. It seems worth doing to me anyway, especially since, in the meantime, even a U.S.-only initiative would spur development of green technologies and act as sort of a proof of concept for the whole idea. If not us, who? If not now, when?
Trying to figure out the carbon footprint for everything you do is just too damn hard. In fact, nearly impossible, as Will's example demonstrates.
Isn't this calculation problem at least as bad in levying a carbon tax as with trying to appease one's guilt?
One advantage on the taxation side is that the tax collectors have a much greater incentive to do some meaningful calculation. But I'd still be surprised if there wasn't a long period of bickering about how exactly carbon assessments are done.
I would like to point out that not only is a unilateral carbon tax a non-factor, its actually counter-productive to the cutting down of carbon emissions. Make goods more expensive here by adding the tax + the administrative costs of adhering to the tax and more goods will be bought from overseas. These overseas goods will of course be bought from countries whose means of production are more carbon intensive. A unilateral approach could just add to more carbon emissions. Good idea Kevin,
I think the carbon tax would still be a net positive if we were the only people in the world to have one.
At the margin, it would shift carbon intensive things overseas and it would shift carbon saving things to the US.
Then, if saving carbon became important worldwide and other countries started to reduce their carbon output then American industry and know how would be a small step ahead.
Of course, all of this is at the margin.
A carbon tax would be a great way to reduce the deficit or to cut income taxes, period.
A better solution is to put a tax on carbon, let prices adjust to new levels, and then let the market sort things out.
We'll have to figure out the carbon footprint for cake, 'cuz before we say "let them eat cake" we'll need to know whether or not they can afford it.
guilt reduction...pay the carbon tax and relax.
It's not about how to make upper-middle class Americans feel less guilty.
But then again a negotiated agreed upon carbon tax is no good either. Do you really expect a Chinese govt which can't even tell the truth about the age of its gymnasts is going to enforce a carbon tax agreement to its own detriment? This is what I mean by Democratic naivatte. BTW- just look how good those Kyoto signers are doing on self-enforcement of Carbon emissions.
Who pays the carbon tax? The end user? Any buyer of hydrocarbons (even if they only are passing it through)? The producers?
Would we attempt to tax importers via some kind of carbon tarriff?
The devil is in the details.
To make the carbon tax world-wide, it suffices to add the appropriate tariff if the country at the other end doesn't impose a carbon tax. A container ship going from country A to country B would have to pay half of the carbon taxes to each country, and if country B doesn't want to collect it, the money could be sent to an international fund.
"But this violates WTO rules". So what? Change the rules.
Kevin,
Exactly what do you refer to when saying we lead and wait for the rest of the world to follow?
Would that be the mass production of gas guzzling autos? Or maybe you had something else in mind that we do so well like borrowing money?
Yep we are world leaders.
Interesting study and I certainly understand the point it it trying to push.
However, there are a multitude of reasons why it is a fantastic idea to focus on local foods whenever possible. Its only a guilt issue if you make it so (in buying imported/shipped foodstuffs).
Buy Local, eat local. A great general rule, not an absolute.
Eating meat may not "bug" you, but it is hell for the animals bred and slaughtered by modern industrial agriculture.
Another level to this point: a carbon tax is something that is purely bipartisan, with the tax component a liberal idea and the market fixing itself a conservative one. BHO should jump on this.
Good point, RC.
I was thinking something like how we raise wages and then wait for the rest of the world to take our jobs.
Another point about eating food raised "in faraway lands."
People in some of those faraway lands are, well, hungry, in part because the Divine Will of the Sacred Market dictates that food produced for export to Americans is more profitable.
To make the carbon tax world-wide, it suffices to add the appropriate tariff if the country at the other end doesn't impose a carbon tax. A container ship going from country A to country B would have to pay half of the carbon taxes to each country, and if country B doesn't want to collect it, the money could be sent to an international fund.
"But this violates WTO rules". So what? Change the rules.
I don't think tariff surcharges based on carbon usage would violate WTO rules if done to comply with an environmental agreement (e.g., Kyoto protocol). One of the reasons ratification of the global warming treaty would be worthwhile.
Its a bit late for the US to take the lead here, as other jurisdictions already have carbon taxes (which are really just fuel taxes anyhow)
Robert Hansen, Kevin said explicitly that the rest of the world wouldn't necessarily follow right away. So try to read more carefully before posting.
We have lots of things China wants, and if we have the will and the patience, we can make it happen.
Kevin, you missed one BIG monkey wrench: Per Bretton Woods, you cannot tax fuel used for international food shipments.
Cows generate greenhouse gas (and dangerous E. coli) when they are fed corn.
The grass-fed beef from your local farmer is better for everyone, even the cow.
And if not them, then a blanket import tariff on any country not cutting their carbon consumption.
Yeah, conservatives are always called the U.S. "the leader of the free world" but when leadership requires any sacrifice, they're no where to be found.
Their idea of "leadership" is not sound.
Eehm, Kevin. About the US going ahead, not waiting for others.
You're not really being serious there, are you? I mean, paying attention to what happened the past 5 years, and all.
(If not you, then Europe, Japan, Russia, Canada, Australia, New Zealand...)
Also note: it is perfectly possible for parties to a new agreement to instate a common border adjustment tax for carbon.