Check out this TED talk by Al gore on the global climate crisis. I just watched it and something hit me square in the face that I had not considered before. He reduced the entire solution down to one activity:
And that seems logical, right? Penalize the people who produce the most pollution. But what I had never considered is the secondary (and more important) effect this would have: by taxing carbon-based systems and making them financially less-viable, you attract entrepreneurs to create substitutes for a profit motive. You could be an entrepreneur with not one ounce of altruism and be motivated to solve the global warming problem simply because with the carbon tax, there’s now an opportunity to make money.
I had been thinking of the carbon tax purely as a punishment and had never considered the displacement this creates and the consequent incentive effect it has on pulling bright people out of the woodwork to solve the problem. Books like Freakonomics and playing with Kiva.org make me realize the solution to a lot of problems involves ensuring two things: that a) incentives are structured properly and b) entrepreneurs are aware of these incentives/opportunities and have the resources to go make money solving the problem. In hindsight this realization resolves a question that has been subconsciously nagging me: “Why are VC’s so bullish green technology?” It’s definitely not because they’re the most altruistic people in the world- it’s because they realize the magnitude of the opportunity as carbon-based fuels become impractical.
Can anyone think of a reason why the carbon tax doesn’t make 100% sense? AFAIK, the people that would suffer most are the Exxon’s of the world (but with a $500BN market cap I don’t have much sympathy). Everyone else (including me and my SUV) will be hit to a lesser extent- but we should be. I drive a big Tahoe now and I admittedly have some cognitive dissonance about this because I know that I’m contributing more to pollution than drivers of smaller vehicles. But at the end of the day, I don’t want a yugo or a hybrid. However, if a carbon tax made it financially painful for me to keep the Tahoe, I would probably get rid of it. For better or worse, practicality trumps altruism.
I saw a movie last week called the 11th hour – it was like Gore’s Inconvenient Truth in its mission to raise awareness of global warming. The trouble is, awareness is not the issue anymore, awareness of how to realistically act and contribute is. The idea of switching to CFC light bulbs just seems like a feel-good gesture that doesn’t truly help the situation. But implementing the Carbon Tax – now that makes perfect sense to me and is a real, actionable activity that I can get behind. It seems like VC’s with heavy investments in green tech would stand to benefit most from the carbon tax. I wonder if they have the wherewithal to organize and help in the lobbying effort…
If you’re interested in learning more about this stuff, here’s Carbon Tax Web Site.
I guess the problem then becomes, what to do with the Tax money collected… let the Pandora’s box begin…
I guess the other issue is that there is still a lot of scientific debate to whether all this carbon reduction actually will change our future. There’s plenty of qualified opinions that totally disagree with political drop-out Al Gore…
I think that Al Gore should commit to paying back every dollar that was spent if it turns out to be wrong in 10 years time. Now there’s some accountability.
When someone says sustainability is necessary and then sells you a product you know it’s a fad, not a real solution.
If Al Gore was so convinced of his argument, he should speak for free.
Chris, a couple things:
> what to do w/ the tax money
This wasn’t clear from reading my post but Gore in the video suggests replacing income tax with the carbon tax. It’s already been demostrated that there’s no constitutional basis in the US for the income tax->http://video.google.com/videoplay?docid=-1656880303867390173
I don’t know how feasible this would be (ie. if it could generate enough alone to cover without crippling an economy that is currently so dependent on oil), but if you look at things from the perspective of aligning people’s incentives with sustaining the earth, it seems like a wise direction to me. So use the money from the carbon tax to replace the money from income tax and gut the entire bureaucracy that surrounds tax collection.
> plenty of qualified opinions that totally disagree
where are some of these? To my understanding there are zero peer-reviewed journals that dispute global warming and it’s threat. The only dissenting opinions I’ve heard were from lobbyists and legislators that had been courted by lobbyists. Michael Crichton (who is my favorite author) wrote “State of Fear” which attempted to debunk global warming and while I respect that guy immensely, I’ve since been convinced that this is real and serious.
>and then sells you a product you know it’s a fad
no doubt. Al Gore has investments in a bunch of those clean energy companies so arguably HE stands to benefit greatly by convincing the public of his agenda. The thing is, I think he’s investing in what he believes in the same way that I bought stock in Poore Brother’s potato chips when i first had them because I thought they were incredible and and that other people would eventually discover how good they were. Putting your money and energy into a cause you believe in is the truest thing you can do.
>he should speak for free
are you sure that he charges to speak? I haven’t heard this. i don’t believe he got paid to do the TED talk.
sean
There are very few who dispute that global warming is occurring. What is contentious is the degree to which man is responsible and the level of catastrophe that results from the warming. I think it’s hard to say how much we’re responsible because there is a case to be made for a natural cycle, but it’s decidedly far from settled as to what we can expect to happen from this warming.
I think the best resource for this subject is Climate Skeptic and this recent entry really boils it down. If he is right (and I think he is), then the future isn’t nearly as bleak as Al Gore et al. would have us believe even if we were to do nothing different.
That said, I think the carbon tax is the wrong solution. The market is already working on addressing the situation: you can’t read a magazine without some advertisement describing how some company is reducing its carbon footprint and similar examples abound. Introducing a tax to attack the problem would just cause dislocation and malinvestments; forcing carbon-based businesses out of business is not a good idea.
As for replacing the income tax with the carbon tax, corporate income tax receipts for 2006 totaled $354 billion. If that’s your target, you’ll find plenty of businesses that would support you 100% and lobby Congress with all their might because they would see their tax bills evaporate. And there’d be plenty of other businesses that would quietly go out of existence because the tax would fall disproportionately on them. Imagine the consequences of that. Waving your hands and saying that someone will come up with a solution isn’t an answer.
Finally, you’re skeptical of anyone who doubts catastrophic global warming because they’re just in the pay of the oil companies but you give Al Gore a free pass. Why is that? He stands to gain so much more than any doubter has ever been paid should his view of global warming prevail and the carbon tax be enacted. I mean, aside from the prestige he’s gotten with the Nobel and the Oscar, he’s going to be rolling in it should the investments that he’s shilling for pan out. Also, I’m pretty sure that his bluster has never been peer-reviewed either.
Bill,
I’ve seen the magazine ads you’re talking about- Chevron religiously has a huge spread right in the front of WIRED. These ads are their penance for fucking things up in the way that Pillip Morris now has to do anti-tobacco commercials. Funny thing is there are studies that say these anti-commercials actually have the reverse effect. The market doesn’t fix itself when the incentives are still improperly aligned. To predict how any system will evolve you only need to look at the start condition and the grooves that are in place.
The idea isn’t to force carbon-based businesses into bankruptcy- that helps nobody. it’s to force them to change. Doing anything short of altering the economics so it’s financially impossible for them to succeed by continuing on the current trajectory is failure. Think about it- if you were sitting on a goose that laid a black egg every year of $6BN in profit, how tenaciously will you defend that position?
And the defense of “man may not be to blame” is no justification to do nothing either. Who cares why it is getting hotter, really? If it’s determined that the warming is going to ultimately destroy our civilization are we really going to waste one minute quabbling about who started it when we could spend that time trying to cool it down?
Bill, i don’t know if you remember this post from 5 yrs ago-> http://thread.gmane.org/gmane.comp.cms.cold-fusion.user.azcfug/3378
but had I followed your advice to “settle” take the safe, predictable, traditional path of a 9-to-5, the incredible company we’re building would not exist.
I appreciate your input but dare to dream man. I’m not giving Al a free pass here- read the comment above yours. I pointed out he has investments in a huge number of green tech companies and stands to benefit more than anyone if the world embraces this movement. But shouldn’t he? It’s not like he’s invested in the atom bomb. To me the fact he’s put devoted his entire life and his money full force to what many believe is THE way to avert catastrophe – I think that’s laudable, not mercenary. Money chases value and what more valuable contribution than to avert disaster.
That post you cited just plays the blame game- so what if man only represents a fraction of the cause? If the result is that we all perish, let’s forget blame and fix it. And if there are legitimate scientific papers that show it’s really no big deal, please link to those so I can get the other side of this story.
sean
What would prevent corporations from passing that ‘tax’ burden to their customers and mitigating the impact on their bottom line?
Doesn’t this tax include, taxing the humans, for exhaling co2? I understand the part about taxing the objects that emmit the gas, but what about me… Does’t this idea include taxing the human race, for breathing?
That’s funny that you should remember that response. I think about it often when I read your blog. Only probably not the same way you do.
The problem with your statement about how who’s to blame isn’t important is that it is terribly important. If the earth is warming regardless of what we’ve done, then that would suggest that cutting carbon production by 90% as Al Gore desires is a futile effort. If the earth is going through a natural cycle, then we should either spend our resources adapting to the coming hotter environment or figuring out how to ameliorate conditions.
And I’m sorry, but did you link to the peer-reviewed scientific papers that support Gore’s catastrophic forecast? Or is Gore credible enough because of his contributions to basic scientific research on the subject? That’s the thing that really rankles me is that everyone I’ve met just takes An Inconvenient Truth at face value.
It says that sea levels will rise by 20 feet (I couldn’t find the time period for this). But the IPCC report says it’s more likely to be 0.49 feet by 2100 (page 751):
http://www.ipcc.ch/pdf/assessment-report/ar4/wg1/ar4-wg1-chapter10.pdf
Also, I can’t find anything in it that says warming by 2100 is going to be greater than 5° F. Well, at least nothing that goes beyond “possibly.”
My basic point is that we should really be sure before we act so drastically as what you and others are suggesting. We don’t need to do something for action’s sake. There are very real costs involved and it’s easy to play armchair dictator with other people’s lives and money.
While I don’t disagree with a carbon tax, I find it funny that “light bulb on the carbon tax” is coming from the same guy that wrote a song called “hug a tree for me” in which he makes fun of birkenstock wearing baby seal loving ozone layer protecting environmentalists. My favorite line from that song went something like – “if it wasn’t meant to be chopped down, why is it made of wood?” Joking aside though, i think tax incentives encouraging people to put solar panels on their houses is the way to go. I hear right now, in many states, people are actually dis-incentivized to do so because the utilities (which are a government sanctioned monopoly) often charge you fees for doing this and don’t compensate you for the excess power you generate.
Keith,
ahh yes the Tree Hugger song. You grill me on that and I’ll bust out some of your old Severed Piece lyrics ;-) The lyric was actually:
“If we weren’t supposed to burn them then why are they made of wood? If we weren’t supposed to cut them down, why is it that a saw works so good?”
ummmm yeah, so i guess I’ve grown up a bit since that one… Still a fun song to poke fun at the Sierra Club fanatics but watching the TED talks with Gore and hearing the whole “no peer-reviewed journal has disputed global warming and it’s detrimental effects” has been a wake-up call.
I’ve heard that it actually takes a good deal of energy to produce the solar technology so it ends up yielding a net loss and doesn’t pay itself back for something like 15yrs. So driving a bunch of people towards solar right now could actually be a detrimental thing in the short-term. My guess is the solution is going to be something around fission/fusion with splitting H20. My dad has a friend who is doing some promising work in that area using aluminum and salt water as a catalyst- completely reusable energy that runs from what looks like a Propane tank bolted on your house. really interesting.
sean
I’ve never heard about solar yielding a net loss before…please forward me something that shows that. Obviously it is going to require some energy to produce a solar panel as it requires energy to produce pretty much anything, but I would have guessed it’s pretty minimal. I know from an economic standpoint, it currently takes a long time to get the payback and actually save money, but from a carbon energy standpoint, i would think the payback would be very fast…are you sure you’re not mixing up the economics with the energy payback?
Keith,
I stand corrected- apparently the idea that there’s a 15-year breakeven on the cost of producing solar cells is just FUD that I overheard and perpetuated. I looked it up and found this article which debunks it. Apparently solar has roughly the same “energy balance” as gasoline->
http://www.ecogeek.org/content/view/794/
“energy balance” in this context isn’t a perfect fit since the solar cells don’t contain the energy that we extract but the idea that it takes 15 yrs to pay for themselves in terms of cost of producing the cells is apparently total crap. my bad for repeating it without fact-checking.
sean
Bill,
I've seen the magazine ads you're talking about- Chevron religiously has a huge spread right in the front of WIRED. These ads are their penance for fucking things up in the way that Pillip Morris now has to do anti-tobacco commercials. Funny thing is there are studies that say these anti-commercials actually have the reverse effect. The market doesn't fix itself when the incentives are still improperly aligned. To predict how any system will evolve you only need to look at the start condition and the grooves that are in place.
The idea isn't to force carbon-based businesses into bankruptcy- that helps nobody. it's to force them to change. Doing anything short of altering the economics so it's financially impossible for them to succeed by continuing on the current trajectory is failure. Think about it- if you were sitting on a goose that laid a black egg every year of $6BN in profit, how tenaciously will you defend that position?
And the defense of “man may not be to blame” is no justification to do nothing either. Who cares why it is getting hotter, really? If it's determined that the warming is going to ultimately destroy our civilization are we really going to waste one minute quabbling about who started it when we could spend that time trying to cool it down?
Bill, i don't know if you remember this post from 5 yrs ago-> http://thread.gmane.org/gmane.comp.cms.cold-fus…
but had I followed your advice to “settle” take the safe, predictable, traditional path of a 9-to-5, the incredible company we're building would not exist.
I appreciate your input but dare to dream man. I'm not giving Al a free pass here- read the comment above yours. I pointed out he has investments in a huge number of green tech companies and stands to benefit more than anyone if the world embraces this movement. But shouldn't he? It's not like he's invested in the atom bomb. To me the fact he's put devoted his entire life and his money full force to what many believe is THE way to avert catastrophe – I think that's laudable, not mercenary. Money chases value and what more valuable contribution than to avert disaster.
That post you cited just plays the blame game- so what if man only represents a fraction of the cause? If the result is that we all perish, let's forget blame and fix it. And if there are legitimate scientific papers that show it's really no big deal, please link to those so I can get the other side of this story.
sean