Carbon Taxation: A Tale of Two Approaches

Al Gore’s Muppet-Master Plan, Versus McKitrick’s Evidence-Based Plan


As discussed in summary by Investors Business Daily, James Hansen, Al Gore Guru, and Climate Scientologist/Hansenologist  par excellence, has written a letter (see full version and “edits” here) to President-elect Obama and Ms. Obama making an overheated appeal for a “well-head or port of entry,” carbon tax from where it “will then appropriately affect all products and activities that use fossil fuels.”


The IBD Op-Ed credits Hansen with his support, as stated in the letter to the Obamas, for fourth-generation “nuclear power and coal-fired power plants with carbon capture and sequestration,” but notes, appropriately,


…he’s done so much yammering about global warming and encouraging “young people” to do “whatever is necessary to block construction of dirty coal-fired power plants,” that any sensible ideas he might have are lost.


The IBD editorial also emphasizes Hansen’s transparent (and hypocritical—see Al Gore’s lifestyle) social engineering agenda:


This tax will have “near-term, mid-term, and long-term” effects on “lifestyle choices,” Hansen acknowledges. But he seems unconcerned about how such coercion will rearrange the lives and manage the behavior of a people who should be free of state coercion. Acting either out of boldness or desperation, Hansen goes on to reveal the environmentalist left’s deeper ambition: a collectivist redistribution of wealth. He recommends that the carbon tax be returned to the public in “equal shares on a per capita basis.” That means wealthier Americans whose activities emit more CO2 will pay more in carbon taxes than they get back, while those who earn less will receive more in refunds than they will lose through taxes. “A person reducing his carbon footprint more than average makes money,” explains Hansen, while “a person with large cars and a big house will pay a tax much higher than the dividend.”


Hansen and his ilk never seem to question whether the government should be involved in behavior modification. They believe so zealously in their cause — establishing an egalitarian society where conspicuous consumption is limited to the few who make the rules — that they have no misgivings about using the police power of the federal and state governments to beat society into shape.


And of course putting the Climate Scientology Horse (Hockey) well before the actual cart of the objective scientific reality of anthropogenic climate change, as the IBD notes,


Nor do they question their hunch — the idea doesn’t even rise to the level of theory — that CO2 emissions are causing climate change even as there are ample reasons to doubt it.



Anticipating such alarmist efforts, Dr. Ross McKitrick, the brilliant University of Guelph Economics Professor who helped debunk the Hockey Stick fraudulence of Mann et al, called their bluff in this June 12, 2007 Op-Ed. McKitrick’s full argumentation, including his mathematical modeling can be read here (McKitrick, Ross. “A Simple State-Contingent Pricing Rule for Complex Intertemporal Externalities,” July 1, 2008, at the Social Research Network site).


McKitrick’s premise is simple—and wait for this—evidence-based!


Why not tie carbon taxes to actual levels of warming? Both skeptics and alarmists should expect their wishes to be answered



Below are the salient points of McKitrick’s proposal. Again, the entire June 12, 2007 Op-Ed can be read here, and his full discussion of the proposal can be evaluated here.


The IPCC [Inter-Governmental Panel on Climate Change] predicts a warming rate in the tropical troposphere of about double that at the surface, implying about 0.2C to 1.2C per decade in the tropical troposphere under greenhouse-forcing scenarios. That implies the tax will climb by $4 to $24 per ton per decade, a much more aggressive schedule of emission fee increases than most current proposals. At the upper end of warming forecasts, the tax could reach $200 per ton of CO2 by 2100, forcing major carbon-emission reductions and a global shift to non-carbon energy sources.


Global-warming activists would like this. But so would skeptics, because they believe the models are exaggerating the warming forecasts. After all, the averaged UAH [University of Alabama-Huntsville] / RSS [Remote Sensing Systems] tropical troposphere series went up only about 0.08C over the past decade, and has been going down since 2002. Some solar scientists even expect pronounced cooling to begin in a decade. If they are right, the T3 tax will fall below zero within two decades, turning into a subsidy for carbon emissions.


At this point the global-warming alarmists would leap up to slam the proposal. But not so fast, Mr. Gore: The tax would only become a carbon subsidy if all the climate models are wrong, if greenhouse gases are not warming the atmosphere, and if the sun actually controls the climate. Alarmists sneeringly denounce such claims as “denialism,” so they can hardly reject the policy on the belief that they are true.


Under the T3 tax, the regulator gets to call everyone’s bluff at once, without gambling in advance on who is right. If the tax goes up, it ought to have. If it doesn’t go up, it shouldn’t have. Either way we get a sensible outcome.


But the benefits don’t stop there. The T3 tax will induce forward-looking behavior. Alarmists worry that conventional policy operates with too long a lag to prevent damaging climate change. Under the T3 tax, investors planning major industrial projects will need to forecast the tax rate many years ahead, thereby taking into account the most likely path of global warming a decade or more in advance.


And best of all, the T3 tax will encourage private-sector climate forecasting. Firms will need good estimates of future tax rates, which will force them to look deeply, and objectively, into the question of whether existing climate forecasts have an alarmist bias. The financial incentives will lead to independent reassessments of global climate modeling, without regard to what politicians, the IPCC or climatology professors want to hear




One response to “Carbon Taxation: A Tale of Two Approaches