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The economic impacts of carbon pricing

What the science says...

Select a level... Basic Intermediate Advanced

The costs of inaction far outweigh the costs of mitigation.

Climate Myth...

CO2 limits will harm the economy
"Legally mandated measures for reducing greenhouse gas emissions are likely to have significant adverse impacts on GDP growth of developing countries [...] This in turn will have serious implications for our poverty alleviation programs." (Pradipto Ghosh)

If climate change proceeds without any efforts to reduce it, we can expect to incur serious economic costs. In fact, it's not unreasonable to expect that the effects of climate change will create greater economic instability worldwide.The solution is, of course, to reduce fossil fuel use. One way to do this is to shift away from fossil fuels towards renewable energy sources. The other way is to reduce energy demands through increased efficiency.

Both mechanisms have economic implications. In order to stimulate the private sector’s investment in renewables, governments can put a levy on fuels, which may be used to fund or subsidise new initiatives.

To reduce demand, there are a number of solutions available, but most seek to raise the cost of carbon through taxes. However, such increased costs give rise to concerns that change underwritten by taxes or levies will damage economic prospects, particularly in developing countries.

The Representative Picture

In the fifth IPCC Assessment Report (AR5), a new set of scenarios called Representative Concentration Pathways (RCP) will be used. The four RCPs replace the previous scenarios from the "Special Report on Emissions Scenarios" (SRES). Each RCP represents a set of initial conditions and projections to year 2100, based on a synthesis of the peer-reviewed literature.

The graphs below show the predicted RCP trajectories for economic performance:

             

Figure 1: GDP projections of the four scenarios underlying the RCPs (van Vuuren et.al. 2011). Grey area for income indicates the 98th and 90th percentiles (light/dark grey) of the IPCC AR4 database (Hanaoka et al. 2006). The dotted lines indicate four of the SRES marker scenarios.

The number of each RCP is the forcing (in watts per square metre) associated with a specific amount of emissions for each scenario, up to the year 2100. The graph of GDP clearly shows that the pathways that reduce emissions the most in that time frame (2.6 - green, and 4.5 - red) are those with the best long-term economic performance. In other words, the investment required to reduce emissions is repaid by increased economic performance. Business as usual strategies (high-emission scenarios RCP 6 and 8.5) are the least profitable; the money saved early on is dwarfed by the costs of damage and disruption done in the longer term.

Putting a Price on Carbon

There are a number of schemes under consideration, and a number already implemented. According to the article Pollution Economics in the New York Times, more than 20 percent of global greenhouse gas emissions are now subject to carbon pricing systems. About 60 other states, provinces or countries are considering similar approaches, according to a recent World Bank report.

It’s too early to judge long-term economic performance of the early adopters, but Canada’s province of British Columbia serves as a good example of how carbon pricing can reduce fuel use - in their case through a revenue-neutral scheme. A recent study found that since 1st July 2008, when the tax was introduced:

  • BC’s fuel consumption has fallen by 17.4% per capita (and fallen by 18.8% relative to the rest of Canada).
  • These reductions have occurred across all the fuel types covered by the tax (not just vehicle fuel)
  • BC’s GDP kept pace with the rest of Canada’s over that time
  • The tax shift has enabled BC to have Canada’s lowest income tax rates (as of 2012).
  • The tax shift has benefited taxpayers; cuts to income and other taxes have exceeded carbon tax revenues by $500 million from 2008-12.

Source: BC’s Carbon Tax Shift After Five Years: Results, Elgie & McClay 2013

In a separate report, the British Columbia Department of Finance found that in 2012, BC's taxes were among the lowest corporate tax rates in North America and the G7 nations. 

Conclusions

Since a number of economic incentives are being tried, it seems too soon to declare them failures. It is interesting to note that while governments are having difficulty negotiating agreements on the global scale, regional schemes are already proving effective, flexible and popular. An important ingredient seems to be an accompanying tax reduction that makes the carbon tax revenue-neutral.

In the long term, unless we drastically reduce the rate at which we are still emitting greenhouse gases, we are very likely to incur huge costs as a result of climate change. Part of these costs will be in adaptation, and the inevitable disruption. In part costs will escalate due to turmoil and uncertainty throughout the economic world. There will also be costs that cannot be quantified, particularly when we try to value a human life and its loss.

We have to reduce our emissions. If we are to avoid draconian government intervention, carbon pricing schemes are a viable method of encouraging us to reduce fossil fuel use. Coupled with other measures to stimulate renewable energy development, putting a price on carbon may help us make the transition away from fossil fuels. And from our experience to date, it seems likely  that carbon taxes, instead of bringing an economy to its knees, may well help transform an outdated system into one fitting for a sustainable century.

Basic Rebuttal written by GPWayne

Further Reading: The Intermediate and Advanced rebuttals contain detailed information about carbon pricing and tax schemes. Skeptical Science contributor Andy Skuce has also written an article about British Columbia’s experience here, with an update here describing the findings of the Elgie & McClay paper.

Last updated on 22 August 2013 by dana1981. View Archives

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Further reading

Only tangentially relevant but a nifty java animation at the Quaker Economist projects the world's future energy production and when it's expected to peak.

Comments

1  2  3  Next

Comments 1 to 50 out of 104:

  1. Do these analysis consider the global industry transfer- it may destroy the last bit of heavy industry in the US and send it somewhere they have no problem polluting
    much more- let alone other effects of that ? How about the cost the massive new bureacracy for this tax- I admit less than that for a carbon trading scheme? Even more disasterous for somewhere like Australia and no net benefit on carbon dioxide output.
  2. Not much of a problem. Massive new bureaucracy? I don't think so. Taxes are one thing modern governments have lots of experience with - income taxes, goods & services, excise, import duties - all well established, ho-hum, routine procedures. Hand over the legislation and the public servants will just do the same as they've always done.

    Heavy industry, light industry, any industry? All you have to do is organise import duties to match homegrown production taxes so that it won't matter where the stuff is produced, the same imposts will go on.
  3. Would Cap-and-trade be an effectual way of significantly reducing greenhouse gase emissions? Or do we need a much more aggressive bill to make large differences in greenhouse gas emmisions
  4. Cap-and-trade offers no incentives for reducing emissions beyond the set limits. To me, it looks like a shell game, CO2 emissions aren't reduced and the carbon credit brokers are the only ones to make money.

    I was pleased to discover some time ago that James Hansen and others had reached the conclusion before I did, that a revenue-neutral, phased-in carbon tax was the most sensible way to reduce emissions.

    I hope this site is on the level
    http://www.carbontax.org/

    It appears to be, but sometimes it's hard to tell.
  5. Chris G, it looks legit, the owner of the domain is Thomas Stokes who seems to be reputable.

    Having just read Hansen's writings more carefully here http://www.columbia.edu/~jeh1/mailings/2010/ I agree with the tax and dividend approach. If it were proposed with a decent phase-in period (since I also believe there is no urgency), I would support it over cap and trade because cap and trade is much harder to measure and enforce.
  6. Berényi - Benefits look to outweigh costs by a factor of 2 to 8, neglecting benefits such as decreased air pollution, ocean acidification, and overall climate change. Your cost argument does not hold up.
  7. #6 KR at 06:14 AM on 19 February, 2011
    Berényi - Benefits look to outweigh costs by a factor of 2 to 8, neglecting benefits such as decreased air pollution, ocean acidification, and overall climate change. Your cost argument does not hold up.

    Come on. Have you actually read Policy Brief No. 4 from Institute for Policy Integrity (which is not a peer reviewed paper so I wonder how is it allowed at this site at all)?

    Anyway, it all depends on discount rate, about which the authors say

    The interagency review process acknowledged that "[t]he choice of a discount rate, especially over long periods of time, raises highly contested and exceedingly difficult questions of science, economics, philosophy, and law."

    The benefits Holland & Schwartz are talking about are clearly not economic benefits, as they depend on such things as science, philosophy and law, but never on supply and demand, so they do not constitute a true income. Therefore they are not comparable to costs. End of story.
  8. Berényi - I looked at a number of the analyses. Cost estimates per US household were estimated at $80-160/year, or ~$20-50/person/year, not too much, with lower prices for lower income families. Economic benefits include deficit reduction, $$ for investment in renewables/energy efficiency/lower polluting tech, and a reduction in greenhouse gas accumulation, hence a reduction in warming speed and mitigation of global warming consequences and their associated costs.

    And that's completely without considering the "Other Side of the Coin" paper, which uses a range of societal carbon costs estimates established by fairly detailed Department of Energy estimates. If you don't like that paper, take the estimates and do the calculations yourself.

    Sounds like an good economic trade to me. Avoiding some of those considerable upcoming costs is income, if you can look at and plan for the future - rather than being short-sighted about immediate rewards.
  9. Berényi - As an example of climate change costs: the Central Valley (around Sacramento) in California, USA, is a major 'bread-basket' region, producing 8% of the USA agricultural output.

    That agriculture is fed by year-round Sierra mountain snowcap runoff, which is shrinking due to global warming and reduced snow accumulation. Rice crops will be among the first to suffer, but all agriculture needs water - 20-50% less over the next century. Walnuts, cherries, prunes and peaches, on the other hand, require lower winter temperatures to produce, and are declining as well; by 2100 about half the $9B annual fruit and nut crop will not be able to survive there.

    Minimizing these sorts of changes is the economically wise thing to do; I fail to see how you think otherwise.
  10. Berenyi:
    What is the value of preserving the land in Bangladesh? With only 2 meters of sea level rise 100,000,000 people will be refugees from that part of the world alone. Not to mention all the other major cities around the world that will be inundated. What is the benefit of maintaining those cities versus the cost of building new cities further inland? These are clear economic benefits that have not even been added to most of the analysis cited above, the recent sea level estimates were not available. The infrastructure alone is worth trillions of dollars in the USA.
  11. Energy cannot be creatd or destroyed, except in the minds of those who advocate alternative energies.

    If something produces less energy than something else, it's going to cost more money to use it. It's not rocket science, and rockets will not get to the moon using wind energy.
  12. Thingadonta, far more solar energy reaches the earth every year than can be used by our civilization. Therefore talking about conservation of energy is irrelevant.

    The cost of energy is important, and the direct cost of alternative energy is currently greater than the direct cost energy from fossil fuels. However, the indirect costs of fossil fuels are very large. Our society does not seem to care, because those costs will be paid for primarily by future generations rather than by us. Ignoring those direct costs will not cause future generations to thank us.
  13. BP #7 - as discussed in Monckton Myth #11, we have examined studies using discount rates ranging from 1.4% to 5%. In every case the benefits of carbon pricing exceed the costs several times over.
  14. I have a question. Some developed countries like Iceland or Japan are almost devoid of fossil resources (mainly volcanic countries whose ground is too young to contain sedimentary rocks). Obviously, barring any CO2 effect, this would be very interesting for them to develop without using FF. there is no interest in using them if they can make it without them, they're expensive to import : and actually they did it when they could ! Iceland has a lot of renewable electricity (hydraulic and geothermal) and is also mainly heated by geothermal sources. BUT..but... they still use plenty of FF for the rest and they produce as much (or more ) CO2 per capita than comparable countries.

    So if it were so easy to suppress the use of FF, why didn't they do it a long time ago ? maybe the brilliant engineers of MIT should explain them how dumb they are and give them access to their marvelous solutions ?
  15. Everyone of those taxes produced a massive bucreacracy- Government would have to assess every single carbon dioxide emitter- Your IRS will need employ new people to assess a whole group of tax payers in a totally different way than they have ever done before. Every tax written is a mess of exceptions, special rules. Put in a transfer tax (involves only few extra line of code on financial institions' computing) and abolish all your other taxes. Either fire the IRS or set them to analyse the mass of new information to catch terrorists, organised crime, and general fraud.
  16. cloa513 - good points. But please suggest a better way to reduce carbon emissions that is compatible with your political philosophy. "Skepticism" about climate science because you don't like proposed solutions is illogical.
  17. Gilles has argued that it cannot be both easy and difficult to give up fossil fuels at the same time. As dana has pointed out, that is a strawman argument. It has not been argued that it is easy to give up fossil fuels, but rather that it is technically feasible, and beneficial to do so.

    By technically feasible, we mean that there is no impediment from physics to doing so - so I guess at a stretch, we could say it is "physically easy", so in this sense, and understood only in this way, it is "easy" to give up fossil fuels. But, this does not even mean that it is technically easy. Going from physics to a usable technology is not always a straight forward path.

    In the case of fossil fuels as fuels, their use in transport is particularly difficult to find a technically equivalent alternative to using fossil fuels, although there are already many technically adequate alternatives. Transport ships, for example, could use a combination of wind power (sail) and solar power with battery storage to make any trip they currently make - but would take significantly longer to do so (though not more than three times longer). That is a technically adequate solution. Our civilization could operate on that basis, and probably at an advantage economically when the additional shipping cost implied is defrayed against the reduced cost of not needing to ship a torrent of fossil fuels.

    Business and political communication needs can be adequately substituted for by a combination of high speed internet connections for very fast virtual meetings using Skype equivalents, and solar powered Zeppelins for air transport. Again the transport times will significantly increase, but economic and political costs need not do so in tandem if we adjust behaviour to match what is now technically feasible.

    Of course, what is not technically feasible at the moment is eliminating fossil fuels while retaining our SUV driving, one person per car, traffic jam loving culture. A switch away from fossil fuels in the short term is going to require significant cultural changes. Not changes in those core parts of western culture that has made our civilization great, of course, but in some of those aspects of our culture which have grown up since the 1950's based on the assumption of an endless supply of cheap fossil fuels.

    So, this means that while fossil fuels are physically easy (in the strict sense defined above) to replace, they are culturally difficult to replace in the short term.

    You can easily extend the pairing of easy/difficult juxtapositions:

    It is physically easy, but psychologically difficult;

    It is physically easy, but institutionally difficult;

    It is physically easy, but economically difficult (in one of several possible meanings of that term).

    In fact, this easy/difficult juxtaposition is very easy to extend, but while rhetorically gratifying in showing that Giles knows so little about what he talks - that he is big on factoids but low on wisdom - it is not profitable.

    Now, I am perfectly happy to get into the nitty-gritty of this subject with Giles - but only on the condition that he restrict the discussion exclusively to this appropriate thread. If he discusses it anywhere else, except by a simple link back to this thread in other partially appropriate threads (and only in such partially appropriate threads), then I will withdraw from the discussion here as well. I will adopt the principle of not feeding the troll, unless he shows he is not a troll by not trolling other threads.

    I strongly recommend that other commentators follow the same strategy.

    I also strongly recommend that the moderators cease telling us to not feed the troll. If you need to tell us that, the troll is trolling and their trolling comments (and any replies) should simply be snipped with a link the appropriate thread for discussion provided. The current moderation policy is simply asking for denier talking points to remain continually unanswered on every thread that is generated - which is unacceptable.

    So, now it is over to Gilles (and the moderators). I look forward to the discussion.
  18. Now for the *real* impacts of carbon pricing :

    http://www.foxbusiness.com/markets/2011/04/11/oil-prices-inflation-pose-risk-global-economy-imf/

    http://www.nytimes.com/2011/04/19/business/global/19euro.html

    http://blogs.reuters.com/james-pethokoukis/2011/04/18/the-politics-of-sps-u-s-debt-warning/

    = recession, unbearable debts, economic crisis. That's the real world.
    Response: [DB] Please demonstrate the relevance of a link by providing some context showing why its relevant to the thread at hand. Otherwise, you're merely vomiting forth newspaper links (in this case) with no demonstration that you've actually read the post you're commenting on. Future posts lacking such context will receive moderation. FYI: as in the real world of astrophysics, peer-reviewed science publications carry the most weight, don't they?
  19. I think Gilles should try reading the post he's commenting on here, as it refutes every claim he made. Just as one example, try reading the Impact on Gasoline Prices section.
  20. "... a GDP reduction of less than 1%..."

    Can I presume that GDP is conventionally calculated?

    In that case electricity, petrol, diesel, coal not sold because of reduced sales (through reduced demand by negawatts or distributed generation investments) will indicate a reduction or "loss" of production - which is exactly what we want in the first place.

    This would be a bit like saying the country's families are starving - because they started buying packets of seed to grow their own instead of buying fruit and vegetables grown by others.
  21. Giles @18:

    From his first link:

    "Oil prices, which surged above $126 a barrel on Friday -- their highest level in 32 months -- retreated on Monday as the African Union signaled progress in Libyan peace talks."

    Reality check: Each barrel of oil used as fuel releases 0.45 tonnes of CO2 into the atmosphere (highest of three estimates found on the web). Introductory carbon prices are expected to be around thirty dollars per barrel, so that represents a price increase of 13.5 dollars, or just over 10%. Given the volatility of oil prices, that is not an earth shattering rise and would certainly not be, by itself, enough to drive a nation into recession. Indeed, with crude oil representing just 0.04%, the direct inflationary impact of such a carbon price driven price rise would only by a 0.004% blip in inflation.

    The second link discusses the EU bailout of Greece, and so far as I can tell contains no relevant discussion to this topic.

    The third link is a discussion of Standard & Poor's downgrading of the outlook on the US financial position. Ironically, that downgrade is likely to have a greater direct adverse impact on the US economy than a carbon tax would, but as it is, it is irrelevant to the topic of this thread.

    So Gilles's apparent argument to date is that: 1) The real world contains inflationary risks that can potentially lead to recessions; and

    2) A carbon tax's contribution of an estimated 0.004% to inflation is so large that it significantly raises those risks.

    Oddly, I am not convinced by his logic.
  22. Tom, I don't know how it might work in other countries, but Australia's proposal for carbon tax on petrol should have no, nil, zilch effect on retail prices.

    All they're proposing is that any carbon tax will be offset by matching reductions in excise. No change in the amount going to the government, but it will be paid from the oil companies' pockets instead of the user's.
  23. Gilles#18: "That's the real world. "

    Here's the rest of the so-called real world, in which the so-called free market is left to itself: Crude Oil Advances as Speculation on ECB Rate Increase Weakens Dollar

    Oil increased for the fourth time in five days as speculation that the European Central Bank will further raise interest rates strengthened the euro against the dollar, boosting commodities’ appeal as an alternate investment.
  24. I am new to this site and am yet to get my head around a lot of what I am reading.

    I do want to protect the environment, I would love to see more effort being put into renewable resources.

    Taxing carbon might be the best way on paper. The part that makes it so scary for me is the ongoing greed of big business. I fear that the cost of living will increase dramatically due to their greed, not based on the logically put predictions made by those proposing the solution.
  25. 212, Tom Curtis, (from another thread here),
    I also find it utterly risible that people claim that public transport is inefficient because it requires subsidies to operate, while completely ignoring that users of private transport never pay the full cost of the roads they use.


    That's an excellent point, even as it relates to the redistribution of wealth issue. The beneficiaries of publicly funded interstate highway and rail systems are inevitably the very wealthy. While we may not enjoy the selection as much, people could very, very easily live a good life style using more locally produced goods, which require less roads and rail infrastructure.

    Certainly, our current society depends on those two, but by far, the beneficiaries are the extremely wealthy who then accumulate more wealth than they otherwise could.

    So a "fair" tax on roads and rail really should be on a per-use basis (in which case the small, local businessman would be far more competitive, and the consumers would have a better choice, and free market forces would include that hidden expense of long-distance-transportation infrastructure... but the wealthy would never stand for such a thing).
  26. Sphaerica @25, I doubt that this is really on topic here, or anywhere else on Skeptical Science, so I will make a few short observations and leave it at that.

    First, while there is a hidden subsidy of private transport, the subsidy is one in which all, or almost all members of society are substantial beneficiaries. In the simplest terms we know the standard of living of people dependant primarily on local distribution networks, and it is not high. Indeed, it struggles to match that of even pensioners in our society. Typical examples can be found in any Indian or African village.

    With modern technology, that standard can be lifted to a very comfortable level, but the ready availability of that modern technology depends on the existence of mass markets and cheap transport. Consequently a modern village life style can only be a utopian dream for a wealthy (at least in world terms) few. Further, such a life style cannot sustain anything like our current world population.

    You probably did not have in mind anything like the level of localisation I am describing, but the point is a general one. Consequently I am certainly not opposed to the hidden subsidy on private transport. I just do not think the need to subsidise public transport is not a reason to invest in it. What is at issue is which is the most efficient subsidy, and that will depend on the particular situation. In general, public transport will yield greater efficiency, but only because as a result of the very visible nature of the subsidy, investment in public transport tends to lag investment in private transport.
  27. 26, Tom,

    Pretty much agreed.

    My position was probably presented in too extreme a fashion. Certainly, everyone benefits hugely from the vast transportation infrastructure that has grown in the last 150 years, and you are right, modern societies and populations would not be sustainable without it.

    But, I would also argue that while all benefit from it, the wealthy benefit disproportionately more, and pay disproportionately less. A transportation tax of any sort (on roads, or on fuels/energy) will ultimately be passed on to the consumer, making all products more expensive. But this will ultimately result in a new, more appropriate balance between more-expensive-to-produce-but-cheaper-to-transport local goods, versus the opposite (which is almost all we have in today's society). It moves some of the easy ability to accumulate wealth out of the hands of a national and international very few, and into more, more local hands. Not a lot, just some.

    It would also result in the development of cheaper and more sustainable energy sources and transportation systems.

    So, in the end, my argument is that future fossil fuel taxes and their effect on the economy are really simply righting an injustice that is already inherent in the current system, i.e. that large corporations and a wealthy few benefit disproportionately from a massive, fossil-fuel based infrastructure that is not, in and of itself, as currently fashioned, in the best interests of either society or most people in society.

    It is already a redistribution of wealth, from the poor and average person to the wealthy.

    Will prices go up some? Yes. Would a wholesale destruction of the current system badly damage society, and individual wealth at all levels? Obviously, and absolutely.

    Are either of these valid arguments for leaving the current system in place? Not remotely close.
  28. Sphaerica @27, a case can certainly be made that the rich benefit more in absolute monetary terms. I, however, would argue that the correct terms of analysis are in terms of utility gains (where "utility" is the technical term used in economics and ethical theory). As absolute income increases, utility gain per dollar increase in income declines, and quite sharply above a certain point. Just one example, in 2000 dollar terms, the difference between an annual income of $5000 and $10000 is the difference between a life expectancy of about 50 and about 75 (from memory). The difference between an annual income of $10000 and $50000 in contrast is only a difference of a life expectancy of around 75 to less than 85. So, in utility terms the gains of the poorer members of society from the transport system are massive. So also are those of the wealthier members of society. But it would take very careful analysis to decide who gained most in relative utility terms.
  29. Sphaerica,Tom Curtis @ 25 26 27 other thread 212

    Public transportation is inefficient regardless of the subsidy. The US light rail inefficiency arise from the constant power consumption. Whether it running full speed, half speed, idling or breaking, nearly the same power is consumed. The large cages, usually atop a the trains, contain a huge resistor grids. The grids act a giant rheostat to offset actual use to mitigate dynamic loading of catenary and/or third rail. Worse yet, being a government entity they operate on the 'use it or loose it" budgeting criteria. Budgeted money not spent is retracted and counts negatively (less funds) the following cycle...thus system manager leave surplus trains idling to burn electricity. Why you ask, well being a wholesale consumer of electricity, overages in negotiated electrical rates cost little, and show a need for bigger budget (tax money), and if overages are substantial enough a better negotiated rate. Under use will do just the opposite.

    Whats' the result, the CO2 ton/rider ratio is abysmal, while the cost/rider is exorbitant. As I said inefficient. Inefficiency to a level unheard of within the private sector.

    If I had my druthers all roads would fall to big oil for construction and maintenance. Who has more interest keeping the roads operating at top performance.

    Maybe OT but private schools out preform public. Private schools out preform at a lower cost/pupil. You need only look at the charter schools in the major cities as evidence. Yes this is a hybrid, public money private schools. However, these school cost less and perform better and highly sought by those trapped in fail, expensive public schools.
  30. Sphaerica @ 206 other tread

    You are completely and utterly wrong about SS. It was never intended to be a retirement program. It was intended to be a insurance program for those living in excess of life expectancy. SS is constructed as a ponzi scheme, current retires are dependent on the still working. The "Lock Box" Gore talked about is filled with IOUs. With true unemployment approaching 20% there will soon not be enough coming in to secure the increasing elderly population. So to the contrary, SS and all entitlements will be this countries undoing.

    BTW, I agree defense needs to be drastically cut but consider two things. National defense is a Constitutional mandate, though wars must be declared by congress, not presidential decree. Entitlement account for the largest portion of the national budget.
  31. Tom Curtis @ 210 other thread

    I did not say taxation was theft, I said "Redistributive taxes (money) is most certainly theft." It's the taking of ones property and GIVING that property (money) to others; be it individual, corporation, organization or country. Altruism is not a government function it is an individual choice.
  32. Ganesha @ 215

    Your (See Page F-59) link is broken.
  33. jigoro kano @29, public transport is inefficient where it is inefficient, only because of a lack of passengers relative to the service. If there is an over investment in private transport, the consequence will be apparently inefficient public transport because potential passengers will be drawn away by the hidden subsidy.
  34. Jigaro, as a matter of interest what do you think is the most effective way to limit CO2 emissions within your political values?
  35. jigoro kano @31, thoroughly of topic, but property can only exist because of "redistributive taxation". In the absence of assigned property rights, any person can make use of any space or resource as they feel fit. In declaring that some piece of land is the property of a particular person, the government (as agent of society) takes away the rights all other people had with regard to that piece of land, and assigns those rights exclusively to the new land holder. That is a redistribution. So, if there is a blanket ban on redistribution, the government cannot sell land to any person, nor can it defend the "rights" of any person to any particular property they may claim.

    Further, when assigning rights to land, the government (as agent of society) retains certain rights over the land and requires compliance with certain conditions for the land holder to retain the land. Those conditions include the paying of taxes. The obligation of the landholder includes paying the taxes but that obligation does not carry with it any right to restrain the governments use of the taxes. Suggesting that it does is as absurd as suggesting that because you bought something of me, that gives you the right to limit who I can give my money to.

    (As a side note, taxes are a condition of certain services provided for us by society, primarily through its agent, the government. Any person should be entitled to refuse to pay those taxes, but only on condition that they no longer accept the services. Those services include citizenship and residence rights. So while it is probably wrong to jail anybody for tax evasion, it is doubtful anyone would prefer the truly just punishment for tax evasion of being stripped of their citizenship, and exiled.)

    Finally, I have yet to meet a person consistent enough to argue both against redistributive taxes and against other legislative methods of redistributing wealth, in particular, the existence of corporations, the existence of limited liability, and the existence of a constant slightly inflationary economy. Can you be the exception? Can there really be just one person on Earth for whom right wing economic theory is a principled position rather than just another self serving ideology? I doubt it.
  36. Jigaro - sorry I missed you post on tax - however, this would effect emissions how?
  37. Tom Curtis @ 33

    Sorry Tom, you need only look at MTA to prove you demonstrably wrong. High population density, high ridership, yet high inefficiencies. If NY can't make work no area of the country can overcome this problem. Mass transit is costly, dirty, non-green, a non-solution dream of the left.
  38. 'Mass transit is costly, dirty, non-green, a non-solution dream of the left.'??

    So how do you explain Europe?
  39. Oh boy Jiguro...the MTA is more a necessity than anything else. In NYC it is taken for granted -- few in Manhattan own a car because of it. I wouldn't visit the city a quarter as much if it didn't exist. It's really really hard to imagine how NYC would be better off without it. I never used to fly through before they built a train to it. Too expensive otherwise.

    How are you calculating it's "inefficiencies." Inefficient with respect to what?

    And if you think it is easy to run mass transit system in NYC with its molding infrastructure, you're crazy.
  40. Jigoro,

    You've made a lot of assertions without providing a single concrete number backed with references. I'll help you out, and will even use a CATO Institute report as reference.

    Take a close look at Table 1. Light rail on average accounts for 0.36 pounds of CO2 emissions per passenger mile, while automobiles account for 0.61. This is of course dependent on the local methods of electricity production as the report points out. Combined with a move towards greener energy production, that number can come down further. Also note that the energy intensity in BTU's for light rail is entirely comparable to automobiles.

    Now of course, light rail is no silver bullet and there are other factors to consider. However, your claims that "the CO2 ton/rider ratio is abysmal" and "Inefficiency to a level unheard of within the private sector", are completely without merit, even when using sources subscribing to your point of view. This leaves your analysis unimpressive to say the least.
  41. I meant "fly through JFK airport..."

    Having been to Europe, I echo adelady's point.
  42. Jigoro Kano @37:

    1) The average cost per passenger mile on the Subway in New York is 33 cents. That cost is inclusive of the cost of rolling stock, energy, and maintenance of tracks (calculated from figures in this report;

    2) The cheapest urban driving cost per passenger mile in the US is estimated by the AAA as being 35 cents per mile. That cost does not include costs for building or maintaining roads;

    3) So, even excluding the hidden subsidies, road passenger transport is more expensive than subway transport. If you include the subsidies that is very obviously so. This is true despite the (as you point out) massive organizational inefficiencies of some public transport operators, which if eliminated would improve the comparison;

    4) This also does not include other costs, such as air pollution from the massive fleet of cars that would be needed if private transport was substituted for public transport; the relative mortality rates, with fatalities per mile being 6.5 times higher for car transport than for subway transport, or the very large cost of parking, a necessary addendum for private transport (in Brisbane, daily parking fees exceed daily rail transport fees for even the longest commutes, ie, from adjacent cities); and finally

    5) It does not consider the real cost of replacing public transport with private transport in New York, with the shut down of the subway likely to result in 6.5 million additional car journeys (if not taken up by other public transport) on already notoriously congested roads.

    All of this uses New York as your chosen comparison. I will pass over the jingoism present in the automatic assumption that the way it is done in the US automatically represents worlds best practise.
  43. Tom Curtis @ 42

    Nice work finding this gem. After reading it, I need to make a non-pertinent correction to my 29. The NYC subway and others listed within CBC are considered Heavy Rail not Light Rail as I posted. I should say it makes a small difference when readings e @ 40 post.

    If not publicly owned, not publicly subsidized the NYC system would be much more efficient and profitable. Being public makes it's a bastion of corruption, but that story is more OT then we are now. I do not object to mass transit, I do object being forced to pay for it.

    Taken at face value, you'll notice NYC has more riders then all other municipalities combined. With the highest US population density, obviously the best suited for a mass transit system. The calculation as listed CBC-NYC however, are a bit curious.

    1)For example, look at the Daily Passenger Trips: 6,461,133. For a population of 8.3 million the ridership seems a bit unrealistic. Assuming this count includes a rider from A to B and also that same rider from B to A so although it is two trips but one rider. So halving the ridership for comparison to overall population yields a ~40% ridership, still unlikely.
    But lets work with it.

    2)By dividing Daily Passenger Miles by Daily Passenger
    Trips a 4.23 mile average trip per rider is calculated. Completely feasible.

    3)Accepting the given $.33/per passenger mile and multiplying the 2) results (4.23 miles) a $1.40/trip average is found. Confirmed table 3.

    4)Multiplying 3) by the Daily Passenger Trips; MTA spends nearly $9.02 million a day...or $3.39 billion a year in expenses. Not far off from that given.

    5)The fee per subway ride, according to MTA is $2.50, so MTA receipts are $16.1 million/day or $5.8 billion/year...WOW!

    6) Are you suggesting MTA nets $2.58 billion/year? Or could it be the given stats are...curious?

    I never suggest NYC was the world capital for mass transit efficiency. In fact quite the contrary. The US transit system are wrought with bad practices and outdated designs. Europe, Shanghai, Taipei...etc have all modernized their trains. The US, however will never take such steps do to the intrenched interest. Tom there is a lot of money to be made in these government approved entities; unlikely to change.

    Tom, I still owe you a response to 35. There is much in that post I need to consider.
  44. Jigoro Kano @43, the fares for the New York Subway are actually 2.25 per trip or 2.50 if you buy a traditional ticket. Further, children accompanying an adult ride free, and the elderly and disabled can ride for $1.10 per trip. I do not have the information to turn that into an overall revenue for the Subway. I do know the MTA has an estimated fair revenue across all services of 4.5 billion dollars for 2010. That indicates that free and discount trips (possibly along with fare evasion) eats substantially into their revenue.

    I will say that NY public transport fees are absurdly cheap when compared to those of, for example, Brisbane.

    As to the direct issue of public or private ownership, it makes no difference to the train driver of conductor whether their salary comes from a corporation of a government. Therefore it is not the case that public enterprises are inefficient, while private ones are efficient. In fact, having worked for large public and private enterprises, the most inefficient, bureaucratic and corrupt enterprise was the private corporation.

    What is very important is the system of management, and public enterprises often fall into bad systems of management. That is not an argument against public enterprise, but for efficiency driven, accountable management in public enterprises.
  45. Jigoro - is few % drop in CO2 from engine efficiency (which also requires worldwide car ownership to be static) the best you can do for emission control consistent with your polical values? Come on please, I asked for effective emission reduction. My issue here is that if you can't come up with an effective scheme within your values, then I can only conclude that your "skepticism" is rationalization for doing nothing.
  46. Just a note on NYC trips per day - I lived in Brooklyn and owned a car. And I drove the car every day (it was required as the rules mandated leaving opposite sides of the street car free each day).

    Other than moving it to meet the requirements - I used the subway for everything. It was a 2 block walk to the subway. So I could make 2 or 3 trips per day (4-6 "rides").

    If you have never lived in NYC it seems a little strange. But the subway takes you where you want to go. No parking, no traffic. Clever New Yorkers don't even own a car. Rent as needed. The societal savings of the NYC subway are jaw dropping (time, pollution, wasted capital in vehicles, fuel, land dedicated to parking, CO2 emissions). Any one of which would justify the expense.

    I wish all private industry was as "inefficient" as the NYC subway!

    "stan clee doe" - the NYC subway driver's version of "please stand clear of the closing doors" - I will never forget it, and it still brings a smile.
  47. e @ 40

    Your link, concluding statement:

    Conclusion:

    There may be places in the world where rail
    transit works. There may be reasons to build it
    somewhere in the United States. But saving
    energy and reducing greenhouse gas emissions
    are not among those reasons. Regions
    and states that want to be green should find
    cost-effective alternatives such as the ones
    described here.
  48. actually thoughtfull @ 46

    You said;
    "I wish all private industry was as "inefficient" as the NYC subway!"

    In case you missed it:

    US public transportation is inefficient regardless of the subsidy. The US light rail rail transit inefficiency arise from the constant power consumption. Whether it running full speed, half speed, idling or breaking, nearly the same power is consumed. The large cages, usually atop a the trains, contain a huge resistor grids. The grids act a giant rheostat to offset actual use to mitigate dynamic loading of catenary and/or third rail. Worse yet, being a government entity they operate on the 'use it or loose it" budgeting criteria. Budgeted money not spent is retracted and counts negatively (less funds) the following cycle...thus system manager leave surplus trains idling to burn electricity. Why you ask, well being a wholesale consumer of electricity, overages in negotiated electrical rates cost little, and show a need for bigger budget (tax money), and if overages are substantial enough a better negotiated rate. Under use will do just the opposite.

    Whats' the result, the CO2 ton/rider ratio is abysmal, while the cost/rider is exorbitant. As I said inefficient. Inefficiency to a level unheard of within the private sector. US rail transit is horribly inefficient

    Bolstered by e link, I stand by my position. And as I also said, NYC is the only area in the US which could possibly make the numbers work.

    Don't deny the facts.
  49. I have a question about the economy-energy link. If this story
    http://blogs.forbes.com/gordonchang/2011/05/29/who-turned-out-the-lights-in-china/
    then essentially China is reducing their fossil fuel use by capping the price of electricity while fossil fuel prices rise. One of the effects is shortages of electricity but presumably that will result in shortages in China's supply chain and eventually higher prices for U.S. and other consumers.


    Is this an acceptable way to pass the cost of limiting fossil fuel use along to U.S. consumers? If not, would a tariff on our end work better and why? Another question (presuming the story is accurate), does China have the option to make up for the economic loss with a green economy and if they do, why aren't they doing it?

  50. Jigoro @ 48 >"CO2 ton/rider ratio is abysmal, while the cost/rider is exorbitant. As I said inefficient. Inefficiency to a level unheard of within the private sector. US rail transit is horribly inefficient"

    Again with this claim, are you serious? According to the CATO report I already provided, heavy rail generates 0.25 pounds of CO2 per passenger mile, commuter rail 0.29, and light rail 0.36. Meanwhile automobiles generate 0.61. Your claims are therefore demonstrably and inescapably false.

    Or are you seriously trying to argue that the 0.25 is greater than 0.61? If so, you have reached a level of denial so stunning that it is unheard of even on this website.

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