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How I lived through a carbon tax and survived to tell the tale

Posted on 8 April 2011 by Dan Moutal

A guest post by Dan Moutal, the voice of the Irregular Climate Podcast. Follow him on Twitter @ScruffyDan

Just over three years ago the province of British Columbia (BC) on Canada’s west coast implemented a revenue neutral carbon tax. And the world didn’t come to an end.

But three years on it is easy to find people who continue to unfairly criticise the policy and show that they simply don’t understand it.

For example this article from the New York Times:

John Hunter despises [the carbon tax].

"I've already insulated my house to be energy efficient. I already turn down my thermostat. Why should I have to pay $20 on my natural gas bill for something that is doing nothing for me?" the 64-year-old engineer said in an interview from his home in North Vancouver, British Columbia. His anger about the C$21.85 charge on his C$263 December bill prompted a protest op-ed in a local Vancouver paper. (One Canadian dollar equals roughly 1.02 U.S. dollars.)

What John Hunter might not realize is that the the carbon tax here in BC is revenue neutral. Meaning that every penny collected by the tax is returned to the public in the form of tax rebates (aka cheques in the mail) and lower income and corporate tax rates. So while John Hunter might have to pay a little extra to heat his home, he gets to keep more of his income in his pocket, and so does his employer. In fact it is entirely possible that Mr Hunter’s income tax savings are a fair bit larger than the $20 monthly charge on his home heating bill.

And since Mr Hunter has already taken steps to insulate his house and make it energy efficient, he is emitting less carbon and thus paying less taxes. The carbon tax gives people some amount of control over how much taxes they end up paying.  Instead of taxing the good (aka income), the carbon tax taxes the bad (aka GHG emissions). Emit less and you pay less taxes.

In fact thanks to the carbon tax, BC has the lowest income tax rates in Canada for people earning up to $118,000, as well as very low rates of corporate and small business taxes.

Yet that is rarely mentioned when the tax is criticized.

But let's back up a little; what exactly is the carbon tax policy here in BC? I need to be upfront and say that the tax here is modest. It started out at $10/tonne and has been increasing by $5 each year untill it reaches a maximum of $30/tonne in 2012. And as I mentioned earlier, all the money raised by the tax is refunded back to residents and businesses in BC.

So how has my life changed since the introduction of the tax? The short answer is that it hasn’t really changed much at all. The biggest change is that I get quarterly carbon tax rebate cheques from the government, because I fall into the low income tax bracket.

Sure gas and home heating is a little more expensive. But the economy did not collapse and I am proud to say that at no time did we travel back in time to the Stone Age.

And that price on carbon is exactly the point. By pricing emissions there are now greater incentives everywhere to reduce greenhouse gas (GHG) emissions. Activities or products which lead to lots of emissions are now relatively more expensive, while their low carbon counterparts are not. This leads to millions of small individual choices that result in less emissions. Those renovations Mr. Hunter made will pay for themselves sooner than they otherwise would, because of the carbon tax.

But there are limits to what a modest carbon tax like the one here in BC can do. At the maximum rate of $30/tonne, the results will never be sufficient to reduce BC’s GHG emissions enough to avoid the worst impacts of climate change, to say nothing of the GHG emissions of the rest of Canada or the world for that matter.

For that the carbon tax would have to be higher, with coresponding larger tax decreases elsewhere, and apply to a much larger jurisdiction.

Here in BC we have just taken a successful first step.

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Comments 151 to 200 out of 248:

  1. @Gilles "the lack of cheap energy in the near future" I shouldn't but here goes anyways. And that is exactly what a carbon tax aims to solve. By making FF use more expensive, and providing a clear price signal going forward. This gives the free market the ability to get creative and find solutions to the problem. And before you go on about extraction costs, please read my comment #127. I would also recommend you so some research into the different signals sent by a tax increasing at a known rate and the wild price fluctuations we have seen over the past few years. And finally I recommend again that you listen to the Jaccard interviews, because he directly answers the question why higher extraction costs are NOT a solution to lowering GHG emissions. (hint it was the high cost of oil which spurred a massive development in the Alberta tar sands)
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  2. 150, Gilles, So in the end your answer is that now tax will work, and there is no solution, because it's not possible to get off of fossil fuels until civilization is destroyed, and that every attempt to do so will simply result in more use, and we are bound by a system of global supply, demand and competition in which intelligence, scientific knowledge and social responsibility are of no value. Your position is that governments and peoples are unable to work in their own self interests because they are so wedded to capitalism, in one form or another, that they won't do what's good for them, even when facing the effective end of civilization as we know it. And since fossil fuels must inevitably run out and will do so precipitously rather than gradually, the end of (our) civilization is inevitable in that sense, regardless of the realities of climate change. And since people will further be unable to effectively adapt to climate change without adequate power, and in your paradigm fossil fuels are the only adequate power source, we are doomed in that sense as well. So your position amounts to "don't try to tax fossil fuel use now and attempt to get out of the corner we're in, because it won't work, and I'm just as happy to see the world end after I die, as long as it means I get to live the high life now, and with a clean conscience to boot because in my own mind there was never anything I could have done about it." My, how convenient.
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    Moderator Response: [Dikran Marsupial] I have told Gilles that his idea of the real issue is off-topic. I have left this post as is, but (i) Gilles feel free to reply to only the issues that relate to the topic of the thread and (ii) please can we all be careful not to tempt Gilles to revisit off-topic issues.
  3. "the lack of cheap energy in the near future" Its worth noting that, even without a carbon tax in place, the above comment is becoming increasingly untrue. I've looked at a number of estimates for energy generation costs from *new* power stations, & they always look remarkably similar. Coal & Nuclear are about $0.04c to $0.07c per kw-h; Hydro is about $0.03c to $0.05c per kw-h; Wind is around $0.05c to $0.08c per kw-h; Sewer/Landfill gas is around $0.08c to $0.10c per kw-h; Solar Thermal is around $0.08c to $0.12c per kw-h; Geothermal is around $0.06c to $0.12c per kw-h-& Solar PV is the only outlier-at around $0.22c per kw-h. Of course, that's generation cost *only*, & doesn't include the costs of transmission & distribution or-to the best of my knowledge-the cost of various externalities (not even including CO2 emissions). These are all costs that impact coal & nuclear far more than the other energy generation technologies I've mentioned-as the other technologies are more scalable &-therefore-can distribute energy over a much smaller distance, & with little or no harmful emissions. Even so, a fairly moderate carbon tax *should* make the already cost-competitive renewable energy technologies even *more* attractive, as would removal of some of the many subsidies that the fossil fuel sector have enjoyed for close to a century.
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  4. I would hope that the Australian government would learn from the BC experience - and not introduce a Carbon Tax. It is true that a Carbon Tax can and will reduce FF consumption if it is set high enough. It will stimulate development and use of energy produced from renewable sources and it will encourage more efficient use and reduction of energy produced from FF, thereby curbing GHG pollution. No less importantly it can be targeted so that it applies only to those who are directly responsible for GHG pollution. Maybe that will be the experience in BC? The problem is that imposition of a carbon tax does not result in these outcomes being assured – only encouraged and then only to a limited, poorly targeted extent. The Australian government proposes to introduce a Carbon Tax in 2012 – but only as a temporary measure pending finalisation of the design of an ETS. Presumably this is to demonstrate to the electorate that pricing Carbon does not cause catastrophic damage to the economy, our standards of living and end of the world as we know it, as Opposition Leader Abbott and vested interests would have us believe. The Australian Prime Minister has told us that a Carbon Tax will be applied in a way which ensures that monies raised by it will be applied to compensating lower income households, export vulnerable businesses and, importantly, stimulating the development and use of new technology aimed at producing energy with low and no GHG emissions. The PM also tells us that she intends to follow the example set by most European countries and move to an ETS, though not as rapidly as most would like. Why the move to an ETS? Because, unlike a Carbon Tax where the price of carbon is determined by government in the hope that emissions reduction will follow, an ETS enables the market to determine, review and continually revise the price of carbon in response to GHG reduction targets specified by government. The result is that the outcomes encouraged by a Carbon Tax are guaranteed by an ETS and, no less importantly, the price of carbon is determined by an informed market rather than a less informed bureaucracy. In summary, an ETS is more cost efficient and effective in achieving emissions reduction and development of clean energy technology. For these reasons one would hope that in both Australia and BC, the transition from Carbon Tax to ETS will be rapid and smooth.
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  5. @ Agnostic Thanks for opening up that can of worms:) Actually I expected the ETS (or cap and trade) vs carbon tax angle to be brought up sooner. Again the Jaccard interview posted in comment #128 (especially the first one) goes into this somewhat. And as a bonus this is MUCH more on topic than the rabbit hole Gilles was leading us though The first thing to realize is that both an ETS and a carbon tax have the same goal. To price GHG emissions. The key difference is in how they achieve that. The second thing to realize is that the cap in cap and trade (or ETS) is not really a cap at all. It is possible for companies to emit without a permit, but they would be fined for the privilege. The value of this fine would essentially be the upper limit of the price on emissions. Why would anyone pay more than that for a permit? So one can reasonably expect emissions to go over the cap in many situations. But that isn't any worse than the carbon tax proposal. So why am I skeptical of ETS? Well for one they are much more complicated. This makes it easier for cleaver lobbyists to ensure there are some well hidden loopholes. Then there is the whole mess of offsets. (don't get me started). They sound like a good idea in principle, but in practice there exists all sorts of problems with them. Just take a look at the Kyoto Clean Development Mechanism. And finally there is the whole problem of money crossing national boundaries. This isn't automatically a problem, but it does complicate thing a lot. (in fact rich countries probably should help out the poor countries who haven't caused the problem and will be most impacted by it). And this is one of they key areas that continuously holds up progress at UN climate meetings. All that being said, ETS policies in theory at least can achieve the same goal. I just feel that in practice they will be a more costly and complicated solution. But since at the international level ETS schemes are all that is really being talked about I hope I am wrong
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  6. Thanks for that Dan. I much, much prefer a carbon tax system. Firstly because we know advanced economies have long experience and established mechanisms for imposing and collecting simple taxes. They also have little difficulty with universal payment systems, like pensions and various benefits, easily converted or added to for carbon compensation/ benefit/ dividend or whatever it's to be called. I dislike ETS proposals because, everywhere I look, I see people suggesting exemptions for this and exclusions for that - and a whole new bureaucratic machinery for implementing, regulating and reporting all the bits and pieces involved. I realise that it's probably not as bad that, but the problems in Europe suggest to me that these schemes require a lot more detailed supervision than some people think. Let's face it, our "market-based" trading in convevtional goods and services needs oversight from competition and consumer watchdogs of various kinds. Anything new that regulators are unfamiliar with provides opportunities for the unscrupulous to get in quickly to get a profit before all the unforeseen loopholes are closed off.
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  7. Dan Moutal & Agnostic, the features of a carbon tax and an ETS can be designed so as to have almost identical outcomes. Specifically, a Carbon Tax can include a nominal target for emissions set by regulation, with the feature that is the target is exceeded, the Carbon Tax automatically increases by an amount which depends on how much it was exceeded. If emissions are under the nominal target, the tax would be reduced by a similar mechanism. The result would be that in the long term the Carbon Tax would approach a value which results in the target being met consistently. Clearly an ETS can be designed with a nominal price for carbon with the number of permits varied depending on how the market price varied compared to the nominal price. In that way the ETS would behave like a tax for abatement purposes. Because of this, the difference between an ETS and a Carbon Tax really comes down to the desirability of tradable credits. Clearly, issues of market manipulation aside, tradable credits are preferable to a non-tradable tax because: 1) The market mechanism ensures a minimum cost for industries which have difficulty with abatement, and a maximum incentive to abate for those who find it easy (in that they not only avoid a cost, but can gain income by abatement); and 2) International trade in carbon credits is a natural mechanism to subsidize abatement strategies in third world nations. Further, the possibility of a trade in carbon credits provides a substantial incentive for third world nations to sign up to carbon reduction treaties. Against this is the issue of market manipulation potentially making an ETS less, rather than more efficient economically. It seems to me that this possibility can be largely restricted by issuing a small number of credits periodically (weekly, or monthly) and giving credits a restricted "used by" date (15 months at most). With those conditions a speculator cannot corner the market because of the frequent issuance of new credits, and is restricted in their ability to stockpile credits because they become less valuable with time due to the "used by" date. Given that, an ETS with these features would be preferable to a Carbon Tax. However, I have been thinking lately that a tradable voucher system might be better. In this system, the government issues free of charge a number of carbon vouchers, distributed according to a fixed formulas. The issuing should be periodic, and the vouchers should have a limited time in which they can be used, for reasons given above. They should also be tradable through a government agency which takes a small commission on each scheme to fund administration. Emitting CO2 without a voucher would attract a fine based on some multiple (greater than one) of the highest voucher price traded in the last 3 months. Because the fine is set by the market, it is always better to buy a voucher than to cop a fine. (To prevent a price blow out, an initial cap on the fine may be desirable.) The advantage of this scheme over an ETS is that compensation is built in by the distribution mechanism. Consequently there is not need for the large churn of funds through government hands involved in an ETS. What do you think?
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  8. adelady, current debates in the Australian Parliament show a Carbon Tax will have the same issues of exemptions and compensations, and will need the same detailed scrutiny of an ETS (or tradable voucher)
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  9. Sphericae : I would modulate some parts of your presentation of what I'm thinking, but generally speaking, you got my point - it's that industrial civilization is not a mere cultural event due to our intelligence and our discovery of fundamental laws (which are indeed a key point), but also the by-product of the availability of abundant cheap FF, and that a tax will never change this feature. The implicit assumption behind the idea of a tax is that, as many of you seem to think, we could obviously build the same society without FF, weren't some little obstacles, prejudices, and lobbies , that could be easily overcome with some political decisions like a tax. (I hope that I describe correctly your general opinion). My opinion is different : it is that we *cannot* sustain the industrial civilization without a minimum amount of FF (of course this does *not* mean that we can't improve their use and reduce somewhat their consumption), and that the minimum amount is enough to be exhausted in one century or so at the current rate. I understand you can disagree with that - after all we're here to discuss. But I don't understand that you try to alter my opinion or my motivations, and emit judgements that would be considered as an insult by any normal individual. I am *not* working for any industry, I am *not* belonging to a right wing party or even voting for them, I am *not* defending the inequality of incomes - all that is totally irrelevant to my position. I am a mere academic scientist, with a modest salary, I live probably with a much less carbon footprint than the average american, and I just try to work on these problems like on any scientific one : building what I think being the most exact theory from known facts. I may do mistakes, but I don't allow you to doubt from my intellectual integrity.
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  10. Dan @ 155 You are quite right – there are problems with an ETS, as discovered by the Rudd Government which put forward proposals seen by many as flawed, particularly regarding the issues you have raised. The result was rejection of the legislation and determination of the Gillard government to get the design of a cap and trade right and fully explained to the electorate before presenting it to Parliament. adelady @ 156 Yes, I have read your comments on an ETS before and I understand your views. However, the primary purpose of pricing carbon whether by a tax or cap and trade is: 1. To reduce carbon emissions and 2. To develop and replace FF with clean energy technology as rapidly as possible. A carbon tax is deficient in doing this since it excludes compulsion or penalty for GHG emissions, government pricing is only maintained at an effective rate if this suits political ideology of the day (imagine what Abbott would do to it!) and excludes the market from pricing carbon depending on cap changes. Bureaucrats are not best placed – or informed – to specify price, for either an ETS or a Tax. Tom Curtis @ 157 As I note above, getting the design of a cap and trade right and fully explained to the electorate – what Rudd/Wong failed to do – is important. You suggest it can provide for a hybrid Carbon Tax/ETS and I agree. I think this is what Gillard has in mind – a hybrid which combines the best of both systems and prevents the pitfalls which adelady rightly sees as loopholes for inefficiency and corruption and the measures which you regard as desirable. My hope is that the only involvement of government in pricing carbon is to set an annual floor price and that a Carbon Tax transits quickly to something with teeth and realistic reduction targets – and 5% reduction by 2020 is barely tokenistic.
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  11. Dan, I'd like to ask a simple technical question to Mr Jaccard : does he know technically how to build a cheap windmill and connect it to a cheap electrical network without cheap fossil fuels? that's not an economist issue, that's an engineer issue.
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  12. Gilles @ 159 If you price carbon and impose that price on the top 1,000 Australian companies directly responsible for CO2 emission, the FF sourced energy they produce becomes more expensive. Put another way, the cost of energy produced from renewable sources becomes cheaper relative to that produced from FF. In a bid to curb CO2 emissions, the carbon price (whether imposed as a tax, an ETS or a hybrid) is increased until a point is reached where, relative to the cost of producing energy from renewable sources, energy produced from FF is more expensive. When that stage is reached, FF sourced energy will cease to be used. Most businesses do not care where their energy needs come from, provided it is the cheapest available, is available 24/7 and is priced so as to enable them to compete internationally. The technology already exists for Australia to produce all of its 24/7 energy needs from renewable sources. So, you ask, why is it not being done now? Ans: because it is more expensive than energy produced from FF sources. However, increasing the price of carbon encourages emitters to reduce less of it and at the same time makes FF energy relatively more expensive than renewable energy. Further, the government intends as part of its carbon pricing policy, to provide assistance to trade exposed industries, enabling them to continue trading competitively. Government also intends to use part of the proceeds of carbon pricing to provide assistance to and otherwise stimulate development of new technology enabling cheaper, more reliable production of energy from renewable sources. A common misconception is that the technology of to-day is the technology of tomorrow but this is simply not so. It advances. To deny that FF will ever cease to be used for production of energy, as you seem to, is of course a nonsense.
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  13. Agnostic : there at least two flaws in your assertions : "Put another way, the cost of energy produced from renewable sources becomes cheaper relative to that produced from FF. " just think of what really makes the cost of renewable sources. It's not the fuel, because it's free. So it's all the rest. But what is the rest? what do you need to build a windmill? or a big dam? well you need steel or carbon fibers, copper, concrete, engines, roads, a number of various materials and commodities that are all extracted, processed, and carried by cheap fossil fuels. We're constantly bathing in a sea of cheap materials that seem totally naturally exist - nobody cares about the availability of steel, rubbers, paintings, asphalt, and so on.. I could cite you dozens of products that are necessary to build any power plant - and *their cost are directly impacted by the cost of FF*. So thinking that making FF more expensive would favor renewables is just wrong on this aspect. A second factor you think to totally ignore is that various form of energy are *not* interchangeable , and even all form of electric power are not equivalent. I do not know any electrical network that is not powered mainly by a non-intermittent source , as FF, nuclear or hydroelectricity - nowhere in the world. I have some reluctance to admit that no country, including those totally deprived of FF, would have applied an easy solution to an old problem. Thinking it is just because of FF lobbies doesn't obviously fit to the case of hydroelectricity, which has indeed be used when possible - so obviously WHEN renewable were usable , they have been used. There is no problem in powering a country with water, when possible, and companies can make big profit by selling hydroelectricity just like any other commodity. So you have to find another explanation for: a) why only hydroelectricity , and no other renewable source, has been used as a only source of electric power, in the whole world, despite huge differences in natural and social conditions b) why even those countries that have largely more hydroelectricity than they need haven't succeeded in replacing totally FF . If you can offer me a simple explanation of these two facts, I will be happy.
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  14. Gilles @163: A) You assume that fossil fuel based power generation will not have its construction cost increased in a similar way. Without that assumption, you find that capital costs for both fossil fuel and renewable energy will be increased by a carbon price; but the fuel costs of fossil fuel power generation will also be increased, thus leaving renewables with a competitive advantage. Further, even is we just consider capital costs, renewables will still have a competitive advantage. Assume for example, that power costs rise 20% due to a carbon price, and that power constitutes 50% of the cost of capital costs. Then the capital costs of the renewables will rise by 10%, or half the increase of power costs for fossil fuels. So even treating capital costs alone, renewables will gain a competitive advantage from pricing carbon. And, the renewables can increase their competitive advantage by sourcing their energy costs from renewables. B) That various forms of energy are interchangeable was one of the great scientific discoveries of the 19th century. It has not been refuted. Therefore the interchangeability of power sources and fuels is a technical issue only. This certainly means that small countries such as Iceland cannot afford the capital cost of converting to an electrical vehicle economy when they would be effectively the only market for such vehicles. That does not mean such a conversion would be technically or economically unfeasible given a suitable mass market. C) It is well known that fossil fuel driven power generation is cheaper than alternatives if you do not price in externalities. It is also true that if you do price in externalities, most renewable energy sources are cheaper than fossil fuel use. The fact that negative externalities have until now not been priced into the market explains the current dominance of fossil fuels in the energy market. It is no reason to continue making others suffer for our cheap power. As my (B) and (C) provide simple explanations for your (b) and (a), you should now be happy. Why is it, then, that I suspect you will reject the simple explanations without due consideration?
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    Moderator Response: [DB] Fixed tags.
  15. My apologies to the moderators.
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  16. Tom Curtis #157: Overall I'd agree with your analysis that an 'emissions trading scheme' / 'cap and trade' type system theoretically could be a more efficient solution than a carbon tax. However, practically I don't believe that is the case. Cap and trade worked fairly well for dealing with sulfur dioxide and other components of 'acid rain', but there we were dealing with a much smaller segment of industry with much less political power (though their shills still insisted that fixing it would bankrupt the economy). With the entire fossil fuel industry, and various industries dependent upon them, involved, we are looking at an environment which basically guarantees legislative salad. Every 'cap and trade' scheme I have seen suggested has quickly morphed into a Frankenstinian monstrosity. That said, there isn't really anything which prevents the same kind of insanity with a carbon tax... except that the fossil fuel industry is so steadfastly against one in any form that they can pretty much only be passed if there is a sufficient majority not to need the votes of any FF-favoring reps. At which point there also isn't a need to compromise and allow in the legislative salad.
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  17. Tom A) OK but you didn't prove that you can increase the cost of FF enough to make renewables more profitable without crushing the economy. Furthermore, the cost of renewables is very dependent of what you exactly ask them. Producing 10 % or even 20 % of wind electricity in a FF based network that can compensate any time for intermittency is very different from insuring 80 ou 90 % of the power by intermittent devices without black outs - requiring sophisticated and expensive storage devices. Again compare simply hydroelectricity and other renewables and ask yourself why the former can sometimes provide 100 % of electricity, but not the latters - this has nothing to do with FF lobbies. B) there is no law of physics governing the economic productivity of energy - no, liquid fuels aren't the same as electricity, you need coal to reduce mineral oxides, etc... C) externalities are not the only criterion again - taking into account that you cannot produce the same wealth with different energy. If you compare something, it is the economic productivity minus externalities. Now again if you're convinced that it is lower for FF, you're saying that people like Icelandic one are totally stupid, because they add the cost of importing FF to their externalities, which should produce no benefit at all. And I don't think personally they're that stupid.
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  18. 159, Gilles,
    ...or my motivations, and emit judgements that would be considered as an insult by any normal individual.
    Sorry, but you get what you pay for, and you do not get a free pass. You don't get a pass by trying to prop up your position by declaring yourself as some sort of cool headed academician who's just being honest with himself. You don't get a free pass by (like Watts) claiming on the one hand to be "living green" while on the other sabotaging efforts of society as a whole to do the same. Whether or not people doubt your intellectual integrity is determined entirely by what you post here, and how you respond to others, not how insulted you feel. Whether or not people doubt your motives is determined entirely by how your objectives are interpreted by each individual who reads your posts, and the responses to your posts, not by how you insist they be interpreted. Hand waving, lack of citations, tricks and games do not earn confidence in one's intellectual integrity. Beyond this, you've adopted the very convenient position of saying that we should do absolutely nothing, which coincidentally lets things continue on their merry way, even though you've admitted that at the end of that path lies catastrophe, even though your only reason for not even trying is because your opinion is that it won't work. You dismiss the obstacles as insurmountable merely by declaring them as such, as being more than "some little obstacles, prejudices, and lobbies." Some points of fact: First, in the past centuries, the world has adopted railroads, steamships, the telephone, satellites, and a host of other technologies. Each has replaced something unimaginably irreplaceable that had come before it. This isn't an argument of the magic of technology, but rather against the fantasy of stagnation. The idea that "this is the only way, take it or leave it" is foolish and naive. It's been held by many, many people in history before you, and they've always been wrong. Second, as I've said repeatedly, one need only look back at the sacrifices made in the Second World War to see how far civilizations can and will go to defend themselves. It's not only possible, it's easy. It just requires some personal sacrifice. I'm not saying we can do it overnight, or that we can even completely abandon fossil fuels within the next century, but we could certainly cut their use if people were motivated. They aren't motivated, because of a plethora of characters who keep screaming (using various, disparate approaches) for people not to do anything. A tax is a step towards getting things done, a necessary first impetus to get people moving in the right direction all by themselves. And if people listen to positions like yours, the sacrifice that must be made will be equivalent to that paid during World War II. If people ignore positions like yours, take the problem seriously, and put effort into it, the sacrifice will be almost trivial. This last point is the one that really, really bugs me about positions like yours. With a wave of the hand you dismiss any attempt to wean ourselves from fossil fuels as harmful to the economy. In what way? How will it hurt the economy if people are motivated to put their energies into building wind turbines instead of billion dollar special effects for movies? How many jobs will be lost because efforts are put into designing a new breed of fuel efficient (maybe electric) vehicles instead of gas guzzling SUVs? How long will the "food lines" be if people are employed creating a new, more efficient fuel infrastructure instead of serving double espresso lattes? This is the real problem with your position, that an economy is only healthy if it doesn't change and retool, and that any effort to change and retool represents a loss, rather than a gain, in wealth. To me, a society or civilization that rips out the rusting, cancerous, archaic parts of its own framework -- that can see what is not going to last, and take action to change -- is the healthy, happy, wealthy society. Clearly the only people that will be hurt by such a course of action are the people who already have everything they could want in the current society. Even they should not be foolish enough to completely resist change, unless they care so little for their children and grandchildren that they are willing to go to their own graves knowing that their progeny will too soon follow them, having lived a short, hard life of famine, squalor, and bare existence. Sorry, but even if I believed what you believe, I'd never admit to it, or surrender to it, no matter how comfortable I was in my own quiet, green little life.
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  19. Wow, Gilles, way to be *wrong* on all counts. Lets deal with them in order shall we? A) this just smacks of 1980's thinking. The majority of Wind Farms built since the late 1990's have a capacity factor of between 30% to 40%-even without storage. Add in a grid storage mechanism (like compressed air, pumped storage of Vanadium Flow Batteries) & you can get it to between 70% to 80%. Also, who says you need fossil fuels to fill any gaps? Bio-gas from land-fill or sewerage treatment plants are just as effective at producing base-load power as coal power stations are (actually better, because they're more efficient & can be scaled better to meet demand). Also, why focus on Wind Power alone? Geothermal, bio-gas & Tidal Power are all capable of producing base-load power, as is solar thermal with heat storage built in. Also, you mention hydro-power but, like coal & nuclear, their reliability can drop very sharply in situations of prolonged drought (like the European Heat Wave of 2003). Also, the over-centralized nature of coal, nuclear & hydro-electric make them more susceptible to large scale black-outs, which is not true of the smaller, more distributed renewable energy generation systems. b) "no, liquid fuels aren't the same as electricity, you need coal to reduce mineral oxides, etc..." Hmmm, clearly you've never heard of fuel cells, which can generate electricity from liquid fuels. Also, you don't need coal to reduce mineral oxides-any material with a sufficiently high Reduction Potential will suffice. Indeed, electric arc furnaces are able to reduce mixtures of metal oxides & scrap metal-more efficiently than coal. Also, its only because coal is *carbon* that its able to reduce metal oxides-other forms of carbon, potentially of a biological origin, could be substituted. C) Again with your beloved Iceland. How many time do we need to remind you, though, that Iceland *only* imports oil-& only for its transportation needs. No, they're not stupid though, because since 2005 they've been looking into ways to increasingly substitute their oil dependence with locally produced hydrogen instead-so clearly *they've* recognized the low, long-term value of importing oil. Other nations are also looking into non-FF substitutes to power their transportation sector. Increasing numbers of Americans & Europeans are looking at electric & hybrid vehicles, whilst both China & Germany are going big on bio-fuels (Especially bio-diesel). So you see, Gilles, that yet again you've provided us with a rant that's long on error, but short on facts.
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  20. @ Gilles Thanks for finally admitting your defeatist attitude. You could have saved us a lot of time by being upfront about it, instead of being cagey and obstructionist. You sound similar to the people predicting doom and gloom when the Montreal Protocol was proposed. And when the Sulphur Emissions Reduction Protocol was proposed. And there are many more examples. In all cases people such as yourself have been wrong. And currently you stand in opposition to a rather large majority of economists (PDF). And it doesn't matter that they don't know how to build cheap wind farms.
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  21. @ Gilles "OK but you didn't prove that you can increase the cost of FF enough to make renewables more profitable without crushing the economy" Perhaps john didn't. But already posted links to an interview with Mark Jaccard who has looked at this extensively. And guess what he found? Yep, that's right. You can increase the cost of FFs via a price on carbon enough to phase them out, without destroying the economy. But we already knew that, you just fail to follow up on the sources people provide. But more importantly your 'analysis' fails to consider the cost of inaction, which makes it meaningless. Look at here for more info
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  22. err by john, I mean Tom. Oops
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  23. I an getting through the comments slowly. I an at work and replying on my phone. @Gilles "Now again if you're convinced that it is lower for FF, you're saying that people like Icelandic one are totally stupid, because they add the cost of importing FF to their externalities, which should produce no benefit at all. And I don't think personally they're that stupid." This statement makes it clear that you have a poor understanding of the issue. Perhaps you haven't been thinking about the problem for very long. By definition externalities are felt by those not involved in the economic transaction. So when Iceland imports FFs, they get the benefits. Yet the externality costs are spread around the entire planet. This is why they continue to import FFs. And this is why we have a market failure. The point of a price on carbon (for the millionth time!) is to internalize those costs so they are payed by the people who are emitting GHGs. See http://en.wikipedia.org/wiki/Externality and http://en.wikipedia.org/wiki/Pigovian_tax for more
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  24. I'd still love to see the results of doing 2 simple things before worrying about tax or ETS. 1/ Kill all forms of subsidy on FF. I just cant believe you have the right wing supporting subsidies in the US where its supposedly the home of capitalism. Evidence of corrupt government. 2/ Simply ban any new coal-fired generation. That concentrates the mind of energy sector. Now let capitalism do its thing.
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  25. 174, scaddenp, On #1, absolutely, yes, I can't believe it even needs to be discussed... except for the political power of the FF industry, and other complexities in the issues, such as the fact that the issues are not that simple... if some tax breaks are taken away, the obvious business response would be to let American oil fields lie untapped and put more resources into tapping foreign oil, which many companies can do without paying US taxes and paying lower foreign tax rates. The net result would be the same oil production, lost American jobs, and a negative political fallout for the politicians that endorse it. Like most things, it's not as simple or as obvious as it sounds. On #2, you'd similarly have a lot of lobbies to fight through (coal miners, coal economy states, coal industry heavyweights, etc.). And again its not that simple. What if the new, cleaner (if not clean) coal plant that you want to prohibit is to be built so that they can shut down an old, inefficient and dirtier one? Do you force them to build nuclear instead? The reality is that we will never be able to turn any source of energy off like a tap. The economy is too complex and interdependent, and the infrastructure is too inflexible. That's why action needs to begin soon, in a variety of areas (changing that infrastructure, such as how power is delivered, how vehicles are fueled, etc.) We don't need dramatic solutions, so much as we need to begin concerted work on a variety of solutions, so that we have better options as things get worse. This is the whole reason for general solution tax mechanisms like cap-and-trade or fee-and-dividend. If you try to target specific items, that's the "communist, centralized economy" approach that tends to fail abysmally. There are always pitfalls that people didn't foresee, and there's no reason to be so single-mindedly focused, no matter how obvious the solution may seem to be. A broad brush attempt to try to make FF carry their full (including externalized) costs will lead instead to many different, but hopefully appropriate, solutions in different arenas, as is fitting in each case.
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  26. The paper that Dan linked here about a survey of economists supporting a carbon tax would be worth a thread by itself. Thanks for the heads up.
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  27. I agree that #1 needs treaty but I think its easier to get than an emissions treaty. On 2/, well our previous government did just that. No new FF thermal unless you could deal with the emissions. It certainly spurred interest in clean coal and alternatives. A lot easier that designing a C&T without undesirable loopholes. US needs to deal with fundamental problem of lobby power. It's destroying your democracy.
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  28. scaddenp#177: True dat. Especially since corporations gained the right of free speech in the form of political contributions. Who wins when elections are bought and sold? The Brothers Grim Koch.
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  29. 117, scaddenp, I agree, for the most part. And harsh regulations (in effect, a tax) on coal plants in particular would be good in so many ways. First we have to get past the "would you like some oil with your Tea" Party crowd. A hugely backward, Joe McCarthy style denial movement appears to be brewing in the U.S. Senate and Congress. I'm waiting to see what sort of nightmares it tries to create over the coming months -- or years, if the next election goes too poorly.
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  30. Sphaerica @ 168 I object. How can you possibly use the term “intellectual integrity” when commenting on Gilles “contributions”. Such an oxymoron! As Dan Moutal @155 notes, Gilles does nothing more than invite commentators into a warren of off-topic rabbit holes. That so many accept the invitation is absolutely astonishing! Sorry Moderators if this too is off topic.
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  31. So, why am I "defeatist" following you ? which defeat ? which war ? what are you advocating against me ? could you please be more explicit on your final goal ?
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  32. "So when Iceland imports FFs, they get the benefits" I remind you that Iceland produce much more renewable electricity than they need (they use a fair part of it in aluminium and ferrosilicon factories, but they could use it for their personal needs). So what is the "benefit" for them to use oil ? I don't understand.
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    Moderator Response: [muoncounter] Let's try staying on topic; save Iceland for another thread.
  33. Marcus A) could you please indicate me a country reaching 70 80% of duty cycle with Windmills , or basing their power supply on biogas or tidal energy ? -but even if you found one, it wouldn't do better than the countries that I've cited, that have already 100 % renewable power, as I said. B) "Hmmm, clearly you've never heard of fuel cells, which can generate electricity from liquid fuels." Oh, yes, surprisingly, I've heard of them ! but I still didn't see any personal vehicle using them on a street. Again, technical possibility doesn't mean economical possibility. "Indeed, electric arc furnaces are able to reduce mixtures of metal oxides & scrap metal" I would be interested in knowing how an electric arc can reduce metal oxides, without carbon ... C) could you be a little bit more quantitative on the number of hydrogen vehicles in Iceland and electric vehicles in europe and america ?
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  34. Other question about Mark Jaccard : did he forecast the spike in oil prices and the subsequent recession ? where?
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    Moderator Response: [muoncounter] Oil price forecasts are off-topic for this thread.
  35. @ Tom Curtis #157 The idea of issuing permits often (weekly or monthly) is interesting, but would require serious study to understand what effect that would have. I haven't heard this proposed before so for now I remain skeptical. And I still think a tax is simpler, which I think is very important when it comes to public policy. BUT I do think there is benefits is separating the flow of aid money to poor countries who will bear the brunt of global warming from pricing carbon. I suspect many people here will disagree with me on that. But the issue of aide is one that frequently ties up international co-operation in reducing GHG emissions. Would it not be easier to deal with these two important issues separately so that lack of progress in one of them doesn't hold up the other? And #158 I am not very familiar with the Australian carbon tax proposal so I wont comment directly on it. But I will note that it is certainly possible to implement a carbon tax poorly. I think it was France where the courts struck down a carbon tax proposal because there were too many exceptions. And Here in Canada in the province of Quebec there was talk of a carbon tax (not sure where it ended up) but politicians were making noise that power producers should eat the cost of the tax, which of course defeats the purpose entirely. @scaddenp I agree with you about the subsidies, but the nice thing about a carbon tax, if done right (and that means that some sort of price on carbon would have to be implemented globally) is that you don't have to muck around with banning coal, or thing like vehicle efficiency standards. The carbon tax allows the free market to handle this far more efficiently.
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  36. "I remind you that Iceland produce much more renewable electricity than they need (they use a fair part of it in aluminium and ferrosilicon factories, but they could use it for their personal needs). So what is the "benefit" for them to use oil ? I don't understand." You really, *really* do have a listening & comprehension problem, don't you Gilles? We've already said that their oil imports are for *transportation*!!! { snip }
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    Moderator Response: [muoncounter] DNFTT!
  37. @ Gilles. A) Again with your poor reading & comprehension skills. It was abundantly clear to anyone reading my post that I was simply making the point that it is already technically-& economically-feasible to generate electricity, domestic heat & even industrial heat from 100% renewable sources. Of course the established energy generators (nuclear, fossil fuels & large-scale hydro) have done their level best to prevent this from being achieved. For the record, though, both King Island & Sorne Hill have apparently achieved capacity factors of over 60% using vanadium flow batteries. B) ...and again your poor comprehension skills come to the fore. I was making the point that, thanks to things like fuel cells, electricity & liquid fuels *are* effectively interchangeable. You claimed, falsely, that they were not. As to Arc Furnaces-I'm not across all the details, but I do know that there are already many mills which have already switched to this technology. Given that Reduction is essentially nothing more than gaining of electrons-& electricity is nothing but pure electrons-it certainly makes sense. I have read, though, that metal oxide reduction using arc furnaces uses 1/3rd of the energy of coke-based blast furnaces. C) Well Iceland currently has around 50 hydrogen powered buses, both at home & abroad-which isn't bad for a program only started in 2005. As for electric vehicles, I've had difficulty finding long-term figures, but I've seen figures to suggest that almost 90,000 electric vehicles were sold in the first quarter of 2011 alone. Of course, the one thing currently limiting production-& sales-of electric & hydrogen powered vehicles is the lack of an established "fuel" infrastructure. However, need I remind you that the same was true when the first petrol powered cars became available. It took several *decades* for petrol powered cars to be on the road in significant numbers, though I do expect electric vehicles to be more numerous in a much quicker time span-*assuming* governments don't allow themselves to be bullied by the powerful oil industry lobby.
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  38. Sphaerica @ 168 Yes, your quote below is absolutely correct, but these innovations were not taxed into existence. They were adopted because they were better than what they replaced. Ingenuity and capitalism rule. "First, in the past centuries, the world has adopted railroads, steamships, the telephone, satellites, and a host of other technologies. Each has replaced something unimaginably irreplaceable that had come before it. This isn't an argument of the magic of technology, but rather against the fantasy of stagnation. The idea that "this is the only way, take it or leave it" is foolish and naive. It's been held by many, many people in history before you, and they've always been wrong."
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  39. "They were adopted because they were better than what they replaced. Ingenuity and capitalism rule." So, how many of the technologies that we've adopted over the last 150 years were done so *entirely* using private money Harry? How many of those technologies were rabidly opposed by the vested interests who profited from the old way of doing business? I think that if you check the history books, most examples of technological progress had to get at least initial support from governments/taxpayers, & that most of this progress was opposed by the vested interests of the day-so much for capitalism.
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  40. Harry, I would still be interested in a response to questions at bottom of this post. It's not meant to be rhetoric, I'm interested in genuine solutions that are acceptable to political right. You can see at #174 what I think is a better starting point than tax or cap&trade.
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  41. Sphaerica @144 The 5 examples you gave are good examples of where a capitalist society uses some technically socialist methods to improve society. I say technically because I think (correct me if I am wrong) that in our society (USA) even if you are in those sectors that you listed you are compensated based on your experience, education, seniority, etc... and not a common pay. Now to the rest of your post: the carbon tax that you are in favor of assumes that it will be voted into place. Right now most Americans aren't buying into it and the trend is increasingly negative. I don't know where you are from, or what your profession is, but the general public is not in agreeance with you. Solving problems by being a capitalist is not a knee-jerk reaction. Look at every successful and every failed society and tell me what they were. I think Russia is a prime example of failed socialist (communist) society that is actually out-capitalizing the USA. I've tried for a long time to keep the politics out of this discussion and the science about man-made global warming. But, when I see comments creep in like from DSL (who hasn't answered my question) @ 55 it does make one wonder. For the record, I do believe that CO2 contributes to global warming. Anthropogenic CO2 is a factor. Reducing pollution and becoming more energy efficient is something we should all strive for. However, a carbon tax is still a prime example of redistribution of wealth that is a tenet of the socialist dogma. Taxing all citizens - taxing carbon producers - sending the collected funds back out to the citizens (100% return with no administrative costs??? Even my liberal banker friends laugh at this) - giving the "poor" citizens tax breaks, etc... If that is not redistribution of wealth - then what is it? And, how does it help? If the purpose on putting a tax on FF use is to make other energy sources more attractive, and so we tax everyone including energy, but give the money back to public as subsidies to off-set the costs of the tax... Then we are basically taking money from the deep pockets and passing it back out.
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  42. Scaddenp @ 174 Point 1: I think (and I repeat think) those subsidies were put in place to encourage exploration because a reliable fuel supply is absolutely necessary to ensure the security of our country. But, surprise, I agree with you. If we are no longer allowed to explore and exploit our own resources, then no one should receive these subsidies. It is a complicated issue. Point 2: How can you ban what is cheaper and more dependable? Anyone (including me) would be an idiot not to favor alternative energy, if it was dependable and affordable. Dependable being more important than affordable. My region of the US receives our energy from hydroelectric and nuclear and a small percentage from natural gas. We are very low carbon and I like that. (Even though I don't buy into AGW and I am a degreed and working environmental scientist). If a government tries to tax FF out of existence in favor of alternative energy sources, the lashback will be incredible.
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  43. @ Harry Seaward. Though its off-topic, I'd hardly call the current state of the US a great advertisement for Capitalism. The GFC was born of a very strict adherence to capitalist principles, & look where that left the US. I'm *not* advocating a 100% Socialist system, but I equally think that a 100% Free Market Economy is just asking for trouble. My experience is that those nations that have achieved the best middle ground between Socialism & Capitalism are the ones that are currently thriving.
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  44. Marcus @ 193 I agree with you. The US is no longer a truly capitalist society. There are now twice as government employees as there are manufacturing employees. That can't continue. A carbon tax only adds to the problem.
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  45. "Anyone (including me) would be an idiot not to favor alternative energy, if it was dependable and affordable. Dependable being more important than affordable." Didn't you read my figures for comparisons of renewable vs non-renewable energy Harry? Even with all the subsidies enjoyed by the fossil fuel energy sector, new power stations won't be able to generate electricity much cheaper than the majority of currently available renewable energy technologies. This will only become *more* the case as economies of scale kick in for renewables on the one hand (thus pushing down capital costs) & as fossil fuels become even more expensive on the other (due to demand vs supply of fuel). They're also much more reliable than some people make out-thanks to advances in storage technologies over the last 15-20 years. Of course, certain elements of the mainstream press have become very adept at reporting on the renewable sector as if it was still the 1980's or early 1990's-i.e., as if the sector hadn't made huge progress in the areas of price, unit output & reliability over the last 30 years.....and on a fraction of the tax-payer funds enjoyed by the nuclear & FF industries I might add!
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  46. "The US is no longer a truly capitalist society. There are now twice as government employees as there are manufacturing employees. That can't continue." Yes, but the Global Financial Crisis had *nothing* whatsoever to do with that. It was the appalling "self-regulation" of the US financial sector-which operates under the very strictest definitions of the "Free Market".
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  47. Harry, Capitalist does not equal no tax. Never has. However, while you have commented on my approach, at the base of it you stuck on idea that cheapest must be best even if isnt. You don't think climate change is going to cost us more than giving up FF. However, you still havent answered the more serious question on the linked earlier post - what IS the answer if you want to prevent FF usage?
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  48. Why are people so adamant that alternatives to fossil fuels are 'a bad thing'? Anyone (including me) would be an idiot not to favor the horseless carriage, if it was dependable and affordable. Dependable being more important than affordable. Besides, I am reliably informed by scientists that these newfangled dirty, noisy, bone-jarring horseless carriages will require - purely for the comfort of their rich owners - smoother carriageways than the sturdy and reliable horse-drawn vehicles used by the common man. And who, pray, is expected to pay for such "essential" carriageways? The taxpayer, naturally! Yes, when Mr. Ford began to build his model T there really were people complaining about how this would impact their rights and freedoms, etc. etc. Plus ça change ...
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  49. @ Harry Seaward "100% return with no administrative costs???" As has already been mentioned actually more than 100% has been returned. "these innovations were not taxed into existence. They were adopted because they were better than what they replaced. Ingenuity and capitalism rule... How can you ban what is cheaper and more dependable?" As has already been discussed, the only reason why FFs are cheaper is because of the externalized costs. Or as Wikipedia says "If there exist external costs such as pollution, the good will be overproduced by a competitive market, as the producer does not take into account the external costs when producing the good." And sooner or later (actually now in some cases) those costs will rear their ugly head. Or another way to think about is is the tragedy of the commons: "The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource even when it is clear that it is not in anyone's long-term interest for this to happen" Carbon pricing is just an attempt to internalize the costs of GHG emissions, which intern allows the free market to do its thing. Significant externalities lead to market failure. This is basic economic theory. And is the crux of the problem. "then no one should receive these subsidies I hate to break it to you, but externalities function as a de facto subsidy allowing FF producers to sell their products at lower prices than would otherwise be possible. So I have to ask, what is the problem with internalizing the costs of FFs? And do you have a better way fo doing it that a simple tax?
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  50. Marcus : and what is the point that oil is needed for transportation ? (but also for fishing for instance, and some left is used for heating where geothermal warmth is not available). Isn't transportation necessary for a modern economy ? now for 187 : A) it is possible when non-intermittent and steerable hydro and geothermal power is available - otherwise, it's just wishful thinking up to now. B) again - you mix up technical feasibility and economical one - the issue is to replace them at no cost, for a given standard of living. For steel - it seems that you don't fully master the chemistry of oxidation and reduction. Electric furnaces only oxidize carbon rich iron cast, or recycle already used metallic pieces, either by mixing them with iron cast, or by using carbon electrodes. The carbon consumption is much lower just because you start basically from already reduced metals, and just have to reduce the small amount of oxides produced by roast. They don't work for mineral oxides. We don't know how to produce the current quantity of steel without coke. C) Well Iceland currently has around 50 hydrogen powered buses, both at home & abroad-which isn't bad for a program only started in 2005. well, not bad ... what do you think is the growth rate ?
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