What we should be taxing: greenhouse gases

December 1, 2010


Bravely, international diplomats, United Nations officials and environmentalists are meeting in Cancun this week to demand that other people use less fossil fuel. Bravely they met in Copenhagen a year ago to make the same demand, after also bravely meeting in Bali, Montreal and similar resort locales in prior years.

I will skip the obvious point about the greenhouse gases emitted by the jets and limos that bring the participants to these annual confabs, where preaching-to-the-choir is the order of the day.

Most of what happens at the annual international conference on climate change has been decided on in advance, so the greenhouse emissions could be avoided by a tele-meeting. But then the delegates won’t get a paid trip to Cancun!

Last year, the majority of the world’s heads of state, including President Barack Obama, attended the climate change conference in Copenhagen, where they bravely made vague, nonbinding comments about how other people should use less fossil fuel.

Obama ended the conference by declaring the United States would make a nonbinding commitment to engage in future greenhouse gas negotiations — exactly what the elder president George Bush was mocked for saying at the conclusion of the 1992 Earth Summit, in Rio, a place the delegates bravely went.

Nearly two decades after Rio, nothing has changed in the international legal status of greenhouse gases, which are all but unregulated; nothing has changed in the United States, which does not regulate greenhouse gases; and President Obama was even using 17-year-old meaningless boilerplate!

Wait, the 2009 meeting did vote out this extremely vague, nonbinding document, whose only clear conclusion is that the United Nations and its member countries should continue to provide cushy jobs to the kinds of people who attend these kinds of conferences. Amorphous as the 2009 document was, only about half the heads of state present endorsed it. The rest just made hollow speeches then jetted away, after posing for pictures. But they posed bravely! It takes tremendous courage to stand in a fancy hotel in a beautiful locale and demand that other people use less fossil fuel.

This year’s conference may not even result in a vague nonbinding memo. Though there is sure to be lots of talk about … next year’s conference.

Perhaps you think I am mocking the Cancun event because I believe climate change to be inconsequential. Rather, I am mocking the Cancun conference because I believe climate change is a real threat.

Going-through-the-motions of international gatherings that accomplish nothing other than a luxurious week of travel for climate-o-crats are part of the problem. Such conferences make global warming concern seem the kind of thing only United Nations officials and environmental fundraisers care about. Having the United States president, and other heads of state, attend such conferences and then reach no agreement only makes the climate change concern seem ridiculous — as yet another self-promotion photo-op for politicians.

Greenhouse gases won’t cause the instant-doomsday calamities spoken of in Hollywood and environmental literature. But there is real risk climate change will harm agriculture, by altering rainfall patterns; will raise sea levels and change ocean currents; will reduce the global freshwater supply, by melting the snowpack and glaciers that provide most of the freshwater used for farming and drinking. Plus we should be reducing fossil fuel consumption regardless of climate trends.

The above paragraph contains ample rationale for action to reduce greenhouse gases. But wasteful international meetings in resort cites will not get this job done — no matter how fancy the chardonnay and canapés may be.

The United States should drop out of all international negotiations on greenhouse gases — such negotiations are a total waste of everyone’s time — and go it alone. Regulate carbon within the United States, on a domestic-policy basis. This will inspire U.S. engineers, inventors and business people to devise clever ways to reduce greenhouse gases cheaply. Once we invent them, we give them to the world.

That is how rapid global progress against smog and acid rain was achieved. The United States regulated these problems on a domestic-policy basis, invented cost-effective engineering and economic solutions, then gave the solutions away. Smog and acid rain are now declining almost everywhere in the world, even with population growth. Yet no international treaty governs these issues, and the United Nations has nothing to do with them.

International negotiation regarding greenhouse gases is not only complex, expensive and goin’ nowhere, there is no chance — none, zip, zilch — that the United States Senate ever will ratify a treaty that grants the international community decision-making input into American energy policy.

The Senate ratified the 1992 Framework Convention on Climate Change, under whose auspices the annual meetings are held. But the Framework Convention has no teeth — basically, it authorizes annual meetings. In 1997, a test vote on the Kyoto Protocol was rejected 97-0. Not even one Democrat voted in favor!

The current Kyoto Protocol is somewhat improved over the 1997 version – it might draw 15 or even 20 votes in the Senate. There is no chance — none, zero, zilch — that Kyoto or a hypothetical better-written Daughter of Kyoto will be ratified by the Senate. Not in the lifetime of anyone reading this column, at least.

So why does the White House and State Department continue to participate in climate change negotiations and send officials to conferences like Cancun to make empty speeches? In order to create the appearance of action, distracting attention from the lack of real change.

The cap-and-trade greenhouse legislation failed last year in Congress, and good riddance to the bill, which was ultra-complex, plus larded with bureaucracy and special-interest handouts.

The United States needs a carbon tax, the simplest and most cost-effective means to address greenhouse gases. Free-market economists such as N. Gregory Mankiw, head of the White House Council of Economic Advisors under George W. Bush, have endorsed a carbon tax — to inspire inventors and business people to seek profit by finding cost-effective ways to reduce greenhouse gases.

Right now Washington is debating raising taxes to fight national debt. Rather than tax labor or capital — all current proposals call for one or the other — let’s tax greenhouse gases. This will create a profit incentive to fix the global warming problem. Then we’ll give the solution to the world.

That’s American can-do spirit, and that’s what can protect us against climate change. Not conferences in Cancun.

Photo caption: A member of an environmental organization holds a sign during a protest outside the U.S. Embassy in San Salvador November 30, 2010, to demand that the U.S. sign the Kyoto treaty on climate change at the United Nations Climate Change Conference that is being held in Cancun, Mexico. The talks are seeking a successor for the U.N.’s 1997 Kyoto Protocol, which obliges almost 40 developed nations to cut greenhouse gas emissions by at least 5.2 percent below 1990 levels by 2008-2012. The U.S. never joined Kyoto, believing it would cost U.S. jobs and excluded developing nations. REUTERS/Luis Galdamez


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Gregg, while I don’t disagree with you, there is one key difference between acid rain & smog and climate change. Acid rain & smog in general are regional problems. What matters is the pollution emitted immediately upwind/upstream, not the global aggregate. Contrast this to carbon emissions, where it is the total global emissions that matters.

Of course, this is exactly why a tax and carbon offsets are actually a reasonable solution. It doesn’t really matter where the net carbon pluses and minuses are, as long as they balance out. This is not the case with acid rain and smog. A more accurate comparison may be the regulation of CFCs, another great environmental success story.

Posted by bubba0077 | Report as abusive

Couldn’t agree more. Even if you don’t agree that climate change is a true, human-induced threat, getting more energy independent can only be a national plus.

Posted by nadie | Report as abusive

Nice thought, but the problem is the US Congress has said that they are unwilling to take action domestically unless other major economies do too… they are unwilling to let others be “free-riders” in this problem of over-use of the global commons. Politically, going at it alone is DOA. Other countries like China, Japan and Canada have said the same thing about moving without the US.

I’d love it for the US to go alone on this, but the fact is that we can’t solve it on our own… the problem is too big, and thus, we send diplomats around the world to beg and plead and cajole to try to get some sort of workable consensus for EVERYONE to take action at the scale needed to avoid the worst impacts of climate change.

Now, should the US take on a modest carbon tax that could have great benefits for federal revenue, business innovation, fossil fuel independence, and perhaps a small contribution to beginning to address the climate challenge? ABSOLUTELY!!! It is a MUCH better idea than taxes on capital or labor, as you rightly point out.

But don’t delude yourself into thinking a small carbon tax in the US will solve the climate change problem in absense of global agreement to jointly take the really hard actions needed.

Posted by cjf | Report as abusive

I don’t know why Mr. Easterbrook thinks that getting a carbon tax through the US senate would be any easier than getting an international treaty with binding commitments through, but I do know that if we accomplished the latter the former would have to be a lot easier. Especially if it included means of monitoring other nations progress on these same issues. I also think it is a pity that the good old Nobel Love and Peace boys turned this into a political football by giving Al Gore and the IPCC a piece of the same Nobel Pie, then following up with Obama.

Posted by thisoldman | Report as abusive

Absolutely wrong.
What we should be taxing is sex!
Imagine the numbers of sex police volunteers that would work almost for free!
It’s this one human trait that is overpopulating the planet and changing the “Environment,” but nobody seems to mind.
Other options are war and pestilence, and I’m sure God’s getting ready for that.

Posted by rickahyatt | Report as abusive

You are probably correct that a carbon tax is the most likely means of success. However,like any GHG emissions reduction program, it would have to largely exempt food production and disribution, because at this late date, development of carbon-free food production methods sufficient to feed 9 billion people in 2050 is essentially impossible.

The “Green Revolution” was, as its “father,” Norman Borlaug, was first to admit, primarily the adoption of high-water-and-nitrogen-input practices that cannot be repeated and cannot even be maintained,without continued extravagant use of fossil energy for manufacture of fertilizers, pumping of irrigation water (to the extent it is not quickly exhausted), fuelling of tractors and fuelling of transportation. FAO’s 2010-1019 food report balanced the food/population budget for the decade by hypothesizing a fantasy – that petroleum prices would not go up substantially and petroleum availability would continue to rise. The latter will not happen, and the former will happen only if farmers are heaviloy subsidized rather than taxed for their fossil fuel use.

So the agricultural sector will have to be exempted from ANY GHG reduction program to avoid famine, which indeed requires a combined program of continued fossil use in agriculture, a universal one-child-per-family progam, and prohibition of the use of grain or arable land for production of either biofuels or beef. Unless at very least coupled with those things,programs for meeting the IPCC emission-reduction goals and avoiding massive famine are not both achievable.technically, let alone politically or economically.

Borlaug told us in his 1970 Nobel acceptance speech, that the Green Revolution had done nothing more than give the world thirty years in which to get its population under control. We ignored the warning, instead adopted a conspiracy of silence on population, and failed. That failure has a domino effect, meaning the virtually certain failure of GHG controls by any method.

Will the conspiracy of slence on population be lifted at Cancun? No.

Nicholas C. Arguimbau

Posted by narguimbau | Report as abusive

I think your argument is bang on, I think climate change threatens the US in the long term and dependence on foreign oil already dictates too much of our foriegn policy. Unlike the Congress who wants a bureaucratic nightmare carbon control mechanism (carbon missions trading) which is not market-based as implemented by in the current bill, I think a carbon tax is far more sensible . It is easily understood particularly if applied at the point of consumption. The initial burden on consumers could even be softened to be revenue neutral through tax credits applied on an mean consumption basis.

Posted by LWT | Report as abusive

“Right now Washington is debating raising taxes to fight national debt. Rather than tax labor or capital — all current proposals call for one or the other — let’s tax greenhouse gases. This will create a profit incentive to fix the global warming problem. Then we’ll give the solution to the world.”

You know what will happen if you tax Greenhouse gases. Energy prices will increase, people paying $2.80 at the pump will get to pay $4-$5 at the pump, heating and power bills will go up, end result is people will have less disposable income. Less disposable income means less spending, and the fragile economy collapses further.

Any remaining factories, or industries will pack up to go to another country that the doesn’t have the second highest corporate tax in the world that just added a greenhouse gas tax to that. While I do support efforts to keep the environment as clean as possible, I find the idea that mankind can control global warming via taxes/carbon credits/etc to be laughable.

Posted by Trooth | Report as abusive

Sorry, Greg, but though I agree a carbon tax is better than cap and trade, there is no chance (zero, zilch…) that Republicans will approve a gas tax, irrespective of Greg M’s position. Too many Republicans (both officeholders and rank and file) think global warmning is a hoax. Cap-and-trade, however, may be adoptable (or maybe not..), and cap-and-trade is largely responsible for motivating the successful smog and acid rain reduction technology you rightly applaud. EPA may be able to regulate greenhouse gases (GHG) under current legislation; which could lead to some type of de facto cap-and-trade and attendant emissions credit market (which already exists and has funded projects around the world, such as burning methane from landfill gas).

Posted by mbruce | Report as abusive

Decades of hysterical fear mongering and out right science fraud concerning global warming and climate change have created a sort of “green fatigue.” Climate has become a goldmine of scary propaganda to fatten eco-group fundraising. Al Gore would become the world’s first “carbon billionaire.” Global government regulators have spent (or proposed to spend) hundreds of billions of dollars to control climate based primarily upon U.N. Intergovernmental Panel on Climate Change (IPCC) reports and policies.

Last year’s “climategate” scandal began with the publication of thousands of U.N. climate scientist e-mails that revealed their eco-biases. These biases may be mitigated by the Inter Academy Council (IAC) reforms that would end the chronic exaggerations about global warming coming from the U.N.

What remains as disturbing about the U.N.’s climate culture is the socialist governance that has now been openly advocated by members of the IPCC. Several members meeting this week in Cancun at the annual conference to replace the 2012-expiring Kyoto Protocols have spoken in pure Marxist-socialist principles – wealth redistribution.

A Chinese member said that multi-billion dollar Western developed-nation payments would be the key to success of the Cancun meeting. And, co-chairman of the IPCC’s third working group, Ottmar Edenhofer, has stated, “One must say clearly that we redistribute de facto the world’s wealth by climate policy…. One has to free oneself from the illusion that international climate policy is environmental policy.”

The IPCC meeting in Cancun is not expected to accomplish much more than to subtly shift the operative regulatory language from “climate change” to “global biodiversity,” and attempt to shakedown developed countries for billions in order to fund underdeveloped countries under the guise of environmental and social justice. Karl Marx would be most proud.

It is clear that socialist ideologies and cultish environmentalism have replaced prudent science and economics in U.N. climate policy. Militant environmentalism and green-obsessed bureaucrats have become an “axis of antagonism” that we can no longer afford.

Posted by ECOPOLITICS | Report as abusive

Oh my. Are there people still talking about this rubbish?

Posted by OracleOfMumbai | Report as abusive

Gregg, your said: “But there is real risk climate change will harm agriculture, by altering rainfall patterns; will raise sea levels and change ocean currents; will reduce the global freshwater supply, by melting the snowpack and glaciers that provide most of the freshwater used for farming and drinking. Plus we should be reducing fossil fuel consumption regardless of climate trends.”

Your statement is half truth, half speaking from ignorantia. It shows you have not a good understanding of the water cycle. 2ºC or more degrees of warming will not stop snowing during winter, and perhaps will increase snowfalls as it has been doing in Antarctica. After all, a warmer ocean provides more water vapor, hence more precipitations, rains and snow. The spring and summer meltdown will increase the water supply down river with benefits to crops and populations -save periodic or cyclic floods that have been a constant in human history.

High mountain glaciers are not a reserve of water as they rarely melt giving away water. If they were the source of rivers, given the flow that rivers carry, glaciers would have melted completely long ago. They lose mass by sublimation under the sun’s rays, as Mt. Kiliminjaro has been doing for many decades, not by melting.
And I have never understood the science behind the claim that man made CO2 will cause an irreversible warming. There has never been such irreversible warming in Earth’s history, even when there were much higher temperatures in past eons, eras and periods. Remember that Earth has seen no less than 26 ice advances and retreats, ALL of them related to cosmic and astronomic factors and variations in sun magnetic activity.

As someone said recently in an open letter to Mr. Cameron, “Whilst no one denies that the world’s industrialisation has increased considerably the output of greenhouse gases, to ascribe the current phase of our ever changing climate to one single variable (carbon dioxide) or, more specifically, to a very small proportion of one variable (i.e. human produced carbon dioxide – 0.117%) is not science, for it requires us to abandon all we know about planet Earth, the sun, our galaxy and the cosmos.”

After all, what’s the problem with an increase of 0.117% in the greenhouse effect contributed by mankind’s activities? And worse still, even famous IPCC and NCAR scientist, Tom Wigley, already demonstrated long ago that, even if ALL measures in CO2 emissions reduction were fulfilled by ALL countries according to Kyoto, the warming increase spared would amount to 0,06ºC by 2050, or reaching the date of the predicted warming of 2ºC will be delayed by 16 years.

So why all the hassle? Why taxing CO2, an invaluable gas for human and vegetal life, and increase everybody’s living costs? CO2 has no influence on climate or a very minuscule one because it logarithmic properties for every doubling of CO2 concentrations. Science already showed that, many years ago (Eric Monnin et al, 2000) and several others. Let’s take care of more important environmental issues. Let’s get down from the Warming Bandwagon and let the Gravy Train go away…

Posted by Achuara | Report as abusive

When a politician calls for a carbon price, what he generally means is that he favours a carbon tax over the flexibility of the market. In a time when Government budget deficits are running at record high levels the temptation to generate new sources of tax revenue must be great, but it should not prevail to the detriment of the environmental objective.

On an environmental basis, there are four good reasons for not favouring a carbon tax over a cap-and-trade solution.

First, a “one size fits all” tax requires an impossible calculation of the average cost of reducing emissions over a given period of time. Compare this with an emissions-trading system that works on the free-floating marginal cost of emission abatement.

Second, carbon taxes would be levied locally and so impossible to properly administer on a global scale. A global carbon-market price is perfectly pervasive.

Third, taxation cannot guarantee a reduction in greenhouse-gas emissions; emitters could opt to pay the tax and continue emitting at will. Conversely, a cap-and-trade solution introduces a carbon ceiling (the cap) and the price acts as no more than a useful barometer of how close we are to achieving that cap; prices will tend to zero as the requisite level of emission reductions are achieved. On this basis, if the price falls too low too quickly, then perhaps the carbon cap should have been set at a more ambitious level.

Fourth, is the issue of financial leakage. Under cap-and-trade, the market decides which are the most viable low-carbon technologies and money flows from one company to another in what becomes a zero sum game for the economy as a whole. However, a carbon tax would see money flow out of the economy and into Government coffers with no hypothecation guarantees. That money will invariably find its way into noble causes including defence, healthcare, education and infrastructure. Only a small part of it will find its way back to fighting the environmental cause which would produce yet further inefficiencies in climate change policy.

The political myth that “we need to establish a fixed carbon price” is nonsense. It matters not if we achieve the requisite volume of emission abatement at $2 per ton or at $50 per ton. In fact, a fixed carbon price is quite counter-intuitive: the environmental objective needs to be balanced with economic policy and the lower the cost of achieving the requisite emission abatement, the better the result for the economy generally.

Politicians need to focus their minds on setting an appropriate cap and then leaving the market to determine the price.

Posted by JEmanuel | Report as abusive