Friday, June 15, 2007

A taxing proposal

This proposal has attracted some interest, primarily it seems from the delusionist wing of the blogosphere (eg). The basic ideas is that a carbon tax be instituted in such a way that it ramps up with observed temperature change. Of course a tax that ramps up over time is essentially the policy proposed by many economic analyses of the problem. There are those who would argue for cap-and-trade, and no doubt a capping system could be implemented on similar principles (eg where emissions permits are scaled depending on temperature change). But anyway, I see no problem with the principle.

McKitrick's "clever" point is to make the tax increase conditional on (proportional to) temperature increases: therefore delusionalists should have no reason to object, since they claim to believe that temperatures will not increase. The flip-side of this is that accelerated warming would cause a greater tax hike, so alarmists should also be reassured that if they are right, the tax would have a real bite. Further, markets could bet on who was right - neither, obviously enough, but I wouldn't object to the chance to make some money off that fact.

Of course the details of the proposal are completely impractical, and indeed I'm sure it wasn't even proposed as anything more than a thought experiment. The suggested 3-year average would be rather volatile, which is a problem irrespective of the average rate. Something like a 10-year average would surely be more sensible as a starting point. It's not clear whether the suggested rate (20 times the temperature anomaly) is a reasonable one: it should in the first instance be set so as to give a sensible tax trajectory over the next 20 years under the expected warming of about 0.2C/decade (surface air temperature). Most importantly, using such dodgy and disputed measurements as these two competing analyses of satellite observations of the tropical troposphere is little short of idiotic: one analysis is 50% greater than the other, and given that NASA no longer has any interest in Earth observation, who can say if there will even be continuity of these rather limited observations?

Perhaps the least attractive aspect of the proposal is the way in which it bends over backwards to atttract the delusionists, giving the another fig-leaf to hide behind. They lost the argument years ago, and I don't see why anyone with a strong track record of incompetence, sophistry and dishonesty should be offered a free pass to the policymaking table. On the other hand, political expediency often enough trumps basic decency, and perhaps it could be argued that the end justifies the means.

An obvious alternative policy that avoids these problems would be to institute a ramped carbon tax, with a promise to re-evaluate in say 10 or 20 years (since we cannot usurp the rights of a future electorate to change tax policies, this right will necessarily exist anyway). Of course a rump of irrelevant delusionists won't like this counter-proposal, but why should the rest of the world care what they think anyway?


EliRabett said...

Mostly it closes the door when the horses have fled. By the time you see the rise, you are committed to a lot more increase.

James Annan said...

Well, for those of the end-of-the-world-is-nigh tendency, we need a swingeing tax, and we need it yesterday (actually, several years ago). For example, I can guarantee that David Roberts will never be satisfied with any policy package enacted in his lifetime. But although it would be a mistake to settle for something wholly inadequate, it's also a mistake to make the best the enemy of the better-than-nothing. A modest tax together with the promise that it will ramp up steadily over time seems like a sensible enough starting point.

Michael Tobis said...

I agree with James reply to Eli.

The close the door after the horse is gone (a nice Texas idiom which Eli botches a bit) issue occurred to me as well. In practice, though, that can pretty well be accounted for by the proportionality constant, which you can be sure we will end up arguing over.

Also, I think it is good to have something you can afford to give your opposition. Something that comes from the McKitrick camp which is actually workable is definitely worth pursuing, because they will have a hard time opposing it.

As the Python community says to express agreement, "+1".

EliRabett said...

Fled has a bit more urgency than gone Michael. What I wanted to capture is the idea that while everyone else is looking at serious action, McKitrick surfaces an inadequate bid. Thus fled, not gone. The same thing is happening on with the current CAFE proposals. IEHO you don't accept the used climate salesmans first offer.

English is a language that Eli speaks on occasion but mangling English is an old time hobby of his.

Heiko said...

I wonder whether it mightn't be an idea to split NASA. Let the likes of Griffin get on with exploring space, and have someone like Hansen take care of Earth observation and climate modelling. Why is NASA responsible for collecting surface temperature records and producing climate models anyway? I mean, why didn't that get put into another agency's portfolio in the first place (like say the Geological Survey or the Department of the Environment)?

James Annan said...

Well the link is presumably through Earth observation satellites. Our institute was initially part-sponsored by the space agency here, although that fell apart a few years ago.

EliRabett said...

Given NOAA's record with the next generation (the missing generation) of weather satellites, that might not be a very good idea. Essentially they loaded everything into a basket of wishes and it sank