Hi Dan,
I am not a tax expert, but I did go on a week's Climate Change course at Imperial College last spring, which was heavy on cap-and-trade; and the Danish woman in charge of organising the upcoming December Copenhagen meeting was among the people on the course. I was underwhelmed by cap-and-trade, and have now the same low opinion as Prof Hansen [1]. One of the things that struck me was that the whole enterprise is messed up by fluctuations in the price of carbon. People design carbon-saving projects based on a high price, and when the price goes down, the projects flounder. It is all thoroughly unstable. And there is so much red tape to go through, that there are a limited number of projects that get started. Furthermore, there is only a very limited amount of economic activity that would ever be covered by such projects. However a tax/levy on fuel as used can have a fixed carbon price. And this price can be ramped up linearly over ten or twenty years, so that people can make investments on that basis. Furthermore, if this tax/levy is taken back to source, and levied at the point of fuel extraction from the ground, it can offset all carbon emissions down the supply chain, however that fuel is used - whether in transport, industry, heating, electricity generation, etc. Cheers, John [1] http://www.columbia.edu/~jeh1/mailings/2009/20090505_TempleOfDoom.pdf ----- Original Message ----- From: "dsw_s" <[email protected]> To: "geoengineering" <[email protected]> Sent: Sunday, May 10, 2009 6:00 AM Subject: [geo] Re: Funding air capture and CCS Actually, the option I was primarily thinking of was for air capture to generate carbon credits in cap-and-trade. But any binding international agreement that limits net carbon emissions would likewise provide an incentive for a country to fund air capture so that it can gain an advantage in carbon-emitting activity. On May 9, 10:43 pm, Sam Carana <[email protected]> wrote: > The question is how we can best get carbon air capture started. > > With so many local things to fund (financial assistance for the poor, > subsidies for solar energy, building insulation, electric cars, etc), > what incentive is there for a country to fund air capture? > > Aviation causes lots of emissions. So, politicians are proposing all > kinds of ways to make conventional jet fuel more expensive. However, > what guarantees do they give that the proceeds will help reduce > greenhouse gases? The proceeds may well end up in countries like India > and Pakistan and cause people there to buy more polluting cars and eat > more meat. Politicians may promise anything to get elected, without > having to demonstrate that their proposals will indeed make any > difference. By contrast, we should come up with proposals that are > indeed effective in reducing greenhouse gases. > > One proposal is for aviation, by international agreement, to offset > carbon emissions by means of fees imposed on conventional jet fuel, > with the proceeds of those fees used to directly fund carbon-negative > activities, e.g., carbon air capture and storage, biochar burial, > afforestation, etc. > > Another proposal calls for an international agreement to reduce > greenhouse gases, with reduction targets set for each country to > reach. Local politics could decide how to reduce greenhouse gases, > provided that the internationally agreed targets are indeed reached. > Tariffs would be imposed on products imported from countries that fail > to reach targets, and the proceeds of these tariffs would then be used > to fund carbon-negative activities. Such carbon-negative activities > could take place anywhere in the world. Market mechanisms can then > sort out which methods are most cost-effective in reducing greenhouse > gases, all government needs to do is to channel the proceeds of these > tariffs to funding of activities that capture carbon and store it. > > Each of these propositions would get things like carbon air capture > started in a big way. The promise of such funding will attract > investors and business activities, while there's government > supervision over the funding to ensure that things are done in clean > and safe ways. > > Cheers! > Sam Carana > > On Sun, May 10, 2009 at 8:23 AM, dsw_s <[email protected]> wrote: > > >> it is more economically sensible to tax where substitutes are readily > >> available. > > > If you're taxing to change behavior, yes. If you're taxing to raise > > revenue without distorting markets, no. If we tax high-carbon > > activities to fund mitigation in other areas, we're taxing for > > revenue; if we tax high-carbon activities to encourage substitution of > > lower-carbon alternatives, we're taxing to change behavior. I don't > > immediately see a reason to prefer one over the other, rather than > > just going with cap-and-trade that's indifferent between having people > > substitute or subsidize. > > --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "geoengineering" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/geoengineering?hl=en -~----------~----~----~----~------~----~------~--~---
