http://www.econ.yale.edu/~nordhaus/kyoto_long_2005.pdf
http://watthead.blogspot.com/2007/03/cap-and-trade-gaining-favor.html We had an interesting discussion on this board a while back on carbon taxes and there is now a realistic prospect of cap and trade in the United States in the near future. My current opinion is that cap and trade is vastly inferior to carbon taxes (as expounded in more detail by myself in the second link the comments section and by Nordhaus in the first link). Reading through what Nordhaus has to say, I noticed that he also mentions the fact that there are already taxes and subsidies on fossil fuels, with some of the taxes much higher than any proposed carbon tax level. The worry Nordhaus focuses on is that nation states might want to circumvent their (hypothetical at this stage) treaty obligations to maintaining a particular carbon tax level by raising subsidies or lowering already existing taxes He then goes on to argue that it should not be too hard to calculate an average actual carbon tax level and cites his own calculations indicating that carbon taxes in Europe are $100 per tonne of carbon higher than in the US. What surprised me in his argumentation was that he didn't take account of the fact that taxes on petrol are there for a number of reasons. http://heikoheiko.blogspot.com/2006/06/gasoline-vs-kerosene-taxes.html#comments http://heikoheiko.blogspot.com/2006/01/economics-of-fuel-taxes-continued.html#comments http://heikoheiko.blogspot.com/2006/01/economics-of-fuel-taxes.html#comments (I personally favour rather high petrol taxes, even though for the time being I think the optimal level for carbon taxes is zero.) European petrol taxes are there to combat ordinary air pollution, to cut down on traffic accidents, to pay for roads, to deal with traffic congestion, as a revenue source that is more difficult to evade than income taxes, and to reduce oil imports for geostrategic reasons. In our earlier discussion in this group on the subject of carbon taxes I suggested that these reasons were difficult to disentangle, but one could make some educated guesses. http://groups.google.com/group/globalchange/browse_thread/thread/d0ab0ea86e675b3a/d656aeef0450d6fa?lnk=gst&q=carbon+taxes&rnum=1#d656aeef0450d6fa I think that Nordhaus's estimate of the differential between Europe and the US is therefore probably too high. There is more concern in Europe, but not sufficiently so in my opinion to amount to $100 per tonne of carbon worth of difference. I don't see the tax rate as such in need of worldwide harmonisation. A Kyoto replacement treaty focused on carbon taxes, I think, mainly needs to consider tax competition for traded goods (like steel, cars, aluminium) to ensure that subsidies to protect domestic industry from foreign competition don't undermine the carbon tax. And while that cannot easily be done in the form of a treaty, I also think, more co-operation and trust on energy security would help by lessening the allure of coal compared to natural gas and oil. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups Global Change ("globalchange") newsgroup. Global Change is a public, moderated venue for discussion of science, technology, economics and policy dimensions of global environmental change. Posts will be admitted to the list if and only if any moderator finds the submission to be constructive and/or interesting, on topic, and not gratuitously rude. 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/globalchange -~----------~----~----~----~------~----~------~--~---
