Jim Devine wrote, replying to me:
> > [JG] Perhaps you should consider the case that the carbon tax is just
> > another
> > disastrous marketplace method for dealing with global warming:
>
> [J. Devine] I didn't say "decent." I said half-decent.
The question you raised remains. It surprised you that the neo-liberal
s.o.b. Mankiw wrote what you seemed to you a half-decent view about what
should be done about the environment. My point is that his views on the
carbon tax and cap and trade aren't really so surprising -- what he is
advocating is a neoliberal solution; it won't work for the environment, but
it will work for the capitalists.
Mankiw regards cap and trade and the carbon tax as closely related, and
in that he is correct. Despite the sharp debate between some advocates of cap
and trade and some advocates of the carbon tax, both cap and trade and the
carbon tax are marketplace solutions, and both suffer from some of the same
problems.
Mankiw believes that one or another form of these market solutions will
work because he believes in market fundamentalism, and in the wonder-working
abilities of the "invisible hand" of market incentives. Now, there are
different types of taxes, with different aims, but the fact that Mankiw backs
the carbon tax as the main way to deal with carbon emissions shows that he
sees this particular tax as basically a marketplace measure and an
alternative to direct regulation and planning.
>
> > * It won't sufficiently affect carbon emissions.
>
> can't it be increased in magnitude?
I dealt with this question in my article on the carbon tax. But, for
one thing, there is every reason to believe that by the time the carbon tax
got high enough to eliminate certain sources of carbon emissions, it would
have dramatically upset the economy. Look at the results from a short stint
at $4 gallon gas in the US -- major pain while the effect on carbon emissions
was minor.
Aside from that, the carbon tax
-- doesn't in itself provide for alternatives to dirty products;
-- its impact on the major corporations most responsible for devastating
the environment is ambiguous;
-- it may have unexpected effects that themselves hurt the environment
(such as promoting the razing of every last available tree -- or remember
that during $4 gallon gas public transit declined in some areas because the
high gas price made it too expensive to run)
No doubt there will be some economists that can be found that will
assure us that -- in the long run -- the invisible hand of proper market
incentives will solve all these problems. If only we could put off eating
until that time, and the atmosphere could put off reacting to greenhouse
gases until that time...
>
> > * It will fall with greatest weight on the workers and the poor.
>
> in theory, the revenues could be used to compensate them.
>
At a time when the capitalists are cutting wages, cutting social
benefits, and displaying the utmost callousness to the masses, do you really
expect that they will ensure that the workers and the poor are compensated?
Or even "half-decently" ensure this? This is aside from the fact that it is
actually much harder to do this then one might imagine.
More likely, in the name of compensating the people, there will be
increased tax cuts directed disproprortionately at the better-off. Meanwhile
some sections of the population, such as undocumented workers, will get
nothing at all as compensation -- as that would presently be politically
impossible.
The left should be debunking the fairytales of the neo-liberals such
as Mankiw about how the masses will be shielded from the effects of neo-
liberal measures, not contributing to these myths. If we don't debunk the neo-
liberal myths, then how do we expect to have any credibility when the masses
see what the actual carbon tax does to them?
> > * It will end up being extremely complex. The way of setting the tax and
> > judging the carbon content, and the handling of the exceptions and special
> > regulations which will accompany any actual carbon tax, will be opaque, and
> > everything will be put into the hands of a horde of highly-paid specialists
> > with links to the industries. The same thing will happen here as happened to
> > cap and trade under Kyoto.
>
> the tax is simpler, but you're right that it's complex (especially
> given the political interests pushing for exemptions, etc.)
Ah, a point of some agreement!!! I knew there was some reason why I
paid attention to your writings! <g> And I have paid attention to them and
looked at them as one way of checking out the various serious views on
various subects.
But don't you think it's possible that the carbon tax only looks
simpler because it isn't here yet? Cap and trade was pretty simple too -- so
long as it was just a gleam in the eye of a free-market economist.
>
> > * The belief in the wonder-working effects of Pigovian taxes is just
> > another version of the belief in the benevolent effects of the "invisible
> > hand" of market forces.
>
> I don't remember using the word "wonder."
That's true, you didn't. Too bad. The pretensions with which
marketplace solutions and privatization are promoted *should* be ridiculed.
>
> > * This belief in companies doing the right thing because of the carbon tax
> > is a market fundamentalist fantasy to avoid dealing with the need for direct
> > envrionmental regulation and the need for overall planning of the
> > environmental impact of the economy.
>
> I didn't say that it was better than direct regulation. But the fact
> is, businesses do try to avoid taxes. If they can't push the costs on
> to others, they are forced to adapt.
>
> > * It ends up being a way to pretend to do something while actually marking
> > time.
>
> so says you.
That's true. In this discussion, I am indeed the one making that claim.
However, other people as well have said so with respect to cap and trade, and
published studies on this. I believe that the carbon tax won't be much
different, and I give reasons for this belief in my article, as well as
pointing to the experience of past marketplace measures.
Regards,
Joseph Green
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