Excellent break down and more or less is why carbon taxes are little more than another version of a command style economy. It’s really just a tax on people’s energy and reduces the ability to improve their lives.
And you’re spot on, the carbon tax is so subjective. Take for instance, the interest rate used to calculate the ‘cost of carbon.’ Small swings in the interest rate can take the tax down to near zero or cause it to skyrocket.
You claim carbon taxes are a way of reaching command economies while pushing everyone in America and Asia to move towards natural gas is not a command economy?? Also I don't really care about the regressive nature of carbon taxes other than making politically unpalatable. It's not like we reduce sentences for criminals just because they're poor.
I never claimed that "carbon taxes are a way of reaching command economies."
My claim is that many supporters of carbon taxes claim that their favored policy is an alternative to command economies, but yet their method for determining the proper level of a carbon tax is very similar to the method that command economies use to determine prices.
If not, then prove me wrong.
What is the level of carbon tax that you propose?
How did you get that number?
Regarding "while pushing everyone in America and Asia to move towards natural gas is not a command economy."
I assume that you are referring to my other articles:
I never made that claim either. The term "command economy" does not appear anywhere in either article.
As for you not caring about "regressive nature of carbon taxes."
Fine. How do you deal with my other claims?
Do you care that carbon taxes will greatly increase the cost of energy when we should be doing the opposite? If not, then I suggest that you do not care about human material progress.
I'm from bangladesh. The material progress of the rest of the world is leading to more floods and cyclones in my own country. Also the somewhat arbitrary carbon tax argument can also be said for your proposed coal tax. If it makes you feel any better I would make the carbon tax some ridiculous number like 80.4572. We will hit net zero by year 2052.6372. Personally I prefer the idea of a carbon budget than the net zero by year X but the dye has been cast unfortunately.
I just looked up the electrical grid in Bangladesh. I am having problems finding solid numbers, but it looks like it is mainly based on natural gas. That is great!
So your country would greatly benefit from my proposal and it would be hurt by carbon taxes (which would increase the price of electricity in your nation).
So the method that you use to determine the proper carbon tax sounds very similar to how planners in the Soviet Union computed prices, so you just proved my point.
And I am very skeptical of your claim that "material progress of the rest of the world is leading to more floods and cyclones in my own country."
Sadly, your country has a long history of destructive flooding. In the 19th century, six major floods were recorded: 1842, 1858, 1871, 1875, 1885 and 1892. Eighteen major floods occurred in the 20th century. Those of 1951, 1987, 1988, and 1998 were of catastrophic consequence.
And if you are correct, then it was to a large extent caused by coal-burning power plants, so you should be in favor of my proposal.
How is your proposed coal tax any less of a command economy approach than a carbon tax? Your system is even more command based since you're targeting a specific technology. Also I would you debate a policy on its own merits as opposed to bringing up the Soviet bogeyman. It's like all those wokes who call everything they don't like colonial.
Again, I never used the term "command economy" except in response to your comment. The only reason that I mentioned it in this article is because you used the term in comments to another article 11 days ago.
If you do not like the term, then stop using it.
I personally do not think either of our proposals is a command economy.
I also would prefer to debate my proposal based on its own merits. but you keep talking about "command economies" and "Governments should not be in the business of picking technologies."
I don't think you understand what the term "command economy" means. It is not just a government policy. It has a very specific meaning. The Soviet Union is the best example of that type of economy, so that is why I mentioned it.
I presume “ Since a new CCGT plant emits roughly 2/3 of the carbon emissions of an existing coal plant,” should be 1/3, or “2/3 less”.
Great writeup. I have been persuaded that a coal tax is more practical because of the ease of instituting it and the way it affects countries who might not otherwise take action to replace coal.
Why do you think American shale companies have not began expanding overseas to begin shale production everywhere that deposits are known?
As for why American shale gas companies are not expanding overseas more, my guess it is some combination of the below:
1 ) They have their hands full with scaling up American natural gas production.
2) Shale gas production is dominated by many small and medium companies, not the big majors who dominate conventional drilling. Expanding overseas is much harder for small companies who only have experience with American geology and regulations.
3) Shale gas drilling and distribution is either illegal or heavily regulated in other nations. The first movers are going to have huge political head aches, and may never be allowed to actually sell their product at scale.
My guess is that until foreign governments change #3 in a serious way, American shale gas companies will be perfectly happy to remain domestic producers.
Thanks for your response! Interesting that adoption is slow, even in somewhere like South Africa which seems to have every incentive to get shale gas out of their deposits to produce cheaper, lower emissions energy as quickly as possible.
Yes, I think the reason other nations cannot do it on their own is that the geology is very complex. Conventional drilling is like drilling down into a large underground reservoir.
In Shale gas you are drilling sideways along very narrow seams that have been repeatedly bent by the movement of the earth. It requires incredible precision. And every shale play is different.
> Why do you think American shale companies have not began expanding overseas to begin shale production everywhere that deposits are known?
The explanation I've heard involves differences in how mineral rights work in America vs. most of the rest of the world.
In America mineral rights belong to the land owner. In most of the rest of the world they belong to some layer of government, thus the land owners have no incentive to cooperate with shale producers.
That said, perhaps the simplest and most practical approach in the short term is to tax only coal. (I think you discussed this in your book?) If we internalize the negative externalities of the coal burning, we could make a serious dent in CO2 emissions as very small cost.
Essentially, a precision strike against pollution and climate change.
Excellent break down and more or less is why carbon taxes are little more than another version of a command style economy. It’s really just a tax on people’s energy and reduces the ability to improve their lives.
And you’re spot on, the carbon tax is so subjective. Take for instance, the interest rate used to calculate the ‘cost of carbon.’ Small swings in the interest rate can take the tax down to near zero or cause it to skyrocket.
You claim carbon taxes are a way of reaching command economies while pushing everyone in America and Asia to move towards natural gas is not a command economy?? Also I don't really care about the regressive nature of carbon taxes other than making politically unpalatable. It's not like we reduce sentences for criminals just because they're poor.
I never claimed that "carbon taxes are a way of reaching command economies."
My claim is that many supporters of carbon taxes claim that their favored policy is an alternative to command economies, but yet their method for determining the proper level of a carbon tax is very similar to the method that command economies use to determine prices.
If not, then prove me wrong.
What is the level of carbon tax that you propose?
How did you get that number?
Regarding "while pushing everyone in America and Asia to move towards natural gas is not a command economy."
I assume that you are referring to my other articles:
https://frompovertytoprogress.substack.com/p/there-is-a-better-alternative-to
https://frompovertytoprogress.substack.com/p/lets-leverage-american-lng-exports
I never made that claim either. The term "command economy" does not appear anywhere in either article.
As for you not caring about "regressive nature of carbon taxes."
Fine. How do you deal with my other claims?
Do you care that carbon taxes will greatly increase the cost of energy when we should be doing the opposite? If not, then I suggest that you do not care about human material progress.
I'm from bangladesh. The material progress of the rest of the world is leading to more floods and cyclones in my own country. Also the somewhat arbitrary carbon tax argument can also be said for your proposed coal tax. If it makes you feel any better I would make the carbon tax some ridiculous number like 80.4572. We will hit net zero by year 2052.6372. Personally I prefer the idea of a carbon budget than the net zero by year X but the dye has been cast unfortunately.
I just looked up the electrical grid in Bangladesh. I am having problems finding solid numbers, but it looks like it is mainly based on natural gas. That is great!
So your country would greatly benefit from my proposal and it would be hurt by carbon taxes (which would increase the price of electricity in your nation).
https://frompovertytoprogress.substack.com/p/there-is-a-better-alternative-to
So I am really not understanding why you are opposed to it.
OK
So the method that you use to determine the proper carbon tax sounds very similar to how planners in the Soviet Union computed prices, so you just proved my point.
And I am very skeptical of your claim that "material progress of the rest of the world is leading to more floods and cyclones in my own country."
Sadly, your country has a long history of destructive flooding. In the 19th century, six major floods were recorded: 1842, 1858, 1871, 1875, 1885 and 1892. Eighteen major floods occurred in the 20th century. Those of 1951, 1987, 1988, and 1998 were of catastrophic consequence.
And if you are correct, then it was to a large extent caused by coal-burning power plants, so you should be in favor of my proposal.
How is your proposed coal tax any less of a command economy approach than a carbon tax? Your system is even more command based since you're targeting a specific technology. Also I would you debate a policy on its own merits as opposed to bringing up the Soviet bogeyman. It's like all those wokes who call everything they don't like colonial.
Again, I never used the term "command economy" except in response to your comment. The only reason that I mentioned it in this article is because you used the term in comments to another article 11 days ago.
If you do not like the term, then stop using it.
I personally do not think either of our proposals is a command economy.
I also would prefer to debate my proposal based on its own merits. but you keep talking about "command economies" and "Governments should not be in the business of picking technologies."
I don't think you understand what the term "command economy" means. It is not just a government policy. It has a very specific meaning. The Soviet Union is the best example of that type of economy, so that is why I mentioned it.
I presume “ Since a new CCGT plant emits roughly 2/3 of the carbon emissions of an existing coal plant,” should be 1/3, or “2/3 less”.
Great writeup. I have been persuaded that a coal tax is more practical because of the ease of instituting it and the way it affects countries who might not otherwise take action to replace coal.
Why do you think American shale companies have not began expanding overseas to begin shale production everywhere that deposits are known?
Oops. Good catch on the typo. I corrected it.
As for why American shale gas companies are not expanding overseas more, my guess it is some combination of the below:
1 ) They have their hands full with scaling up American natural gas production.
2) Shale gas production is dominated by many small and medium companies, not the big majors who dominate conventional drilling. Expanding overseas is much harder for small companies who only have experience with American geology and regulations.
3) Shale gas drilling and distribution is either illegal or heavily regulated in other nations. The first movers are going to have huge political head aches, and may never be allowed to actually sell their product at scale.
My guess is that until foreign governments change #3 in a serious way, American shale gas companies will be perfectly happy to remain domestic producers.
Thanks for your response! Interesting that adoption is slow, even in somewhere like South Africa which seems to have every incentive to get shale gas out of their deposits to produce cheaper, lower emissions energy as quickly as possible.
Yes, I think the reason other nations cannot do it on their own is that the geology is very complex. Conventional drilling is like drilling down into a large underground reservoir.
In Shale gas you are drilling sideways along very narrow seams that have been repeatedly bent by the movement of the earth. It requires incredible precision. And every shale play is different.
It really is incredible technology.
> Why do you think American shale companies have not began expanding overseas to begin shale production everywhere that deposits are known?
The explanation I've heard involves differences in how mineral rights work in America vs. most of the rest of the world.
In America mineral rights belong to the land owner. In most of the rest of the world they belong to some layer of government, thus the land owners have no incentive to cooperate with shale producers.
Yes, you are correct. I should have mentioned that in my list above. Thanks for the addition.
I support a carbon tax as a “better than nothing” measure. Fully agree with you though, carbon taxes are not perfect.
See my discussion on how we could implement a reasonable carbon tax here: https://www.lianeon.org/p/the-key-to-a-sustainable-economy
That said, perhaps the simplest and most practical approach in the short term is to tax only coal. (I think you discussed this in your book?) If we internalize the negative externalities of the coal burning, we could make a serious dent in CO2 emissions as very small cost.
Essentially, a precision strike against pollution and climate change.