So many (like California) favor carbon taxes, as primarily driven by the climate-change debate (click here, here, and here, too) that it's worth collecting the most useful sources I come across here.
Here's a comment to a wind-subsidy opinion piece that nicely sums up my feelings in this area:
2014: Here's a good argument for having the government price-manipulate carbon emissions to induce the growth of lower-carbon coal power plants.
June, 2014: The EPA squeezes states, and thus brown power, over carbon emissions. (Source). Here's a 7/14, Georgia-centric piece on that score. Here's a December, 2014 column that says renewable power won't solve the CO2-generated global warming problem.
September, 2013: How carbon price distortion enables gov't agencies to fudge facts.
August, 2013: The Chinese wade in.
Check out this guy’s cogent reasoning:
(Source). Here's a counterpoint column. This, too. And here's some historical perspective (Clinton backed it, maybe now Obama, too).
Of course, taxing carbon-based energy could always be used to pay down “[o]ur national debt, at $15.8 [trillion], [which] would form a stack of $100 bills 10,712 miles high.” (Source). As David Frum writes in his "Let's Tax Carbon" column:
And "[a]ccording to a September 2012 study by the Congressional Research Service, a small carbon tax of $20 per ton — escalating by 5.6 percent annually — could cut the projected 10-year deficit by roughly 50 percent (from $2.3 trillion down to $1.1 trillion)." (Source).
Other carbon-tax articles here.
An explanation of Renewable Energy Certificates (RECs).
7/22/12 -- Interesting NYT piece dealing with carbon taxes versus direct gov't investment in green power. 1/27/13: NYT piece on Air travel and carbon emissions.
7/12 -- An Australian Perspective.
7/12: "George Shultz was an economist in the Eisenhower administration, as well as secretary of the Treasury and Labor, and director of the Office of Management and Budget in the Nixon administration. Under President Ronald Reagan, he was secretary of state for almost seven years. Despite the reluctance of his fellow Republicans to embrace action on global warming, Shultz is confident that when the time is right conservatives will support a carbon tax, for a number of reasons." Here's the rest of that article.
Here's part of a comment I left at this fellow's site (we were debating the economic sense of Solar PV and thus the use of tax policy):
1. The government can, must and will tax us based on income and consumption. But it’s crazy to punish industriousness and thrift, so taxing corporations, productivity, investment income, etc. is like driving a car with the brakes on.
2. Tax policy can quickly alter mass behavior, especially the self-destructive kind that costs us all (e.g., jack up tobacco taxes, reduce consumption, impose guzzler taxes, reduce air pollution and watching wealth go up in smoke).
3. If we must tax, we should do so in a way that constrains higher and higher efficiency and thus less pollution. Hence, tax pollution-causing consumption (coal, gas, oil, nukes) and don’t tax (reward) efficiency (millions of Joe’s making their own electricity and back-feeding excess into the grid).
All that is pretty basic stuff, and common-sense driven.
Here lies the rub:
You say that you “don’t think it’s appropriate to force people to buy expensive electricity, which everyone, except possibly those who install the cheap PV solar panels, will have to do.”
I think you do. Once you agree that we must tax something, and that it might as well be negative-effects-causing consumption (cigarettes, junk food, gas guzzlers), then why wouldn’t you want to tax Brown Power, which admittedly will raise electricity rates, but ALSO price-encourage (rather than bureaucratically jawbone) conservation and thus higher efficiencies? At the same time, consumption tax gains can pay for the elimination of corporate, investment-income and other productivity-hampering taxes. Ditto for the tax-collection bureaucratic savings with narrowing taxes to the vastly simpler source consumption (tax coal coming out of the mines, oil and the well-head and ship terminal).
I’m betting you’ll agree with me that taxing consumption and un-taxing productive effort can be more than a tax-wash, it can be a net gain for everyone.
All right, now let’s try some more grayish areas:
First, you are correct that Solar PV (my “infatuation”) won’t work everywhere. But you know what? You’re not sure, and neither am I, given the ever escalating, compensating efficiencies in Solar PV — just in the last 36 months alone.
What is certain, however, is that the Northern area Joe can figure out for himself whether it works for him. I say let him decide. He can Google up insolation maps and have his roof or yard or farm field “pyrometered” and then, with that read-out (my solar vendor’s engineer did it for me for free) calculate net electricity yield by inputting Solar PV panel specs into simple equations available to all. Note: My vendor calculated the return on my array and I have continuously EXCEEDED it.
All of what I just described (Joe figuring out and deciding to invest on his own) is The Free Market at work. Something you no doubt would applaud.
Second, Canada and Germany are one and two gradations below my (Georgia, USA) insolation region and yet people there are heavily investing. But yes, you’re right, those markets — like NY, CA and NJ — are “subsidy distorted” and thus aren’t the best examples to cite — subsidies distort and thus pollute free market data, and thus scare away venture capital.
So we’ll agree that all of that is a distortion of, as caused by pernicious government entanglement in, The Free Market.
But focus here a minute: UN-subsidized Solar PV prices have fallen so far that Joe may (by 2015, I project) soon stand a good chance of erecting what I’ve got (my array produces over 12,000/KWH of electricity a year) and feeling good about it (because it’s a money-maker) based on his self-consumption savings alone (a family of four, according to Georgia Power, consumes 12,000 KWH/year), let alone the $.08/KWH reverse-meter credit which, you must concede is NOT an outrageous subsidy if at all (again, much of Solar PV power’s generated during the peak load phase).
And if that happens, all of that would be a virtually 100% Free Market result. And Joe will jump on it because for $10,000 ($1/watt) he gets a 30-year system that covers 100% of his power bill if not makes him a few dollars (the reverse-credit, “meter gold” will induce him to optimize his output and minimize his consumption — a double efficiency gain).
I’m asking you to re-examine some of your premises. It was all theoretical to me until I erected my array. Now I’ve got documented, real time data to show, plus a reasonable market projection to help develop a new investment channel — a free market for Solar PV as a mass consumer (like PCs) product.
And by the way, there is nothing “unreliable” about Solar PV, unless you mean hey, no sun, no power. But that, as you know, is a specious argument, for with a grid-tied system the issue is NOT whether one enjoys 100% sun all day long, but what the system produces over a month, as levelized out by the net-meter standing between the erected array and the grid.
My system’s producing over 1000 KWH a month, even though on dark rainy days it produces very little. But it’s the 1000 KWH that constitutes the bottom line, and it would be silly to say my system’s “unreliable” merely because on a rainy day it’s output is maybe 18 KWH instead of 50 KWH or 60 KWH.
Listen, I’m with you on gutting government, its stifling bureaucracy and its outrageous tax burden. And I’m also a drill, baby, drill advocate.
But even the most minimalist libertarians like me recognize that some taxation must occur for the basic protections and infrastructure that a minimum government requires.
You and I also recognize that the business of America is business. We want to see thriving, productive activity that produces net new wealth, not “government-printed” wealth. I’m saying that millions of Joe’s will, on their own, research and figure out that hey, grid-tied Solar PV (“A chicken in every pot”) makes sense. And all of their “home-grown” electricity will become net new wealth — times millions of Joe-owned arrays.
And again, you may be right — in some areas (Canada reaps pretty low irradiance) Solar PV may not make economic sense. But Joe will figure that out on his own and won’t need you or I or Nanny Governmenteers to “guide” him. More importantly, what I’m advocating is PRIVATE investment by tens of millions of Joe’s, and not a DOE bureaucrat tossing $500 million bundles of OUR cash at political favorites dialed in by their bribologists (lobbyists).
Finally, let’s you and I touch the Third Rail of Environmental Politics, shall we?
Do you agree with my premise that if we must tax why not tax “bad consumption” (anything producing ill environmental and health effects) first, and good consumption (productive activity, thrift) second?
If you do (c’mon, I know you do!), then what exactly is so awful about taxing brown power, not to mention junk food, and other deleterious consumption? Donn, anyone can see the substantial net reduction in Joe’s consumption of gasoline. Step up the pain, Joe becomes more careful, lower the pain (price) and Joe goes back to buying slobmobiles. In our lifetimes did you ever believe MPG would become as prominent a selling feature in vehicle advertising? Well, it’s here! And America’s net, per capita gasoline consumption has declined.
Price. Pain. Conservation.
That core human operating system unit (seek pleasure, avoid pain), lies at the root of all government (hence, tax) policy, and undergirds all free markets.
So really, is it that hard to see the same effect with electricity? Folks who come to my home in the winter are handed “guest sweatshirts” to put on (I got a good, “Seasonal Close-out” deal on them at Sam’s Club). My all-electric, 2150 foot Savannah GA home’s power bill last winter never exceeded $46. Pleasure, pain (the ladies snuggle closer to me to stay warm, too).
And if coal and gas are taxed (Georgia Power’s prime sourcing) as I advocate (to make my $.08/KWH reverse-meter rate “market natural” and not a coerced subsidy), then I’m guessing my bill will go to $56, and sure, product prices will rise too (I don’t have that calculation), as offset if not washed by the elimination of corporate and other nutty taxes (sure, let’s vote for Mitt).
I’ll gladly pay that for seeing PV ride the same tidal wave of growth (and engender a similar tidal wave of prosperity) that I saw with PC’s. And you and I will be there, at the head of the huge new investment channel we together will now open by influencing the masses and policy makers toward a sound, rational policy that puts money in the little guy’s pocket, not just the fat cat’s. Doesn’t your gut tell you that the net positive result will more than wash if not greatly exceed the cost of taxing Brown Power?
I believe that you see, as I do, that markets and attendant government policies are highly dynamic and nuanced. Ergo, some give and take on the ideological front must necessarily occur. Again, I ask you to reconsider your premises.
The missing link takes you to an analysis about California’s Senate Bill 843, the Community-Based Renewable Energy Self-Generation Program. It’s designed to enable those without solar-radiated roofs and without capital to participate in larger solar arrays, just as farmers form cooperatives to levelize farm-equipment costs amongst their membership. I don’t know if that makes sense, it was just announced. I rely on smart guys like you to analyze these things.
Why I believe nothing will be done about the Greenhouse Effect: