Author Topic: Here's a carbon tax that would be a good idea  (Read 651 times)

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Online aleks335

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Re: Here's a carbon tax that would be a good idea
« Reply #15 on: August 03, 2017, 06:11:27 PM »
Right now, with prices of natural gas low, it' is more profitable for electric companies to buy electricity generated from natural gas and even coal, than from solar or wind or hydroelectric.

So, what's happening is we're burning mostly gas, some coal, while wind turbines are standing still in heavy winds, and utility companies aren't buying back solar from the grid unless they have to.

But, if a carbon tax were levied on carbon based energy sources, and on a kilowatt per kilowatt basis that tax income were used to subsidize use of wind and solar and other renewable sources, then we'd generate less CO2; increase solar and wind production and keep consumer prices moderate.

Sounds like a good idea to me. Probably makes more sense in USA than in Norway. My contract with the power company is "hydropower only" which sounds impressive, until you find out that 99% of all power generation in Norway is hydropower.

And also when you fail to realize that there is no way to deliver different power to you than to your neighbor.  Here I can buy renewable-only power, but what I'm really paying extra for is at best an offset and at worst just renewable power that was already generated and would be part of the energy mix.  But I get to pretend that that portion of the power generation is mine...

Yeah. It is a little abstract, power is a very strange commodity. But Norway is integrated into a European energy market, and power has to come from somewhere and the company guarantees that when they buy the power equivalence of my use they do so to hydropower generating companies so i think it is a little more than indulgence (in the Catholic sense).
“I quite realized,” said Columbus
“That the earth was not a rhombus,
But I am a little annoyed
To find it an oblate spheroid.”

Offline The Latinist

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Re: Here's a carbon tax that would be a good idea
« Reply #16 on: August 03, 2017, 08:01:52 PM »
Right now, with prices of natural gas low, it' is more profitable for electric companies to buy electricity generated from natural gas and even coal, than from solar or wind or hydroelectric.

So, what's happening is we're burning mostly gas, some coal, while wind turbines are standing still in heavy winds, and utility companies aren't buying back solar from the grid unless they have to.

But, if a carbon tax were levied on carbon based energy sources, and on a kilowatt per kilowatt basis that tax income were used to subsidize use of wind and solar and other renewable sources, then we'd generate less CO2; increase solar and wind production and keep consumer prices moderate.

Sounds like a good idea to me. Probably makes more sense in USA than in Norway. My contract with the power company is "hydropower only" which sounds impressive, until you find out that 99% of all power generation in Norway is hydropower.

And also when you fail to realize that there is no way to deliver different power to you than to your neighbor.  Here I can buy renewable-only power, but what I'm really paying extra for is at best an offset and at worst just renewable power that was already generated and would be part of the energy mix.  But I get to pretend that that portion of the power generation is mine...

Yeah. It is a little abstract, power is a very strange commodity. But Norway is integrated into a European energy market, and power has to come from somewhere and the company guarantees that when they buy the power equivalence of my use they do so to hydropower generating companies so i think it is a little more than indulgence (in the Catholic sense).

I don't.  They will buy exactly the same amount of hydro and non-hydro power that they otherwise would, they'll just say that yours is coming.  from the hydro part.  Unless they're guaranteeing that they'll increase hydro generation in an amount to offset your usage, then it's just a piece of paper to make you feel better.
« Last Edit: August 03, 2017, 08:05:19 PM by The Latinist »
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Offline estockly

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Re: Here's a carbon tax that would be a good idea
« Reply #17 on: August 03, 2017, 08:02:31 PM »
Right now, with prices of natural gas low, it' is more profitable for electric companies to buy electricity generated from natural gas and even coal, than from solar or wind or hydroelectric.

So, what's happening is we're burning mostly gas, some coal, while wind turbines are standing still in heavy winds, and utility companies aren't buying back solar from the grid unless they have to.

But, if a carbon tax were levied on carbon based energy sources, and on a kilowatt per kilowatt basis that tax income were used to subsidize use of wind and solar and other renewable sources, then we'd generate less CO2; increase solar and wind production and keep consumer prices moderate.

Sounds like a good idea to me. Probably makes more sense in USA than in Norway. My contract with the power company is "hydropower only" which sounds impressive, until you find out that 99% of all power generation in Norway is hydropower.

And also when you fail to realize that there is no way to deliver different power to you than to your neighbor.  Here I can buy renewable-only power, but what I'm really paying extra for is at best an offset and at worst just renewable power that was already generated and would be part of the energy mix.  But I get to pretend that that portion of the power generation is mine...

Yeah. It is a little abstract, power is a very strange commodity. But Norway is integrated into a European energy market, and power has to come from somewhere and the company guarantees that when they buy the power equivalence of my use they do so to hydropower generating companies so i think it is a little more than indulgence (in the Catholic sense).

Electricity in the grid is fungible. Once it's in the grid it's part of the grid. It has no definable source.

The key is not to try to change what the end user gets, but to change the proportions of the energy the providers buy.

If they buy clean energy at a higher priority than fossil fuels, that would be good. If it takes a carbon tax to make that happen, I'm fine with that, even if the carbon tax doesn't raise prices, decrease demand or goes right back to the same company that's taxed.



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Online aleks335

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Re: Here's a carbon tax that would be a good idea
« Reply #18 on: August 05, 2017, 12:22:06 AM »
Right now, with prices of natural gas low, it' is more profitable for electric companies to buy electricity generated from natural gas and even coal, than from solar or wind or hydroelectric.

So, what's happening is we're burning mostly gas, some coal, while wind turbines are standing still in heavy winds, and utility companies aren't buying back solar from the grid unless they have to.

But, if a carbon tax were levied on carbon based energy sources, and on a kilowatt per kilowatt basis that tax income were used to subsidize use of wind and solar and other renewable sources, then we'd generate less CO2; increase solar and wind production and keep consumer prices moderate.

Sounds like a good idea to me. Probably makes more sense in USA than in Norway. My contract with the power company is "hydropower only" which sounds impressive, until you find out that 99% of all power generation in Norway is hydropower.

And also when you fail to realize that there is no way to deliver different power to you than to your neighbor.  Here I can buy renewable-only power, but what I'm really paying extra for is at best an offset and at worst just renewable power that was already generated and would be part of the energy mix.  But I get to pretend that that portion of the power generation is mine...

Yeah. It is a little abstract, power is a very strange commodity. But Norway is integrated into a European energy market, and power has to come from somewhere and the company guarantees that when they buy the power equivalence of my use they do so to hydropower generating companies so i think it is a little more than indulgence (in the Catholic sense).

I don't.  They will buy exactly the same amount of hydro and non-hydro power that they otherwise would, they'll just say that yours is coming.  from the hydro part.  Unless they're guaranteeing that they'll increase hydro generation in an amount to offset your usage, then it's just a piece of paper to make you feel better.

Well. that makes no sense either cause 99% of all power generation in Norway is already hydropower. Hydropower is so flexible it can be turned on/off according to prices rather than grid requirements. So we export power during the day when European prices are high and import it by night when their grid is overflowing. Capitalism FTW! So all I think the company has to do is to continue to buy from Norwegian sources also during night time.
“I quite realized,” said Columbus
“That the earth was not a rhombus,
But I am a little annoyed
To find it an oblate spheroid.”

Offline The Latinist

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Re: Here's a carbon tax that would be a good idea
« Reply #19 on: August 05, 2017, 10:00:33 AM »
Right now, with prices of natural gas low, it' is more profitable for electric companies to buy electricity generated from natural gas and even coal, than from solar or wind or hydroelectric.

So, what's happening is we're burning mostly gas, some coal, while wind turbines are standing still in heavy winds, and utility companies aren't buying back solar from the grid unless they have to.

But, if a carbon tax were levied on carbon based energy sources, and on a kilowatt per kilowatt basis that tax income were used to subsidize use of wind and solar and other renewable sources, then we'd generate less CO2; increase solar and wind production and keep consumer prices moderate.

Sounds like a good idea to me. Probably makes more sense in USA than in Norway. My contract with the power company is "hydropower only" which sounds impressive, until you find out that 99% of all power generation in Norway is hydropower.

And also when you fail to realize that there is no way to deliver different power to you than to your neighbor.  Here I can buy renewable-only power, but what I'm really paying extra for is at best an offset and at worst just renewable power that was already generated and would be part of the energy mix.  But I get to pretend that that portion of the power generation is mine...

Yeah. It is a little abstract, power is a very strange commodity. But Norway is integrated into a European energy market, and power has to come from somewhere and the company guarantees that when they buy the power equivalence of my use they do so to hydropower generating companies so i think it is a little more than indulgence (in the Catholic sense).

I don't.  They will buy exactly the same amount of hydro and non-hydro power that they otherwise would, they'll just say that yours is coming.  from the hydro part.  Unless they're guaranteeing that they'll increase hydro generation in an amount to offset your usage, then it's just a piece of paper to make you feel better.

Well. that makes no sense either cause 99% of all power generation in Norway is already hydropower. Hydropower is so flexible it can be turned on/off according to prices rather than grid requirements. So we export power during the day when European prices are high and import it by night when their grid is overflowing. Capitalism FTW! So all I think the company has to do is to continue to buy from Norwegian sources also during night time.

Electricity is fungible. The grid is entirely interconnected, and there is no way of separating your electricity from your neighbor's or electricity your company purchases from that purchased by other companies. It all goes into the same grid, and you get whatever you get. And having a piece of paper saying your company only buys hydro doesn't change the mix of power that's needed for load balancing at all. It just can't be separated like that.
I would like to propose...that...it is undesirable to believe in a proposition when there is no ground whatever for supposing it true. — Bertrand Russell

Offline BTS

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Re: Here's a carbon tax that would be a good idea
« Reply #20 on: August 06, 2017, 09:54:42 AM »
I would prefer the carbon tax with out the subsidies.  The carbon tax has the important function of addressing an externality.  The subsidy is just a cash transfer to corporations.

The point of the subsidy is to make the tax on the corporation using the carbon based fuel, but not increase prices paid by consumers.

If that means money is transferred to corporations for generation of clean fuel, I'm fine with that.

Also, looking forward, we can't assume that prices for natural gas will always be this low, and if we use the subsidies to encourage development of clean sources of energy production, then when those prices go up it will have less of an economic impact.

Taxing corporations is political speak nonsense.  A carbon tax is effectively passed through to the consumer, which means that the price of carbon derived energy would be priced with the externality included (assuming we really know what that externality cost is).  So I take just as much umbrage with the clean fuel corporation "getting" money, most of that is passed through to consumers of clean power.  One could argue that the subsidy is unfair as there is no such negative externality compensation needed and that clean energy is fairly priced. 

Perhaps using the tax money to fund R&D for clean energy is more appropriate; if we can find a way to make CO2-less power less expensive than fossil fuels the problem will solve itself.  Perhaps we need an X-prize for the development of economically viable clean power tech.  Picking winners with a central administration, i.e. deciding that solar is the answer, stifles innovation and creativity and encourages the barnacles that even if well intentioned end up just hanging around for the research grant.

I suspect that even if we adopted a carbon tax that it would not result in the shift in energy production desired.  What if people are just willing to pay the $11/ton? then the global warming side has to just go away, assuming you accept the economic externality argument.  Presumably the carbon tax should saved to compensate those that are eventually inconvenienced by the impacts of global warming, however that process is destined to be a complete mess, the grand daddy of special interests trying to slice their chunk of the huge pile that would be accumulated for the latent externalities that come due decades from now.

Offline The Latinist

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Re: Here's a carbon tax that would be a good idea
« Reply #21 on: August 06, 2017, 11:30:46 AM »
I suspect that even if we adopted a carbon tax that it would not result in the shift in energy production desired.  What if people are just willing to pay the $11/ton?

People use the cheapest energy that is available to them. They aren't so enamored of fossil fuels that they would pay more to use them than renewables, it's just that right now they are artificially cheaper because they do not price in the cost of externalities.
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Offline estockly

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Re: Here's a carbon tax that would be a good idea
« Reply #22 on: August 06, 2017, 12:10:50 PM »
I would prefer the carbon tax with out the subsidies.  The carbon tax has the important function of addressing an externality.  The subsidy is just a cash transfer to corporations.

The point of the subsidy is to make the tax on the corporation using the carbon based fuel, but not increase prices paid by consumers.

If that means money is transferred to corporations for generation of clean fuel, I'm fine with that.

Also, looking forward, we can't assume that prices for natural gas will always be this low, and if we use the subsidies to encourage development of clean sources of energy production, then when those prices go up it will have less of an economic impact.

Taxing corporations is political speak nonsense.  A carbon tax is effectively passed through to the consumer, which means that the price of carbon derived energy would be priced with the externality included (assuming we really know what that externality cost is).  So I take just as much umbrage with the clean fuel corporation "getting" money, most of that is passed through to consumers of clean power.  One could argue that the subsidy is unfair as there is no such negative externality compensation needed and that clean energy is fairly priced. 
 

This proposal would be revenue neutral. The power companies would have a certain amount of control.

Purchases of Electricity generated from fossil fuels would be taxed, making that more expensive.

That money would be used to subsidize purchases of electricity generated from clean sources, making that less expensive.

The net effect on consumer prices would be minimal.

And the issue is that right now, we have windmills and other clean sources sitting idle, while we burn coal and natural gas 24/7, and the alternate fuels are used when needed to supplement.

We should be utilizing all the alternative fuels possible first, and burning fossil fuels to supplement those.

The economics now is flat-ass backwards.

This kind of carbon tax could resolve it.

Do you know of any other way?
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Online aleks335

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Re: Here's a carbon tax that would be a good idea
« Reply #23 on: August 06, 2017, 05:55:53 PM »
Right now, with prices of natural gas low, it' is more profitable for electric companies to buy electricity generated from natural gas and even coal, than from solar or wind or hydroelectric.

So, what's happening is we're burning mostly gas, some coal, while wind turbines are standing still in heavy winds, and utility companies aren't buying back solar from the grid unless they have to.

But, if a carbon tax were levied on carbon based energy sources, and on a kilowatt per kilowatt basis that tax income were used to subsidize use of wind and solar and other renewable sources, then we'd generate less CO2; increase solar and wind production and keep consumer prices moderate.

Sounds like a good idea to me. Probably makes more sense in USA than in Norway. My contract with the power company is "hydropower only" which sounds impressive, until you find out that 99% of all power generation in Norway is hydropower.

And also when you fail to realize that there is no way to deliver different power to you than to your neighbor.  Here I can buy renewable-only power, but what I'm really paying extra for is at best an offset and at worst just renewable power that was already generated and would be part of the energy mix.  But I get to pretend that that portion of the power generation is mine...

Yeah. It is a little abstract, power is a very strange commodity. But Norway is integrated into a European energy market, and power has to come from somewhere and the company guarantees that when they buy the power equivalence of my use they do so to hydropower generating companies so i think it is a little more than indulgence (in the Catholic sense).

I don't.  They will buy exactly the same amount of hydro and non-hydro power that they otherwise would, they'll just say that yours is coming.  from the hydro part.  Unless they're guaranteeing that they'll increase hydro generation in an amount to offset your usage, then it's just a piece of paper to make you feel better.

Well. that makes no sense either cause 99% of all power generation in Norway is already hydropower. Hydropower is so flexible it can be turned on/off according to prices rather than grid requirements. So we export power during the day when European prices are high and import it by night when their grid is overflowing. Capitalism FTW! So all I think the company has to do is to continue to buy from Norwegian sources also during night time.

Electricity is fungible. The grid is entirely interconnected, and there is no way of separating your electricity from your neighbor's or electricity your company purchases from that purchased by other companies. It all goes into the same grid, and you get whatever you get. And having a piece of paper saying your company only buys hydro doesn't change the mix of power that's needed for load balancing at all. It just can't be separated like that.

Of course I understand this. I can't go around insisting that my energy is cleaner than my neighbors. But an amount of power is purchased on my behalf and put into the grid to cover my use. It matters how companies handle this. If more companies did stick to hydro and other renewables the composition of the power in the grid would of change.  Now since all these neoliberal right wing asshats have forced me to have the fucking glorious freedom to choose my own power company in some faux free market solution, rather than just getting the power from the state owned power company that we used to have (which was 100% hydropower baby), then I must at least try to approach the whole thing with some sort of rationality. So I tried to make a choice that would nudge this whole thing, if not in the right direction, at least not in a bad direction.

“I quite realized,” said Columbus
“That the earth was not a rhombus,
But I am a little annoyed
To find it an oblate spheroid.”

Offline Mr. Beagle

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Re: Here's a carbon tax that would be a good idea
« Reply #24 on: August 06, 2017, 06:14:12 PM »
The argument against taxation of business because consumers eventually pay is a bit thin.

First of all, you have to dump ideological talk about theft and waste/fraud/abuse. Basically, taxation is the cost of the stuff we do collectively (ignoring for the moment whether we should or not be doing X collectively, and ignoring for the moment deficit spending).

So we need to extract cash to pay for the collective from a complex economic system in which many of the most important factors of wealth are NOT cash. This means that we need to extract cash at the points where cash rears its head, otherwise we cannot capture sufficient cash to finance the collective.

Cash surfaces in both B2B (business-to-business) and B2C (business-to-consumer) transactions. So that is where you need to capture it, and find ways to adjust for non-cash wealth accumulation, eg capital gains.

Capitalists insist, when convenient, that a corporation is a "legal person" separate from the owners. Thus it is a taxable entity. It's financial transactions (part of GDP) are legally separate from financial transactions between it (the legal person) and the owners.

Add to this that, in modern corps, the line between debtholder and stockholder is often very fuzzy, and subject to today's whims.

Tl;Dr, cash is cash, and all transactions are part of our collective economy, thus subject to tax.
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Offline BTS

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Re: Here's a carbon tax that would be a good idea
« Reply #25 on: August 12, 2017, 10:09:56 AM »
I never argued against a carbon tax. I did talk about productive ways to use the tax money. I did note that investing the money to compensate those affected by future externalities could be problematic.  Depending on the size of the tax, it may not be enough to severely reduce fossil fuel consumption, however it does lower the bar for the point where the alternatives take off.   It still boils down to developing economically viable alternatives solving the problem, I suggested that the technology has a way to go so that is where we should be focusing.

If it costs Shell $1.80 to make a gallon of gas, they add $0.16 for their margin (7% is close to their margins) add another $0.04 to pay their corporate income tax, toss on another $0.20 for government direct tax you get $2.20/gallon.   If you another $0.30 carbon tax, price goes up to $2.50, I still pay the extra $0.30 at the pump.   You can construct a chain whereby several b-b transactions occur with some fractional energy cost which is increased by a carbon tax and you will come out to the same place.  All I was pointing out is that things will cost more to cover the externality tax, that's ok. Let's not pretend that big corporations are going to pay for it.

If you want something substantive to disagree with, let's talk about calculating the fair tax rate.  I have seen calculations that use an NPV300 to come up with a number, which quickly becomes an ideological based discussion on discount rates.  Presumably you have to go 300 years to pile up enough harm to be compelling.   Even if we just go NPV100 the discount rate is at issue.  Never mind the difficulty in coming up with economic impacts of warming over many decades into the future.




Offline estockly

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Re: Here's a carbon tax that would be a good idea
« Reply #26 on: August 12, 2017, 01:47:28 PM »
Right now there is a bill before Congress to give electric companies a subsidy if they burn coal from the Eastern part of the US.

That's exactly the opposite of what's needed   

Coal is dying due to price competition from natural gas. A carbon tax would apply to both, and the proceeds would subsidize clean energy, with minimal effect on prices or profits.


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