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Renewable Tuesday 9/12: Carbon Taxes vs. Subsidies; More Sources [1]
['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']
Date: 2023-09-12
The idea of a carbon tax comes from economist Arthur Pigou, who created the theory of externalities. It works. Therefore the industry is screaming about it. Therefore we must do more of it. And dump the subsidies, too.
Pigou didn’t use the word “externalities”. He called them “negative marginal social net product”. I will have a Diary about his views on taxing them, in what has come to be known as Pigovian taxation, on Saturday. For today, let’s look at the data, including the maps above and below, of carbon taxes and subsidies.
Fossil fuel subsidies—Wikipedia
This is the epitome of wasteful government spending. We can sell saving Real MoneyTM, real lives, and Planet A to the public, and we must do so.
Carbon Tax and Cap and Trade Initiatives
Past Evidence
We have solid data showing that carbon taxes work.
News
Africa proposes global carbon taxes to fight climate change
The Nairobi Declaration capped the three-day Africa Climate Summit in Kenya's capital. The document, released on Wednesday, demanded that major polluters commit more resources to help poorer nations. African heads of state said they will use it as the basis of their negotiating position at November's COP28 summit. The Nairobi Declaration urged world leaders "to rally behind the proposal for a global carbon taxation regime including a carbon tax on fossil fuel trade, maritime transport and aviation, that may also be augmented by a global financial transaction tax". Around two dozen countries currently impose taxes on carbon, according to the International Monetary Fund (IMF), but the idea of a global carbon tax regime has failed to gain much traction.
No word on a specific price level in this proposal. $100/tonne is common in Europe.
EU commission chief asks G20 to join global carbon pricing
According to a World Bank report, there are currently 73 carbon pricing instruments in operation, covering around 23% of global greenhouse gas emissions. Speaking at the opening session of the G20 Summit in New Delhi, Leyen said that the EU's 'Emissions Trading System' has helped reduce emission by 35% since 2005, while generating more than 152 billion euros ($162.6 billion) of revenues. Japan, the world's fifth-biggest carbon dioxide emitter, is among the G20 countries that have recently adopted carbon pricing. The Tokyo Stock Exchange plans to open its carbon credit market and begin trading around October. Climate talks in the G20 grouping, responsible for 80% of global emissions, are being keenly watched by the world ahead of a crucial global stocktake COP28 meeting in the United Arab Emirates later this year.
Stepping stones for a broader carbon tax scheme in Bangladesh
A carbon tax is a more appropriate instrument for Bangladesh than an emissions trading scheme because of the ease of implementation. A tax can also provide a clear price signal, while the carbon revenue can be a good funding source for clean energy projects.
Carbon tax medicine is a better Rx than green subsidy sugar
It's a more cost-efficient and an overall more effective system.
Carbon Tax Market Size and Regional Outlook Analysis 2023-2030
This is a press release, high on hype but including no facts. When I was writing press releases for market research reports that I wrote for various companies, we always included estimates of market size and growth rate.
Subsidy Initiatives
Biden Cuts Fossil Subsidies, But Oil and Gas Still Lines Up for Billions “The President is committed to ending tens of billions of dollars of federal tax subsidies for oil and gas companies,” the White House said in a budget fact sheet. The proposal “saves $31 billion by eliminating special tax treatment for oil and gas company investments, as well as other fossil fuel tax preferences.” It is far more of a start than we could hope for given the usual Denialist obstructionism, but far less than we need. Just vote in Nov. 2024, so we don’t have to take this any more. But oil and gas companies still stand to gain billions of dollars in subsidies under Biden’s signature climate legislation, the 2022 Inflation Reduction Act, the Financial Times writes. Although the bill mostly funds a vast, ambitious menu of energy efficiency and renewable energy manufacturing and deployment efforts, it “also includes generous incentives for a set of lower-carbon technologies and fuels where oil and gas executives argue they hold a big advantage,” the Times explains. “Oil companies are starting to plough cash into projects to capture and lock away carbon dioxide, to retool refineries for making biofuels, and produce low-emission hydrogen, all supported by the IRA’s green subsidies.” Industry carbon capture for rejuvenating oil wells is 100% bogus, but biofuels and hydrogen will be for real. Real carbon capture, at the multi-gigaton scale, will come from the Trillion Trees project
regenerative agriculture to increase carbon in soils
seeding the oceans with iron dust to create plankton blooms
reacting CO 2 with reactive serpentine, olivine, and basalt minerals to create stable carbonate minerals.
with reactive serpentine, olivine, and basalt minerals to create stable carbonate minerals. Or perhaps new technologies that can scale
IMF: Climate Change | Fossil Fuel Subsidies
Subsidies are expected to decline in the near-term as energy price support policies is unwound and international prices fall, but then rise to $8.2 trillion by 2030 as the share of fuel consumption in emerging markets (where price gaps are generally larger) continues to climb. 18 percent of the 2022 subsidy reflects undercharging for supply costs (explicit subsidies) and 82 percent for undercharging for environmental costs and forgone consumption taxes (implicit subsidies), with the share of explicit falling to 8 percent by 2030. Raising fuel prices to their fully efficient levels reduces projected global fossil fuel CO2 emissions 43 percent below baseline levels in 2030—or 34 percent below 2019 emissions. This reduction is in line with the 25-50 percent reduction in global GHGs below 2019 levels needed by 2030 to be on track with containing global warming to the Paris goal of 1.5-2C. Globally, around 60 percent of the CO2 reduction comes from reduced use of coal, while 30 and 10 percent respectively are from reductions in consumption of petroleum and natural gas. Removing only explicit subsidies reduces emissions to 5 percent below the baseline, while a partial price reform of halving the gap between current and efficient prices reduces emissions 31 percent.
Carbon Taxes in Theory and Practice: Revenue Recyling U.S. policymakers should learn from carbon tax revenue recycling and carbon taxes in practice like the British Columbia Canada carbon tax. Niskanen Center
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