> To force industries to change their ways of doing business, there's not many options beyond carbon taxes.
The absolute best way to fix the problem is to develop new technologies which are cleaner and cheaper and equivalent or better than what they are replacing.
It is absolutely possible to discourage “dirty” production by taxing the externalities to drive production to cleaner methods at a higher cost. The effect of this is to drive up costs and this causes inefficiency, which is an economists way of saying it is harmful (to the economy and therefore to people).
Instead, if a new technology is developed which makes the “dirty” method obsolete which is both cleaner and cheaper, then the economy benefits and the world benefits.
We see this perfectly with the rise of renewables in power generation, and the fall of coal. In the last 5 years renewable share has gone from 13.4 to 17.6%. There is a tipping point ($1/W) which we’ve recently hit which will increase the growth rate. Give it 15 more years and between increased solar efficiency and lower solar deployment costs, combined with grid storage batteries, the grid could be 50% clean energy.
Similarly with EVs you have a product which now that’s it’s gotten to a point where you can make one that is better in every way than an ICE vehicle, manufacturers are racing to switch. You can’t tax your way to an EV future, but you can subsidize the R&D which ultimately allows a superior product to come to market.
If the message was consistently that cleaner products are superior products both in price and performance, you will have 100% agreement that products and production should be clean.
The alternative — that we need to sap trillions of dollars out of the economy to deploy substandard products and infrastructure which will deliver the same or worse service at higher cost, ban scores of products which people use, enjoy, or rely on, and increase taxes on a massive scale, I think that’s not only a losing proposition but that’s where you end up with the disastrous politics we have today.
> The absolute best way to fix the problem is to develop new technologies which are cleaner and cheaper and equivalent or better than what they are replacing.
Yes and no. We absolutely have to pursue cleaner technologies but many of those technologies are not mature yet. We shouldn't continue driving full throttle towards the cliff when we don't actually have fully developed solutions to go carbon neutral yet. It would be absolutely irrational not to cut consumption.
> It is absolutely possible to discourage “dirty” production by taxing the externalities to drive production to cleaner methods at a higher cost. The effect of this is to drive up costs and this causes inefficiency, which is an economists way of saying it is harmful (to the economy and therefore to people).
Yes, and this is part of what has helped renewable energy develop. If fossil fuel energy sources don't have their negative externalities priced in, they're going to be more economically attractive than renewable energy than they should be. When the true price is factored in, renewables are far better. In absence of a carbon tax, subsidies are another way to make the develop of renewables more favorable.
> Similarly with EVs you have a product which now that’s it’s gotten to a point where you can make one that is better in every way than an ICE vehicle, manufacturers are racing to switch. You can’t tax your way to an EV future, but you can subsidize the R&D which ultimately allows a superior product to come to market.
Part of the reason EV's have gotten to that point is because of tax subsidies and government investment. Without those helping hands EV's wouldn't be as far along as they are.
> The alternative — that we need to sap trillions of dollars out of the economy to deploy substandard products and infrastructure which will deliver the same or worse service at higher cost, ban scores of products which people use, enjoy, or rely on, and increase taxes on a massive scale, I think that’s not only a losing proposition but that’s where you end up with the disastrous politics we have today.
People need to let go of this idea that somehow we can make a shift to 100% renewables without any sacrifice. In some places the shift will be painless, in others it won't be. But make no mistake, the pain of climate catastrophe is going to make the pain of going carbon neutral look like a paper cut.
> The absolute best way to fix the problem is to develop new technologies which are cleaner and cheaper and equivalent or better than what they are replacing.
Laws of physics do not owe us miracle technology, and can't afford to sit on our collective asses doing nothing until one shows up.
Luckily there are innumerable innovations happening every year to provide environmentally cleaner products, whether it's LED lighting, emissions technology, battery chemistry, clothing dyes, irrigation techniques, crop resiliency, or even a more effective cold water formulations of laundry detergent... when cleaner is correlated with better, it wins in the general market all by itself.
we don't have time to wait for future innovations, because they take decades to deploy.
Look at cars - even if every single car produced from tomorrow onwards was electric, it would take 20 years to replace cars already on the road. And most cars being produced are not electric. And electric cars are more expensive, today, than their ICE cousins, so a random poor bloke in Russia is not going to be buying one.
Not consider that electrification of trucks, ships and planes is basically at 0%.
Replacing powerplants and other large caliber infrastructure takes even longer.
So we don't have the luxury of sitting around and wait for the market to sort itself out.
The trillions I was referring to would be to build new infrastructure that is more expensive to operate instead of less. It was already stated elsewhere, but if you spend investment dollars to decrease productivity, you waste money twice -- first on the new equipment, and second on the added cost for each unit output.
So I guess you could say yes, if we collect the taxes and then sink them into substandard infrastructure, that effectively destroys a lot of wealth.
Likewise, if you subsidize something to the point where an inferior product only makes sense because of the subsidy, that's destroying wealth. There needs to be a technological path which shows how any given piece of subsidized infrastructure can ultimately stand on its own. If the subsidized thing is structurally inferior, it has to be turned off the moment the subsidy is taken away, or the government is forced to subsidize it forever.
ok, thought you were arguing against taxes for subsidies.
My own argument against subsidizing is simply the information problem. While a tax can add information to the market (this externality is expensive) a subsidy must be someones best guess at what should be done, which is most likely wrong. And as you point ultimately based on a distorted market.
I guess a public dividend would be better, less distorting. And it would offset some of increased costs.
The absolute best way to fix the problem is to develop new technologies which are cleaner and cheaper and equivalent or better than what they are replacing.
It is absolutely possible to discourage “dirty” production by taxing the externalities to drive production to cleaner methods at a higher cost. The effect of this is to drive up costs and this causes inefficiency, which is an economists way of saying it is harmful (to the economy and therefore to people).
Instead, if a new technology is developed which makes the “dirty” method obsolete which is both cleaner and cheaper, then the economy benefits and the world benefits.
We see this perfectly with the rise of renewables in power generation, and the fall of coal. In the last 5 years renewable share has gone from 13.4 to 17.6%. There is a tipping point ($1/W) which we’ve recently hit which will increase the growth rate. Give it 15 more years and between increased solar efficiency and lower solar deployment costs, combined with grid storage batteries, the grid could be 50% clean energy.
Similarly with EVs you have a product which now that’s it’s gotten to a point where you can make one that is better in every way than an ICE vehicle, manufacturers are racing to switch. You can’t tax your way to an EV future, but you can subsidize the R&D which ultimately allows a superior product to come to market.
If the message was consistently that cleaner products are superior products both in price and performance, you will have 100% agreement that products and production should be clean.
The alternative — that we need to sap trillions of dollars out of the economy to deploy substandard products and infrastructure which will deliver the same or worse service at higher cost, ban scores of products which people use, enjoy, or rely on, and increase taxes on a massive scale, I think that’s not only a losing proposition but that’s where you end up with the disastrous politics we have today.