It is time to stop quivering in our boots in pointless fear of the future and just roll up our sleeves and build it.
- Ray Pierrehumbert

Saturday, May 19, 2007

Statement of the Obvious

Of course alternatives to fossil fuels cost more than fossil fuels do, provided you neglect the environmental impact of fossil fuels. If this were not the case, the other sources of power would already be dominant.

Unfortunately, the marketplace as presently constituted does not adequately account for the damage due to fossil fuels.

The fact that carbon is not already largely phased out is a simple example of the tragedy of the commons. In the global aggregate, fossil fuel use is much more expensive than it appears. It's just that you are extracting wealth from a common pool every time you use them, rather than from your own resources. The commons is the climate system. So each of us, when we maximize individual utility in our energy decisions, reduce the viability of the world as a whole, by extracting value from the climate resource held in common.

The simplest solution is to increase the cost to the consumer of carbon emissions to the point where these externalities are accounted for, and wait for alternatives to emerge from private enterprise. Since it would be counterproductive to increase the profits of the producer, this amounts to a tax. Public revenues can be held constant, if so desired, by reducing other taxes.

The devil is in the details of course, but the big picture is really not all that complicated.


David Duff said...

"The simplest solution is to increase the cost to the consumer of carbon emissions to the point where these externalities are accounted for, and wait for alternatives to emerge from private enterprise".

All sounds very simple, Mr. Tobis, but pray tell, how do you set about taxing poor Indonesian and Brazilian peasants who burn their forests wholesale in order to improve their standard of living which is on the borderline? Or, for another example, what makes you believe that the Communist Party of China will raise taxes against its peasantry and workers who burn and produce coal? And why would an Indian government which is democratic and thus reliant on votes, tax its own people who are utterly dependent on economic growth, not just to improve their standard of living, but just to live?

Or are you suggesting that we in the West just tax ourselves and hope that one day the rest of the world will follow suit? And if we are to tax ourselves who is to to be the arbiter in setting tax rates? A committee made up of representatives from Green Peace and Friends of the Earth, perhaps?

As you say, the devil is indeed in the detail!

ankh said...

Just for comparison, the recommendation for improving skyscraper design to increase survivor escape success and to avoid the "Progressive collapse" problem would add 5 (five) percent to the cost of new buildings.

Resistance has been total. No improvements have been assimilated into the building codes.
Thursday, 23 June, 2005,
----excerpt follows-----
A federal inquiry into the 11 September collapse of the World Trade Center calls for major changes in the safety specifications of US skyscrapers.

One of the key recommendations of its report is for all new tall buildings to have better emergency exits.

Other recommendations include the need to construct skyscrapers to withstand what is called progressive collapse - in other words to avoid the sort of cascade effect which ultimately brought down the Twin Towers.

These new federal recommendations will not be binding and they will certainly be resisted by many in the construction industry.

The improved specifications would add an estimated 5% to the cost of building a new skyscraper.

------ end excerpt ------

What's the percentage profit on building a skyscraper, anyone know?

-- Hank Roberts