This interesting idea ties the rate of carbon taxation to the temperature of the troposphere: if the Earth continues warming, the tax increases.
If global warming is not really happening, and the warming trend proves to be a temporary fluctuation unrelated to man-made carbon emissions, then the tax would decrease or disappear. This approach has appeal in that the tax is self-correcting, but there are some reasons to proceed with caution as well, not the least of which is the politicization of scientific research. Another benefit I can imagine is that we would find out rather quickly "what the market believes" is really happening, as investments should favor either companies that are planning for a low-carbon future, or companies that are betting on a fossil-based model.
1 comments:
Rarely does an idea qualify as both bad in theory and in practice! For argument's sake, let me illustrate why I think this is both.
In theory, the price mechanism would respond to warming, however, it would always be after the warming had already occurred. Unfortunately, one of the tricky things about CO2 is that it lasts in the atmosphere for ~100 years - so any change in the price signal would fail to stop the warming that had already occurred. You can't remove CO2 from the atmosphere, so the lagging nature of the price indicator would not be sufficient to prevent warming.
You could argue that by simply setting the 'tax' high enough at the outset - before warming has accelerated - enough future emissions would be discouraged to prevent warming. However, this would leave you in the same box as today - needing to put a heavy tax on a problem which most people can't internalize today.
In practice this is a bad idea as well. The real 'unlock' to enable low carbon investment is CERTAINTY in future pricing and price competitiveness. For example, I'd be quite hesitant to spend $1BN building a CCS mechanism for my coal plant if I didn't firmly believe that this was going to lead to cheaper operating costs in the future. The mechanism described gives investors and companies no certainty.
Unfortunately there are no quick fixes, and certainly not politically palatable ones. If we want to have an efficient pricing mechanism, we should focus on actually pricing today's energy at true value - not surprisingly, I'd argue this is several multiples above what it currently sells for. The (higher) price would reflect things like social costs - for example, healthcare costs driven by polluted environment (just ask the Chinese).
Interesting discourse on this can be found here; try to ignore all the upfront 'hugging it out' between columnists:
http://www.grist.org/article/2009-12-08-mackler-take-1-clean-coal-is-necessary-to-fight-climate-change
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