Comments on: Climate Economics 101 & Policy Activism

By: TheSkyIsFalling

TheSkyIsFalling — Mon, 28 Dec 2009 09:36:05 +0000

Argh – sorry response was intended for another post

By: TheSkyIsFalling

TheSkyIsFalling — Mon, 28 Dec 2009 09:34:32 +0000

Point one I guess covers it but I would state clearly that liberty depends upon not feeding government with more taxes. The more you feed it the stronger it becomes and the more money it has to play with to regulate more aspects of individuals’ lives and economic activity.
One further point that does not appear to be covered – what about the cost of having such a tax removed? Backing out of such a complicated octopus like tax with tentacles everywhere would be extremely complex and disruptive when it is found that CO2 emissions are either not the significant player we are told they are or even if they are that it is too costly in terms of standard of living to tax (costs exceed benefits). I assume nearly everyone would prefer a higher standard of living and easier life (if not contact me and I will give a bank account for funds to be deposited) to the problem of turning up an air conditioner a notch – and that is assuming CO2 has a positive forcing effect greater than 1 on temperature – this has not been proved as yet and I doubt it will be. What if we survive as a species into the next ice age – and we are due for one now. Will a carbon tax make sense then? Unfortunately like a junky on heroin it will come to depend on its carbon tax fix and won’t be able to just do without the revenue when the time comes. Another tax will need to replace it and the overall economy contracts with compounding effects over time as worthwhile activity is channelled into mandated useless activity. With our present economy we may be say 50 years away from a completely new technology that makes current energy sources look like kids stuff but slowing the economy may push that discovery out a century or more depending upon the effects. Would taxing horse “emissions” in the 1700’s have sped up the development of a reliable internal combustion engine!? I somewhat doubt it.

Charles

By: Rent Seeking, Crony Capitalism, and U.S. Energy Politics: Who Wins from the Racket? — MasterResource

Wed, 05 Aug 2009 06:01:57 +0000

[...] it is clear that the initial cap-and-trade legislation was insufficiently opaque. Numerous analyses of Waxman-Markey (HR 2454) on this site and others have shown that the proposed cap-and-trade [...]

By: Tim Curtin

Tim Curtin — Wed, 29 Jul 2009 03:53:12 +0000

Splendid article! I would just add that the original purpose of discounting cost and benefit flows was (1) to find a way of comparing alternative projects where the time profiles of respective costs and benefits differed, and (2) to compare such projects with existing alternative investment projects, such as buying shares or bonds, where the time profiles also differ.

In shorthand, the concept here is “opportunity cost” – if I invest in project A which offers a positive return from benefits 100 years hence with costs upfront now only if the discount rate is 0 or 1% as in Weitzman when I could buy shares in Rio (paying out at c5% p.a. grossed up (tax) on respective current price since 1827) or in say BHP’s Olympic Dam, then I am forgoing 5% now against Stern/Weitzman’s 5% available only after 100 years (from averted climate damage that manifests only from 2100 disocunted at 0.1% p.a.). Stern has ever since I came across him in Nairobi in 1970-71 ignored the whole concept of opportunity cost (he said then that project’s benefits should be evaluated on what he called “shadow prices”, namely what he Stern said the price of tea, coffee, or cotton should be, not what it was; the World Bank bought this Little-Mirrlees theory and still applies it (thanks to Stern in his time there). If only I could get the ASX to value my portfolio at my shadow prices for Rio and BHP instead of the actual how rich would I be?). The outcome is that my grandson will do better from my share portfolio with its current ror of around 4-5% than on buying Stern’s which will yield only in 2100, and then only if I sell my portfolio to buy Stern’s.

By: Climate Economics 101 and Policy Activism « Economics Info

Climate Economics 101 and Policy Activism « Economics Info — Sun, 26 Jul 2009 11:01:28 +0000

[...] Source [...]

By: Tom Tanton

Tom Tanton — Tue, 21 Jul 2009 13:31:49 +0000

Nice post Robert. I do find it ironic that the risk averse nature of people is abused to “justify” the risk-taking nature of entrepreneurs/V.C. but that the “nature” is treated asymetrically.

By: champthom

champthom — Tue, 21 Jul 2009 06:23:52 +0000

I wish more free market/Austrian economists could be like Dr. Murphy here. Rather than trying to be scientists and attack the science, he’s addressing the policy typically associated with it and showing that even if global warming is a problem, statism is not necessarily the answer.