Post #285: A break from MAC to talk about something even more depressing

Posted on May 28, 2019

I finally have a week without a MAC-oriented public meeting, and I’m going to take this opportunity to lay out my plan for stopping and reversing global warming, within our children’s lifetimes.

Sufficient warning

If you don’t believe that global warming is real, just don’t bother to read this one.  If you have some sort of happy fantasy that global warming will be good for the U.S.A., again, just move along.  And if you think this can be easily addressed with anything short of drastic measures, likewise.

Also, I’m going to do this one without citation as to source of information.  If there’s sufficient interest I’ll go back and document everything I say in this posting.

What’s wrong with a carbon tax

I’m an economist.  I’d like a market-based solution where possible.  While the idea of taxing C02 emissions makes sense, it just doesn’t, and likely can’t, go far enough.

This approach of taxing C02 emissions typically goes by the name of “tax and dividend” or “carbon dividend” or some such.  The idea is to tax fuels in relation to the C02 emissions when burned.  The higher prices will give people an incentive  to reduce use of those fuels, both by reducing total fuel consumption and by switching to lower-carbon-intensity fuel/energy sources where possible.

Put aside issues of fairness: Consumption taxes are regressive, and hit the poor the hardest.  Put aside issues of feasibility (technical or political).  Those aren’t the main failings of this approach.

The main problem with “tax and dividend” is that it’s what economists call a Pigouvian tax, named after a French economist.  You take the money in the form of a tax, to penalize individuals for emitting C02.  And then … you do nothing with it.  You rebate it back to people.

There is no linkage between the tax, and actually stabilizing the level of C02 in the atmosphere.  For example we, of this generation, could collectively decided that it’s perfectly fine to let Earth’s livability decline, as long as we can continue to (e.g.) travel by jet for our vacations without too much financial penalty.  We’ll be dead by the time the worst effects hit.

To economists, the key issue is “elasticity of demand”.  How effective will plausible taxes be at reducing C02 emissions?  And then, separately, there is a question of science rather than economics: Will that be enough to stabilize and reduce atmospheric C02 levels?

Here’s the problem:  There’s no guarantee that those two will dovetail.  There’s no way to guarantee that any particular tax will be adequate to stabilize C02 levels.  And there’s almost no way to guess how much of a tax would we need here (and world-wide) to obtain that real-world outcome, given the uncertainty of climate projections (and economic projections, for that matter).

We end up in this situation because there’s no linkage between the tax and actually fixing the problem.  With “tax and dividend”, we rely entirely on elasticity of demand (higher price = lower use) to drive de-carbonization of the energy supply.  That’s it.  If that fails — if it turns out that we’ll cheerfully pay (say) $2/gallon more for gas, as long as we can keep burning it at the current rate — then our grandchildren inherit an earth that is significantly less livable than what we inherited.

“Clean up your own mess” as an alternative to “tax and rebate”.

The problem with “tax and rebate” is the feel-good “rebate”.   Might make it a better political “sell”, but it doesn’t get the job done. You don’t actually use the tax money to remove C02 from the atmosphere.  You don’t actually use it to clean up the mess that burning fossil fuel creates. 

And because of that, “tax and dividend” comes with no guarantee.  You are not guaranteed any particular level of atmospheric C02 levels.  You know it should probably help the situation.  Probably slow things down about, in terms of accumulation of C02 in the atmosphere.   But that’s it.  Nothing closes the loop between the tax and the ultimate effect on the environment.

Instead of “tax and dividend”, I call my alternative proposal “clean up your own mess”.  As a society, we (I think) realize that the buildup of atmospheric C02 is causing some small problems now, and will cause much larger problems in the future.  We are no longer naive about it.  We know that burning fossil fuels is creating a mess.

All I’m asking for, with this plan, is that if you choose to create that mess, well, you pay to have somebody clean it up for you.

You can’t dump your trash in the street.  You can’t burn your garbage in your back yard.  You can’t discharge your toilet into the gutter.  What do you do instead?  You pay (through your taxes in Vienna) for trash service, you pay for sewer service.  You pay to have somebody take care of your mess.  It’s what responsible adults do.

All I’m saying is, let’s use the model that works for what comes out of your tailpipe, so to speak, and use it for what comes out of your car’s tailpipe.  You admit that it’s crap, and you pay for somebody to clean up your crap for you.

The details.

On a three-year cycle, the Federal government shall conduct a request for proposals for industrial-scale capture and permanent sequestration of C02 from the atmosphere.   Of all apparently-feasible proposals, the government will accept those with the lowest cost per ton of carbon sequestered.  In any one bidding cycle, the government may select proposals amounting to no more than capture and sequestration of 3 percent of (then) current C02 emissions.

Of the winning proposals, the high-cost (?) proposal then sets the price of C02 emissions for the next three years.  Based on what I read in the literature, that would likely amount to about $150/ton C02.  By itself, that would raise the price of gasoline by about $1.50/gallon.  To ease the shock, and because we’re funding this in three year cycles, cut that by a factor of three.

So for the next three years, there’s about a 50 cents per gallon “clean up your own mess” tax on gasoline, and the equivalent on other (ideally, greenhouse gas but more likely) fuels generating C02 emissions.  The revenues from that tax pay for the construction and operation of the C02 sequestration plants.   That three years tax, at one-third of the actual average cost per ton C02, on 100% of fossil fuel use, funds the likely 30-year lifespan of the operating and capital costs of the first round of winners.

So that’s round one.

We could find out a few things just with round one.  First, maybe there is no feasible industrial-scale technology that can remove C02 from the air and permanently sequester it.  If so, that would be a good thing to know, sooner rather than later.   Second, maybe the most we might hope for is to sequester 1 percent of our C02 emissions.  Again, good information.  Finally, if it is feasible to do this, we get some good hard cost data on how expensive it is.

Three years later, you repeat.  Six years, nine years, and so on.  Presumably, as technology improves, the cost of re moving and sequestering C02 will fall.  And the tax will fall.  That’s fine.

It’s fine because, in the end, if this works well, we won’t have to care if you want to burn a lot of fossil fuel.  Just the same way that we don’t really care how often you flush your toilet — as long as you pay your sewer and water bill.  So, go ahead — burn it up, as long as you pay to remove the resulting C02 from the air.  And as long as we actually do remove it.

And that last point is key.  Society didn’t solve the problem of sewage in the gutters by merely taxing the individuals who discharged it.  We made them pay for it, and then we used that money to clean up the mess.   It’s that second step that is missing in “tax and dividend”.

Is this process too slow for you?  Great, speed up the bidding cycles, do them every two years.  Still too slow?  Great, shoot for 5% sequestration as the cap.  Still too slow?  Then keep the taxes higher.  Plenty of tweaks available.

But the end point is the same — make the US as a whole carbon-neutural.  Not by taking away people’s cars and air conditioning.  Just by making them pay for cleaning up their mess.

Internationally, this is a much tougher sell.  Clearly we could use tariffs to account for carbon emissions embodied in imports.  But that, by itself, likely would not be enough.  It would likely require cooperation among the largest C02 producers to agree that this is the right way to go.

What can go wrong?

Oh, where to start.

We could lose our carbon sinks.  Right now, Mother Nature is a net carbon sink.  This number gets mis-quoted so often that I’ll take the time to quote it correctly.  Just prior to the industrial revolution, the atmosphere held about 600 gigatons of carbon (not C02).  Currently it holds around 850 gigatons.

Of that entire 250-gigaton disequilbrium excess, Mother Nature absorbs about 5 gigatons annually, mostly in the oceans.  It varies considerably from year to year, depending on (e.g.) drought in the tropical rainforests and such.

Meanwhile, mankind manages to put out about another 10 gigatons of atmospheric carbon every year.  And so — here’s the key part — just by chance, Mother Nature absorbs about half of our current increment.

To be clear, if we put out nothing, Nature would absorb 5 gigatons.  If we put out 50 gigatons, Nature would absorb 5 gigatons.  The absorption rate is driven by the overall imbalance between atmospheric carbon (about 850 gigatons) and a presumed short-term equilibrium level of about 600 gigatons.

So this is always mis-cited as “nature absorbs half of our annual C02 output”, but that’s misleading.  True, as a matter of arithmetic.  False as a matter of cause-and-effect.  Nature currently absorbs about 5 gigatons a year on average, and that has nothing to do with our current output of atmospheric carbon.

If that process stops — either by slowdown in the rate of absorption by the oceans, or the speedup of emissions from the substance formerly known as permafrost — now the carbon taxes have to go up, to keep pace with the emissions.  Because we’d be cleaning up not just our mess, but also the mess we have caused Mother Nature to create.

Not possible to sequester that much carbon.   This one is all too plausible.  Let me give an example of growing trees, and let me switch to gigatons of C02.  Last I looked, net US emissions amounted to about 3.6 gigtons of C02 per year.  A maturing US Southern Pine forest can sequester about a ton of C02 per acre per year.  So, to capture our emissions, all we need to do is plant 3.6 giga-acres of new pine forest (and then store the resulting wood so it does not rot).

Problem is, the entire land area of the US is 3.3 giga-acres.  We’d need a brand new country, just a bit larger than the U.S., not currently forested, but capable of growing a forest, in order to offset our emissions by planting trees alone.

This is not a slam on tree-planting, this is just an indication of how large the problem is.

Not politically feasible/no international cooperation.   Impossible even to speculate on this.

Too slow, civil order collapses in the US before this is effectively implemented.  At some point, odds are fair-to-good that we will lose the ability to grow crops in much of the US Midwest and Southwest due to increasing soil aridity brought about by global warming.  (Warmer soil = more evaporation = dryer soil).  There is good scientific debate about just exactly how much of a problem that will be — just how dry the soil will get — both here and on the interiors of all the continents.  But several groups of seemingly reasonable people have independently come up with an answer that boils down to “dryer than it was during the Dust Bowl, before the end of this century”, certainly for surface (top foot or 10 CM of dirt) moisture (where we lose the crops), possibly much deeper (where we also lose the trees).

And yes, I realize the irony of this in the context of historic Midwest floods.  If pressed, I can do the entire drill that boils down to “more rain, but increasingly concentrated at high northern latitudes”.  Think of the current situation as temporary for the next couple of decades or so.

I taught my children about the French revolution and why “Let them eat cake” has echoed down the centuries.  (Yeah, I know Marie Antoinette didn’t actually say that.)  The French citizenry had revolted many times prior to the French revolution.  But the French Revolution took place in an era of widespread crop failures and famine.   And that seems to have put them over the top.

What does this have to do with civil order?  As I explained to my kids, a) if they were starving to death there is nothing I would not do to prevent that, b) every parent in the US feels the exact same way about their kids, and c) we (nearly) all have guns.  They were smart enough to put 2 and 2 together.  And that’s why I talk about potential loss of civil order in the US as a possible side-effect of global warming, due to increasing soil moisture reductions where we currently grow most of our food.


On that happy note, let me end this piece.  I’ve spent the last year of my life squabbling about MAC zoning.  In the grand scheme of things, at some level, a handful of out-of-place buildings on Maple is hardly the end of the world.  (Though I suspect it will screw up my neighborhood pretty badly).   Sometimes I need to put that in perspective.