Category Archives: Policy/Economy

What is a Carbon Tax?

A carbon tax is a tax on fossil fuels according to the amount of CO2 they would produce on combustion (burning).  It would apply to all fossil fuels, and would be charged at extraction or importation of the fossil fuel. This tax would generally be passed on to consumers in an interim before alternatives are developed; but the revenue generated can also be refunded to taxpayers more generally so that average taxpayers are no worse off.

Reflections on Reflections on Oil

My piece yesterday was never intended to be the finished article.  My goal is to outline a solution to global warming that might prevent the human race destroying the natural world and many members of our own species.  A solution based on how the world is, will, I suggest, be superior to one based on how we would like the world to be.

But I now realise that, lengthy though it was, Reflections on Oil omitted a few points that might be vital to understanding the jigsaw.

Continue reading Reflections on Reflections on Oil

Reflections on Oil

I once visited an art installation which consisted of a pool of oil maybe 10m long by 5m wide at about 1.25m high. It was indoors and still, so, at the angle you looked at it, the reflection was near-perfect. Apart from a few dust motes on the surface it was like a supernatural (using the word in the sense made popular by the late Lyall Watson) mirror onto the world.

Let’s see what light reflecting on oil can shed on the current economic turbulence. Continue reading Reflections on Oil

Corporations for Climate Stability

On Wednesday, I went to a meeting organized by ‘resurgence’ magazine entitled “Corporations for Climate Stability”. On the panel were:

· Jonathan Porritt – director, Forum for the Future, Commission for Sustainable Development (Sophisticated, Realistic and historical view of the world; emphasized the internalization of pollution costs)

· Alan Knight – Corporate Social Responsibility – has worked for 9 months at Virgin group. He emphasized the importance of scaling up good ideas.

· Tessa Tennant UK Social Investment Forum;- Spoke about socially responsible investment forum several trillion. What will be the big names in the future

· Nick Robins Hendersons International Investors: spoke about financial innovation

· Tony Jupiter (Chair), Executive Director of Friends of The Earth: Companies are Powerful Actors; How companies can make a difference; Education& Long termism.

Overall it was an interesting meeting; I was impressed by Porritt’s erudition and preparation: less so the other speakers, although there were good moments. I asked the speakers about using carbon taxes to offset other taxes and received a positive comment – this had been done in British Columbia. As soon as I had made my comment about carbon taxes, Jupiter, and Porritt made a number of points against nuclear. Nobody made any countervailing comments. So it was interesting meeting but I still felt the discussion was not covering the complete story.

Continue reading Corporations for Climate Stability

Sweeping not tweaking

Tax reform is essential is we are to stop or slow many of the most persistent threats to our environment. Here Dr Adrian Wrigley lays out his ideas for a radical Carbon Tax and explains how replacing the Council Tax with a Land Value Tax could solve the current housing crisis

The Conservatives are considering an array of tax tweaks this week based on studies by the Centre for Social Justice. Their latest recommendations include tax rewards for married couples and welfare measures aimed at “ending the costs of social breakdown”. But although they deserve full marks for identifying the symptoms and establishing that the culprit is the structure of the tax and benefit system, their “solutions” show an astonishing failure to grasp the magnitude of the social, economic and environmental crises that we face.

Founded on the philosophically appealing but flawed concepts of “taxation based on ability to pay” and welfare assistance to “those most in need of support”, the tax and benefit system has become a terrible bureaucratic monster. Tax treatment of marriage is the tip of the iceberg since the impact of this tax monster runs deep – promoting environmental outrages such shelling British prawns in Thailand for sale back in the UK. The flights each way are exempt from tax and enable cuts in highly taxed British jobs. The poverty trap this creates causes unemployment and degrades the environment

The necessary reforms are simple but radical. We need to re-examine the tax, benefits, subsidies and laws that affect the core economic and environmental foundations of society, and embark on a 20-year programme to abolish those found to be unnecessary, complex or harmful. The few taxes remaining will be developed as the basis for a freer, fairer and sustainable society. Prosperity will rise as wastage falls.

A new Carbon Tax would allow the phased abolition of VAT across Europe. This would be a welcome step for business owners and customers alike, boosting the service sector and cutting red tape. The new tax would be levied on the extraction and importation of fossil fuels, and the release of global warming gases such as methane. The UK carbon tax rate needed to replace VAT today is £140/tonne CO2 – about 40p on a litre of petrol. A carbon tax would drive investment in the low-carbon sectors, particularly into power generation, transport and home energy efficiency. It would lead to the abandonment of calls for new airport runways and terminals as the aviation sector decreased in size, and green subsidies, biofuel mandates and pollution permit trading systems would become unnecessary.

Another high priority is addressing the root cause of the housing crisis. Almost any productive activity undertaken in the UK is subject to hefty taxes. Investment, saving, working and innovation all pay more than their fair share to The Exchequer. The only refuge from high taxes is the housing market, a situation that causes booms, busts and inequity.

Evidence of a real housing “shortage” is absent. A real shortage would show up as overcrowding nationwide. People would be walking the streets in the hope of finding a room. Room prices would be high, and there would be no empty houses.

We have a crisis of affordability and allocation. People are borrowing eight times their income to get on the housing ladder yet there are 700,000 derelict houses, 500,000 second homes, and hundreds of thousands of pensioners’ homes with at least three bedrooms spare. The overheated Spanish housing market shows that rapid building programmes do not cure price bubbles.

Turning the Council Tax into a monthly land value tax (LVT) paid by all landowners based on the full rental value of the underlying land is key to a just and rational tax system. This would allow the elimination of Inheritance and Capital Gains Tax, and Business Rates. Equivalent to 0.25% of current house prices, the LVT would also fund major welfare reform and a simple flat rate income tax.

The LVT would help bring derelict city land into productive use. Single people in large houses would tend to move to smaller ones. Under LVT, outsize homes cannot be an alternative to a pension so elderly people in large properties would either “roll up” their pension payments via a charge against their house, or would move to smaller premises.

The impact on housing supply and demand would be startling: plans for new towns would become redundant; the need for new roads and other infrastructure would evaporate and, together with the Carbon Tax, the LVT will protect the countryside and prevent suburban sprawl.

Green Party supporters will recognise the ideas here but also see substantial differences. Two things are certain: tweaking taxes will not do – sweeping reform must become mainstream, and the debate on ecological taxation is just beginning.

Originally published in the Ecologist magazine. Published here with permission from the author.

Implications of ‘peak oil’ – Tim’s Translation Service

No sooner had I digested the Target Atmospheric CO2 paper than another one (pdf) arrived, courtesy of James Hansen’s mailing list.

The paper “Implications of ‘peak oil’ for atmospheric CO2 and climate”, Pushker A. Kharecha and James E. Hansen (pdf) makes a similar argument to that in “Target Atmospheric CO2″, though there are some differences.

I’ll try to keep the translation brief this time.

Summary

The paper seeks to show that we can keep CO2 below 450ppm [Hansen argued for less in “Target Atmospheric CO2″] by avoiding burning coal to the atmosphere, and using a high price of CO2 to deter the use of unconventional (e.g. tar sand) and other expensive sources of oil. Various Peak Oil scenarios imply that we can keep below 450ppm CO2, based on the Bern carbon cycle model, with both a static pulse response function (PRF) and a dynamic PRF. That is, even if some carbon cycle feedbacks are allowed for, CO2 can be kept below 450ppm if we burn all the existing conventional oil and natural gas reserves.

Continue reading Implications of ‘peak oil’ – Tim’s Translation Service

Biofuel Payback Periods

A sustainable development talk yesterday made the point that we have to be careful not to focus purely on carbon emissions to the atmosphere, since if we do this we may make other environmental problems worse. The examples of acidification and eutrophication (elevated levels of nutrients e.g. nitrogen) were mentioned, but I’d certainly add water availability to the list.

At first sight, different problems of sustainability may seem to be incommensurable. But I suggest they can be related in various ways. For example, we could set up tradable quotas of all different emissions to the atmosphere allowed in a given geography – e.g. globally or in South Cambridgeshire – and establish financial markets for all resources, in particular water and land, and allow the market to sort the problem out for us. Having a Carbon Budget alongside the fiscal Budget, as our friend Alistair Darling has announced the UK will do from 2009, in fact represents a reinvention in a limited form of that clever tool we call “money”. The wrong approach, IMHO. What’s needed is political courage, not a new currency. If it is indeed necessary to postpone from April to August a 2p/litre rise in fuel duty, then we’re only pretending to solve the problem. You can’t make meringue without breaking eggs, Chancellor.

Until and unless we monetise all environmental resources, we can nevertheless make ad hoc analyses to try to work out whether we are doing the Right Thing. The use of biofuels is a case in point. Here, the crucial resource is land, because land (that we humans have deemed is not required for food production or other uses) can be used either to grow biofuels or left alone to sequester carbon. There may be other reasons for using land to grow biofuels, but here we are only concerned about global warming. We therefore consider growing biofuels to be a way of employing land to try to alleviate global warming, using a resource (the land) to (supposedly) reduce a liability (carbon emissions in the atmosphere). Since land stores carbon naturally (go for a walk in the woods!) there is an opportunity cost in terms of carbon emissions of the land we use to grow biofuels. The crucial question is how long we have to grow a given biofuel for on land with a given carbon carrying capacity (dependent on climate conditions etc.) in order to produce a net carbon saving.

A few years ago we were all talking about our “ecological footprints”, i.e. how much land we need to support our lifestyles. If we switch from fossil fuels to biofuels we obviously increase our footprint. Land use therefore seems to me the obvious measure of whether biofuels are indeed sustainable. Growing biofuels saves (if we’re lucky) an amount of carbon each year. This amount is small relative to the amount of carbon stored in a natural ecosystem on the same land. I therefore suggest that the critical measure of sustainability is the payback period, the number of years for which biofuels would have to be grown in order to justify the decision to farm the land rather than allow it to support a natural ecosystem, such as a forest. This idea is developed in this paper:
Biofuel Payback Periods (pdf).

Once again, for a little more discussion around the issue, please see my original essay on this topic, Biofuels Are Not the Answer (pdf).

Note that my argument is not particular to biofuels. It can also be applied to other land uses. We need to take the opportunity cost of the land required into account when, for example, deciding what food to eat or how to produce energy. In the case of renewable energy, my method is really no different to taking into account the carbon emissions (and/or energy) “embedded” in the hardware. PVs, I’m reliability informed, take about 1 year to pay back the energy cost of their manufacture. If the purpose is to “displace” carbon emissions, and we start to cover fields with the things (as apparently is being done in Germany), then we also need to consider the payback period for the land being used – a PV “farm” is no longer able to support an ecosystem, such as a forest. Obviously, the best place to put PVs is in the desert, where there’s also more sun per square metre and less cloud, and not artificially divert the world’s limited supply of solar panels to Northern Europe.

A Case Study of Personal Harassment and Amplification of Nonsense by the Denialist PR Machine

A Case Study of Personal Harassment and Amplification of Nonsense by the Denialist PR Machine
(pdf)
, by John R. Mashey

Anthropogenic Global Warming (AGW) – the idea that recent temperature rises are substantially caused by humans is supported by a very strong scientific consensus. But for ideological or economic reasons some people are absolutely sure that it cannot be true, frequently attack it and are often called contrarians or denialists as a result. They try to manufacture doubt on the consensus among the public, not by doing good science, but by using PR techniques well-honed in fights over tobacco-disease linkage. These are amplified by widespread use of the Internet, which is at least as good at propagating nonsense as truth.

A recent, well-coordinated transatlantic attempt to attack the consensus included:
-A not-very-good anti-consensus paper written in the UK by an NHS King’s College endocrinologist, Mr Klaus-Martin Schulte, not obviously qualified for this task,
-of which much was posted by Viscount Christopher Monckton at a Washington, DC denialist website of Robert Ferguson, and publicized by Marc Morano of Senator James Inhofe’s staff.
-The non-story then propagated rapidly and pervasively through the blogosphere.
-This expanded further into personal harassment of a US researcher, Naomi Oreskes