Seeking Alpha

"A Carbon Tax That America Could Live With"

  • Harvard economist N Gregory Mankiw, a former adviser to President George W Bush, believes a carbon tax would be the best way of attempting to cut U.S. emissions of the gas.
  • The "fee would be built into the prices of products and lifestyles," says Mankiw. "When making everyday decisions, people would naturally look at the prices they face and, in effect, take into account the global impact of their choices."
  • A Congressional bill to impose a carbon tax has been introduced by four Democrats, putting its passage through the House into doubt. Mankiw reckons that if the proceeds from the levy were used to reduce personal and corporate income tax, the Republicans might come on board.
  • ETF: GRN
Comments (67)
  • Energysystems
    , contributor
    Comments (1328) | Send Message
     
    That guys' got pudding for brains.
    1 Sep 2013, 09:02 AM Reply Like
  • Guardian3981
    , contributor
    Comments (2158) | Send Message
     
    Like we dont have enough fees and taxes in this country already.
    1 Sep 2013, 09:23 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (5267) | Send Message
     
    I, for one, think that Prof. Mankiw's idea is a sound one.

     

    Most of what government does is to pay people to do things that we don't want them to while we punish people for doing things that we want them to. This is a little flicker of an attempt to discourage via taxation something that is worth discouraging.

     

    An advantage of a carbon tax is that it places the role of picking winners and losers within the free market instead of government programs that dictate solutions. This is essentially internalizing negative externalities.

     

    There are important caveats: in practice, this will probably add to existing tax burdens instead of replacing a more economically distortive tax. Additionally, environmental costs can be badly mispriced if the appropriate discount rate is not applied. Within public policy debates, is routine to hear of global warming concerns of a multi-inch rise in sea levels over the course of the next few centuries as a rationale behind measures that would reduce our annual GDP growth rate by a percent or more. This is often accompanies with grim graphics of Manhattan underwater. However, were a reasonable discount rate applied, it would be a better risk:reward to simply wait a century or two and then build a small levee; the net present cost would be negligible. The point is that much malinvestment comes from getting the discount rate wrong.

     

    There: pro-tax and anti-global warming alarmism. I think that I may have just assured that my future political campaign may be the first to be defeated in a unanimous vote.

     

    For more ideas from Greg Mankiw: http://bit.ly/17zHioS
    For more ideas from me (several others may also increase your taxes, but only by making you money): http://bit.ly/XR2j4o
    1 Sep 2013, 09:38 AM Reply Like
  • davidbdc
    , contributor
    Comments (3183) | Send Message
     
    Most of what government does is to pay people to do things that we don't want them to
    ----------------------...

     

    I'd have to disagree. Most of what our government today does (and I'd include the 8 years of Bush), is to lessen our personal freedoms and liberties.

     

    While doing so, those involved with government are enriched financially, and the economic opportunities for those not associated with government are lessened (meaning they are more likely to support even more government since they instinctively want to support those that promise help).

     

    I'm not anti-global warming. I believe its gotten warmer. But I also don't think we know how the Earth's atmosphere is going to change in the future. When I was young - we spent a decade being taught that a new global ice age was just around the corner. So I'm more willing to wait a few years and see if the temperature rise continues or if Mother Nature reacts in a way that rebalances things.

     

    I'd be willing to compromise though. Get government out of the charity business (ie safety net, Social Security, Medicare, and now Obamacare), and I'll agree to have part of that to be replace with trying to affect climate change. Our government is already bloated and inept - no reason to turn something else over to them to corrupt.
    1 Sep 2013, 11:32 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (5267) | Send Message
     
    Well thought/well written. Thanks for the reply. There are so many examples of overconfidence that we know what we're doing and unintended or even perverse consequences when a system is run by third party payers.
    1 Sep 2013, 11:49 AM Reply Like
  • The Patriot
    , contributor
    Comments (326) | Send Message
     
    Its is very hard for me to forego anymore taxes until I see proof of more responsible spending. I for one, am furious over how my tax dollars are spent. As one that doesn't buy into the global warming model, a carbon tax is nothing more than a slap in the face.
    1 Sep 2013, 07:31 PM Reply Like
  • wyostocks
    , contributor
    Comments (8869) | Send Message
     
    What crap. A tax is a tax is a tax and simply steals from the people to give to the government.
    1 Sep 2013, 09:46 AM Reply Like
  • GaltMachine
    , contributor
    Comments (1309) | Send Message
     
    Ever since time immemorial, the government's goal was to tax the air we breathe!

     

    Amazing how you can use a pseudo scientific political issue like man-made global warming to sell a tax!

     

    How does a tax save the world?

     

    Why not just "save the world' directly (smirk)?

     

    George Carlin on global warming:

     

    http://bit.ly/170L2x1
    1 Sep 2013, 09:53 AM Reply Like
  • Deja Vu
    , contributor
    Comments (1403) | Send Message
     
    The Pol Potist carbon taxing elite, of course, will continue to live a luxurious Al Gore style existence.

     

    The cap and trade scheme will provide permits that will be purchased by the deepest pockets. That is the I-banks with bottomless cash from the federal reserve and now the ordinary consumer deposits. After they buy the permits, you cannot turn on a light bulb in your house without paying Goldman Sachs and JP Morgan.

     

    Mean the high prophets of the IPCC like Pachauri, Kevin Trenberth, etc have all been proven to be false, repeatedly - making fake claims, destroying data, writing conclusions before gathering any data, suppressing any dissenting research from being published.

     

    The "climate change" cabal of "scientists" is a pool of self serving charlatans whose agenda is allocation of power and resources to themselves. They are no different than the village witch doctor who demanded control over the whole village, the choicest cut from every animal killed - or threatened the world would end tomorrow.

     

    The failed "Global Warming" (that never happened for the last 15 years) turned "climate change" witch doctors want to reduce living standards back to the early 1800's. I shudder for the US economy were this to gain traction.
    1 Sep 2013, 10:26 AM Reply Like
  • justaminute
    , contributor
    Comments (836) | Send Message
     
    Spot on.
    1 Sep 2013, 12:04 PM Reply Like
  • Davidoff
    , contributor
    Comments (320) | Send Message
     
    US follows the EU brilliant invention of making their citizens pay for the air. If Mankiv thinks that more than 5% of the EU carbon tax income is used to finance the development of the green technologies, instead of their giant deficits, he's completely out of his mind.

     

    Today modern economy and ecology are 2 completely opposed concept. By setting new taxes, governements take a way a significant part of people's ability to consume. If you want to expand the economy, you need to increase people's income so that they would be able to buy more things. By setting new useless taxes on all levels of income, they do the exact opposite. Ecology pushes people to reduce their consumption to the stric minimum, without any superficial purchases. Ecology goes against international exchanges and wants countries to go back to the archaic and unefficient local economies. Ecology also wants to shut down all the cost efficient high industries just because they pollute. Ecology pushes toward a moneyless communist economy. I can keep going like that for hours after having read dozens of European ecological political essays.

     

    Ecology is an uncompromising dictatorship where a minority of people without any understanding of democracy impose their ideas to the majority of citizens. But I'm not against ecology as a business. Tesla, or dozens of Israeli green startups are examples to follow. The future is all about making high green technology more efficient and cheaper and thus more accessible to all the citizens, instead of bringing people back to the Stone Age or confiscating their income through "Eco" taxes, that have actually nothing to do with ecology.
    1 Sep 2013, 10:28 AM Reply Like
  • Sirvasq
    , contributor
    Comments (330) | Send Message
     
    Sound idea. Horrific policy. Doomed -- like his entire 2d term agenda -- now that he has turned his back on his base and embraced the irresistible badge of world's sheriff.
    1 Sep 2013, 10:29 AM Reply Like
  • bgold1955
    , contributor
    Comments (2237) | Send Message
     
    Doesn't matter if you are pro or con on this issue as "nothing will be passed" by this congress that is initiated by the administration or democrats unless it involves military action of some sort.
    1 Sep 2013, 10:40 AM Reply Like
  • Regarded Solutions
    , contributor
    Comments (17900) | Send Message
     
    even if the US cuts emissions to ZERO, other nations especially emerging ones, do not give a damn.
    1 Sep 2013, 11:34 AM Reply Like
  • tomlos
    , contributor
    Comments (1207) | Send Message
     
    But it makes liberals feel good... Same with recycling, and the never ending welfare state.
    1 Sep 2013, 11:35 AM Reply Like
  • Regarded Solutions
    , contributor
    Comments (17900) | Send Message
     
    yeah they feel good with creating another tax....what a joke.
    1 Sep 2013, 12:08 PM Reply Like
  • bgold1955
    , contributor
    Comments (2237) | Send Message
     
    Regarded..... What tax period would you rather have now over today's tax structure? Only period I remember that was lower was 2004-2012 as I believe the new taxes did not going into effect until this year. On a Fed level.

     

    On the state and local level - Live in an extremely non liberal state and fees and property taxes have soared with a lot of fees that were levied for a certain purpose going straight into the general fund and not used for the intending purpose as proposed via officials.

     

    I feel your pain while not embracing some commenters opinions. When one mentions welfare state, I get confused sometimes as I don't know if they mean individual or corp welfare.
    1 Sep 2013, 05:12 PM Reply Like
  • bigbenorr
    , contributor
    Comments (828) | Send Message
     
    Pre 1913
    2 Sep 2013, 08:37 AM Reply Like
  • bob adamson
    , contributor
    Comments (4559) | Send Message
     
    Leaving to one side whether Governments should intervene through taxation to reduce carbon consumption (clearly many SA readers oppose such initiatives while I am in favour– but let’s not get hung up trotting out all the well-worn arguments pro and con), a couple of points can be made on the economics of such a tax.

     

    1. While the proceeds of such a tax might go into general revenue or be used to defray subsidies for alternative or renewable energy initiatives, such a tax can be quite effective in reducing carbon consumption if the proceeds of taxation are simply remitted annually to consumers.

     

    2. To achieve the policy objective of reducing carbon consumption , the rate of taxation need not be initially large provided that this rate at inception is scheduled to increase in adequate steps annually so that consumers and producers know in advance that the equipment, cars etc. they purchase or produce, if inefficient to run, will become expensive to operate over the life of the product.

     

    The reason point 1 applies is that consumers will face two relevant expenditure times; first when they initially purchase the carbon product with the added tax applied and the second when they decide how to save or spend their rebate on earlier purchases. Thus at both the first and second time, the consumer logically will reduce his or her expenditure on a high carbon consumption product because the tax applies making the carbon purchase option less attractive (and other options more attractive).

     

    The reason point 2 applies is that the reasonable policy is to change general expenditure patterns significantly but not disruptively over time (and encourage the private sector to produce products that use alternative energy or less carbon based energy) but to do this in ways that distort or disrupt the economy minimally. Thus, the measure of success is not to make a major initial impact but rather to encourage significant planning and consumption choices by consumers and producers going forward,
    1 Sep 2013, 11:57 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (5267) | Send Message
     
    Excellent points.
    1 Sep 2013, 11:59 AM Reply Like
  • davidbdc
    , contributor
    Comments (3183) | Send Message
     
    Bob,

     

    I'd merely point out that I believe the US has met and exceeded our Kyoto goals on carbon emission reductions.

     

    What policy achieved that?

     

    Free-market innovation. Shale gas revolution that has shifted more power generation from coal to NG is the bulk of it from what I've read.

     

    How was the government involved in the shale gas revolution?

     

    Um, well, lets see, er, uh...give me a second.... or a minute..... dammit let me think....... Oh, I guess they weren't.

     

    Theoretically, the one part of a carbon tax I never hear about is that all imported goods should carry high taxes - both because the majority are manufactured in less energy efficient countries (especially in regards to carbon) and also because of all the energy expended in their transport and storage.

     

    How would all that get determined in a practical way? I know - bribes and corruption.

     

    We have enough of that currently IMO. Lets get the government out of several areas of our lives before we let them into others.
    1 Sep 2013, 12:52 PM Reply Like
  • Val Halla
    , contributor
    Comments (307) | Send Message
     
    is there a free market alternative? i mean it sure looks like there is one in the form of "more fuel efficient vehicles, sudden explosion in natural gas use, solar solutions, Tesla's" etc, etc. this guy has an agenda and i think it's pretty obvious what it is: "more money for Wall Street via taxation." if you can't see through that then i think you need to have your head examined.
    1 Sep 2013, 02:45 PM Reply Like
  • Val Halla
    , contributor
    Comments (307) | Send Message
     
    a carbon tax on imported goods as a VERY interesting idea actually. why should the USA which as you point out truly is doing its part (with a decrease in incomes in absolute terms i might add) be the one to "pay" here. 100 percent tariff on all the "polluters" of the world if you want to "sell American."
    1 Sep 2013, 02:47 PM Reply Like
  • D_Virginia
    , contributor
    Comments (2280) | Send Message
     
    > Shale gas revolution that has shifted more power generation
    > from coal to NG is the bulk of it from what I've read.
    > How was the government involved in the shale gas revolution?
    > Um, well, lets see, er, uh...give me a second.... or a minute.....
    > dammit let me think....... Oh, I guess they weren't.

     

    Incorrect sir. A lot of tax dollars have been leveraged in the shale boom, and continue to be.

     

    Fracking was adapted from massive hydraulic fracturing, a technology first demonstrated by the Energy Department. Shale’s potential was observed from the Eastern Gas Shales Project, a partnership begun in 1976 between the Energy Department’s Morgantown Energy Research Center and dozens of companies and universities. Shale's success depended on a revolution in monitoring and mapping technologies driven largely by government labs. Shale companies asked the publicly funded Gas Research Institute, then funded by a tax on gas production, and the Energy Department for help in 1991. Sandia National Labs (a DOE lab) provided shall companies with many critical microseismic tools. Shale also benefited from 3-D imaging, which the Energy Department had long supported. A joint venture between the Energy Department and industry drilled the first horizontal Devonian shale well.

     

    If anything, the shale story is a good example of public-private partnerships.

     

    And that was just the federal level. Local governments continue to shower shale with subsidies:
    http://exm.nr/15MSwnv
    1 Sep 2013, 03:15 PM Reply Like
  • bob adamson
    , contributor
    Comments (4559) | Send Message
     
    David,

     

    To your point that the shale gas revolution etc. have had a material beneficial effect by lowering carbon emissions, this may well be true but this in no way excludes the possibility that a well designed carbon tax could have a significant further beneficial impact upon emissions without unduly distorting or constraining the growth of the broader economy.
    1 Sep 2013, 04:34 PM Reply Like
  • davidbdc
    , contributor
    Comments (3183) | Send Message
     
    but this in no way excludes the possibility that a well designed carbon tax could have a significant further beneficial impact upon emissions
    --------------
    That's true. But can you point to one policy success in this area to date? How many Hundreds of Billions have been thrown at the "green" energy whatever and have made a material impact?

     

    We can always dream up something that the government could do to improve life - unfortunately, it never works out the way intended. And its my opinion that currently our sole goal should be to reduce government influence on our lives and get our personal freedoms and liberty restored. Then we can discuss what government might be able to do.
    1 Sep 2013, 06:47 PM Reply Like
  • davidbdc
    , contributor
    Comments (3183) | Send Message
     
    D Virginia,
    Sorry but that simply untrue. The first experiment in hydraulic fracturing was in 1947 and done by a private company. The first patent was issued in 1949 - and the technology was licensed to Halliburton soon thereafter. It was used primarily in vertical wells and used around the world.

     

    So you can claim whatever you'd like in 1976 - the government as usual was only about 3 decades behind. And all it was - was a set of development projects........ that led to absolutely nothing.

     

    And the adaption of horizontal fracking was again done by private companies, first in the Austin Chalk, and later on a much larger scale and with process and technology break-through in the Barnett shale - both done by private companies - in the 1990's! So much for your government project in the 70's.

     

    And there have been no subsidies to these companies - liberals identify the fact that some states have very low production taxes as a subsidy - because you inherently believe its all the government's money.

     

    Private companies - private money - risk taking men - failure after failure - led to breakthroughs in processes and approaches - and now the government is running around trying to clamp down on these men and women that dare to take risk and be successful.

     

    Government had NOTHING to do with the shale gas revolution. NOTHING, NOTHING, NOTHING.

     

    Go back to invading everyone's privacy and spying on all the citizens.
    1 Sep 2013, 07:02 PM Reply Like
  • bob adamson
    , contributor
    Comments (4559) | Send Message
     
    David,

     

    Let me draw an analogy with the so-called war on cancer. This war has gone on for decades, the successes have (to put it gently) have been few and slow in coming and the financial cost and the diversion of highly talented professionals have both been huge. While there undoubtedly have been false leads followed and poor allocation of research resources on many occasions, who will argue that interesting leads and some successes have not occurred, or that the pace of progress has not quickened in recent years or that significant added impetus forward has not resulted from public funding and other involvement as well as work by the private sector. In other words, who would argue that public funding and other such public resources should be withdrawn from this field in favour of tax cuts etc.?

     

    Arguably a similar trajectory is occurring in the search for meaningful development of alternative energy. There are simply some areas where short term development and a clear path to a profitable return on investment (i.e. preconditions for private sector involvement on a grand scale) are not present. Many areas of medical research and research into utilization of alternative energy arguably fall into this category. It follows that reasonable public funding of these endeavours (assuming that there is a great public need to be addressed) can be warranted.
    1 Sep 2013, 07:32 PM Reply Like
  • nemonemo
    , contributor
    Comments (324) | Send Message
     
    Obama prohibited EPA to not to issue any regulation on fracking. That happened in 2009. Check rise in dry wells immediately after that regulation. Around 175%. Get your facts right.
    1 Sep 2013, 08:50 PM Reply Like
  • davidbdc
    , contributor
    Comments (3183) | Send Message
     
    Bob,

     

    Its my opinion that the most successful spending of public money was the Space program in the 1960's. We spent tons of money.

     

    But we also had a very tangible and practical goal. To put a man on the moon. We took huge risks. There was much public scrutiny of the various programs. I remember when Cal-Tech was being raked over the coals for not meeting goals on a 10 or 20 million dollar contract - imagine that today - a public institution being pressured to produce by the media and general public?

     

    Today - we would never take the risks. There would be no accountability for performance. Can you imagine the Apollo program continuing in the way it did after the fire? There would be armies of bureaucrats running around doing absolutely nothing. We'd have to hire certain percentages of different groups of people - contracts handed out on the same basis. And on and on and on.

     

    In terms of medical research - I know a little bit about this field. I support a certain amount of pure research and have no issue with having the NIH. But again, programs should be structured to achieve results - risks can and must be taken to accomplish this - and we have to be willing to have failures (ie rockets exploding). Instead we have programs that never die - leaving little pressure on those doing the research. And with the changes that now allow government employees to earn over 200K - we get more and more of these new "public servants" that are quite happy with the status quo - fiddle around in the lab - collect the big check and great benefits - work flextime - go to conferences - rinse and repeat.

     

    Pure research - yes. But anything beyond that with our current state of government - absolutely not - might as well burn the money.

     

    I agree that there are some things only the government can do - and large scale medical research in areas with no visible path to a return may be one of them - but I don't see a correlation to why windmills or solar panels would fall into the same area. Lots of smart people that want to get rich can fiddle around with windmill models on their own time - eventually either they will succeed and I'll be ordering my backyard Pittsburgh Steeler Model Windmill to power my home...... or I'll be using natural gas at prices 1/4 what they were just 5 years ago.

     

    And while I'm not an expert - what I've read about all these electric cars and how the batteries are made..... we might actually be doing damage to the environment by trying to switch to them!

     

    And finally, after being told directly by our president that there is no spying going on in regards to US citizens by our "security" apparatus...... I think all the material from this Snowden guy should expose any remaining thought that government is somehow this benevolent group of people trying to do good. Our government is the largest enemy to our freedom and liberty. Not Russia. Not Al Qaeda. Not China. Our very own government.

     

    All just IMO of course.
    1 Sep 2013, 08:57 PM Reply Like
  • justaminute
    , contributor
    Comments (836) | Send Message
     
    Well said, David - all of it.
    1 Sep 2013, 09:49 PM Reply Like
  • bob adamson
    , contributor
    Comments (4559) | Send Message
     
    David,

     

    I think we would both agree that public expenditure with the goal of fostering more rapid development of an industry or technology can lead to major waste and misuse of public monies. This can be equally the case where the goal is important and a clear route for progress is in hand. To my mind, however, this is not necessarily a reason to avoid public involvement; only a reason for developing clear guidelines and accountability mechanisms.

     

    You refer to the Man to the Moon stage of the US space program. It is noteworthy that in addition to attaining its primary goal (albeit after many initial delays and setbacks) it was instrumental in the development of many unanticipated technological advances which helped the US economy in significant ways. The same can be said for the breakneck industrial innovation arising out of WW II and the Cold War related public programs. The US Interstate Highway System and airplane manufacturing industry were likewise shaped and advanced by strategic defence and defence procurement policy needs and many helpful spinoffs ensued. The same can be said for the Public University system and Federal Agricultural programs.

     

    In short, a large and underappreciated factor in post WW II US development was shaped and accelerated by public policy supported by massive public expenditures. Further, much of the cost to the public purse was offset by economic growth that resulted from those public investments.

     

    Note that the forgoing is not a blanket endorsement of direct public sector involvement and expenditure: only a caution that we shouldn't be ideological and dogmatic on this point.
    1 Sep 2013, 10:08 PM Reply Like
  • davidbdc
    , contributor
    Comments (3183) | Send Message
     
    Bob,
    I agree with all your examples (perhaps with some slight more/less benefit differences), with the exception of Public Universities - our federal government had little to do with their development - that happened at the state level and private level. I agree that state expenditures to develop state universities has benefited our country greatly. However, federal intrusion with rules and regulation has led to bloated bureaucracies at Universities and the constant shoveling of money into the system at the federal level has resulted in astronomical prices.

     

    I believe that shortly after WWII Harvard cost the equivalent of $4000 in today's dollars (in tuition) - that was full cost. I could have the year slightly wrong but its in the ballpark. State Universities cost less. And again that was full price. It would be tough to argue that our higher education system since about 1970 has had drastic improvement (overall) that would justify the price increases - its been driven by the federal government involvement.

     

    Anyways - I agree that there should be areas of focus where our government is a full participant. But its not everything - and its not nearly everything. National Defense (note I said defense, not spying on the whole world), NASA, NIH, Federal Parks and a few other areas ok. But then do it well - full accountability - reasonable pay and benefits (its public service, don't like service start your own business in your garage and create jobs) - and the willingness to GET RID OF THINGS when the times change. If the average citizen can't know how many federal cabinet level agencies we currently have then its time to start gutting the bureaucracy.

     

    Regards,
    1 Sep 2013, 10:55 PM Reply Like
  • bob adamson
    , contributor
    Comments (4559) | Send Message
     
    David,

     

    You properly point out that I should have been more focussed in my observation about the Federal Government involvement in funding university. As you observe, the States have been the primary public funding source here. The fact remains, however, that the US Federal government through its many agencies has been a major funding source for research at both public and private universities (and at the research parks that are satellites associated with these universities. It is the outcome of that research funding to which I was referring.

     

    Best regards.
    2 Sep 2013, 01:34 AM Reply Like
  • D_Virginia
    , contributor
    Comments (2280) | Send Message
     
    David, incorrect again (and again,and again, and...).

     

    > The first experiment in hydraulic fracturing was in 1947 and
    > done by a private company.

     

    This is true, but not for shale:
    http://bit.ly/1fu20W0

     

    No one is saying the government deserves all the credit, they couldn't have done it without private industry as well.

     

    But to claim that the government had "NOTHING" to do with the shale boom is denial incarnate. :-)
    2 Sep 2013, 07:55 AM Reply Like
  • D_Virginia
    , contributor
    Comments (2280) | Send Message
     
    > the US Federal government through its many agencies has
    > been a major funding source for research at both public
    > and private universities

     

    Bob,

     

    When it comes to research (as opposed to education), the federal government has actually been the source of the *majority* of funding for universities (though this data only goes back to the 70s):
    http://1.usa.gov/1dzZ9hR

     

    (I presume states have contributed the majority to universities' educational aspects, I'm only speaking to R&D here.)
    2 Sep 2013, 08:04 AM Reply Like
  • gjg49
    , contributor
    Comments (411) | Send Message
     
    "Thus, the measure of success is not to make a major initial impact but rather to encourage significant planning and consumption choices by consumers and producers going forward, "

     

    While I agree in principle with your comment, the sentence above presents the biggest obstacle to success of such a policy. People will probably forwardly thing about planning and consuming based on a carbon tax about as well as they forwardly think about their prospective retirements. That is, despite the fact that everyone on the planet knows they have a finite working life, too many people simply are not rational and do not take the necessary steps to properly plan for what they know must eventually come (and I am not referring to those whose incomes are so low that they can not save at all). What makes one think that many consumers would actually change what they do in anticipation of such a policy??
    2 Sep 2013, 10:20 AM Reply Like
  • bob adamson
    , contributor
    Comments (4559) | Send Message
     
    Gig49

     

    There is quite a bit of behavioral research that supports your note of caution. However, while being suitable skeptical of placing too much reliance upon ‘the reasonable man’ in assessing economic matters, it is equally questionable to discount the prospect that, on balance, people as a whole will tend to respond rationally provided the issue in question is squarely put.

     

    Arguably consumers are quite sensitive to fuel prices, particularly the price of gasoline, in light of repeated price shocks over the past 40 years. This is not to say that consumers are not unfortunately quick to begin again to buy gas guzzlers after an interval of low or steady gas prices, only that they are increasingly quick to react as gas prices increase. In other words, to return to your example, people are reluctantly rational (i.e. they know they will need income after they are too old to work and that they should therefore save for that day) but in their short term actions they tend to be overoptimistic (i.e. they delay making difficult decisions like increasing their rate of retirement savings) on the rational that they can make up for this in the near future. This brings to mind the oft quoted humorous line of St. Augustine that he wished to renounce sin, but not yet.

     

    To return to the topic of the day, I think the foregoing bodes well for the success of a carbon tax that was introduced at a low introductory rate that was scheduled to ratchet up annually at a modest but noticeable rate. The continual reminders that fuel prices (a matter of some sensitivity to consumers) would increase continually would keep consumers focussed upon the advantage of fuel efficient cars and appliances. Producers would in turn respond to this consumer trend.
    2 Sep 2013, 11:24 AM Reply Like
  • davidbdc
    , contributor
    Comments (3183) | Send Message
     
    Nemo,
    The "Halliburton Loophole" was part of the 2005 Energy Policy Act. And actually oil and gas companies were first exempted in 1987 - this just expanded that exemption.

     

    I believe Obama was still the Junior Senator from Illinois at that time.

     

    It was technological and process improvement that led to the rise in wells (along with the $12+ price). And the price decrease has led to the reduction in dry wells.

     

    So there are the facts - keep dreaming that Obama has anything to do with the shale revolution.
    2 Sep 2013, 02:55 PM Reply Like
  • davidbdc
    , contributor
    Comments (3183) | Send Message
     
    Virginia,

     

    They (government) couldn't have done it without private industry????????????????? What make believe dream world do you live in.

     

    If that doesn't pretty much sum up with everything wrong in our country today. Without private industry we'd have ZERO wells and no fracking technology and process.

     

    There are government run oil companies in this world (all nationalized former private companies). Venezuela and Mexico are two good examples - how well are those companies doing????? Oh, they are failing.

     

    Even Saudi Arabia had the sense to nationalize but then turn back to the same private companies to run things.

     

    Sorry - Correct.

     

    The evolution of fracking techniques has NOTHING - I repeat NOTHING to do with any government entity nor activity.

     

    And the first experiments did occur in 1947. What you don't seem to understand is that fracking has been used for more than 50 years in vertical wells. Constant attempts, experiments, technology improvements, process improvements, and just dumb luck is what lead a few folks to take this to the level of being able to have horizontal drilling.

     

    Please go back to your big brother nirvana dream. The government nor Obama has had anything to do with the oil and gas boom in this country the past 5 years. They had nothing to do with developing the technology. They took no risks. And your own statement shows how ridiculous the thinking now is for those that believe in big brother.

     

    They (government) couldn't and wouldn't have done a damn thing.

     

    Stick with Al Gore invented the internet. Its more believable.
    2 Sep 2013, 03:08 PM Reply Like
  • The Patriot
    , contributor
    Comments (326) | Send Message
     
    " However, while being suitable skeptical of placing too much reliance upon ‘the reasonable man’ in assessing economic matters, it is equally questionable to discount the prospect that, on balance, people as a whole will tend to respond rationally provided the issue in question is squarely put."

     

    I consider myself a "reasonable man". The computer model of man made climate change is not IMO "squarely put" . The only reason CO2 is a pollutant, is because the Supreme Court said it was.

     

    If evidence mounts over the next couple of years to show there is no warming but indeed cooling, would you still support a carbon tax ?
    2 Sep 2013, 03:14 PM Reply Like
  • D_Virginia
    , contributor
    Comments (2280) | Send Message
     
    Please at least pretend to read what I wrote.

     

    Fracking did indeed begin under commercial efforts in 1947. Mostly in lime stone I believe.

     

    Fracking SHALE (S-H-A-L-E) wasn't viable until the 70s after a lot of public-private partnership research.

     

    We wouldn't have the shale (S-H-A-L-E) boom with decades of taxpayer funded research and development. Nor would we have it without commercial involvement.

     

    Again, it's a solid example of the good things that can be accomplished with public-private partnerships -- or to translate for "regular hard working Americans" who might know what what that terms means: commercial enterprises working *together* with taxpayer funded resources to advance an industry.

     

    Stop seeing only what you want to see and attempt to comprehend. The only one pretending that anyone is saying "government run" is you.

     

    Now, as to the last ~5 years specifically, you might be a little less wrong than usual. (Kudos old friend!) Certainly Obama hasn't been a big fan, and while local governments continue offer subsidies, federal funding has been reduced recently.
    2 Sep 2013, 03:23 PM Reply Like
  • bob adamson
    , contributor
    Comments (4559) | Send Message
     
    Patriot,

     

    Arguably the better way of looking at these matters is to note that something is OK or even welcome and necessary in moderation but can be dangerous or even deadly in absence or excess ( and the crossover point where OK shifts to dangerous varies in the circumstances). Examples abound. We need a continuing supply of water in moderation simply to survive and too much or too little water is deadly. It is therefore meaningless to generally characterize water as either welcome or deadly as it can be either in the right circumstances. On the more trivial level, the ornamental plant that escapes from my rock bed to infest my lawn becomes a lawn weed.

     

    Without CO2 we would not have photosynthesis and much life, including mankind, as we know it would disappear. On the other hand, Ice Ages are marked by especially low levels of atmospheric CO2 and especially high levels mark periods of exceptional climatic warming. Admittedly attempts to computer model the global range of CO2 concentration that constitutes the happy middle ground is a work in progress but we do know that

     

    (a) The rate of increase in CO2 concentration has increased at a rapid and increasing pace since the advent of the Industrial Revolution and, while there are natural sources for much of the CO2, the additional contribution by human activity is significantly contributing to this process.

     

    (b) Through study is has become increasingly clear that the rate of impact of the CO2 increase is not a simple linear matter. Plants can adjust and through photosynthesis recycle some of this increase (but how much and for how long is a troubling question). The oceans likewise appear to serve a countervailing effect (but also, how much and for how long?). Further, the effects in differing regions of the globe can vary markedly at various points of time (with, for example, local examples of cooling at certain periods). Further, at the arguably earlier stages of climate change currently experienced, it is often difficult to distinguish changes in weather patterns (i.e. local spells of abnormal weather for a few years that later corrects) from enduring shifts.

     

    (c) Amongst the troubling conclusion to be drawn from points (a) and (b) are that the rate of change can speed up markedly after a period of apparent modest change and that, should the rate increase and be evidenced by significant environmental degradation on a global scale, it would not be within the technical and political capacity on mankind to reverse the process efficiently and effectively.

     

    In short, the causes and patterns related to climate change are more complex and can be more subtle than we can readily appreciate but the broad outline is apparent, dangerous and worthy of further study and concerted action to give us time to respond adequately as circumstances and our knowledge unfold.
    2 Sep 2013, 06:30 PM Reply Like
  • The Patriot
    , contributor
    Comments (326) | Send Message
     
    I pretty much agree with all your statements. My problem is with the CO2 being the causing agent of warming, not to mention the predictability . We have been producing massive amounts of CO2 for decades, warm spell in the solar cycle, massive amounts of un measurable amounts of CO2 and SO2 from above ground and below ocean volcanoes. Yet every year there are numerous places across the globe that still set record lows. My region just finished the coolest August - ever !! I have no problem with being cautious, but "they" are out for blood.
    2 Sep 2013, 08:35 PM Reply Like
  • larocag
    , contributor
    Comments (1466) | Send Message
     
    I would think "The Patriot" would have already made-up their mind on such matters in a predictable way. "The Patriot" is rarely a RINO, so has little latitude on such matters.
    2 Sep 2013, 08:46 PM Reply Like
  • bob adamson
    , contributor
    Comments (4559) | Send Message
     
    Patriot,

     

    You are correct that CO2 level increases are not alone the potential culprit. There are many naturally occurring contributors to climate change and other man induced contributors such methane and deforestationbut man caused CO2 increase might best be seen a significant further contribution which, together with all the others, may well push climate instability further towards an edge we don't want to fall over.
    2 Sep 2013, 10:27 PM Reply Like
  • justaminute
    , contributor
    Comments (836) | Send Message
     
    Lots of may, mights and pointing a finger in the general direction of - all to come up with some vague notion of some undefined "edge" we should all be in fear of. And that's "global warming" or "climate change" or whatever the current socially pleasing phrase is in a nutshell.
    2 Sep 2013, 10:53 PM Reply Like
  • davidbdc
    , contributor
    Comments (3183) | Send Message
     
    Virginia,

     

    We haven't had decades of government funded research and development about fracking. You live in dream land.

     

    We didn't have S-H-A-L-E boom in the 1970's because technology didn't support horizontal drilling. So again your just winging it. It wasn't viable until much later. And again it was private companies that found ways to perform horizontal drilling and develop the processes to support it - that's what made it viable - and further improvements of the processes turned it into a boom.

     

    You should stop reading the Al Gore internet.

     

    Go back and look at the government projections for future natural gas production and how many years of reserves the government felt we have. Ooops!!! The ALL KNOWING GOVERNMENT was basically predicting we would run out of NG and it wasn't really going to be a large part of our energy future!!!!

     

    And once again - the lack of massive taxation isn't a subsidy. Its NOT the government's money. Let me repeat - IT IS NOT THE GOVERNMENT's MONEY.

     

    What the government has been massively subsidizing are solar, wind, etc. How is all that working out??? Battery companies established and then sold to the Chinese for pennies on the dollar!!! yeah - that's the private-public partnership at work. Solar companies going bankrupt because they spend all their time and energy getting the next subsidy instead of improving the technology? Yeah - more public-private nonsense.

     

    There is no public-private partnership. That's just code for politicians to take money and hand it over to their friends - its called corruption.

     

    While our idiot government spent Billions upon billions on all kinds of nonsense - hard-working, risk taking men found ways to extract huge amounts of NG from formations that the GOVERNMENT didn't believe viable. Their own estimates prove that.

     

    Only you and Al Gore believe the Government played any role of consequence in developing the technology or processes that unleashed our NG boom.
    3 Sep 2013, 05:15 AM Reply Like
  • bob adamson
    , contributor
    Comments (4559) | Send Message
     
    just,

     

    You must be a joy to your family doctor.

     

    He suggests you stop smoking. You reply that your 90 year old Uncle Albert has smoked two packs a day for 80 years - so the doc should prove why you personally should stop or keep his scaremongering to himself. Actuarial tables, statistics - all that general numbers stuff - is too vague, speculative and imprecise for you and if the doc can't give a precise diagnosis showing why you personally, not some statistical number of a smoker, will die by a specific date, then the doc's opinion is of no worth to you.

     

    And the doc's blowhard mutterings about cholesterol, your weight, your blood pressure and sleep habits - well, the less said the better.
    3 Sep 2013, 10:55 AM Reply Like
  • justaminute
    , contributor
    Comments (836) | Send Message
     
    I'm in good health, bob - thanks for your concern though.

     

    PS - I don't smoke.
    3 Sep 2013, 10:01 PM Reply Like
  • bob adamson
    , contributor
    Comments (4559) | Send Message
     
    Just,

     

    Good retort!
    4 Sep 2013, 12:18 AM Reply Like
  • Brad Kenagy
    , contributor
    Comments (1861) | Send Message
     
    This is an endless cycle, government will always try to tax the next new thing. Wherever the government is able to tax they will, example of taxes that didn't exist 100 years ago:

     

    Cigarette Tax
    Corp Income Tax
    Inheritance Tax
    Property Tax

     

    Looks like Carbon Tax is next on the list. This cycle will never stop until another Boston Tea Party lol.
    1 Sep 2013, 01:00 PM Reply Like
  • D_Virginia
    , contributor
    Comments (2280) | Send Message
     
    It is worth noting that the same generation that participated in the first Boston Tea Party was actually quite in favor of an Inheritance Tax:
    http://bit.ly/sjO2C0

     

    And given that one of the earliest taxes levied during President Washington's administration was a tax on whiskey, I think there is good reason to believe the founding fathers would have favored the Cigarette Tax too.

     

    It's fine to hold whatever opinion you hold, but I recommend invoking some different historical events to support your case. :-)
    1 Sep 2013, 01:44 PM Reply Like
  • davidbdc
    , contributor
    Comments (3183) | Send Message
     
    Like the Whiskey Rebellion?????

     

    I know of no reading of any of the main writings of our founding fathers that would support the level of government involvement in our lives - if you can point to one please do so,
    1 Sep 2013, 07:04 PM Reply Like
  • bigbenorr
    , contributor
    Comments (828) | Send Message
     
    "In 1794, secretary of the treasury Alexander Hamilton introduced the first ever federal excise tax on tobacco products. Hamilton’s original proposal passed after major modifications, only to be repealed shortly thereafter with an insignificant effect on the federal budget"

     

    quoted from wikipedia

     

    Finally I can sympathize with Aaron Burr.
    2 Sep 2013, 08:43 AM Reply Like
  • larocag
    , contributor
    Comments (1466) | Send Message
     
    I don't care about the next generation either. I got mine. I purposely didn't have kids so I wouldn't feel bad about our generation running the world into the ground.
    1 Sep 2013, 01:02 PM Reply Like
  • Michael Nau
    , contributor
    Comments (972) | Send Message
     
    Everyone on this thread seems to be groaning about taxes being too high. If you looked at a list of the countries with the lowest government revenues-to-gdp ratios, it would be a list of failed states. Afghanistan and Somalia are libertarian paradises.

     

    If you read a list of countries with the highest government revenues-to-gdp ratios, it would be mostly countries that respect human rights, have high literacy rates and life expectancy and places you'd like to go on vacation.

     

    Correlation or causation? Civilization isn't cheap.
    1 Sep 2013, 01:17 PM Reply Like
  • Val Halla
    , contributor
    Comments (307) | Send Message
     
    i don't disagree with this either. but the TRAJECTORY is not bad and installing a carbon tax in the USA does hurt some of the best taxpayers and more importantly "liquidity providers" in this recovery. higher taxes are not the only way to create revenue. it is simply an axiom that a return to growth (which we have) is the way to go. again this guy has an agenda. he needs to speak clearly to it.
    1 Sep 2013, 02:50 PM Reply Like
  • justaminute
    , contributor
    Comments (836) | Send Message
     
    Taxes could be lower as well as government outlays if 25% of the population would quit whining and go get job or start their own business.
    1 Sep 2013, 09:52 PM Reply Like
  • Clayton Rulli
    , contributor
    Comments (2918) | Send Message
     
    The last thing American consumers need is more taxes. If you want to increase the price of oil and gas, do so by making fracking safer by imposing stricter oversight of operations. This will naturally increase the price at the pump and elsewhere, while making the environment safer.
    Simply taxing the people and putting that revenue in the hands of wasteful government spending is not the answer.
    1 Sep 2013, 02:22 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (5267) | Send Message
     
    "SeekingFruad is also Obama's puppy."

     

    Could you please expand upon that? What do you mean? I am curious. Others may well understand your point, but it is not clear to me. Thanks and sorry for my confusion.
    1 Sep 2013, 02:31 PM Reply Like
  • Val Halla
    , contributor
    Comments (307) | Send Message
     
    higher taxes while Wall Street rakes in hundreds of billions and interest rates are at all time record lows? i mean go ahead...keep being confused.
    1 Sep 2013, 02:40 PM Reply Like
  • nemonemo
    , contributor
    Comments (324) | Send Message
     
    SeekingFraud aka SeekingAlpha is extremely pro Obama; to the extreme that they resort to put mis-leading pro Obama news during election. More like founders of SeekingFraud are liberally distorted. Also, selective new filtering in most cases. Anti-Obama comment removal. I even heard they were watching out for anti-obama comments during election.
    1 Sep 2013, 02:54 PM Reply Like
  • D_Virginia
    , contributor
    Comments (2280) | Send Message
     
    Many anti-Obama comments get deleted because they are ignorant and immature ("What lord Obama wants will happen lol"), not because they are anti-Obama.

     

    Make a rational, intelligent, fact-based anti-Obama comment, and it will sick around.

     

    Try it, you might enjoy yourself. :-)
    1 Sep 2013, 03:01 PM Reply Like
  • bgold1955
    , contributor
    Comments (2237) | Send Message
     
    Either way, will not be done before 2017. However, was going through old photos of Houston area taken in 1973 and the pollution was horrible. Much worse then than now. Guess unleaded fuel had something to do with it. Maybe other things as well. But, then again, we had a gov't that actually did function at times back then and apparently passed things that cleared the air a bit.
    1 Sep 2013, 04:56 PM Reply Like
  • SoldHigh
    , contributor
    Comments (1013) | Send Message
     
    Another stupid idea from the detached world of academia
    1 Sep 2013, 11:37 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (5267) | Send Message
     
    Greg Mankiw shoots an air ball on carbon tax: http://bit.ly/1fBX95s
    5 Sep 2013, 11:06 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs