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A Practical Method To Cut Greenhouse Gas Emissions to Zero

As an engineer who has studied control systems, it has always frustrated me that we don't make what to me is the obvious choice: treat greenhouse gas emissions as the input to a control system, and a tax rate on greenhouse gas emissions as the output. Then, you choose how many years until your emissions should be zero, and let the controller tell you what the tax rate should be. This tax rate would change every month, every year, and would inexorably force emissions down to zero over the chosen time period. Choosing the longest time period possible -- e.g. ~40 years -- would give the system as much time as possible to adjust, meaning that we'll experience the minimum pain possible.

If this increase in emissions tax were paired with a decrease in other taxes (like income tax, corporate tax, and other regressive taxes) so that the tax change every year was revenue neutral, the average tax being paid would not change. Then, people would naturally vote with their wallets for more efficient cars, electricity produced by less expensive methods (and therefore more efficient and less greenhouse gas emitting), food that is less expensive because it is transported a shorter distance, and so on. Fundamental and applied research and development would happen naturally in both the academic and in the private sector, and we can sit back and allow our capitalist system to do what it is so incredibly good at: optimizing based upon money.


Remarks

Over time, income/corporate/other taxes would increase again within a country as the emissions tax brings in less income. By year 40, we'd be back to business as usual. At that point, it would probably make sense to remove the law taxing greenhouse gas emissions, and instead simply outlaw any net emission of greenhouse gases.

If some technology were implemented for removing greenhouse gases from the atmosphere directly and permanently, that removal would count as a credit on the emissions tax, so a company could potentially bring their emissions tax to zero without cutting emissions to zero simply by implementing such technology. That would create a market incentive for creating and using such technologies (assuming they are even possible and/or economic).


Possible arguments against

1. "It's a tax grab." No it's not, it's revenue neutral.

2. "It will put an unfair burden on business, and weaken our economy." No, it wouldn't. It puts exactly the least possible burden on business over time. Make no mistake, the only way to bring greenhouse emissions to zero is to change the way you do business, and for some companies or industries that means changing even the business that you're in. On the other hand, the economy is strongest when innovation and new technologies are being developed, and bought and sold. There would be a boom in industries creating technologies to mitigate greenhouse emissions, or creating electricity with fewer emissions, and so on. But yes, your companies and industries would definitely need to change. Thankfully you have some time: 40 years in total. Go! :-)

3. "It's unfair on the resource sector." Actually, no. It's as fair as it can possibly be. Demand wouldn't change immediately, but rather gradually over 40 years, decreasing to zero. Initially, they would still sell oil, gas, coal, etc at the same price and with roughly the same demand. It's the future that would change. So resource companies, would need to start investing in new technologies that make sense in this new tax regime. Those that did would do well if they produced good technology and products, and not if they didn't. It's survival of the fittest in business: I believe we call that system "Capitalism." ;-)

4. "It's unnecessary. Man-made global warming and climate change is a myth." Climate change deniers would gradually disappear and stop feeling compelled to deny once they realized that change was happening, that the pain was minimal, and that they'd better just get on with being good businessmen in their chosen fields.

5. "It puts an unfair burden on the less developed nations." This one I'm not sure about. Perhaps aid given to less developed nations could be adjusted to include significant transfer of both technology and expertise to less developed nations so that they could compete more fairly.


Thoughts? I would be grateful if you would share this with anyone you think might have an interest, especially those directly involved in the science, economics, politics related to this issue.
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Leif Arne Storset's profile photoScott W's profile photo
3 comments
Scott W
 
If this plan were enacted, it is likely that not all countries in the world would adopt it. The non-adopters would initially have a small advantage economically over the adopters (although this advantage would later disappear as the adopters began to develop and use more advanced technology, and leave the others behind). Can anything be done about this initial disadvantage faced by those who adopt this scheme?

Yes. The adopters can do their best to estimate what the net result of the Controlled Carbon Tax would have been on the price of that non-adopter's good or service, and then charge exactly that amount as a tariff. They could even return that money to the government of the country of origin of that good or service (perhaps minus an appropriate service fee to cover the cost of gathering the data required to calculate what the tariff should be), which would give exactly the same result as if the origin country had been an adopter all along!

In this way, the markets of adopter countries would gradually become more and more inaccessible to the non-adopter countries' industries until they were essentially coerced into pulling up their socks and directing their country towards a similar scheme of zero greenhouse gas emission within 40 years.

Sure, the non-adopters could institute similar tariffs, but the net result would be a group of adopter countries taking advantage of free trade within their group and simultaneously moving quickly toward newer, more efficient technologies, while the group of non-adopters perhaps also having free trade only within their group but simultaneously falling behind on the newer, more efficient technologies. They would very soon have incentive to catch up and join this scheme, much like the World Trade Organization provides strong incentive for countries to adopt certain modern regulatory requirements in order to be allowed to join.
 
The main difficulty here is the political sell and the lobbies, I would imagine – not everyone has the mental capacity to read your rationale…

You may be aware that Kyoto-protocol parties already tax emissions. We will pay a carbon tax on our flight home for Christmas, for instance. But the 40-year perspective is interesting.
Scott W
 
Definitely. I think the key would be to focus on the phrases "revenue neutral", "no economic cost", and so on. But certain industries that are rabidly against change have lobbies and mis-information campaigns that are hard to beat.

I was unaware that emissions are already taxed in some Kyoto signatory countries. I guess since Canada has failed to ratify Kyoto, and has now withdrawn, that doesn't include us. Shame on Harper's Conservative government.
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