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The ice did not break. There was not peace in the valley on Monday because the American Petroleum Institute, the nation’s premier fossil-fuel lobby, revealed that it’s leaning toward supporting a carbon tax.

Don’t expect a revolution. Ten years from now, maybe. But the Obama-Biden left long ago lost any interest in this favorite nostrum of economists. This is one of the tragedies of climate politics in our era.

We have leisure to remind ourselves that climate-related models are always an elaboration of a hypothesis; ultimately only the real world can yield the data that tell us if a hypothesis is correct. That said, a timely new model from José Luis Cruz Álvarez and Esteban Rossi-Hansberg of Princeton allows that human behavior, including reproductive behavior, will adapt to future climate changes as indeed it has since early man sought out cave openings that pointed away from the prevailing winds.

The authors are late to dinner in one respect: They adopt the climate community’s now largely abandoned (thanks partly to the efforts of this column, I hope) worst-case emissions scenario, known as RCP 8.5. Even with this glitch, they see trade and migration doing much to alleviate the pains of a changing climate. Total human welfare losses, in their estimate, amount to 6% through 2200, ranging from 15% in the hottest places to a 14% gain in Alaska, Canada and Siberia.

Having a hard time reconciling this with loose talk in the media of human extinction, the death of the planet, etc.? The science has never endorsed such dire outcomes. Most interesting, though, are their observations about clean energy subsidies vs. a carbon tax.

Handouts to clean energy became the preferred U.S. approach under the Obama administration for reasons explained many times: the ability to foster a self-renewing lobby to keep the subsidies going. In the Princeton model, while these subsidies do change the energy mix, they also encourage more consumption overall, as famously seen in the “rebound effect" under U.S. fuel-mileage mandates. The net result in their model is “only a minuscule reduction in CO2 emission and temperatures."

A carbon tax, in contrast, really does suppress emissions and temperatures for all the obvious reasons. If “abatement" technologies are forthcoming, in the very, very long run—the authors are talking centuries from now—fossil-fuel resources might yet be consumed without creating emissions.

These are useful and not revolutionary insights. A carbon tax was Congress’s primary focus for a decade until the green left shifted wholesale to the mandates-cum-subsidies approach that prevails today.

Climate policy turned inevitably into a pork scramble that had to be covered up with ever more strident rhetoric. Prescient was the University of Washington economist Yoram Bauman, then promoting his state’s 2016 failed carbon tax initiative. He said in 2015 that the long-term climate-policy obstacle was no longer the right but the left with its “unyielding desire to tie everything to bigger government, and a willingness to use race and class as political weapons in order to pursue that desire."

OK, this is old hat but it’s not the totality of the story today. Our society still has its strengths. The desire for portable computers created the lithium-ion battery, which has sparked willy-nilly possibilities for energy storage in vehicles and power grids. Money and effort from people like Bill Gates continue to go toward rescuing nuclear from its post-Fukushima purgatory.

Climate experts in good standing have given themselves permission to examine geoengineering fixes if real-world warming should emulate the worst-case climate forecasts.

A turning point more important than this week’s carbon tax conversion by the oil lobby was a rare moment of self-correction by the climate lobby in 2018-20. The hive finally admitted the trajectory of emissions was likely to remain far below the constantly cited RCP 8.5 “business as usual" scenario. When the Paris agreement was published in 2016, global emissions were expected to hit 55 gigatons in 2030. In the pre-pandemic year of 2019, emissions were 33 gigatons and nearly flat from the previous year. Quite plausibly the 55 gigaton level now will never be hit.

Always the most important outcome would be decided below the level of discrete carbon policy, at the level of decisions that contribute to keeping the wealth, knowledge and adaptability of human society advancing regardless of the climate future. A carbon tax is not a bad tax compared with those that weigh on work, savings and investment. When the foolish Green New Deal is in the rearview mirror, the challenge of funding the welfare state while protecting the dynamism of our economy will remain. Then a levy on carbon will likely be on the minds of a lot more than just energy economists.

This story has been published from a wire agency feed without modifications to the text.

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