Thursday, June 14, 2007

A carbon tax everybody will love?

I am against taxes in general and totally opposed to any tax in the name of reducing CO2- we breathe it out all the time! However there are people who are quite enthusiastic about carbon taxes, even apparently reasonable people(sorry to go after this bunch again!).
However if a carbon tax it has to be then why not tie it to levels of actual warming, i.e. more the warming, more the tax and vice-versa. This is an excellent idea proposed by Ross McKitrick-

he IPCC predicts a warming rate in the tropical troposphere of about double that at the surface, implying about 0.2C to 1.2C per decade in the tropical troposphere under greenhouse-forcing scenarios. That implies the tax will climb by $4 to $24 per tonne per decade, a much more aggressive schedule of emission fee increases than most current proposals. At the upper end of warming forecasts, the tax could reach $200 per tonne of CO2 by 2100, forcing major carbon-emission reductions and a global shift to non-carbon energy sources.

Global-warming activists would like this. But so would skeptics, because they believe the models are exaggerating the warming forecasts. After all, the averaged UAH/ RSS tropical troposphere series went up only about 0.08C over the past decade, and has been going down since 2002. Some solar scientists even expect pronounced cooling to begin in a decade. If they are right, the T3 tax will fall below zero within two decades, turning into a subsidy for carbon emissions.

At this point the global-warming alarmists would leap up to slam the proposal. But not so fast, Mr. Gore: The tax would only become a carbon subsidy if all the climate models are wrong, if greenhouse gases are not warming the atmosphere, and if the sun actually controls the climate. Alarmists sneeringly denounce such claims as "denialism," so they can hardly reject the policy on the belief that they are true."

Tim Worstall summarizes-

"Once you get past the technical matters his proposal is really quite simple. Impose a carbon tax, one that's revenue neutral, but tie it to the actual amount of warming observed: the higher temperatures rise, the higher the tax. If temperatures don't rise then nor does the tax.

This should of course please everybody. Those who believe that temperatures will rise get the higher taxes they desire: those who don't can simply wait to say I told you so.

Of course, the true delight of this proposal is that it not only won't please everyone, it will enrage just about everyone. I for one look forward to the great spectator sport of watching those who want the higher taxation explaining why this form of accountable higher taxation won't work."

Somehow I think that this is not going to find favor with the usual suspects.