It turns out people by and large don't do "careful economic cost-benefit analysis". Who could have predicted?
I think a major cause of the problem is that people have been conditioned not to trust government. You could explain how carbon rebates will benefit them until you turn blue, and they still wouldn't believe you. They think crime…
It turns out people by and large don't do "careful economic cost-benefit analysis". Who could have predicted?
I think a major cause of the problem is that people have been conditioned not to trust government. You could explain how carbon rebates will benefit them until you turn blue, and they still wouldn't believe you. They think crime went up, when it actually went down. They think Obama raised taxes, when he lowered them. It's almost like there's a "pessimism bias" that transcends facts and logic.
While more prevalent on the Right, this "government lies" attitude isn't limited to conservatives. Republicans have spent the last 40+ years destroying trust in our institutions, and honestly I don't know what you could do to reverse it.
It's particularly tough when it comes to the climate. "We're instituting huge new interventions in life-as-usual, so we can make the future *less bad*" is a difficult sale to make. We're constantly told we need to emphasize how climate action will *improve* our lives, but I don't see much effort in that direction.
"You could explain how carbon rebates will benefit them until you turn blue, and they still wouldn't believe you." True, Rob!
And one key reason for suggesting a dirt-simple fee and dividend program that simply returns nearly all of the revenue generated to a nation's people (outside of modest administration costs), on a flat, fair, per-capita basis.
Then, the core argument that people will then make – and pretty much the only argument they *can* make at that point – is, "if you're going to give us our money back, why involve government – and why do this in the first place?"
Some hear this and think, what’s the point of taking more money from people and then giving it straight back to them? Well, the point is to nudge behavior. If gas costs $4 per gallon instead of $2 per gallon, we’re going to drive less. If airline tickets cost more, we’re going to fly less. If it costs more to pollute, we’re going to pollute less. Whatever we tax, we tend to reduce it. That’s also one of the reasons more than a few economists don’t like income taxes, while others love the idea of a land value tax.
[I'd add here that perhaps *the* key benefit, outside of nudging consumer behaviors, is to spur innovation. If carbon emissions cost more, businesses are going to be highly incentivized to find ways to innovate to reduce them, as well to meet consumer needs for ways to reduce or accommodate these higher prices. - Aron]
Creating Choices
The creation of monthly cash dividends with carbon tax revenue then additionally enables new market choices. For example, let’s say gas costs $2 without a carbon fee and rebate, but $3 with a carbon fee and $1 rebate. Do we wish to drive around just as much with $3 gas thanks to being able to afford that choice with the extra $1, just as much as we did with $2 gas and no dividend, or do we wish to drive less and use the $1 dividend elsewhere? Perhaps we’d instead prefer to use that money on a new electric car or solar panels? Perhaps we’d prefer to use it on education or training, or more nights out with friends and family, or to pay down debts or build savings? Or to start a new business? The rebate creates new options for consumers that weren’t there before the fee was applied."
Another key point in support of a carbon fee or tax is this: we learned from the Solyndra debacle, as well as the costly synfuels (coal gasification, oil shale, and heavy-oil) experience under President Carter's administration, that when government attempts to pick technology winners and losers in a diverse field, that inevitably results both in market distortions and the loss of taxpayer monies.
Letting consumers and businesses decide, rather than invoking the heavy hand of government, is an argument that an increasing number of conservatives and/or Republicans are coming around to, perhaps especially for whose trust in government has eroded over those past 40+ years.
Solyndra is a bad example. It was one of many companies that got loans from the government. Their particular business didn't pan out, but overall the program actually made a profit.
As far as the government "picking winners", private capital has proven again and again that they aren't eager to fund the high-risk, high-reward moon shots that could really make a difference. Personally I think the government should fund every energy innovation with half a chance of succeeding, with the full expectation that many of them will fail. That, after all, is what venture capitalists are supposed to do, and aren't doing nearly enough of.
It turns out people by and large don't do "careful economic cost-benefit analysis". Who could have predicted?
I think a major cause of the problem is that people have been conditioned not to trust government. You could explain how carbon rebates will benefit them until you turn blue, and they still wouldn't believe you. They think crime went up, when it actually went down. They think Obama raised taxes, when he lowered them. It's almost like there's a "pessimism bias" that transcends facts and logic.
While more prevalent on the Right, this "government lies" attitude isn't limited to conservatives. Republicans have spent the last 40+ years destroying trust in our institutions, and honestly I don't know what you could do to reverse it.
It's particularly tough when it comes to the climate. "We're instituting huge new interventions in life-as-usual, so we can make the future *less bad*" is a difficult sale to make. We're constantly told we need to emphasize how climate action will *improve* our lives, but I don't see much effort in that direction.
"You could explain how carbon rebates will benefit them until you turn blue, and they still wouldn't believe you." True, Rob!
And one key reason for suggesting a dirt-simple fee and dividend program that simply returns nearly all of the revenue generated to a nation's people (outside of modest administration costs), on a flat, fair, per-capita basis.
Then, the core argument that people will then make – and pretty much the only argument they *can* make at that point – is, "if you're going to give us our money back, why involve government – and why do this in the first place?"
And Scott Santens has an excellent observation in response, https://medium.com/basic-income/this-idea-can-literally-change-our-world-107cbc94057a, one that could be used directly in marketing such a plan:
"Changing Behaviors
Some hear this and think, what’s the point of taking more money from people and then giving it straight back to them? Well, the point is to nudge behavior. If gas costs $4 per gallon instead of $2 per gallon, we’re going to drive less. If airline tickets cost more, we’re going to fly less. If it costs more to pollute, we’re going to pollute less. Whatever we tax, we tend to reduce it. That’s also one of the reasons more than a few economists don’t like income taxes, while others love the idea of a land value tax.
[I'd add here that perhaps *the* key benefit, outside of nudging consumer behaviors, is to spur innovation. If carbon emissions cost more, businesses are going to be highly incentivized to find ways to innovate to reduce them, as well to meet consumer needs for ways to reduce or accommodate these higher prices. - Aron]
Creating Choices
The creation of monthly cash dividends with carbon tax revenue then additionally enables new market choices. For example, let’s say gas costs $2 without a carbon fee and rebate, but $3 with a carbon fee and $1 rebate. Do we wish to drive around just as much with $3 gas thanks to being able to afford that choice with the extra $1, just as much as we did with $2 gas and no dividend, or do we wish to drive less and use the $1 dividend elsewhere? Perhaps we’d instead prefer to use that money on a new electric car or solar panels? Perhaps we’d prefer to use it on education or training, or more nights out with friends and family, or to pay down debts or build savings? Or to start a new business? The rebate creates new options for consumers that weren’t there before the fee was applied."
Another key point in support of a carbon fee or tax is this: we learned from the Solyndra debacle, as well as the costly synfuels (coal gasification, oil shale, and heavy-oil) experience under President Carter's administration, that when government attempts to pick technology winners and losers in a diverse field, that inevitably results both in market distortions and the loss of taxpayer monies.
Letting consumers and businesses decide, rather than invoking the heavy hand of government, is an argument that an increasing number of conservatives and/or Republicans are coming around to, perhaps especially for whose trust in government has eroded over those past 40+ years.
Solyndra is a bad example. It was one of many companies that got loans from the government. Their particular business didn't pan out, but overall the program actually made a profit.
As far as the government "picking winners", private capital has proven again and again that they aren't eager to fund the high-risk, high-reward moon shots that could really make a difference. Personally I think the government should fund every energy innovation with half a chance of succeeding, with the full expectation that many of them will fail. That, after all, is what venture capitalists are supposed to do, and aren't doing nearly enough of.