Shifting cost to the emitters is a better way to put it. If a factory can make 10m in upgrades over time to reduce their carbon tax burden by 15m over time, they are definitely going to do it. So I disagree: I say it does change behavior and it does reduce actual carbon.
> There's a lot more low-income emitters than high income ones
Whether that's true or not it does not mean a carbon tax would not 'reduce actual carbon'.
An ICE vehicle sitting in a driveway with its engine off emits no pollution (that is, after the initial impact of manufacturing and delivering it).
However, the part where the resulting revenue is pooled and payed out in an equal amount back per capita is progressive, since that payment is a greater fraction of a low income. Desirably, it also means that low-income people emitting less than the average would make money overall: consider a household consisting of a single mom and two kids that take public transit to work/school.
If you set the carbon tax at about $1/gallon of gasoline, the corresponding carbon rebate would be about $1000 per family per year.
That wouldn't affect rich people much; neither the $1/gallon nor the $1000 extra income is significant. But many rich people get rich by being penny-wise, so many would change behaviour, by buying an EV or similar.
But for poor people both $1/gallon and $1000 per year is significant. If gas was $1/gallon more expensive, poor people definitely would drive less.
The trickle down as those cars depreciated in value was years away.
Someone has to buy them for full price before they show up on the used market 5-10 years later.
New Zealand used car market is likely very different from the market where you are. The cheapest Model 3 I could find was a USD18000 for a 2020.
Subsidies make sense if the environmental gains outweigh the costs of the subsidies.
Subsidies: there was a purchase subsidy, charging stations were subsidised, and I think electric cars are not paying their fair share of road maintenance (much of our road costs are paid for by an excise tax on usage via petrol-tax or heavy-vehicle-milage).
And if you pretend that there is no subsidy, and the original owner paid $80,000 just because it cost that much unsubsidized, the second buyer still gets the same discount off the original purchase price.
So the fact that the car was originally subsidized isn’t relevant.
A poorer person in NZ spends at most a few thousand on their car. The original retail price is nearly irrelevant by the time it gets to someone poorish (however maintenance/parts costs do matter for old cars).
The financial benefit of a discount mostly goes to the people that own the car while it depreciates as it trickles down.
Context: In New Zealand, the vast majority of people drive second hand cars (mostly imported second hand from Japan). A 20 year old car is regarded as newish in New Zealand. I am well off, so I have two second hand cars, my daily driver is 2006 I think, and I have a 1996 4WD for other stuff. New cars are only bought by the well off.
I wonder if your mental model is that a $20k discount applies at all future prices - so that when the car is sold for $5k that it's "actual" worth is $25k.
My mental model is that when the car is sold at $5k it is worth $5k and the $20k discount has disappeared (the value captured by the early owners).
Background: I'm a top 5% earner but I have friends who are struggling financially.
My opinion is that the discounts is money paid for by our taxpayers into overseas pockets, that benefits a few well off people. Strangely enough the discounts were introduced by our more socialist party, and removed by the incoming less socialist party. I don't believe the discounts are an equitable use of government funds.
I am also extremely sceptical that there is enough environmental benefits: the policy appears green but perhaps it is not (greenwashed).
Basic supply and demand. Increases supply keeps prices down
Which is dismaying because carbon taxes are a conservative solution to this problem and IIRC the first political entities to suggest the implementation of them in Canada were Conservative.
At the end of the day you have a nontrivial amount of the population, and many in positions of power who just outright deny environmental concerns and climate change as an existential threat.
They aren't going to approach this problem in good faith and it isn't obvious what the solution to their nefarious influence on policy should be.
1. The textbook implementation involves 3 parts: tax, rebate and tariff. Canada only did the first 2. They were in talks with Germany/EU to create a carbon tariff zone, but that never happens. Without the tariff the carbon tax is massively unfair to local producers.
2. The rebates were almost invisible. If they would have been cheques in the mail it would have had much more impact psychologically.
But I agree, the main problem was denialism and its use as a political cudgel. It should be hard to argue that carbon tax is stealing money when all of it is given back, but they successfully did that.
Second, and probably more important: the rebates showed up in your bank account with a description that didn't make the source obvious enough for laypeople. Had people seen monthly "CARBON DIVIDEND" credits in their bank accounts, they would have noticed.
The issue with this is that it creates a whole parallel (and largely fake) carbon accounting world. Fake estimates, fake offsets, a complex web of compensating subsidies - but real public money.
The field of carbon taxes is tricky because we can imagine simple schemes which handle a few scenarios in a fair way (ok, fuel! we know how to tax that) but once you start thinking about agriculture or construction you quickly get into complex estimation. You then end up with armies of carbon accountants who spend all day looking for loopholes and rorts.
If you want proof of this, just look at what happens to sales of large vs small cars when the price of gas changes.
https://ww2.arb.ca.gov/our-work/programs/fuels-enforcment-pr...
I'm poor. I could get just the $X back as my carbon tax dividend and continue with my current lifestyle. Or I could make choices that emit less carbon, which will cost less since they don't have a carbon tax cost to them, and save an additional $Y on top of the $X I'm already getting.
What do I do?
The government's job is to say that in aggregate, they people better off from the overall reduction in carbon emitted.
My opinion is that trying to make consumption taxes non-regressive is a fool's errand. If it needs to be progressive, figure out what the total dollar contribution needed and pick a rate that when scaled with incomes yields the outcome needed.
Let's say that instead of taxing carbon, we pay people a bonus for emitting a below-average amount of carbon (proportional to the amount that they are below average by). If the amount is in a certain range, it will be too small an amount for wealthy people to care about, but large enough for poorer people to do things within their means (e.g. carpooling) to try to get it.
The results would hit certain geographic areas much worse than others, and (if priced enough to change behavior) would also probably depress car sales, which are two reasons why the federal fuel tax has been flat for over 30 years.
The original suggestion could be collected at point-of-sale for carbon emitting products. Gasoline, airplane tickets (based on average for the flights), even electricity are easy to measure and charge at the point of sale.
In your example, the person has to prove how much they didn’t emit, which is way harder in practice, to get the credit.
And similarly i would extrapolate to do we tax the buyer of electricity (which could be green sourced) or the manufacturer - the gas burner. Or maybe even at the first point of contact with the carbon source, the oil company.
So you're saying that the government should incentivize poorer people to sell one of the last bits of their functional autonomy for what would be trivial amounts? "We'll just hang onto to this for a bit until you decide to stop going anywhere or make friends at work".
I believe this would be more fair to children who are the ones who will be most impacted by climate change in the end.
I believe there are even some governments that use this approach, but many of them don't make it feel as significant as it should. You should get a big fat cheque in the mail every month as if you won the lottery.
"Taxes are simple... and they don't have loopholes" is not at all how taxes work in the US. Perhaps your imagined perfect carbon tax is simple, but a simple tax with no loopholes is not likely to happen. Everyone wants a break or exception, and many of the interested parties are powerful.
You could say the same thing about zoning. Higher density is better for affordability, but faces opposition from landowning existing residents. Does that make it wrong, or not worth pursuing? No, and that particular movement seems to be getting traction despite the political opposition.
I read "trivially fixable" as "there is an elegant solution to this," not that "it is easy to get it politically passed."
> I read "trivially fixable" as "there is an elegant solution to this," not that "it is easy to get it politically passed."
The huge problem with this line of thinking is that it's easy to identify a half-dozen key players standing in the way of your elegant solution and it would be easier to remove them from the situation than change their minds. It's an attractive idea that can become a fixed idea.
In an ideal world, I'd like the tax to be made more progressive, but I'll take anything!
Unfortunately, poor people don't have the cash on hand to hold them over until they get their Carbon Stipend on April 15th.
It's going to hurt poor people to charge them more at the counter, even if you give them more later. The stipend is just going to end up paying for less than the interest the tax created on a credit card.
I'd like to see a carbon tax coupled with massive investments to make public transit legitimately good. There are too many places where there is no viable alternative to driving, a carbon tax will unnecessarily punish those people without giving them a reasonable alternative.
Government ‘carrots’ are almost universally a terrible idea because they codify specific solutions. Instead you can get the same effect more efficiently with a carbon tax large enough for people to notice.
I'll boil it down to:
If you want less of something, tax it.
Why would you think so? People driving older cars, not being able to afford to fly - will certainly spend more money on fuel for their car.
Maybe they drive a more efficient car, but they own much larger houses which are heated or cooled consistently, they travel a lot more, and they buy things with embodied carbon emissions.
That's close to impossible to implement. You'd need to track production and usage of everything in an extreme detail. Plus tracking all purchases (items + services) to a given person. So complete state surveillance of citizens. Globally.
You don't need state surveillance or tracking purchases. You just need to get to the source of the problem. Hydrocarbons leaving the ground.
At the hydrocarbon level, it's much easier to track. Oil and gas is mostly extracted by very large corporations and transported by large infrastructure. You don't care what happens to it once you've produced it - but you do need to put a levy on the hydrocarbons before they're sold on. The people who use those hydrocarbons all have higher costs which pass on to customers.
The biggest problem is international borders. If another country isn't applying carbon tax, then you need to make an estimate of the embodied energy of a product at the point of import. Or encourage them to tax carbon. But neither of those require surveillance. Once the product has been imported, you don't care who buys or sells it because the tax is already paid.
For a carbon tax, I think you only need to track imports, and domestic extraction of coal, petroleum, and natural gas.
What problem was solved here? None.
Finally a good use for tariffs!
Increasing the tax on aviation fuel to $2/gallon wouldn't produce massive shifts in the next several elections, therefore it's easier to implement.
I don’t think that level is sufficient to cover the externalities.