Wednesday, October 03, 2007

Richard Tol Changes Tune, Talks Carbon Tax

Economist Richard Tol is often quoted with approval in climate skeptic circles, and indeed he has employed some rather questionable methods to argue that, among other things, Global Warming will make Canada a vacation hot-spot. To which one can only respond: dude, if someplace like Winnipeg warms to the level characteristic of an “optimal holiday destination”, it still won't lure the tourists, it will just make the flies and mosquitoes bigger.

However, Mr. Tol seems to have had a change of heart, especially with respect to the Stern Review, which he once described as "alarmist and incompetent". In "On Setting Near-term Policy while the Dust Begins to Settle", he states that

"The major messages of the Review’s assessment of the current science are sound."


A persuasive case can be made that climate risks are real and increasingly threatening. If follows that some sort of policy will be required, and the least cost approach necessarily involves starting now.

Further, the most efficacious means of meeting the climate change threat is a carbon tax designed to make lower or near zero carbon technologies more attractive than, for example, coal:

...a tax, increasing at the rate of interest a la Hotelling, would produce a persistent and predictable increase in the cost of using carbon that would inspire cost-reducing innovation and fuel switching in the transportation, building, and energy supply sectors of our economy.6 If carbon were taxed at the point it entered an economy (a couple thousand sources for the United States as opposed to millions of end-users), then it would be dispersed appropriately throughout the economy with relative prices of thousands of goods changing in proportion to the underlying carbon intensities. Moreover, it would generate revenue. The $15 per ton of carbon dioxide tax noted above would, for example, generate something like $90 billion in tax revenue in the United States in 2007 if it were paid on every ton of carbon embodied in every unit of fossil fuel consumed. This is revenue that could be used to offset the regressive nature of the carbon tax itself, by underwriting tax credits for citizens with taxable incomes below a specified level. The substitution effect would still apply, of course, so carbon conservation could be expected even from the beneficiaries of the credits. Tax revenue could also be used to reduce other distortionary taxes. It could even be used to fund research into alternative energy sources.

And if Mr. Tol can change his mind, so can I. Richard, I once described your hair as "freakish". I was wrong. It is not freakish, but magnificent. In fact, given the utter paucity of hair among the skeptic crowd, I am surprised that they didn't make you their king. So let the freak flags fly!

In fact, an even weirder thing is that the paper quoted above is slated to appear in E&E. Could it be that they're having a change of heart similar to Richard's over at the Denialist house organ? Naw. That would be too much to hope for.


900ft Jesus said...

I'm sure you noticed the sudden appearance of articles talking about businesses expressing concern over climate change. This was bound to happen. I doubt they are sincere, but they know they have to at least hum along so they can appear as though they want to be good corporate citizens as they target and corner the market on ripping us off with environmentally friendly products and approaches - ones they know they would eventually have to shift to anyway.

Anonymous said...

Your 'arguments' supporting your belief in AGW have gone beyond the absurd, sorry, have become more progressive towards lunacy.

If you can't even make an effort to use real scientific evidence to support your political cause (because you can't, obviously), then why are you still supporting it with inane ideologies about hair or age?

Ti-Guy said...

Shaddup, anony-tard.

I once described your hair as "freakish". I was wrong. It is not freakish, but magnificent.

I'm sorry, but you will lose credibility if you're willing to ignore evidence so cavalierly. His hair is indeed freakish and I'm sure Exxon would give me the research funds necessary to demonstrate that empirically.

bigcitylib said...

900 ft,

I don't doubt that they are sincere in that they believe its happening. That's just becoming too obvious, to the point where businesses (tourism based, for example) are actively having to plan for a warmer future.

This is their attempt to get out in front of the issue and shape the debate. I doubt a pure free market response will prove adequate, but I absolutely think the corporate sector has a right to contribute to the policy debate.

900ft Jesus said...

sorry, what I meant was I doubt their show of caring is sincere. Yes, they know Climate change is real, have known for a long time, but shedding doubt for years has allowed them to keep squeezing what they can out of selling/making/exploring for products that cause global damage, then buying time through staged denial to set in place some new product.

Like you said, it's becoming too difficult to deny and be taken seriously, so better to cultivate some goodwill.

And sure, the corporate sector has a right to contribute to the policy debate. They play a big role in shaping our economy and we global warming alarmists do know that whatever changes are made to minimize the impact of GW must include economic concerns as well.

BCL, I am glad you post often on this issue. The deniers seem to have fewer arguments - even ones that appear to have some basis. When they resort to personal attacks, it's always a sing they are frustrated by their own impotence.

Oldschool said...

I have been saying for years . . . "If you really believed in GW, you would be buying property on Lake Winnipeg and be ready to set up a resort, with palm trees and sandy beaches."
But no one is doing this . . . how come?
By the way . . . the mosquitoes will perrish in the "Mediteranean Climate" the prophets say is coming.
Managed to catch the "Cheech and Chong" act at the hotel in Van last Saturday . . . funny though . . . they couldn't explain either, how a trace gas (less than .05%) can influence the weather. But they did admit though . . . they are making tons of cash!!!

bigcitylib said...

Cheech and Chong are stoners, old school. They can't explain how to tie a shoelace.

Ti-Guy said...

Cheech and Chong appeared together in Vancouver last week? Really?

...why didn't I hear about this?

Anonymous said...

reunion show? they started their act at a strip bar in van.

that hair is freakish.


Anonymous said...

I like the skeptics who are open to persuasion either way. Who are interested in learning. Who want to let the chips fall whereever they may (including publishing tests that go "against skepticism" it that is what data says.)

Like John V, like Mosh Pit. Like Burger. Like Zorita. Like me. Not like Clintonian equivocater Steve M. Or like his hoi palloi.

I think the hair is freaky cool.