There is an endless stream of articles about the climate impact of our daily lives and shopping choices. Today, it transpires that surfing the internet is bad. This lengthens the list of daily activities that we are told is causing climate change. One minute you think you are doing the right thing (like buying local food) and then an expert points out that it depends what time of year you are buying it, what country is comes from, if it was grown in a greenhouse or not, what energy sources were used, whether it come it by road, rail or air, how you got to the shop and how you prepared it (oven, boiled or fried).
All this needless to say is a) disconcerting and b) a complete waste of our time c) ineffective way to deal with global warming.
The alternative promoted by economists and endorsed by some politicians is to price carbon. This means raising the price on carbon to account for its environmental damage. This will change the relative price of energy in favour of low carbon technologies and energy conservation measures. Whilst most agree that this is a good idea (some industry groups disagree), there is disagreement about whether a carbon tax or cap and trade emissions scheme is the best approach. I will leave it to the chief proponents of these respective economic instruments to argue which is the best approach.
Greg Mankiw of Harvard University on carbon taxes as the best approach to reduce carbon emissions and Robert Stavins also of Harvard on cap and trade.
Showing posts with label pigou. Show all posts
Showing posts with label pigou. Show all posts
Wednesday, 14 January 2009
Thursday, 18 December 2008
Poor cows
In 2008, SUVs (or 4x4 as we say in Europe) were the main target for climate change campaigners' ire.
A main target of choice for climate campaigners in 2009 looks likely to be cows.
Whereas SUVs survived attempts by road safety campaigners and environmentalists to get them off the road (until the global recession swiftly dealt with the monster cars), cows now face the twin headed attack of government regulators and vegetarians. This unlikely alliance has honed their sights on the cow each for different reasons.
The regulators, to reduce methane emissions (20 times more global warming potential than carbon dioxide) and the veggies for obvious reasons but using global warming as the hook. The veggies ran a "Silent but Deadly" campaign in 2007 (supported by Sir Paul McCartney). The animal welfare lobby in the UK even had head of the UN climate chief Dr Rajendra Pachuri address their meeting in 2008, at which he suggested people eat less meat.
The alternative to voluntary environmental measures is to introduce environmental taxes, in this case on methane. Taxes (called Pigouvian taxes by economists) are generally more effective than just appealing to our common sense and our better natures. I am sure meat demand continued despite the veggie campaign.
This month, the NY Times report that the Environmental Protection Agency have proposed a "cow tax" - US farmers fear it may reach US$175 per cow and have reacted strongly to the proposal. This proposal is part of an EPA consultation on the idea of regulating greenhouse gas emissions from cars and "stationary sources", which would include cows.
Given that cows produce gases damaging to society it seems fair than the price of producing meat and dairy products should reflect that cost. A tax is an efficient way to deal with the "externality". However, selling the idea to industry, particularly small producers will be difficult. As the NY Times reported, New Zealand proposed this idea but were shouted down.
A main target of choice for climate campaigners in 2009 looks likely to be cows.
Whereas SUVs survived attempts by road safety campaigners and environmentalists to get them off the road (until the global recession swiftly dealt with the monster cars), cows now face the twin headed attack of government regulators and vegetarians. This unlikely alliance has honed their sights on the cow each for different reasons.
The regulators, to reduce methane emissions (20 times more global warming potential than carbon dioxide) and the veggies for obvious reasons but using global warming as the hook. The veggies ran a "Silent but Deadly" campaign in 2007 (supported by Sir Paul McCartney). The animal welfare lobby in the UK even had head of the UN climate chief Dr Rajendra Pachuri address their meeting in 2008, at which he suggested people eat less meat.
The alternative to voluntary environmental measures is to introduce environmental taxes, in this case on methane. Taxes (called Pigouvian taxes by economists) are generally more effective than just appealing to our common sense and our better natures. I am sure meat demand continued despite the veggie campaign.
This month, the NY Times report that the Environmental Protection Agency have proposed a "cow tax" - US farmers fear it may reach US$175 per cow and have reacted strongly to the proposal. This proposal is part of an EPA consultation on the idea of regulating greenhouse gas emissions from cars and "stationary sources", which would include cows.
Given that cows produce gases damaging to society it seems fair than the price of producing meat and dairy products should reflect that cost. A tax is an efficient way to deal with the "externality". However, selling the idea to industry, particularly small producers will be difficult. As the NY Times reported, New Zealand proposed this idea but were shouted down.
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