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138 comments on Geophysicist Klaus Lackner on Fueling the Future
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The benchmark value I often see quoted is $100 per ton of carbon, equivalent to about $30 per ton of CO2 (because CO2 is about a third carbon). Now, actually I think this is an overestimate of the true costs to the world in terms of greenhouse warning. I found a study a while back that compared over 100 separate analyses of the estimated marginal cost of carbon over the course of this century, and the median value was only $14 per ton of carbon:
http://www.uni-hamburg.de/Wiss/FB/15/Sustainability/enpolmargcost.pdf
But even if we use the higher value of $100/tC, that corresponds to only about 20 cents per gallon of gasoline. Does anyone really think that a 20 cents per gallon tax is going to dramatically change people's behavior? We see fluctuations of greater than that amount all the time. Gasoline has fallen by over 50 cents a gallon in the past few weeks. A 20 cent per gallon tax is going to have very little impact on people's energy usage.
And yet, this is the amazing $100 per ton carbon tax which people think is going to save the world, drive sequestration, promote conservation, encourage alternatives, and have all of these wonderful effects. I don't think so.
Next time someone tells you that a carbon tax or carbon trading is going to fix things, just keep in mind this 20 cents per gallon figure. And maybe also take the economic estimates I linked to above into consideration, which implies a 3 cent per gallon gasoline tax as the economically optimal level. That's not going to change a thing.
Some recent estimates of the cost of GW would be higher, I suspect, as estimates of the speed and impact of GW rise.
Because the range of temperatures, and consequences, is a probability distribution, it's not possible to say 'global warming is going to cost us $100bn'. the right hand half of the curve includes a number of possibilities which are of such great concern as to justify radical action.
Because it might cost us civilisation. We don't know what the planet would be like if sea levels were 6 metres higher (what's the cost of relocating the US Eastern Seaboard, and London?). One major Katrina-style disaster in say, NYC or London, could cost $100bn+.
And we don't know what the world would be like if, say, the Amazon dies. or the sub permafrost methane is released rapidly (it happened once before, about 50 million years ago, and 90% of the species on the planet died).
Or what the costs of 2 billion people migrating out of uninhabitable equatorial areas are.
In terms of the 'necessary' level of carbon taxation, the picture is unclear. Since we don't tax carbon emissions, no effort is made to reduce them. Yet the evidence from previous effluent taxes, eg on water, is that economic agents can reduce output by 90%+ in some cases.
Also there may be cheap ways of increasing the uptake and sequestration of CO2.
So high price elasticity activities will follow first. Consuming gasoline is a low price elasticity of demand activity: it may be the case that much higher price changes are needed there to change behaviour (but improving standards for fuel economy may help).
It might be better to use a 'cap and trade' system, which has the advantage of producing a quantitative limit on CO2 emission. Such a system has the advantage of not putting a tax in the hands of government, that might be tempted to use it for economically inefficient purposes.
Either way, the increasing evidence of rapid global warming, species extinction, and the 'right hand' of the distribution of possible outcomes, means we are going to have to do something, do something dramatic, and sooner rather than later.