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climate change
May 2007 
After Kyoto: Alternative Mechanisms to Control Global Warming
Posted on Oct 7th, 2006
by 
Michael
Michael
Can we make tax policy sexy and exciting? It has taken me years to realize that most of the issues that idealists care about are largely driven by tax and regulatory policy; dry, abstract systems that determine how life and energy flows far more than is generally realized.
From an excellent article proposing that tax policy is a more effective means of controlling carbon emissions than are carbon emissions trading systems:
After Kyoto: Alternative Mechanisms to Control Global Warming
William D. Nordhaus | March 27, 2006
Abstract: This paper reviews different approaches to the political and economic control of global public goods like global warming. It compares quantity-oriented control mechanisms like the Kyoto Protocol with price-type control mechanisms such as internationally harmonized carbon taxes. The pros and cons of the two approaches are compared, focusing on such issues as performance under conditions of uncertainty, volatility of the induced carbon prices, the excess burden of taxation and regulation, accounting finagling, corruption, and implementation. Although virtually all policies involving economic global public goods rely upon quantitative approaches, price-type approaches are likely to be more effective and more efficient.
A price approach gives less room for corruption because it does not create artificial scarcities and monopolies. There are no permits handed over to countries or leaders of countries, so they cannot be sold abroad for wine or guns. Any revenues would need to be raised by taxation on domestic consumption of fuels. In fact, a carbon tax would add absolutely nothing to the instruments that countries have today. The only difference would be the international approval of carbon taxes, which probably adds little to their acceptability in corrupt countries. The dangers of quantity as compared to price approaches have been shown frequently when quotas are compared to tariffs in international trade interventions.
Conclusion
The coming years will undoubtedly witness intensive negotiations on global warming as concerns mount and the quantitative approach under the Kyoto Protocol makes little difference. As policy makers search for more effective and efficient ways to slow the trends, they should consider the fact that harmonized environmental taxes on carbon are powerful tools for coordinating policies and slowing climate change.
http://www.fpif.org/fpiftxt/3167
From an excellent article proposing that tax policy is a more effective means of controlling carbon emissions than are carbon emissions trading systems:
After Kyoto: Alternative Mechanisms to Control Global Warming
William D. Nordhaus | March 27, 2006
Abstract: This paper reviews different approaches to the political and economic control of global public goods like global warming. It compares quantity-oriented control mechanisms like the Kyoto Protocol with price-type control mechanisms such as internationally harmonized carbon taxes. The pros and cons of the two approaches are compared, focusing on such issues as performance under conditions of uncertainty, volatility of the induced carbon prices, the excess burden of taxation and regulation, accounting finagling, corruption, and implementation. Although virtually all policies involving economic global public goods rely upon quantitative approaches, price-type approaches are likely to be more effective and more efficient.
A price approach gives less room for corruption because it does not create artificial scarcities and monopolies. There are no permits handed over to countries or leaders of countries, so they cannot be sold abroad for wine or guns. Any revenues would need to be raised by taxation on domestic consumption of fuels. In fact, a carbon tax would add absolutely nothing to the instruments that countries have today. The only difference would be the international approval of carbon taxes, which probably adds little to their acceptability in corrupt countries. The dangers of quantity as compared to price approaches have been shown frequently when quotas are compared to tariffs in international trade interventions.
Conclusion
The coming years will undoubtedly witness intensive negotiations on global warming as concerns mount and the quantitative approach under the Kyoto Protocol makes little difference. As policy makers search for more effective and efficient ways to slow the trends, they should consider the fact that harmonized environmental taxes on carbon are powerful tools for coordinating policies and slowing climate change.
http://www.fpif.org/fpiftxt/3167
Access: PublicTagged with: sustainability, environment, global warming, climate change, tax policy, pollution rights, idealism
