There is a lot of talk right now of imposing a carbon tax to limit global warming.
Europe is taking the lead, creating an emission control scheme airlines will have to join by 2011. But there is increased talk of such a tax here.
There is a better solution. It’s practical and, more important, it could win political support. It lacks that dreaded "t" word that sets voters’ teeth on edge.
Set a minimum price of, say, $70 per oil barrel equivalent, for all
energy in this country. That means oil companies and natural gas
companies get an enormous short-term windfall, which should bring them
on board. If you want to change the tax laws in other ways to capture
those windfalls, that’s another argument.
But look what you’ve done now. You have guaranteed all alternative
energy producers a market for their product. If someone has a scheme to
provide oil from coal sands, which costs $55/barrel, they can get
funding. At the same time if someone has a scheme to build wind farms
or turbines under the sea or new types of solar arrays, they can also
get funding. Because they can see a profit.
Only after supplies become plentiful do you then need to make choices
between hydrocarbons and other energy forms. But that day will come
quickly. Because once businesses and consumers know they’re going to
pay $70/barrel or its equvalent for all forms of energy they’re going
to invest in using less of it. They will buy the smaller cars, the
more-efficient motors, the extra layers of insulation, the lower-cost
water heaters. Once you have a floor price for energy, demand will go
down even while economic growth goes up.
And then, in a time of energy plenty, you can make your choice to
support non-hydrocarbon energy. You might offer them a lower floor
price, say $60/barrel equivalent. This will stimulate demand for those
forms of energy and leave the higher-priced hydrocarbons with lower
market shares. Funding will then flow to hydrogen, away from
hydrocarbons, as it should and as it must.
You’re also, in that case, developing new forms of energy technology
for export. We can turn Arizona or even Hawaii into net energy
exporters with the right incentives. And a market-based approach to
energy change is going to win a broad consensus of support. It’s going
to give business a road map they can follow to greater profits, give
the U.S. a way to export its way out of its current financial bind, and
lead the world by example.
Price floors. Not carbon taxes. It’s the American way.
The price floor for energy is as dumb as any anti-market idea now. But it will be a great idea that I will wholeheartedly support when you’re on Social Security and no longer able to earn significant additional income.
The price floor for energy is as dumb as any anti-market idea now. But it will be a great idea that I will wholeheartedly support when you’re on Social Security and no longer able to earn significant additional income.
Your’s is an overly convoluted process. Alternative fuels (at least good ones) are not inherently more expensive to produce. It is the lack of infrastructure that is the problem. If you raise the price of everything, with the goal reducing consumption, then the ratios stay the same. The only way the alternative infrastructure gets built is if fossil fuels run out or some outside force steps in, For example, if the Gates Foundation invested $10B in alternative fuel infrastructure usage would increase dramatically and the cost/unit would drop dramatically due to economies of scale. Replace the Gates Foundation with the Federal Government and the effect is the same. Imagine if we threw Iraq War type money at this problem . . .
Your’s is an overly convoluted process. Alternative fuels (at least good ones) are not inherently more expensive to produce. It is the lack of infrastructure that is the problem. If you raise the price of everything, with the goal reducing consumption, then the ratios stay the same. The only way the alternative infrastructure gets built is if fossil fuels run out or some outside force steps in, For example, if the Gates Foundation invested $10B in alternative fuel infrastructure usage would increase dramatically and the cost/unit would drop dramatically due to economies of scale. Replace the Gates Foundation with the Federal Government and the effect is the same. Imagine if we threw Iraq War type money at this problem . . .
The price floor isn’t a bad idea, although you might just make it a tax. Why should the oil companies make more money? ( maybe it should be taxx to make it a 4-letter word ).
I live in Costa Rica and there is a significant tax on fuel which makes our gasoline worth close to $3 per gallon. This is also true in Europe.
Most automobiles in Europe run diesel, which is cheaper and in the new diesel engines less contaminating. Also, considering Peak Oil, these engines can be run on bio-diesel which can be produced at home (just in case).
Here in Costa Rica you don’t see anyone importing gasoline SUVs. Or Hummers! One of the most popular cars is the Hyundai Elantra, circa 1994. Because they are very fuel efficient and parts are inexpensive.
Of course if you could divert the taxx to fund research into alternative energy sources, that would be ideal. But even if it went back to the oil companies in the form of a subsidy, it would still serve the purpose of making fuel more expensive and encourage the use of hybrid cars or alternative energy sources.
The tax should also apply to coal and other energy plants, so that people are encouraged to conserve energy in their homes.
The price floor isn’t a bad idea, although you might just make it a tax. Why should the oil companies make more money? ( maybe it should be taxx to make it a 4-letter word ).
I live in Costa Rica and there is a significant tax on fuel which makes our gasoline worth close to $3 per gallon. This is also true in Europe.
Most automobiles in Europe run diesel, which is cheaper and in the new diesel engines less contaminating. Also, considering Peak Oil, these engines can be run on bio-diesel which can be produced at home (just in case).
Here in Costa Rica you don’t see anyone importing gasoline SUVs. Or Hummers! One of the most popular cars is the Hyundai Elantra, circa 1994. Because they are very fuel efficient and parts are inexpensive.
Of course if you could divert the taxx to fund research into alternative energy sources, that would be ideal. But even if it went back to the oil companies in the form of a subsidy, it would still serve the purpose of making fuel more expensive and encourage the use of hybrid cars or alternative energy sources.
The tax should also apply to coal and other energy plants, so that people are encouraged to conserve energy in their homes.
Last Blogroll of 2006!
As I eagerly await the kickoff of the Sun Bowl (Mizzou vs Oregon State, 1pm CST, CBS), I figured I had more than enough time to crank out my first blogroll post in a while. Hope everybody had a lovely Christmas holiday season…now it’s on to the blo…
Thanks for the fantastic post! This information is really good and thanks a ton for sharing it 🙂 I m looking forward desperately for the next post of yours..
Thanks for the fantastic post! This information is really good and thanks a ton for sharing it 🙂 I m looking forward desperately for the next post of yours..