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Nobel prize-winning economics of climate change is misleading and dangerous – here’s why

Nobel prize-winning economics of climate change is misleading and dangerous – here’s why

While climate scientists warn that climate change could be catastrophic, economists such as 2018 Nobel prize winner William Nordhaus assert that it will be nowhere near as damaging. In a 2018 paper published after he was awarded the prize, Nordhaus claimed that 3°C of warming would reduce global GDP by just 2.1%, compared to what it would be in the total absence of climate change. Even a 6°C increase in global temperature, he claimed, would reduce GDP by just 8.5%.

If you find reassurance in those mild estimates of damage, be warned. In a newly published paper, I have demonstrated that the data on which these estimates are based relies upon seriously flawed assumptions.

If you find reassurance in those mild estimates of damage, be warned. In a newly published paper, I have demonstrated that the data on which these estimates are based relies upon seriously flawed assumptions.

Nordhaus’s celebrated work, which, according to the Nobel committee, has “brought us considerably closer to answering the question of how we can achieve sustained and sustainable global economic growth”, gives governments a reason to give climate change a low priority.

His estimates imply that the costs of addressing climate change exceed the benefits until global warming reaches 4°C, and that a mild carbon tax will be sufficient to stabilise temperatures at this level at an overall cost of less than 4% of GDP in 120 year’s time. Unfortunately, these numbers are based on empirical estimates that are not merely wrong, but irrelevant.

Nordhaus (and about 20 like-minded economists) used two main methods to derive sanguine estimates of the economic consequences of climate change: the “enumerative method” and the “statistical method”. But my research shows neither stand up to scrutiny.

The ‘enumerative method’

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Economists: Greta Thunberg’s Ideal World Would Result In A “Human Tragedy Of Disastrous Proportions”

Economists: Greta Thunberg’s Ideal World Would Result In A “Human Tragedy Of Disastrous Proportions”

Whether you were inspired by Greta Thunberg’s tearful UN speech…

…. or merely thought it was the year’s greatest meme, in which an indoctrinated, emotionally frail child is being preyed upon by adults with a far bigger and more lucrative agenda, you probably do not realize how much your everyday life could change if the world were to follow the advice of climate activists to attain Thunberg’s ecological utopia.

To provide some perspective on that question, several economists spoke to RT to share their thoughts out how the proposed changes could affect the global economy and the daily lives of people around the world.

Fossil fuels

The first thing that comes to mind to stop reported global warming is to impose a carbon tax and divest from the fossil fuel industry, as this sector is one of the major contributors to greenhouse gas emissions. However, “a carbon tax and/or forced divestiture from fossil fuels would ultimately make the kind of cheap, varied and efficient transportation that people around the world are accustomed to extremely expensive and more limited,” warns Peter C. Earle, an economist at the American Institute for Economic Research.

Apart from public transport, cars could also become less accessible to most individuals. So if you drive to work without a second thought, the carbon tax could suddenly double or triple the cost of your daily trip, leaving tens of millions of people cut off from their livelihoods, according to the analyst.

Reducing greenhouse gas emissions can have much more serious economic implications, Dr Pierre Noël, Senior Fellow in Economic and Energy Security at the International Institute for Strategic Studies (IISS), told RT.

 …click on the above link to read the rest of the article…

Carbon tax fine print

Carbon tax fine print 

If the Paris agreement target of keeping global warming to well below 2°C is to be met, it is generally agreed that global emissions of carbon dioxide (CO2) from fossil fuels and industry need to peak and then decline very soon–meaning before the end of next year, or very shortly after.

A recent study published in Nature Climate Change sheds light on how 18 countries have managed to achieve this feat: effectively reducing their emissions of CO2 over the period 2005 to 2015. The figure below shows emissions of CO2 from fossil fuels for the 18 countries in the ‘peak and decline’ group.

Change in CO2 emissions from fossil fuel combustion for the 18 countries in the peak and decline group [1]

In spite of this positive performance by 18 countries representing almost 30 percent of total CO2 emissions, global emissions of energy-related CO2 rose in 2017– after a sluggish period from 2014 to 2016 when there was hope that emissions may have flatlined. That hasn’t happened, and estimates for 2018 indicate that CO2 emissions are continuing to rise. 

It’s instructive to look more closely at how this group of ‘peak and decline’ countries have managed to reduce their CO2 emissions over the decade through to 2015. Are there lessons to be learned?

 …click on the above link to read the rest of the article…

How A Carbon Tax Would Be Implemented

How A Carbon Tax Would Be Implemented


There are no solutions to complex problems – except when the problem becomes so complex it must have a simple solution.

That is the paradox thrown up by global warming and the shattering report of the U.N. Intergovernmental Panel on Climate Change. The report cries out for dramatic, simple remediation of the amount of carbon pumped into the atmosphere every day by industrial society.

The complex solution is a case-by-case, country-by-country, industry-by-industry, polluter-by-polluter remediation: power plants, automobiles, trucks, trains, ships, aircraft and manufacturers.

The simple solution to this complex problem is to tax carbon emissions: a carbon tax. Make no mistake, it would be tough. Some industries would bear the brunt and their customers would carry the burden — initially a light burden growing to a heavier one.

The obvious place to start is with electric utilities. Those burning coal would get the heaviest penalty. Those burning natural gas – the fuel favored by its low price and abundance in the nation — some penalty, but not as heavy.

Nuclear, which is having a hard time in the marketplace at present, would be the big winner of the central station technologies, and solar and wind would continue to be favored.

When it comes to transportation and farming, the pain of carbon taxation rises. The automobile user has choices like a smaller car, an electric car or simply less driving. But heavy transportation, using diesel or kerosene, is where the pain will be felt: buses, trucks, tractors, trains, aircraft and ships. The burden here is direct and would push up prices to consumers quickly.

Jets are a particularly vexing problem. Although they represent about 3.5 percent of pollution, it is the altitude at which they operate (above 30,000 feet) that makes them particularly lethal greenhouse gas emitters.

…click on the above link to read the rest of the article…

Canada Global Warming Tax up to $1,000 per Household?


I have been warning that Global Warming is profitable for governments. They paid these academics $1 billion to come up with dire forecasts that ignore nature, cycles, and history, all to justify taxing people that will never actually impact anything nor balance their budgets. Canadian households in Alberta, Saskatchewan and Nova Scotia will be hit with more than $1,000 of carbon tax per year, while those in British Columbia, Quebec and Manitoba will pay around $650. In Canada, where it is often very cold, up to 10% of someone’s income is already going to cover energy costs. Politicians have discovered a new source of revenue and they are NOT about to listen to any evidence to the contrary. At the bug environmental conference in Paris, they outright DENIED any right of any speaker to put on a contrary view. This is all despite the fact that over 30,000 people have signed a petition against Global Warming, which has been ignored as usual. Any opposition is simply ignored or silenced. Why not, there is too much money on the table for governments to just ignore. Guess it will definitely now be cheaper to retire to the Caribbean. You won’t have to pay $1,000 a year to heat your home.

Oil Companies and Lobbyists Say They’re Ready To Solve Climate Change. Check The Fine Print.

Oil Companies and Lobbyists Say They’re Ready To Solve Climate Change. Check The Fine Print.

On Wednesday, former senators Trent Lott (R-MS) and John Breaux (D-LA) announced, with a big public relations blitz, a new campaign, Americans for Carbon Dividends, to address the threat of climate change. The effort is being heralded as a breakthrough by some because it is endorsed by big oil and gas companies Exxon Mobil, Royal Dutch Shell, BP, and Total, and it calls for a $40-a-ton carbon tax, incurred at the source of emissions, with revenues to be returned to citizens as dividends, perhaps $2000 a year for each American family of four.

A Lott-Breaux op-ed in the New York Times presents the deal as a compelling bipartisan solution and touts the support not only of oil companies but also the non-profit Nature Conservancy. The campaign website lists a bunch of newspaper and environmental group endorsements for the underlying $40 carbon tax concept, which was proposed last year under the banner of a group called the Climate Leadership Council, launched by Republican former secretaries of state James Baker and George Shultz and other conservatives, and now including oil companies and various establishment Democrats and Republicans.

The website of the new, affiliated Americans for Carbon Dividends shows its own campaign leadership roster that includes not only Republican Lott and Democrat Breaux, but also former George W. Bush adviser Karen Hughes and Mark McKinnon, plus Bill Clinton White House press secretary Joe Lockhart.

So it sounds like Democrats and Republicans alike, and even some environmental groups, are supportive, the oil companies are at last willing to pay for their dangerous carbon emissions, citizens will get a dividend, and everyone will be happy.

But when one examines the fine print of the deal — and the financial benefits flowing to some of the people touting it — the effort looks much less utopian.

…click on the above link to read the rest of the article…

A carbon tax is bad for Alberta

A carbon tax is bad for Alberta

Rachel-Notley-Sworn-In-2015Yesterday, Alberta Premier Rachel Notley asserted that Canada was “absolutely” closer to a new pipeline due to her province’s new carbon tax. According to the premier, “Alberta is not the Alberta that they thought of a year ago, or two years ago, or three years ago. After years of inaction from the previous government, Alberta is now at the forefront in the fight against climate change.”

How does a carbon tax moderate climate change andlead to the construction of one or more proposed pipelines linking oil extraction activities in Fort McMurray to the Atlantic Ocean, the northern coast of British Columbia and an export terminal near Vancouver? An understanding of economics helps to answer that question.

The new carbon tax takes effect on January 1, 2017. The initial tax will be $20 per tonne, rising to $30 in 2018. According to the provincial government, the carbon tax is the key tool to help pay for a more diversified economy. Conspicuous by its absence is an explanation of how planned wealth redistribution improves the delivery of energy, the consumption of which the government is actively trying to discourage in view of mitigating global temperature changes.

Carbon is a chemical element common to all known life on our plant. It is non-sentient and does not experience gain or loss. Carbon does not and cannot pay taxes. Only individuals can be compelled to do so. The individuals to be dispossessed of their earnings with government’s new policy, and at what rate, can be clearly identified. With few exceptions, they include consumers in Alberta of diesel (5.35¢/litre), gasoline (4.49¢/litre), natural gas ($1.011/GJ) and propane (3.08¢/litre). Cutting through politician-speak: Taxing carbon means taxing people.

…click on the above link to read the rest of the article…

Changing Everything

Changing Everything

Among climate change activists, solutions usually center on a transition to renewable energy. There may be differences over whether this would be best accomplished by a carbon tax, bigger subsidies for wind and solar power, divestment from fossil fuel companies, massive demonstrations, legislative fiat or some other strategy, but the goal is generally the same: replace dirty fossil fuels with clean renewable energy. Such a transition is often given a significance that goes well beyond its immediate impact on greenhouse gas emissions: it would somehow make our exploitative relationship to Nature more environmentally sound, our relationship to each other more socially equitable. In part this is because the fossil fuel corporations – symbolized by the villainous Koch brothers – will be a relic of the past, replaced by ‘green’ corporations and entrepreneurs that display none of their predecessors’ ruthlessness and greed.

Maybe, but I have my doubts. Here in Vermont, for example, a renewable energy conference last year was titled, “Creating Prosperity and Opportunity Confronting Climate Change”. The event attracted venture capitalists, asset management companies, lawyers that represent renewable energy developers, and even a “brandthropologist” offering advice on “how to evolve Brand Vermont” in light of the climate crisis. The keynote speaker was Jigar Shah, author of Creating Climate Wealth, who pumped up the assembled crowd by telling them that switching to renewables “represents the largest wealth creation opportunity of our generation.” He added that government has a role in making that opportunity real: “policies that incentivize resource efficiency can mean scalable profits for businesses.”[1] If Shah is correct, the profit motive ­– in less polite company it might be called ‘greed’ – will still be around in a renewable energy future.

…click on the above link to read the rest of the article…

Forget the Praise: BC’s Carbon Tax Is a Failure

Forget the Praise: BC’s Carbon Tax Is a Failure

Higher emissions, slow growth, regressive taxation. Sorry, what’s to celebrate?

Premier Clark at GLOBE 2016

‘We think in British Columbia a carbon tax is a really successful way to go,’ BC’s premier said last year. The only problem is it doesn’t work. Photo of Premier Clark at GLOBE 2016 by Mychaylo Prystupa.

“Let’s cut the crap about B.C.’s carbon tax. The impact of the carbon tax has been overstated by people who love carbon taxes, and it’s annoying that the tax has generated so much uncritical praise.” — Marc Lee, pro-carbon tax economist.

To hear it from Premier Christy Clark, our province is a beacon of trailblazing perfection in the battle against climate change.

And the crowning glory of B.C.’s efforts is the carbon tax introduced in 2008. The tax now adds 6.67 cents a litre to the price of gasoline and imposes costs on other fuels for residents and industries.

“We think in British Columbia a carbon tax is a really successful way to go,” Clark said in November 2015 before jetting to the Paris climate change talks.

Cue the applause, from the New York Times to the Organization for Economic Co-operation and Development to new group Smart Prosperity that launched last week in Vancouver, with none other than Prime Minister Justin Trudeau to validate Clark’s claims that you can price carbon and reduce greenhouse gas emissions — without hurting your economy.

The only problem is that B.C.’s carbon tax doesn’t work.

Marc Lee, senior economist for the Canadian Centre for Policy Alternatives in the province, likes carbon taxes. But “don’t believe the hype on B.C.’s carbon tax,” he says.

“The reality is that since 2010, B.C.’s GHG emissions have increased every year; as of 2013 they are up 4.3 per cent above 2010 levels,” Lee writes on the CCPA website.

Even on a per capita basis, emissions have risen.

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The problem with a carbon tax in Canada

The problem with a carbon tax in Canada

Catherine_McKennaLast week, Environment Minister Catherine McKenna indicated the federal government has not yet determined the national minimum carbon price which is part of its climate strategy. McKenna rejects any assertions the current economic environment is not the time to impose carbon pricing.

Frédéric Bastiat (1850) forewarned of demagogues like McKenna who demand the use of force to substitute their own inclinations for those of the human race. To seek support for her position, Minister McKenna is appealing to popular desires and prejudices using the most benign language conceivable. Using economic principles to unpack her message reveals its manipulative and sinister nature.

For decades, buyers and sellers have been peacefully discovering mutually agreeable prices for pieces of pure, crystalized carbon, more commonly known as diamonds.  If she chose, the Minister could walk in to any reputable jewelry store and survey the asking prices of diamonds which relate to the weight, shape, colour and clarity of the crystalized carbon. But this is not the carbon she has in mind that requires a national minimum price.

Instead the focus is carbon dioxide, a gas produced by all aerobic organisms when they metabolize carbohydrate and lipids to produce energy by respiration. It is also produced as organic materials decay, as sugars ferment in bread, beer and wine making and though the combustion of wood and fossil fuels such as coal, peat, petroleum and natural gas.

Carbon dioxide is a versatile industrial material. It is used as an inert gas in welding and fire extinguishers, as a pressurizing gas in air guns and oil recovery. It is added to drinking water and carbonated beverages including beer and champagne to add sparkle. As a liquid it is used a solvent in decaffeination of coffee and as dehydration agent. In solid form it is used as a refrigerant, a solvent and an abrasive.

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Oil and Gas Industry Publicly Supports Climate Action While Secretly Subverting Process, New Analysis Shows

A new report recently released by InfluenceMap shows a number of oil and gas companies publicly throwing their support behind climate initiatives are simultaneously obstructing those same efforts through lobbying activities.

The report, Big Oil and the Obstruction of Climate Regulations, comes on the heels of the Oil and Gas Climate Initiative, a list of climate measures released by the CEOs of 10 major oil and gas companies including BP, Shell, Statoil and Total.

According to InfluenceMap the initiative is an attempt by leading energy companies to “improve their image in the face of longstanding criticism of their business practices ahead of UN COP21 climate talks in Paris.”

The big European companies behind the OGCI…will come under ever greater scrutiny, as the distance between the companies’ professed positions and the realities of the lobbying actions of their trade bodies grows ever starker,” InfluenceMap stated in a press release.

The group’s analysis shows a major disconnect between climate rhetoric and action among three key policy strands: carbon tax, emissions trading and greenhouse has emissions regulations.

The findings show companies like Shell and Total publicly support carbon pricing while at the same time support trade organizations that systematically obstruct the legislation’s implementation.

Oil majors BP, Chevron and Exxon also support these lobby groups but spend less time publicly supporting a price on carbon.

Dylan Tanner, executive director of InfluenceMap, said industry is becoming more cautious of public oversight and as a result, has become subtler with its efforts to subvert climate progress.

Companies like Shell appear to have shifted their direct opposition to climate legislation to certain key trade associations in the wake of increasing scrutiny,” Tanner said.

Investors and engagers need to be aware that these powerful energy and chemicals-sector trade bodies are financed by, and act on the instruction of, their key members and should thus be regarded as extensions of such corporate-member activity and positions.”

…click on the above link to read the rest of the article…


Will Washington state have the nation’s first carbon tax?

Will Washington state have the nation’s first carbon tax?

Yoram Bauman is the world’s only “stand-up economist.” He makes his living poking fun at economics and economists. But he’s dead serious about fighting climate change, and he’s the intellectual force behind a climate-related initiative that seems likely to appear on Washington state’s November 2016 ballot.

If voters approve the measure, dubbed Initiative 732, it would implement the first carbon tax in the nation. The purpose would be to motivate households and businesses to cut down on the burning of fossil fuels, the major source of man-made emissions of carbon dioxide, the main greenhouse gas. By raising the price of fossil fuels it would encourage conservation and efficiency and the substitution of low-carbon and carbon-free sources of energy by making these energy sources more cost-competitive.

The organization pushing the initiative is Carbon Washington. The principle behind the proposal is simple: Raise taxes on what you want less of and lower taxes on what you want more of.

In this case, the proposal taxes carbon emissions at a rate of $25 per metric ton. The tax would be phased in over two years and increase each year after that by 3.5 percent plus the rate of inflation. The proposal lowers the sales tax by one full percentage point (from 6.5 percent to 5.5 percent) and provides a rebate to poor families of up to $1,500 to lessen the burden of the carbon tax on their limited incomes. Finally, it virtually wipes out the so-called business and occupation tax on manufacturers in the state. For manufacturers–which tend to be more energy-intensive than other types of businesses–that tax falls from 0.44 percent of gross business receipts to 0.001 percent.

…click on the above link to read the rest of the article…




Oil industry pushing for carbon tax in Alberta

Oil industry pushing for carbon tax in Alberta

But if heavy emitters are going to pay, they want consumers to share the burden

The biggest players in Canada’s oil and gas industry are urging Alberta’s government to step up its environmental policies and introduce a carbon tax.

Alberta already has carbon pricing, but the program is limited and it will expire in the next few months.

Suncor CEO Steve Williams told a crowd in downtown Calgary on Friday that change is needed in Alberta to improve Canada’s global reputation.

“We’re trying to move Canada to a position of leadership, that’s not how we are viewed around the world at the moment. We are viewed to be quite the opposite,” said Williams.

Suncor, along with fellow Canadian energy company Cenovus, says the time is right for Alberta to address its environmental policies. But they also say if the province adopts a carbon tax, it should be broad based and apply to everyone.

That includes consumers. The idea is that industry will pay a carbon tax, but so too will the average person. That would include having to pay extra at the pumps and on their natural gas and electricity utility bills.

“Absolutely,” said Williams. “A realization by the consumer is really important because if you want energy efficiency, if you want people to change their behaviours and affect the demand side, you have to get to those users.”

Alberta’s next premier, Rachel Notley, will be sworn in this weekend. She’s already facing pressure to address the province’s carbon emissions. Alberta produces 36 per cent of Canada’s total emissions.

…click on the above link to read the rest of the article…


Australian emissions set to soar: new report shows carbontax was working | Climate Citizen

Australian emissions set to soar: new report shows carbontax was working | Climate Citizen.

Just two days before Christmas Federal Environment Minister Greg Hunt released the National Greenhouse Gas Inventory June quarter update report which shows that Labor’s Carbon pricing, abolished in July 2014, was being highly effective at reducing emissions, especially from the electricity generating sector.

The Abbott Government wants to bury this story, hence it’s release right before Christmas. Carbon tax abolition was, after all, Prime Minister Tony Abbott’s greatest achievement as Minister for Women, as we were told.

Despite the timing, there was mainstream coverage by the Sydney Morning Herald and in the Guardian, but the details are easily forgotten in the pre-christmas activity and celebrations by most people.

Reading the Latest data in the National Greenhouse Gas Inventory indicates that in the 2013-2014 year to June 2014 (when the carbon tax was in force) greenhouse gas emissions for the energy – electricity sector were reduced by 4 per cent compared to 2012-2013. The rate of reduction had also accelerated from the previous year.

…click on the above link to read the rest of the article…

Polluting Is Getting Expensive in Europe Again: Carbon & Climate – Bloomberg

Polluting Is Getting Expensive in Europe Again: Carbon & Climate – Bloomberg.

The surge in European carbon permit prices may just be beginning.

The price of emission rights will rise 62 percent by June 30, according to the median of 16 trader and analyst estimates compiled by Bloomberg. UBS Group AG says costs may more than double in 2015. Carbon already jumped 44 percent this year, while the 22-member Bloomberg Commodities Index (BCOM) slid 14 percent.

The 28-nation European Union is tightening supply in the 40 billion-euro ($50 billion) emissions market after a glut caused prices to collapse to levels that don’t deter the burning of coal, the most polluting fuel, data compiled by Bloomberg show. Lawmakers want to spur more growth in renewable energy through the first permanent changes to the 10-year-old system.

“Because most governments selling allowances have a vested interest in higher prices, it will happen,” Louis Redshaw, a former head of carbon at Barclays Plc and founder of Redshaw Advisors Ltd., which buys and sells permits on behalf of factories, said Dec. 16 in London. “Painful” price swings are probable, he said.

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