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Originally Posted by Tolanin  why would we ever tax co2 when global warming doesnt even matter? |
This is the beauty of it: It doesn't matter at all for investment purposes.
There's a trend amongst companies to go green, because they know exactly how much it'll cost them and once installed the upkeep cost is almost nothing. Contrast this to oil which is a big uncertainty. Oil is a limited resource, even if we're good for another 50 years without a massive price bump, it'll still run out eventually. The key is to prepare early, because sitting it out and freeloading of others' research tends to not work. If you look at every major computer hardware developer, they're almost exclusively located in the US. Even though how modern computers work isn't a secret, you couldn't just start up the next Intel in Germany - the people who excel at designing them want to do it in the US. Likewise the next google, youtube, myspace, etc won't be coming from Europe, for similar reasons.
So you have two ways to encourage research: let the government fund it, or make buying alternative energy technology more attractive. Usually a combination of this needs to be done. Alternative energy can be made more attractive by offering tax deductions for buying them as well as making oil more expensive. (again, doing both a little is best)
If you can create a demand for these technologies, companies will start up to try and meet it. The money they earn will then also fund product improvements, which will make the technology more competitive down the road - the market at work.
As for taxing CO2 emissions, it's important to keep it budget neutral. Meaning any revenue generated from those taxes goes back in equal shares to taxpayers. So if you pollute less than the average, you'll get back more than what you paid in the CO2 taxes - if you pollute more, you get back less.
Pollution is the best example of market failure, so trying to solve the issue without regulation is certain to fail.
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Originally Posted by chaos I don't have faith that the economy will just suddenly adapt the moment the national gas average hits 5 bucks a gallon. |
You're absolutely right, it won't. It's impossible to adapt so quickly without serious damage, which is why it's important to start working on it long before it becomes a problem. The solution will probably be different for every location and industry, so it's best to let the market and local and state government figure it out and just force them to start doing so now. Maybe it'd make sense to have a commuter train from the suburbs to the city - or even cooler a monorail.
Although the primary incentive would still be to just encourage more fuel efficient cars. If you go from 30MPG to 60MPG that halves your gas bill. As heating gets more expensive, better isolation of houses will become more of an issue as well. There are some existing standards for construction that save home owners a lot over time, but people are bad comparing upfront cost to longterm savings so it doesn't have the 100% adaptation rate it should have. One solution there is to mandate a higher standard by law or simply let people figure it out down the road as prices go up and up.
Once alternative energy generation is more widespread, we can look at other ways to fuel cars. Doesn't matter if it takes more power to create the new gas than we get from burning it, as long as the power used comes from renewable energy the supply will not be limited and likely end up much cheaper anyway.
