Bryan Caplan  

Where the Pigovians Are

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Scott Sumner's not officially in the Pigou Club - and for the record I'm officially not in the club.  Still, in a just world, Scott's words of wisdom would provoke Pigovians to beg him to become their King:
If we set up this entirely rational system of pricing the externalities contributing to global warming, the optimal carbon tax may fall almost to zero.  The reason in one word: geoengineering.  If geoengineering schemes costing $250 million can lower global temperatures by one degree, you'd have companies like Exxon-Mobil building tubes to the heavens in northern Alberta so fast your head would be spinning.  Remember the flip side of taxes of $1,000,000,000,000 per degree of warming is subsidies equally large for technologies that cool the Earth by one degree.  The success of geoengineering would dramatically reduce the benefit from carbon reduction measures.  You say the tubes might not work?  Maybe, but there are lots of other ideas as well.  Believe me, with that sort of subsidy these firms would find a way to get the sulfates up into the stratosphere. [emphasis mine]
 

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COMMENTS (10 to date)
SeanO writes:

A pigovian tax works only if the tax collection is completely seperated from the tax collector and his corrupt baggage. 'Just look at how many dollars have been siphoned away from the tobacco settlement funds in the various states.

I am a firm believer that high energy prices will bring about alternatives. But the unintended consequences of the goverment's reallocation of the assets taken may well be worse than the problems they wish to cure.

q writes:

> The success of geoengineering would dramatically reduce the benefit from carbon reduction measures.

geoengineering worth investigating, certainly, but, given that geoengineering solutions leave the carbon in the atmosphere, we would be left perpetually dependent on them. stop throwing the sulfur into the stratosphere and -- woah! it's venus time.

Eric Johnson writes:

Some rational people open to geoengineering (me) are worried by the fact that sulfates can't address ocean acidification.

Of course there are geoengineering proposals to deal with the ocean too (like this). But adding the ocean issue does make the whole thing harder to pull off. Maybe a little harder, maybe a lot harder - I wouldn't know.

floccina writes:

Q biochar is one geoengineering solution that reduces co2 from the air, there are others.

Greg ransom writes:

And Buchanan would point to shale oil and he 70's and explain how the king wears no clothes of purity and wisdom.

Jorge Landivar writes:

I am not against geoengineering, but I am against trying to make the world colder, right now! Generally look at cold periods in our history and you will see they are very brutal and not at all pleasant. Am I the only one who /LIKES/ CO2 in our atmosphere, and likes global warming.?

Sometimes I feel that way... If I was the Godking of planet earth i'd make the place in terms of climate a lot more like it was during the Holocine Climate Optimum...

It would be great. Better growing conditions for crops, milder winters, etc.

Tim K writes:

Let's hope that government inefficiency and bureaucracy will lead to a dead end on action. But any chance to increase their hold on the economy is surely an attractive proposition for them.
With new research showing that current climate change models have been used to run simulations of the 20th century retrospectively. The models predicted an increase of 1.7-3.4 C rise. The actual rise was 0.6 C. (This was from the supressed NCEE paper for the EPA, http://www.cbsnews.com/blogs/2009/06/26/politics/politicalhotsheet/entry5117890.shtml)
The science of climate change is no where near adequate, the models make assumptions which do not hold, and uses 'grids' to estimate entire global changes. We are putting our economies in the hands of a mediocre predictive science.
Let the free market sort it out when (or if) the effects are apparent, and incentives are real.

Mark Bahner writes:

"Am I the only one who /LIKES/ CO2 in our atmosphere, and likes global warming.?"

It is certainly worth significant time to consider and debate the question: "What is the optimal average temperature of the earth?"

Probably agreement could be achieved pretty quickly that 4+ degrees Celsius cooler than at present or 4+ degrees Celsius warmer than at present would not be optimal.

But I think considerable debate could occur about what is optimal within those boundaries. It would be very surprising to me if the temperature of the Little Ice Age (e.g., the period closest to the beginning of the Industrial Revolution) just happened to be the optimal average temperature of the earth.

scott sumner writes:

The Pigou Club is composed of well-known economists and celebrities like Al Gore. So I don't qualify.

jorge Landivar writes:

@ Mark Bahner

+4 deg C is absolutely positively gigantic for global temperatures. I'm not sure you could do that, doubling the CO2 in the atmosphere.

Anyway, around Alaska during the Holocene Climate Optimum temperatures were about +4C warmer than they are now (globally it was a smaller effect), so I am not too worried.

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