Answering NoPigou in Canada

Mike Moffat has a great article at about.com answering NoPigou in more detail than Kitchen Linker did but with the same thrust and an explanation of how taxation, spending, and regulation actually work in Canada (where NoPigou originates).

Pigou means less planning

NoPigouClub:

But here's Jaccard's big claim: He supports Pigovian taxes because they involve "no role for planners." We'll have more on this untruth in later postings, but let's begin with one question: Who sets the price--i.e. the tax?

and

And then another question: What do we do with the money collected through the Pigovian tax? Let's get the Ministry of the Environment and the Department of Industry...but, hey, no planners, please.

Unless all NoPigouClub members are anarchists, they will admit that taxes need to be collected. The level of energy tax should not be set by the EPA or Commerce Department, but by Congress ... just as Income and other taxes are now set, mostly according to what Congress thinks it can get away with and how much is needed to cover spending minus borrowing. There is no additional planning, just a shift from one sort of taxes to another.

And the shift is better if you care about the environment, the economy, or simply distrust planners.

Why?

1. Taxes on income and capital suppress positive externalities (ex: economic growth).
2. Pigouvian taxes substitute for regulation and prohibition of greenhouse gas and other pollutant emissions.
3. (Redundant, but Kitchen Linker must drive home the point) Without pigouvian taxes, we will continue to have damaging tax on labor and capital AND extremely inefficient and politically determined non-solutions to our environmental problems (ex: the SugarCorn mafia)

Come to grips with reality NoPigou and switch clubs!

65% of economists are pigouvians

Arnold Kling quoting Robert Whaples:

65 percent of economists are members of the Pigou Club--they want to raise taxes on energy.

Kitchen Linker is surprised that percentage isn't even higher.

Pelosi's pigouvian opportunity

SF Chronicle on how fixing the Alternative Minimum Tax, which hits Democratic voters hard, is putting the new Democratic Congress in a tough spot:

But if Democrats impose the pay-go rule, they cannot fix the alternative minimum tax without gutting existing spending programs -- much less creating new ones -- or sharply raising other taxes.

Sounds like a perfect opportunity to swap in a gas tax, which should doubly please environmentalist Democrats.

SugarCorn Mafia

Bring it to justice. James Surowiecki in the New Yorker:

Our current policy is absurd even by Washington standards: Congress is paying billions in subsidies to get us to use more ethanol, while keeping in place tariffs and quotas that guarantee that we’ll use less. And while most of the time tariffs just mean higher prices and reduced competition, in the case of ethanol the negative effects are considerably greater, leaving us saddled with an inferior and less energy-efficient technology and as dependent as ever on oil-producing countries. Because of the ethanol tariffs, we’re imposing taxes on fuel from countries that are friendly to the U.S., but no tax at all on fuel from countries that are among our most vehement opponents. Congressmen justify the barriers to foreign ethanol with talk of “energy security.” But how is the U.S. more secure when it has to import oil from Venezuela rather than ethanol from Brazil? These tariffs are bad economic policy, bad energy policy, and bad foreign policy. Talk about your Domino effect.

Of course ethanol from tropical sugar, not eight times less efficient midwestern corn, could be an important component of reducing greenhouse gas emissions. Time to congress with Congress.

Java and Javascript, free and efficient

Wow, Javascript and now Java, free.

Both are good for the environment, too. Adobe's JS VM is way faster (i.e., more efficient) than the ones that ship with web browsers. And Sun's Java is way fast too. To the extent scripting languages (Python, Ruby, ...) run on the Java VM instead of their own, lots of cycles (i.e., energy/emissions) are saved.

Kitchen Linker lives in interesting and cool times!

Pigou or what? Part III

Mike Moffatt talks sense in the National Post:

High taxes on labour discourage work. High taxes on capital gains discourage saving, investment, and risk taking. High taxes on activities which pollute will encourage consumers to switch to environmentally friendlier alternatives.

Pigou opponents need to respond to this or they're merely blowing hot air.

Green programming: D language

On the subject of efficient programming (machine time/energy/electricity AND programmer), Kitchen Linker wonders why the D programming language hasn't replaced C/C++ AND Java/C#. D is as fast as the former and as easy as the latter and entirely practical.

Green programmers, check out D for your next project.

Pigou or what? Part II

The Mises.org blog joins those criticizing Pigouvian taxation without offering an alternative, thereby buttressing the case for Pigouvian taxes.

Greg Mankiw writes that former Bush speechwriter David Frum and economist Noriel Roubini have joined the Pigou club and that Washington state and the city of Boulder have enacted very weak Pigouvian measures.

Dealing with (climate) change

Thought provoking post by James Annan, not a climate change skeptic: Is (climate) change bad?

Good to think about because change is happening and frankly, dealing with it is more than half the battle at this point.

Pigou or what?

David Masten writes No to Pigou!

He notes many real problems with Pigouvian taxes. Like the NoPigou Club he fails to address the real and far worse alternatives to Pigouvian taxes: regulatory and prohibitionist approaches to externalities and taxation of productive labor and capital.

Do Masten, NoPigou, and other critics of Pigouvian taxes really think energy central planning and income and payroll taxes are preferable to carbon taxes?

p.s. Posner has joined the club.

Rev the Commons

Creative Commons is having a fundraiser and you can contribute just by watching their cool videos and checking out ads tacked onto the videos, a scheme cooked up by Revver. Sez Boing Boing.

Remember the Kitchen use rules?

Be frugal to be green?

Tyler Cowen in Slate on "Can You Really Save the Planet at the Dinner Table?":

Pollan makes much of the energy costs incurred by the long food supply chains of American grocery stores. It may look like we are eating Chilean grapes, he argues, but in fact, once we consider transportation costs, we are guzzling petroleum. Economics offers a clearer view of what is going on. We do need to save energy, but it is difficult for a central planner (or for that matter a food commentator) to identify what is waste, relative to the costs of eliminating it. We should rely on higher market prices, if need be with the assistance of taxes, to increase conservation. If fuel becomes more expensive, we'll likely adopt peak-load energy pricing, and drivers may scrap their SUVs for hybrids. But we probably won't plant grapes in our backyards. While we must conserve energy, we cut back where it makes the most sense; grape-shipping is not the place to start. Global trade does involve transportation costs, but it also puts food production where it is cheapest, again saving energy by economizing on costs of labor, irrigation, and fertilization, relative to the alternatives.

So, is simply being frugal the best way to be friendly to the environment, at first approximation (which may be the most accurate we can be)? There's some discussion at Marginal Revolution.