Blogs, environment, politics, technology and the kitchen link, often all in one post!

Friday, March 23, 2007

A big platform needs a big hole in the ground

Recently recommended Techcrunch transcribes a quote from the putative YouTube competitor from big media:
Chernin: this will be the largest advertising platform on earth.

Kitchen Linker's comment: A big platform is built on a big hole in the ground. This YouTube competitor is the hole in the ground.

European commissioning smarts

Greg Mankiw points out that the European Commission is considering doing the right thing for the environment and its torpid economy:
The Commission will on 28 March present ideas for “green taxes” to save energy and cut greenhouse gas emissions. It says that such an ‘ecological tax reform’ could increase the bloc’s competitiveness by shifting the burden away from labour taxes.

Could the EU lead down the smart path?

Convenient Truth

Jonathan Rausch makes the obvious point that a carbon tax is the best way to deal with global warming and has good side effects:
Just as conveniently, the most efficient way to get started is also the simplest, albeit not the easiest politically: tax carbon emissions. "At around $30 per ton of CO2 over a 25-year horizon, experts seem to think this is the kind of price that will encourage the kind of technologies that are necessary," says Billy Pizer, an environmental economist at Resources for the Future, a Washington think tank. That would translate into an additional 27 cents or so on a gallon of gasoline and about a 20 percent increase in residential electricity bills (more like 34 percent for industrial users). Unpleasant, but hardly radical. Perfectly do-able, in fact.

Fortuitously, a carbon tax could also reduce the U.S. budget deficit and the geopolitical leverage of sinister "petrocracies" such as Iran, Russia, and Venezuela. Policy prescriptions don't come any more convenient than that.

Wednesday, March 21, 2007

Blogrollsix: Techcruch

Required reading, circa 2006-7.

Last blogroll addition was very different, the Tax Policy Foundation Tax Policy Blog.

Al Gore's testimony

As reported at Reason, includes:
(2) I believe we should start using the tax code to reduce taxes on production and employment and substitute pollution taxes. We’re discouraging work and encouraging the destruction of the planet’s habitability. We should discourage pollution while encouraging work. Carbon pollution is not currently priced into the marketplace. I internalize air and water and I think that the economic system should too.

Great, but his other nine points consist of a mismash of regulation, prohibition, and subsidy.

Smart people need to advocate the best policy, doing nothing is a false choice (also see Greg Mankiw's criticism of accepting the worst policies by default).

Saturday, March 17, 2007

Doing nothing a false choice

David Friedman comes out against carbon taxes (at least he's an anarchist, so that is a valid policy choice for him, not so for others). But Friedman really just opposes doing anything:
Finally, I suspect that widespread acceptance of the catastrophist view of global warming would result in quite a lot more than carbon taxes. It would provide a new justification for politically motivated interferences in a wide range of human activities. Anyone who questioned such policies would be labelled a denialist, accused of wanting Bangladeshis to drown and African children to starve. Again, look at the ongoing exchanges on Brian's blog.

Hence I conclude that serious efforts to combat global warming would have large costs, costs justified only if there were good reason to be confident that not taking such efforts would have catastrophic effects.
Not doing something sane (i.e., cabon tax) is going to lead to result in other practices Friedman will like much less, for example blunt regulation, crazy subsidies, and politically manipulated cap-and-trade markets -- also far worse than Pigouvian tax, as spelled out by Steven Postrel:
So the final score is: Permits get a moderate edge on political economy/public choice issues; taxes have a big advantage on institutional/governance issues; and taxes deliver a big can of whipass on traditional economic efficiency concerns. So conditional on accepting the weak case for CO2 emissions control, the Pigou people have a strong case against the cap-and-trade brigade. Maybe they should start making it.
Last quote via pointed out by Greg Mankiw.

The Friedman post comes via the NoPigou Club, which has yet to answer the question if not Pigou, then what?

Saturday, March 03, 2007

Taxation six plus times more efficient than regulation

Econbrowser on CAFE standards:
Overall, Jacobsen estimates that a one-mile-per-gallon increase in the required average corporate fuel efficiency would increase the average fuel-efficiency of all new cars sold by 2.5%. However, since most of the older cars would still be on the road, Jacobsen estimates that during the first year, total U.S. gasoline consumption would decline by only 0.8%. He estimates the costs of this 1 mpg tightening of CAFE would be $20 billion in the first year, with these first-year costs shared about equally between U.S. consumers and producers. For comparison, Jacobsen claims that a gasoline tax could accomplish the same first-year effect at an efficiency cost of significantly less than $1 billion.

Over time, the fuel savings from tightening CAFE would of course increase, but even after 10 years, Jacobsen concludes that that a gasoline tax could accomplish the same thing at 1/6 the cost.

That's not even including that gas taxes produce revenue which can be used to reduce horribly inefficient taxes on labor and capital.

For the n'th time Kitchen Linker says Pigou means less planning, more growth, a cleaner environment, nor that OPEC pays part of any gas tax.