What A Real Global Warming Insurance Policy Would Look Like

It is frustrating to see the absolutely awful Waxman-Markey bill creeping through Congress.  Not only will it do almost nothing measurable to world temperatures, but it would impose large costs on the economy and is full of pork and giveaways to favored businesses and constituencies.

It didn’t have to be that way.   I think readers know my position on global warming science, but the elevator version is this:  Increasing atmospheric concentrations of CO2 will almost certainly warm the Earth — absent feedback effects, most scientists agree it will warm the Earth about a degree C by the year 2100.  What creates the catastrophe, with warming of 5 degrees or more, are hypothesized positive feedbacks in the climate.  This second theory of strongly net positive feedback in climate is poorly proven, and in fact evidence exists the sign may not even be positive.  As a result, I believe warming from man’s Co2 will be small and manageable, and may even been unnoticeable in the background noise of natural variations.

I get asked all the time – “what if you are wrong?  What if the climate is, unlike nearly every other long-term stable natural process, dominated by strong positive feedbacks?  You buy insurance on your car, won’t you buy insurance on the earth?”

Why, yes, I answer, I do buy insurance on my car.  But I don’t pay $20,000 a year for a policy with a $10,000 deductible on a car worth $11,000.  That is Waxman-Markey.

In fact, there is a plan, proposed by many folks including myself and even at least one Congressman, that would act as a low-cost insurance policy.  It took 1000+ pages to explain the carbon trading system in Waxman-Markey– I can explain this plan in two sentences:  Institute a federal carbon excise tax on fuels whose rate increases with the carbon content per btu of the fuel.  All projected revenues of this carbon tax shall be offset with an equivalent reduction in payroll (social security) taxes. No exemptions, offsets, exceptions, special rates, etc.  Everyone gets the same fuel tax rate, everyone gets the same payroll tax rate cut.

Here are some of the advantages:

  • Dead-easy to administer.  The government overhead to manage an excise tax would probably be shockingly large to any sane business person, but it is at least two orders of magnitude less than trying to administer a cap and trade system.  Just compare the BOE to CARB in California.
  • Low cost to the economy.  This plan may hurt the economy or may even boost it, but either effect is negligible compared to the cost of Waxman-Markey.  Politically it would fly well, as most folks would accept a trade of increasing the cost of fuel while reducing the cost of employment.
  • Replaces one regressive (or at least not progressive) tax with a different one.  In net should not increase or decrease how progressive or regressive the tax code is.
  • Does not add any onerous carbon tracking or reporting to businesses

Here are why politicians will never pass this plan:

  • They like taxes that they don’t have to call taxes.  Take Waxman-Markey — supporters still insist it is not a tax.  This is grossly disingenuous.  Either it raises the cost of electricity and fuel or it does not.  If it does not, it has absolutely no benefits on Co2 production.  If it does, then it is a tax.
  • The whole point is to be able to throw favors at powerful campaign supporters.  A carbon tax leaves little room for this.  A cap and trade bill is a Disneyland for lobbyists.

Here are three problems, which are minor compared to those of Waxman-Market:

  • We don’t know what the right tax rate is.  But almost any rate would have more benefit, dollar for dollar, than Waxman-Market.  And if we get it wrong, it can always be changed.  And it we get it too high, the impacts are minimized because that results in a higher tax cut in employment taxes.
  • Imports won’t be subject to the tax.  I would support just ignoring this problem, at least at first.  We don’t worry about changing import duties based on any of our other taxes, and again this will affect the mix but likely not the overall volumes by much
  • Making the government dependent on a declining revenue source.  This is probably the biggest problem — if the tax is successful, then the revenue source for the government dries up.  This is the problem with sin taxes in general, and why we find the odd situation of states sometimes doing things that promote cigarette sales because they can’t afford declining cigarette taxes, the decline in which was caused by the state’s efforts to tax and reduce cigarette use.

Postscript: The Meyer Energy Plan Proposal of 2007 actually had 3 planks:

  1. large federal carbon tax, offset by reduction in income and/or payroll taxes
  2. streamlined program for licensing new nuclear reactors
  3. get out of the way
  • kuhnkat

    I like #3

  • hunter

    Even though I do believe that CO2 is not a great risk, I would support this sort of plan.
    1- It is revenue neutral.
    2- It would drive technological innovation and reduction of other, real, pollutants.
    3- It would keep the government away from what it does very very badly – micromanage things.

  • hunter

    You are a tiresome retard.

    “What if the climate is, unlike nearly every other long-term stable natural process, dominated by strong positive feedbacks?”

    1. The climate is not “long-term stable”
    2. “Dominated by positive feedback” is a meaningless phrase.

    But you seem happy to endlessly demonstrate your stupidity; you lack the science skills to even understand how little science you understand. Once again we can confidently predict that it will be no more than a few weeks at most before we see these meaningless words yet again.

  • Only an idiot would say “Dominated by positive feedback” is a meaningless phrase.

    Oh, wait.

  • Bob H.

    I suppose hunter is right, the climate is not “long-term stable.” In another 4 or 5 billion years, when the sun has finished burning hydrogen and becomes a red giant, expanding out to the orbit of Earth, I would say that there will be some serious, maybe even runaway warming. However, the climate has been stable over the last 3 or 4 billion years. The fact that we are here to discuss this is sufficient proof of this statement.

  • Adiff

    Why should anyone prevent our observing the fascinating spectacle of the entire ‘Environmental Movement’ committing mass suicide? Sure the cost will be high, but since when is that anything new? Every generation has its own particular folly. Why should this tragic generation be any different? When the dust finally settles and this particular idiocy gets swept into the dustbin with so many preceding, the world will quietly move on.

  • hunter (the sane one)

    ‘scientist’/Hunter/hunter/rude poster,
    Please do let Hansen know how stupid he is:
    http://pubs.giss.nasa.gov/abstracts/2008/Hansen_1.html
    Where Hansen specifically states,
    “…describe how two fundamental properties of our climate system, its predominance of “positive feedbacks” and its ponderous inertia, have together brought climate to a great tipping point, a planetary emergency.”
    Please keep posting just as you are.

  • Billy Ruff’n

    A few days ago I was sitting on the steps that lead to the beach near our summer home. The tide was rising and nearly at its full height, and I got to thinking about global warming and one of it’s major consequences, sea level rise. The IPCC tells us that over the next 50-100 years the risk of rising seas is real and the consequences threaten human population and the global economy.

    A hundred years ago my grandmother enjoyed this same beach — we have a picture of her as a young girl sitting just about where I was a few nights ago. According to the scientific data, a hundred years ago the sea level was about 20 cm lower than today. A hundred years ago the bulkhead that protects the houses was a bit lower than it is today and a few yards further to seaward. Perhaps the rise in sea levels caused my ancestors to build a slightly higher bulkhead sometime before I was born. I know that the height of the bulkhead hasn’t changed in the last 50 years because I’ve been around longer than that. Some of the timbers have been replaced but the height of the structure is the same as when I was a small boy. As I sat there sipping my wine, it occurred to me that 50-60 years from now my grandson, now in his fifth year, might be sitting here and, if the AGW crowd is right, the sea level at high tide might be 15, 20 or more cm higher than it is today.

    What insurance policy is going to help him finance the building of a higher bulkhead if the current one is overwhelmed by a rising sea? Won’t he need what my grandmother needed — income sufficient to replace obsolete infrastructure? Is the “insurance” provided by the cap & trade scheme now in Congress likely to provide the resources he and his generation will need should the worst of the AGW predictions result?

    What they will need to combat the possible threats of global warming is a vibrant, healthy, growing economy and an economic system that celebrates and rewards innovation. Anything we do today that gets in the way of that is a disservice to future generations.

  • hunter

    Bob H. – do tell us which temperature data you’ve got from 4 billion years ago, and describe what it shows. Define exactly what you mean by stable, and do make sure you explain adequately how ‘stable’ encompasses all climate states from forests at the poles and ice a mile deep over the mid-latitudes.

    “The fact that we are here to discuss this is sufficient proof of this statement” – I assume by “we” you mean homo sapiens. When did “we” appear? Was it a) 4 billion years ago, or b) about 200,000 years ago?

    hunter (the insane one) – clearly you didn’t remotely understand the point. No change there, eh? You are too thick to understand that ‘dominated’ doesn’t make any sense in this context. The repeated use of exactly the same meaningless wording here, time and time again, is strongly suggestive of some kind of mental illness. It certainly gives us no evidence of any capacity for learning. That you apparently can’t see any problem gives plenty of information about your own intellectual capabilities.

  • mishu

    hunter, I doubt you even know the concept “positive feedback”. The only positive thing about your feedback is that I can count on you to call people stupid. That doesn’t necessarily mean you are elightened. As far as I’m concerned, you are more dense than those you insult.

  • Steve H

    GLOBAL WARMING–DISASTEROUS?

    For humans living on the coast–possibly; for humans that rely on the nortern icesheet–possibly; for humans living in 3rd world economies that are located in flood prone areas–possibly. I could go on but the fact is irrefutable; global warming if true negativly impacts HUMANS!! and a few other animals but the earth will continue to survive and prosper. The past shows that animal life of all kinds prosper in an iceless earth and strugles in an ice age. If I had to chose an end in fire or ice I chose fire. I don’t believe we are in a global warming situation that will be problematic for some people the CO2 levels now are still a far cry away from levles that would undeniably bring about drastic change all you have to do is go back to the caboniferous era when life thrived moreso than at any other time in earths history and you see a lower O2 level with a much higher CO2 level.

  • hunter

    phony hunter,
    Now you are reduced to making circular statements that stand up to no scrutiny at all.
    If you have a problem with the quote I took, in context, from Hansen’s own paper, then explain why Hansen is wrong. Does positive feedback dominate or not? are we near a disastrous tipping point or not? do you even under the concepts involved?
    Simply asserting that you are enlightened, and we are too dim to perceive your light, requires you to actually be be bright. ‘Bright’ is not an attribute that comes to mind when someone witnesses your communication skills.
    You are lots of fun, however. Please keep up the good work. Every post you make means fewer people believe in AGW. More people get to see you as you are. And skeptics only look more and more justified in their stand against the hype and fear mongering and foot stomping of people like you.

  • hunter

    “Does positive feedback dominate or not?”, you ask. That’s like asking “Does gravity dominate or not?”, or “Does entropy dominate or not?”, or “Does the colour blue dominate or not”. Plainly, you do not even remotely understand the words you’re using.

    “Every post you make means fewer people believe in AGW”

    Ha ha ha.

  • mishu

    Plainly, you do not even remotely understand the words you’re using.

    I’m not so convinced you understand what you type there Chachi.

  • hunter

    phony name thieving hunter,
    So you don’t know. I keep forgetting how ignorant you really are.
    Long since time to move on.
    Cya,