The EU Just Kicked Off Its Biggest Climate Experiment Yet [Carbon tariff]
The EU Just Kicked Off Its Biggest Climate Experiment Yet [Carbon tariff]
The world’s largest single market has launched a bold plan to tax carbon at its borders. The rest of the world is paying very close attention.
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Carbon taxes are a red herring. It just becomes a cost of doing business that is passed onto the consumer. Carbon taxes just legitimize pollution if you can afford to pay the fines.
Im not sure what you are talking about, carbon taxes are one of the best ways to mitigate co2 emissions.
If two producers produce the same good, but one of them emits less co2, that one will have higher profit margins.
This is just one of the levers to nudge industries (who, let’s be real, are the main polluters) towards cleaner operations, and as far as I am informed, it’s one of the most effective ways.
So this is good news. It’s good. We have to celebrate that, too, lest we all suffer from doomerism. Can more be done? Yes, there is always more to be done.
But is this a good, important step?
Definitely.
One of the issues with carbon credits is they can be bought and sold. So if my company is more efficient, they can sell their remaining carbon credits to some other company which ends up polluting more.
Carbon credits are basically a fine for polluting. If you can pay the fine, it’s business as usual.
Which makes the environmentaly friendly company more profitable - encouraging others to do the same.
As more and more companies do this, the number of credits can be reduced to increase their price and keep the total emissions on a downward trend.
Yeah a lot of Tesla's revenue is selling carbon credits because their processes are less polluting. They make ungodly amounts of money by doing this.
No tax on emissions mean that companies that try to pollute less can't compete. Either investments for less pollution or the pollution itself needs to be posted on to customers. And if a less polluting alternative costs more right now, it might become the cheapest with carbon tax.
The idea is to raise them until emission is simply unaffordable. The economic literature is pretty clear that this is going to be effective, with the main problem being the political one of actually doing that.
unaffordable to poor people, annoying to the middle classes, utterly inconsequential to the rich. economically slavery was pretty good too, there's a lot more to making a good society than economics.
trying to price people out of living only affects those that already can't afford it, we need to be creating actual solutions at price points where they can gain widespread adoption.
The basic idea of a carbon tax is to increase the cost of emitting carbon, so green processes are relativly cheaper. So companies polltuing the enviroment go bancrupt, whereas companies using green technologies do not. This is already working very well with coal in the EU. that is currently dieing a very quick death. The issue is that it obviously increases cost. However the money is not lost and can be used for all sorts of usefull things governments do anyway.
What the EU has is not a carbon tax thou, but a tariff system. The EU has an internal emissions market, which works fairly well by now. The issue is that it only works in the EU, so companies can just move the production outside the EU and use dirtier processes and not have to buy credits. So the idea here is to have a carbon tariff in which companies selling products into the EU have to pay what they would have paid in the EU for the necessary carbon credits minus the cost of carbon credits or taxes in the countries of origin. So countries outside the EU have a massive insentive to introduce carbon pricing of some sort as well, so their comapnies pay the money to them and not to the EU, which is a massive market. Hence the idea is that this snowballs and acts as an insetive to go for green technologies outside the EU, which is the second biggest importer in the world after the US.
Unless there's a better product the customer can choose.