Musk's advocacy of a Carbon Tax and Carbon Capture

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jlsoaz

Well-known member
Joined
Jul 8, 2012
Messages
849
Location
Southern Arizona, USA
I love criticizing Musk where I think discredit is due, but in this case I think major credit is due. Very glad to see him stumping for, and prioritizing, a Carbon Tax and for Carbon Capture.

1. Carbon Taxes:
https://www.cnbc.com/2021/02/12/elon-musk-reducing-greenhouse-gas-emissions-with-a-carbon-tax.html
Elon Musk: ‘My top recommendation’ for reducing greenhouse gas emissions is a carbon tax
Published Fri, Feb 12 20214:52 PM ESTUpdated Fri, Feb 12 20215:50 PM EST
Catherine Clifford
@CatClifford

I love that he sees this as a top priority and seems to have a good understanding of the economic and political principles. I wish he would add language, when he speaks about it, saying that installing carbon taxes would be a pro-capitalistic measure, not an anti-capitalistic measure. It is part of a capitalistic system to identify property-damaging externalities and deal with them by such mechanisms as taxes.

2. Carbon "Capture"
https://www.cnbc.com/2021/02/08/who-what-where-of-elon-musks-100-million-prize-for-carbon-capture.html
The who, what and where of Elon Musk’s $100 million prize money for carbon capture innovation
Published Mon, Feb 8 20216:06 AM ESTUpdated Mon, Feb 8 20218:46 AM EST
Catherine Clifford
@CatClifford

I love that he sees this as a critical issue, for the here and now, to the point of making significant donations to it. I am not sure if he understands that the main point should be not just to capture the CO2 but to arrange for the C atoms to be combined into different molecules that can then be stored away or used or both.

On both points, a point I want to make to alleged Musk and Tesla supporters: many of you are relatively speaking johnny-come-lately supporters of Musk and Tesla, and, some of you are, to one degree or another, abusive and intolerant of any criticism of Musk or Tesla, or of balanced industry discussion. And yet, here we are, and Musk has arguably taken two of the more important stances he is ever going to take, and now would be a good time for you to break out the full-blown thank-you-Elon-Musk balloons, but so far, on these two issues, I'm not seeing them. Well, maybe I've just missed it, I don't get around the forums and the articles as much as I used to.

Anyway, my point is Thank you Elon Musk for your smart comments and support on these two key issues.

Another ps point is that in the PHEV discussion thread, I was trying to say awhile back that any prioritization of synthesis of Carbon-carrying molecules might well lead to a fuel that in theory could help prolong the useful life of PHEV. Both of these measures would help a bit in that direction, I think.
 
CCS is a fool's errand in my opinion, but it will either surprise me or die a quick death if an appropriate carbon tax constrains bad actors.
 
I've been in favor of a Carbon tax for awhile, so I agree with Musk. But it's unavoidable that being head of Tesla makes his Carbon tax position open to criticism of being self-serving. Like anything else, the idea must stand on its merits.
 
Nubo said:
I've been in favor of a Carbon tax for awhile, so I agree with Musk. But it's unavoidable that being head of Tesla makes his Carbon tax position open to criticism of being self-serving. Like anything else, the idea must stand on its merits.

What surprised me, slightly, is that he seemed to have at least some decent deeper understanding of why a Carbon tax is important.

https://www.cnbc.com/2021/02/12/elon-musk-reducing-greenhouse-gas-emissions-with-a-carbon-tax.html
Power Players
Elon Musk: ‘My top recommendation’ for reducing greenhouse gas emissions is a carbon tax
Published Fri, Feb 12 20214:52 PM ESTUpdated Fri, Feb 12 20215:50 PM EST

"....“My top recommendation, honestly, would be just add a carbon tax,” Musk told Joe Rogan on The Joe Rogan Experience podcast on Thursday. “The economy works great. Prices and money are just information. ... If the price is wrong, the economy doesn’t do the right thing.”...."

"....Musk calls carbon concentrations in the atmosphere and environment an “unpriced externality.” An externality happens when some consequence of production is not properly reflected in the market. In this case, it is a negative externality.

"A carbon tax would change that. “If we just put a price on [carbon emissions], the market will react in a sensible way. But because we don’t have a price on it, it is behaving badly,” Musk says...."

-------------------
To this I would add that I am tired of the moralizing and finger-pointing, indicating that someone is "good" because they save carbon and allegedly not-good because they don't. A carbon tax would just cut through all of that and let us all have the price signals we need. It's been several decades that the carbon tax - arguably the single most important policy mechanism in our battle against climate change - has been too often relegated to the back of the line for discussion. There are multiple policy mechanisms that I think are needed to combat global warming but the "top" one, in my view, is a carbon tax. If we do not use it, then I think we are not serious about addressing the deadly property- and life-destroying pollution emergency.
 
I get that, but I have to add that relying on the free market to correct grave errors like that - or even smaller errors - makes the mistake of assuming that both retailers and consumer are rational actors. A carbon tax likely would cause the market to start to correct the damage done by 'free' pollution and waste, but only until some clever, amoral capitalist found a way to subvert it to make profit as its primary function.
 
LeftieBiker said:
but only until some clever, amoral capitalist found a way to subvert it to make profit as its primary function.
<<shrug>>
Tax evasion is nothing new, but it is hard to deny the overwhelming effect of taxation

Give me $100 a ton global GHG(e) taxation, and the world will self-correct
 
jlsoaz said:
A carbon tax would just cut through all of that and let us all have the price signals we need. It's been several decades that the carbon tax - arguably the single most important policy mechanism in our battle against climate change - has been too often relegated to the back of the line for discussion. There are multiple policy mechanisms that I think are needed to combat global warming but the "top" one, in my view, is a carbon tax. If we do not use it, then I think we are not serious about addressing the deadly property- and life-destroying pollution emergency.

A carbon tax is something needed, long term. No question.

But (and you knew there was a "but", didn't you?) a carbon tax might be too early to be the best policy mechanism today.

There is a paper I should go dig up... But here is the grist of it. A carbon tax is only ideal if production costs are fixed. And in the real world, production costs depend on production history, among other things.

https://en.wikipedia.org/wiki/Experience_curve_effects

Consider two technologies with identical costs and identical cost improvement with production history. One of which, however, has an "externality" such has pollution or other negative side effect. Call them "clean" and "dirty".

If you make more of something, the costs reduce as production history improves. The first technology to reach large volumes gets the large cost advantage from larger production history, and becomes dominate. If that was the clean technology, great. But if it was the dirty technology, the current cost advantage of the dirty technology due to production history might be far than the external harm that a tax would be set to.
 
LeftieBiker said:
I get that, but I have to add that relying on the free market to correct grave errors like that - or even smaller errors - makes the mistake of assuming that both retailers and consumer are rational actors. A carbon tax likely would cause the market to start to correct the damage done by 'free' pollution and waste, but only until some clever, amoral capitalist found a way to subvert it to make profit as its primary function.

The basic idea is improving our understanding of the regulations that are appropriate to a free market. A free market does not mean an anarchistic market and a so-called limited government does not mean no government duties.

In my opinion:
When the global science community alerts everyone involved to a pollution issue which includes the possibility (emerging as increasingly likely as the years pass) that it may directly and indirectly kill large percentages of the population and damage large percentages of private and public property, it is the job of the government to step in and help address the pollution issue. One of the correctly-wielded tools in the government regulatory toolbox at that point is taxation on the polluting material, including bans (which are arguably just infinitely high taxes) as needed.

In a scenario where the government was actually doing its job (and it is not, at present), and where it was widely recognized that it is acting to do its job of protecting the market and the society by imposing taxes and bans, along with other appropriate measures, then loopholes which manifest could be somewhat expeditiously addressed, I would imagine.

These types of taxes, and related disaster-fighting government powers, are often criticized by so-called conservatives in the US as being anti-capitalistic, and anti-freedom, but they are, in my view, pro-capitalistic and pro-freedom.

Sorry for the out-there-politically post, but GHG taxes IMO inherently get into that area.

IMO, advocacy of carbon capture (I wish he had said "cleanup", or maybe he has) and carbon taxes (I"m starting to wish I had been saying GHG taxes more often) are two of the most important and helpful positions that Musk will ever take, in my view.
 
I'm not sure I follow all of this fully, but even with further study I think my answer will be the same -

Imposing GHG taxes is not primarily a matter of economic optimization. It is a matter of arguably the single most important mechanism at our disposal for addressing a planet-scale life-and-death inherently slow-developing and hard-to-fix-quickly pollution emergency. Even conceding (as I think Musk does also) that it is advisable to impose GHG taxes thoughtfully given the extent to which GHG emissions are baked into our society including for poor people, my position is get it done and be gentle about it at first if needed, but get it done immediately. It is arguably very wrong (to say the least) in my view, that we have already delayed for decades making use of what is arguably our single top most-effective mechanism.... a mechanism upon which other mechanisms arguably depend or should depend. One of the results of this, in my view, is that we need to listen to all of these lesser finger-pointing moralizing debates and pledges as to who should or should not be doing this or that. All of those pledges and debates could take a back seat, and happen much more effectively (if optimization is supposedly the issue) with ghg taxes finally sending the price signals we all need.

When I say that other mechanisms arguably depend on such a tax, one example would be this: if we have a proper ghg tax system in place, this could help (for example) to fund moderate electric vehicle purchase incentives. It would also clearly provide a tailwind to EV purchases by driving up the costs of operating fossil fuel vehicles.... costs which presently are held artificially low because the property-damaging life-taking polluting results of operating those vehicles are not presently reflected in the costs of operating those vehicles. ... ghg taxes would finally put disincentivizing prices on those results.

WetEV said:
A carbon tax is something needed, long term. No question.

But (and you knew there was a "but", didn't you?) a carbon tax might be too early to be the best policy mechanism today.

There is a paper I should go dig up... But here is the grist of it. A carbon tax is only ideal if production costs are fixed. And in the real world, production costs depend on production history, among other things.

https://en.wikipedia.org/wiki/Experience_curve_effects

Consider two technologies with identical costs and identical cost improvement with production history. One of which, however, has an "externality" such has pollution or other negative side effect. Call them "clean" and "dirty".

If you make more of something, the costs reduce as production history improves. The first technology to reach large volumes gets the large cost advantage from larger production history, and becomes dominate. If that was the clean technology, great. But if it was the dirty technology, the current cost advantage of the dirty technology due to production history might be far than the external harm that a tax would be set to.
 
jlsoaz said:
Imposing GHG taxes is not primarily a matter of economic optimization.
Actually, it is.

But you have to view money as information, and demand that people be given the full story in order to make rational (for them) decisions.
Externalized costs lead to uninformed consent
 
jlsoaz said:
Imposing GHG taxes is not primarily a matter of economic optimization. It is a matter of arguably the single most important mechanism at our disposal for addressing a planet-scale life-and-death inherently slow-developing and hard-to-fix-quickly pollution emergency.

Rather than reading what I wrote, you show you didn't understand it. Costs are NOT static. So a carbon tax isn't the most important mechanism today... but it may be so in the future.

Go back to 1977, about the time I was first concerned about climate change.

Solar cells were $77 per watt. Power generated from them would be roughly $10 per kWh. Or more.

To incentivize solar power, a carbon tax would need to be roughly $10 per kWh, or $20 per pound of carbon, $100 per gallon of gasoline or $40,000 per ton of carbon. Over 99.9999+% of the economy.

Don't you see that a massive carbon tax wouldn't have worked as well as the historic subsidies for solar power, some inadvertent subsidies like solar powered satellites? The size of the subsidy required is a minuscule compared with the required tax.

1024px-Price_history_of_silicon_PV_cells_since_1977.svg.png
 
Of course he is going to be for a carbon tax. He stands to make billions of dollars off such policies.
I would be for it too if I knew I was going to make a ton of money off it.
 
A person in my NULL bucket said:
To incentivize solar power, a carbon tax
Carbon taxes are not meant to incentivize *anything*, they are meant to correct market distorting externalities.
The social cost of carbon is in the range of $100 - $200 a CO2 ton, and an equivalent amount for NG in GHG equivalents. Both work out to 10 - 20 cents per kWh in terms of electricity from those fossil fuels.

The transition to clean energy would have been accelerated by decades if the fossil externalities had been corrected at around the time of the Kyoto accord.
 
Carbon taxes are not meant to incentivize *anything*, they are meant to correct market distorting externalities.

For the immediate future, a carbon tax would disincentivize the emission of huge amounts of CO2, by making it too expensive if not subsidized in some way. That's effectively the same thing - again, for the foreseeable future - as incentivizing low-CO2 industrial and transportation processes.
 
LeftieBiker said:
That's effectively the same thing - again, for the foreseeable future - as incentivizing low-CO2 industrial and transportation processes.

Arithmetic time
For an ICE vehicle
A gallon of 'gasoline' is about 25 lbs of CO2 emissions
~ 10,000 gallons lifetime consumption

A carbon tax of $100 per CO2 ton works out to
100* 5*25 = $12,500

Double the EV tax credit ... forever ... and you will be on track
 
SageBrush said:
LeftieBiker said:
That's effectively the same thing - again, for the foreseeable future - as incentivizing low-CO2 industrial and transportation processes.

Arithmetic time
For an ICE vehicle
A gallon of 'gasoline' is about 25 lbs of CO2 emissions
~ 10,000 gallons lifetime consumption

A carbon tax of $100 per CO2 ton works out to
100* 5*25 = $12,500

Double the EV tax credit ... forever ... and you will be on track

Double EV tax credit doesn't make economic sense, after about half (plus or minus a lot) of the cars on the road are EVs. A carbon tax would then be more efficient.
 
I'd rather start having the people generating the tailpipe pollution start paying to offset it now. And not just new cars, but all those existing ones on the road.
 
jlv said:
I'd rather start having the people generating the tailpipe pollution start paying to offset it now. And not just new cars, but all those existing ones on the road.

Exactly
 
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