James Hansen favors Carbon Tax

I'm surprised and pleased that I agree with the Director of NASA’s Goddard Institute for Space Studies (GISS), James Hansen, on the need for a Carbon Tax. IMHO, Hansen has gone overboard in his dire predictions regarding human-caused Global Warming. GISS, his agency, has come in for some criticism here for what appears to be some bias in Global Warming data.

Nevertheless he is right on this one!

My support for a punitive Carbon Tax goes back many years and is well documented on this Blog: (July 2007, May, October, and November 2008).

An Opinion piece in today's Wall Street Journal brought Hansen's statement to my attention. (The chart above is from Hansen's June 2008 presentation.)

With gasoline at $2 or less, and the memory of $4 and more clearly in mind, NOW is the right time to impose a $1/gallon carbon tax.

Hansen calls his proposal "Tax and 100% dividend" because it will apply equally to all forms of sequestered carbon (coal, oil, natural gas) and all of it will be returned, equally per-capita, to everyone with a Social Security number.

Other than collecting and distributing the carbon tax dividend, the government will have no role in using these revenues to select the specific alternative energy solution that will arise. By making carbon-based energy relatively more expensive, the carbon tax will spur consumers to conserve energy and also to select products that utilize alternative, non-taxed, energy. The tax will thus put an umbrella over researchers and corporations working on all sorts of alternative energy without imposing the heavy (and politicaly motivated) hand of government "experts" to tip the balance in favor of any one.

The proposed carbon tax will be revenue-neutral, returning money to the people. The tax will also be ultra-progressive since it returns the money equally per-capita while the rich will be paying most of the tax because they use more energy and products that require energy to produce and transport.


Here are some direct quotes from Hansen's remarks:

Tax and 100% dividend can drive innovation and economic growth with a snowballing effect. Carbon emissions will plummet far faster than in top-down or Manhattan projects. A clean environment that supports all life on the planet can be restored.

... Principles must be crystal clear and adhered to rigorously. A tax on coal, oil and gas is simple. It can be collected at the first point of sale within the country or at the last (e.g., at the gas pump), but it can be collected easily and reliably. You cannot hide coal in your purse; it travels in railroad cars that are easy to spot.

“Cap” [and trade of carbon credits] ... may do as much harm as good. ...

The entire carbon tax should be returned to the public, with a monthly deposit ...

A carbon tax will raise energy prices, but lower and middle income people, especially, will find ways to reduce carbon emissions so as to come out ahead. Product demand will spur economic activity and innovation. The rate of infrastructure replacement, thus economic activity, can be modulated by how fast the carbon tax rate increases. Effects will permeate society. Food requiring lots of carbon emissions to produce and transport will become more expensive and vice versa – it is likely, e.g., that the UK will stop importing and exporting 15,000 tons of waffles each year. There will be a
growing price incentive for life style changes needed for sustainable living.

The present political approach is to set carbon emission reduction goals for 2025 or 2050. The politicians do not expect the goals to be reached, and they define escape hatches that guarantee they will not. They expect to be retired or become lobbyists before the day of reckoning. The goals are mainly for bragging rights: “mine is bigger than yours!”

The worst thing about the present inadequate political approach is that it will generate public backlash. Taxes will increase, with no apparent benefit. The reaction would likely delay effective emission reductions, so as to practically guarantee that climate would pass tipping points with devastating consequences for nature and humanity.

Carbon tax and 100% dividend, on the contrary, will be a breath of fresh air, a boon and boom for the economy. The tax is progressive, the poorest benefitting most, with profligate energy users forced to pay for their excesses. Incidentally, it will yield strong incentive for aliens to become legal; otherwise they receive no dividend while paying the same carbon tax rate as everyone.

Special interests and their lobbyists in alligator shoes will fight carbon tax and 100% dividend tooth and nail. They want to determine who gets your tax money in the usual Washington way, Congress allocating money program-by-program, substituting their judgment for that of the market place. The lobbyists can afford the shoes. Helping Washington figure out how to spend your money is a very lucrative business.

But we can save the planet and alligators by making sure that not one thin dime of the carbon tax is siphoned off by lobbyists for their clients – 100% must be returned to citizens as dividend. Make this your motto: “100% or fight! No alligator shoes!”

Check the position of your congresspersons. If they spout things like “global warming is the greatest hoax in the history of the universe”, check the shoes of the people who visit them or have dinner with them. Changes in Congress are needed if we want our children and grandchildren to win this one.

Because of great benefits to the nation, humanity and nature, this approach soon would be adopted by other nations, providing an obvious path toward international agreements. (Jim Hansen)

Ira Glickstein

T-Mobile@home with Competition

Our landline connection to the local telephone company has finally been severed! We are "free at last, free at last!" Well, not quite free - we'll be paying around $12 per month (saving about $25/month) and getting better features.

As I pulled the plug a couple days ago I reflected on the recent comment that mentioned the "ethics-free competition of capitalism". In my lifetime, telephone service has evolved from a "natural monopoly" with a single supplier and limited choice to a vibrant competitive marketplace with a wide variety of service options and prices suitable for nearly everybody. Lots of telephone operators and others lost their jobs, but many more new jobs were created, and, best of all, consumers now have tremendous communications opportunities at reasonable prices.

THE OLDEN DAYS OF MONOPOLY

When I was young, we did not even have a telephone in our Brooklyn apartment. My parents made calls from pay phones. Incoming calls came to the candy store on our block and a kid would be dispatched to fetch us. When we finally got our own phone it was used almost exclusively for local calls because long distance was so expensive. Early in our married life we had a farm in a rural area of New York and experienced the joys of a four-party line.

I remember when the monopoly phone company would not even allow you to connect a "Brand X" phone to their lines because it might "disrupt" service to others - a "phone-y" excuse as we now know. Like all monopolies, the local phone companies provided minimum service, with little efficiency, and used inane "public service" excuses to keep competition out.

THE MODERN ERA OF COMPETITION

Well, along came cell phones, with multiple companies competing against each other and against landline phones. Some of our friends cut their landlines at that point. Then, with the advent of the Internet, and broadband connectivity to most households, along came Internet phone service. More and more of us are cutting our landlines, getting better service at lower prices.

We selected T-Mobile@home because we have T-Mobile cell phones and it is available for only $10/month plus tax and fees (a few bucks, we are not sure yet). Advantages: 1) You get to keep your old landline phone number, 2) all the existing phones in your home ring and can be used to make calls, 3) Your computer does not have to be on to receive or make calls, 4) The speed and voice quality are as good or better than a landline phone, 5) You can use your old answering machine and/or let the T-Mobile system record your voice mail, 6) Unlimited national long-distance is included, 7) Caller ID is included, 8) Call Waiting is included, 9) Call Forwarding is included., and 10) 911 works to alert emergency services to our home address.

We normally leave our old answering machine on and it intercepts and records voicemail normally. When we are away we can turn our old answering machine off and calls will be answered by T-Mobile voice mail -or- we can forward them so any calls to our home phone will ring on one of our cell phones. The only disadvantage of T-Mobile@home is that it fails if the electricity goes down (but that was the case already since all our phones are wireless and the base units need electricity to work) or if the Internet goes down (in which case we can use our cell phones.)

Our local phone bill, with Caller ID but no long-distance or Call Waiting or Call Forwarding, was over $37/month. We expect to save about $25/month once we recover the one-time $35 access fee and $50 wireless router fee.

There are many other Internet phone options if you have broadband service. They range from free to about $25 plus taxes and fees. If you are willing to leave your computer on to receive or make calls, you can sign up for services like Skype for free and make voice and video calls to others, WorldWide, who also have Skype and have mutually registered. Something called Magic Jack costs about $20/year and allows calls to be made and received nationally like a regular home phone. Services like Vonage cost about $25 plus tax and fees and appear to be similar to T-Mobile@home except you do not have to be a T-Mobile customer to qualify.

I expect other cell phone companies will be forced by the competition to offer $10/month home phone via Internet service. However, many cell phone companies are also in the landline business and will be reluctant to do so.

LESSONS LEARNED

The main purpose of this posting is not to "sell" T-Mobile@home, although I certainly recommend it. My purpose is to counteract the media-sponsored idea that competition is somehow evil.

Fair competition - even the "cut-throat" variety - with government serving only to police standards and fair advertising and contracts, is far more responsive to consumers, and more efficient, than monopolies can ever be. Something that is now said to be a "natural monopoly" may, due to technology advances, no longer be so "natural". Beware of claims by monopolies that they are "protecting the public" or "assuring service to poor people or to rural people" or "protecting American jobs", etc. They are usually self-serving, anti-competitive, and, over the long run, bad for everybody, especially the poor and disadvantaged.

Ira Glickstein