I believe in externalities, but I don’t think global warming is a very dangerous one….

Say it can be thought about this way:

The size of ‘work’ in the world is 100 Trillion

The size of the fossil fuel carbon expenditure to power that work is 15 Trillion, and that 15 trillion amount is kind of a line item itself within ‘work’ where it co exists with other market segments and social expenditures.

The size of the non-fossil fuel expenditure to power 100 Trillion work would hypothetically be 30 Trillion. It’s cleaner say, but there aren’t as many BTUs per unit to harvest, so it’s more expensive.

I see this as a fairly finite pie, and not elastic. If you spend 15 Trillion more on energy that provides less BTU’s, that money comes from somewhere else and whatever that category is, it suffers along with whatever material wellbeing its attached to, though you still ostensibly have 100 Trillion in ‘work’. I don’t see that being acceptable to people, to the point that I don’t see it as a realistic possibility.

Or you say, we’re just going to expend the same 15 Trillion on clean power, and enforce 15T less in output on the whole. I don’t see that being acceptable to people, to the point that I don’t see it as a realistic possibility.

I just don’t see it.


One thought on “externalities…

  1. pm1956

    1. It may or may not be a dangerous one. We won’t know for sure for 100 years or so. But there clearly is significant risk.

    2. Economies adjust. we have had a series of “artificial” oil price increases, courtesy of OPEC. They led to temporary bouts of inflation, but the economy adjusted. If you try a similar thing with taxes (increase the price of carbon fuels thru higher taxes), there will be less adjustment because the money will stay inside the US economy (and not go into a Saudi bank account–although they eventually invested the cash in US real estate, or bought F-15’s with it)–we could reduce the debt (not really necessary), we could invest in infrastructure (good fiscal stimulus), we could reduce taxes (pro growth).

    3. Seriously, there really is not a serious downside, except that the carbon fuel industry would be a relative loser, and other sectors of the economy would benefit–depending on where we spent the $$ we made from the carbon taxes.

    4. We don’t need to spend the new tax revenue on clean energy alternatives–the market will do that for us. B y making carbon based energy more expensive, all sorts of innovators will flood into the “alternative” energy area and start exploring different non-carbon based energy alternatives. This is the way that the free market works. No need for a government program–just make carbon more expensive and all sorts of alternatives will become economically viable.

    5. maybe we use the tax revenue to keep Zeke Emmanuel alive until he is 125?


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