Monday, September 2, 2013

Pigou: Again and Again

My "favorite" Harvard Economist is back with his rather socialistic approach to dealing with the alleged man-created carbon dioxide cause of global warming. Now permit me a few opening statement regarding this issue:

1. Unlike Harvard Economists, I have a second life as a Botanist and as such am attuned to the changes in Mother Nature. I have three Hemerocallis plants whose first bloom date, measured in days from the first of the new year, have demonstrated clear shortening. Namely they are blooming earlier each year. Why? Clearly after removing any confounding data it is the heating of the earth, at least the earth near these plants.

Now the first
Now for the second:
And the third:
Thus what to believe, the facts and my eyes or what other people may be saying. The trend is clear and it is significant. Thus we have global warming. First bloom times are excellent integrators of total warmth.

2. Now for the cause. Carbon dioxide has been around for a while and the source and sink models are complex at best. More CO2 means more plant growth which means more O2. What is the stable balance? One really does not yet know. Then there is the oceans and their complex dynamics all too often poorly modeled in the global warming analysis. In the 1960s I did measurements of aerosols in the upper atmosphere. Then we had a growing amount and the fear was global cooling. Now we have reduced them and the opposite effect is occurring. Go figure.

3. The source of the cause is solely man. Well there are lots of things generating CO2 and methane etc. In fact methane is really a nasty source and Mother Nature generates tons of it.

So what can we conclude. The globe is warming. Which may or may not be a bad thing. The source may be CO2, but there is also other stuff. And the source of the sources are complex.

Now comes the Harvard Prof again with Pigou. He states:

The main question is how we, as a society, ensure that we all make the right decisions, taking into account both the personal impact of our actions and the externalities. There are three approaches. ...

Fortunately, a policy broader in scope is possible, which brings us to the third approach to dealing with climate externalities: putting a price on carbon emissions. If the government charged a fee for each emission of carbon, that fee would be built into the prices of products and lifestyles. 

When making everyday decisions, people would naturally look at the prices they face and, in effect, take into account the global impact of their choices. In economics jargon, a price on carbon would induce people to “internalize the externality.” A bill introduced this year by Representatives Henry A. Waxman and Earl Blumenauer and Senators Sheldon Whitehouse and Brian Schatz does exactly that. Their proposed carbon fee — or carbon tax, if you prefer — is more effective and less invasive than the regulatory approach that the federal government has traditionally pursued. 

Let us consider his logic a bit:

1. Economists are not engineers. Engineers see a problem and find a solution which is economical and works. Have a river and want to get to the other side, we build something called a bridge. We do not generate some additional and useless tax. Thus from an engineer's perspective we find ways to generate energy with less CO2 releases if that is the case or find ways to absorb and use the CO2 elsewhere. The result is more business and economic growth independent of Washington. But to an economist who appears to be ignorant of any engineering insight you just load on another tax.

2. Inherent in this third approach is that one has choices.  In many cases in the lower middle class and lower classes there are fewer choices. They have to travel shop, live, work etc. Unlike the Harvard Prof they cannot afford the electric car route. Somehow the elite top 1% are lacking in observations of those underlings.

3. Then if we tax the poor folks the Government just gets more money, it is akin to giving Scotch to an alcoholic. Yet the good Prof states:

The crucial point is what is done with the revenue raised by the carbon fee. If it’s used to finance larger government, Republicans would have every reason to balk. But if the Democratic sponsors conceded to using the new revenue to reduce personal and corporate income tax rates, a bipartisan compromise is possible to imagine. 

 Somehow I have never seen the Government reduce taxes especially this Government. Democrats conceding to lower taxes is akin to the Pope hiring the Devil to run the Curia. Never happen.

So what is the solution? Try technology. It is a word never mentioned by the socialistic Profs who promote Governmental interference.