miniTAX wrote:A carbon tax, fine, that's the most efficient way to use if we want to reduce carbon like many economists think so. But for what result ?
For minimizing the sum of global warming costs and global warming prevention costs.
miniTax wrote:Give me a number, an estimate, a percentage of the result !!!! Cost/benefits assessment PLS !!!
Nordhaus describes the entire cost/benefit analysis in booklength
here. Basically, his approach is a standard, neoclassical growth theory model. Parameters in this model include:
- the resources invested to prevent global warming, which aren't available for investing elsewhere, thus slowing economic growth;
- the impact of global warming on the productivity of various economic sectors, which he takes from econometric data;
- the impact of policies on actually preventing global warming, which he also takes from econometric data. He then asks his model what investment in global warming prevention it takes to minimize the sum of global warming costs and global warming prevention cost.
The result of the analysis is presented in Chapter 7: For different global warming policies proposed, page 34 shows the trajectory of the carbon tax; page 38 shows trajectories of carbon dioxide emissions, page 39 of carbon dioxide concentrations, page 40 global mean temperatures.
Some notable observations:
- The carbon tax under the optimal scenario is low: $10/ton in 2005, rising to $70/ton in 2100. That's 3-4 cents per gallon, rising to 21-28 in 2100. (I'm too lazy to calculate it exactly -- and I got the units wrong in the post you were responding to.)
- Temperatures, CO2 emissions, and CO2 concentrations are pretty close to the business-as-usual, laissez faire scenario. Since Nordhaus does not consider government failure in setting the right carbon tax rate, laissez-faire is arguably within the range of responsible policies.
- The optimal tax is not zero: Global warming does do harm, some of which can theoretically be prevented with carbon taxes.
On balance, since I trust Nordhaus, I'm pretty much on your side of this debate. But the other side has a case too.