A new open thread for climate solutions in the new year (and the soon-to-be new US administration actions). As for the climate science open threads, please try to renew your commitment to constructive dialog that prioritises light over heat (like LED bulbs for instance!). Thanks!
Richard Creager:
This is why I don’t have a facebook feed: I know I can find better analysis in lots of places.
Engineer-Poet @199, interesting info. I did understand the category error: “And the 60,000 GW is all in optical power, so what does this mean in terms of work or equivalent electrical power that can be used for creating actual energy storage?” Admittedly probably not well worded. I previously did a google search and Femtosecond lasers are also used in machining and eye surgery.
I would be almost tempted trade your snow for our stinking hot and humid :) We are getting a lot of marine heatwaves in the last few years, probably climate change related. Its what would be expected.
193 nigel:
186 Killian says:
13 Jan 2021 at 7:47 PM
The problem is on your side: You are not yet understanding MMT.
…
That being the case, I leave it to others to try to help you understand this.
193 nigelj:
14 Jan 2021 at 4:11 PM
mostly just to show others on this website where I stand.
Do you recall all the times I said you post just to see your words in print? You just confirmed this.
Nigel, nobody – not just you, but NOBODY – should ever post here to “show others where [they] stand.” That is not the purpose of such a forum. It’s completely irrelevant. This isn’t a roll call vote on every point raised. The only reasons to post on forums such as these are because you have something unique to say that adds to the discourse, to reinforce a stance someone else made that *needs* reinforcing or to post new information. You should not be posting here just to be heard.
Killian @203,
“You are not yet understanding MMT.”
This sort of rhetoric accusing people of not understanding something is just empty rhetoric that goes nowhere. Its no more useful than some climate change denialist who says ” warmists dont understand how the climate really works”. You and Mike have to prove the MMT critics wrong as in the links I posted and in an itemised, thorough, point by point way. I’m not seeing much of that, which tells me quite a bit about your own level of understanding.
191 Barton Paul Levenson:
14 Jan 2021 at 7:20 AM
K 181: Do not take it seriously. The author of that piece is scientifically illiterate… (goes on to point out unit errors, etc.).
BPL: So because the reporter isn’t a scientist, the thing he’s reporting on must not exist!
K???
Gotta laugh… Way to out yourself as intentionally antagonistic towards a given participant given, um, here’s the header for that comment:
181
Engineer-Poet says:
13 Jan 2021 at 3:51 PM
Killian @204
“Do you recall all the times I said you post just to see your words in print? You just confirmed this. Nigel, nobody – not just you, but NOBODY – should ever post here to “show others where [they] stand.” That is not the purpose of such a forum. ”
No. When I said I would mostly respond to your posts just to show others on this website where I stand it should have been fairly obvious I meant I would be briefly rebutting any incorrect allegations Killian makes against me or what I write. I dont use peoples comments as an excuse or launch pad just say what I think about whatever for the sake of it.
And in terms of input, I’m more like Piotr in that I respond if certain things annoy me, like logical fallacies (Im not necessarily accusing you of this). And I respond if ideas seem unwise (not saying all yours are) or things just look incorrect. All that is legitimate. Just look at how people do it all the time. I did two years in quality assurance management, design and implimentation for a leading, international award winning corporate. In addition to my other job. It makes one look for errors.
At 18C, terrestrial carbon sinks begin to decline from peak uptake/sequestration.
We are is some serious #&$@^$@ isht.
https://phys.org/news/2021-01-earth-temperature-years.html
I have suggested for a long time now that the key reason I expect climate changes to accelerate faster than most seem to expect is that, other than bolide impacts, the entire planet has not been damaged at the same time, but humans have, in essence, damaged every ecosystem on Earth at the same which has greatly diminished hystereses, which is accelerating change.
205 nigelj:
14 Jan 2021 at 10:11 PM
Killian @203,
“You are not yet understanding MMT.”
This sort of rhetoric
While rhetoric has a non-combative meaning, you are clearly using it cobatively here. Why?
If I say, “nigel is from (NZ?),” is that mean rhetoric? Or, “nigel post often at RC,” is that negative? The statement you quoted is correct and true, imo, and in no way an insult. Why did you take it as one?
accusing
Accusing? Seriously? Does that actually make sense to you to characterize an observation or statement as an accusation? Merriam-Webster clarifies:
accusation noun
1 : a charge of wrongdoing
people of not understanding something
If you demonstrate that you do not understand something, what am I supposed to say, “You clearly understand this topic, but are clearly confused?” Does that make sense to you? Perhaps you consider this a case of equal but opposite opinions, but that is not accurate. You have clearly shown you do not understand what MMT is. It strikes me as odd that statement should offend you.
I am perplexed by your response.
Is ‘this’ a form of ‘self correction’?
‘We’ have ten years?
“ . . . our best estimate is that the net energy
33:33 per barrel available for the global
33:36 economy was about eight percent
33:38 and that in over the next few years it
33:42 will go down to zero percent
33:44 uh best estimate at the moment is that
33:46 actually the
33:47 per average barrel of sweet crude
33:51 uh we had the zero percent around 2022
33:56 but there are ways and means of
33:58 extending that so to be on the safe side
34:00 here on our diagram
34:02 we say that zero percent is definitely
34:05 around 2030 . . .
we
34:43 need net energy from oil and [if] it goes
34:46 down to zero
34:48 uh well we have collapsed not just
34:50 collapse of the oil industry
34:52 we have collapsed globally of the global
34:54 industrial civilization this is what we
34:56 are looking at at the moment . . . “
https://www.youtube.com/watch?v=BxinAu8ORxM&feature=emb_logo
https://www.bleyerbullion.co.uk/advantages-disadvantages-modern-monetary-theory-mmt/
I think this article misses the mark with regard to MMT. It’s written and presented from a business that buys and sells precious metals, so it’s kind of steeped in the old economics of the gold standard and is invested in some very old school economic ideas. I don’t think much of their analysis. I am not going to go into detail because I think a lot of folks are tired of the econ discussion.
https://www.macrobusiness.com.au/2019/04/pros-cons-mmt/
Better than the Bleyer page, but still pretty muddled and doesn’t present or critique MMT in significant agreement with MMT as described by Kelton, Mosler, Wray, so its criticisms look like straw man arguments to me.
Richard Murphy takes on the MMT criticism at Financial Times here
https://www.taxresearch.org.uk/Blog/2020/10/22/the-case-for-mmt-or-why-the-ft-is-wrong-to-publish-ill-informed-arguments-against-criticising-it/
and lays out MMT this way: “MMT does not say we can be relaxed about financing, because financing is not its focus. What it actually says is that if there is unemployment that a government wishes to address, then assuming that government spending is appropriately directed to achieve that goal then financing is not a constraint until full employment is achieved. Then it says three further things.
The first is that if spending is continued without any further action when full employment has been achieved then inflation will result.
Alternatively, and somewhat overlooked, more tax at that moment can limit that inflation risk.
But, third and more important still, if the government still thinks its programmes more important than additional private sector growth at that point then a bit more tax reduces private sector demand for labour, so releasing it for publish sector use without inflation arising.
That’s what MMT really says.”
Here are my thoughts:
It seems like humans need to commit to some extensive and expensive global warming controls, including conversion to a net zero economy and the sooner, the better. Lungs of the planet, etc. That is a difficult task.
I don’t expect this post will change minds. Many of us appear to be locked in to superficially incompatible ideologies. Synthesis in this situation is likely to be a slow process. I can wait. Our situation is not getting easier to address and the solutions will not get cheaper over time, so this will all sort itself out if we wait, watch and think hard, but in a friendly manner.
Cheers
Mike
“New research models the effects of a wartime-like “crash deployment” of direct air capture (DAC) as a policy response to climate change, calculating funding, net CO2 removal, and climate impacts. Such a programme, with investment of 1.2–1.9% of global GDP annually, removes 2.2–2.3GtCO2 per year in 2050, 13–20GtCO2 per year in 2075, and 570–840GtCO2 cumulatively over 2025–2100, the study says. Compared to a future in which policy efforts to control emissions follow current trends (SSP2-4.5), DAC “substantially hastens the onset of net-zero CO2 emissions (to 2085–2095) and peak warming (to 2090–2095)”, the authors say, “yet warming still reaches 2.4–2.5C in 2100”. Such massive CO2 removals hinge on near-term investment to boost the future capacity for upscaling, the study notes.”
https://www.nature.com/articles/s41467-020-20437-0?utm_campaign=Feed%3A%20ncomms%2Frss%2Fcurrent%20%28Nature%20Communications%20-%20current%29&utm_content=20210115&utm_medium=feed&utm_source=feedburner
I suspect we are heading toward a future where SRM is deployed to reduce global warming because lower costs to deploy and attempt that tech fix will be hard to resist. This study suggests that an expensive “war-time” deployment of DAC may not prevent rise in global temps in excess of 2 degrees.
I continue to think we need to start with carbon tax and dividend approach if we are serious about reducing the impact and extent of the global warming catastrophe.
The Carbon T&D approach brings taxes out of the shadows of US politics and might help the electorate understand that taxes have a place in macro economics and are not inherently evil. The right wingers in the US have won the meme war on taxes to this point. I think we have to turn that around for a number of reasons. My primary attraction to taxation is that it is so much less destructive to the human economic and biological endeavor than hiking interest rates to control inflation. Using interest rate hikes to cool an overheated economy (something we don’t have currently) or to control inflation (another thing we don’t have currently) is shooting ourselves in the foot or digging ourselves a deeper hold to climb out of because the hiked interest rates mechanism reduces nation level ability to respond to existential challenges like pandemics and global warming by increasing the cost to service public domain debt.
We need to talk about taxation in a positive way as a means to address existential crises and a macro-economic tool to provide stability to the economy.
Cheers
Mike
Mike, can you expand SRM so the rest of us can understand what you’re talking about?
Killian @209, on rhetoric. I’m not even remotely interested in taking this further. I’m not interested in an english lesson. I’ve made my point. It wasn’t meant to be combative.
mike @210
“I think this article (bleyerbullion.co.uk) misses the mark with regard to MMT. It’s written and presented from a business that buys and sells precious metals, so it’s kind of steeped in the old economics of the gold standard and is invested in some very old school economic ideas. I don’t think much of their analysis. I am not going to go into detail because I think a lot of folks are tired of the econ discussion.”
You may not realise this but your response is pretty much an ad hominem. Instead of rebutting their criticisms in detail, point by point, you attack their history and credentials. By analogy its like climate denialists false claims that climate scientists cant be trusted because they are just after government grant money, or that they are steeped in “old out of date ways of looking at climate”. Your accusations are also incredibly tenuous because obviously criticisms will come from other older schools of economic thought. The more passionate MMT advocates are not known for much self criticism.
But you make some other good points. And they way for us to blend those “superficially incompatible ideologies” might be to just accept a limited form of MMT as an experiment (as I’ve mentioned). I’m sure it would be possible to devise something. We put a billion transistors on a microchip, if we can do that we can experiment with MMT somehow.
mike:
E-P, SRM means “Solar Radiation Management”. And thanks Mike, I agree: what could possibly go wrong? Decarbonizing the global economy in the time available is the more urgent practical problem. For more info on carbon fee/tax and dividend with border adjustment tariff, and the text of legislation introduced into both US houses of Congress, RC readers can see energyinnovationact.org, a project of the Citizens’ Climate Lobby. The infographics are a little in-your-face IMO, but try the “How It Works” tab at the top of the home page. Scroll down to the FAQ if you’re impatient 8^).
That DAC concept posted by Mike sure looks like it has considerable potential, maybe in combination with other carbon sequestration approaches. Each approach has rather significant limitations, so I think it looks like you would need a combination of things. I’m not seeing any singular magic bullet solution.
I think America is probably wasting its time with funding climate mitigation by attempting federal level tax increases, for the following reasons. All attempts at federal level carbon taxes have fizzled out. The GOP are still powerful and are very anti tax. The best Biden might do is a modest tax increase on the top band of income, but this could be verging on tokenism and people will want lots of this going into social services (understandably). There might be some potential at State level, I dunno. I sincerely hope there is.
I’m semi retired. Frankly I don’t care much about what the tax rate is on the top band, but you have to consider the political realities, and what the public want and some are very anti tax. This is what real ‘analysis’ is about. it has to include everything.
Commonsense suggests that climate mitigation in America might be better funded with more deficit financing, or a limited form of money printing. So the federal reserve directs new money to climate mitigation ventures somehow. This is not MMT, its just a more basic form of money printing and selectively used. In the current low inflation environment (inflation bobbing along at 1.76% in 2019, below the target of 2%) the risk of significant inflation is probably quite minimal and so its unlikely to require painful interest rate increases or raising tax rate.
Raising taxes might be the better way to tame inflation but is probably far more difficult politically than raising interest rates. The fed can raise interest rates virtually at whim while raising tax rates is far more of a tortuous process. Printing money selectively in a limited way is also easy enough because the reserve bank just does it quietly as it has sometimes in the past to help fund wars, and the public probably dont care or even know.
SRM Solar Radiation Management
https://www.carbonbrief.org/explainer-six-ideas-to-limit-global-warming-with-solar-geoengineering
Cheers
Mike
In which mike perfectly illustrates two points that must be understood across sectors and populations if we hope to avoid the worst long-tail risks of climate and collapse. 1. Simplicity is unavoidable. The temperatures expected in the study represent far too much risk. 2. Economics is nonsense. Do this thought experiment: Consider the Earth as a Commons. There is, then, zero cost and economics can be flatly ignored because they will, as we speak of them now, essentially cease to exist and anything we wish to do instantly becomes affordable.
212 mike says:
15 Jan 2021 at 8:01 AM
“yet warming still reaches 2.4–2.5C in 2100”.
Ah, well. Ho-hum…
Such massive CO2 removals hinge on near-term investment to boost the future capacity for upscaling, the study notes.”
And massive new energy systems and massive new, currently nearly-non-existent recycling and mass migration and ecosystem restoration and…
Does this seem likely to be funded and result in the profits the wealthy want?
I continue to think we need to start with carbon tax and dividend approach if we are serious about reducing the impact and extent of the global warming catastrophe.
Start? OK. So long as it is understood to be a bridge to true solutions.
The Carbon T&D approach brings taxes out of the shadows of US politics and might help the electorate understand that taxes have a place in macro economics and are not inherently evil…
This does not solve the problem. The necessary actions will not be taken if they require the extremely wealthy to be unselfish given they are inherently selfish.
We need to talk about taxation in a positive way as a means to address existential crises and a macro-economic tool to provide stability to the economy.
No, jubilee and Commons. There is no way to have fairness, economic equality and meet the needs of humanity in the short time frames the risk suggests we must meet if we have to rely on wealthy people to allow it to happen.
207 nigelj:
15 Jan 2021 at 12:34 AM
Killian @204
“Do you recall all the times I said you post just to see your words in print? You just confirmed this. Nigel, nobody – not just you, but NOBODY – should ever post here to “show others where [they] stand.” That is not the purpose of such a forum. ”
No. When I said I would mostly respond to your posts just to show others on this website where I stand it should have been fairly obvious I meant I would be briefly rebutting any incorrect allegations Killian makes against me or what I write.
No. Those two things your wrote do not mean the same thing no matter how much you wish they did. Your comments are far too often either far too vague or too poorly phrased to be understood as you *later* claim you meant them.
I am not the cause of the conflict you are keeping alive with these posts. Take responsibility and please stop rationalizing your errors; admit them and move on.
This is now pointless, boring, and your responsibility to fix.
Let it go.
Killian @220, on letting go. You haven’t got the message. I’m going to be ignoring you from now on with a few limited exceptions that will be short and to the point. And since when have you ever admitted any of your own mistakes? Never to my knowledge, so don’t lecture me on errors. Don’t bother replying because I wont be entering a discussion on it. But we do have some common ground on a few things and I wish you well promoting those things.
nigelj:
Bravo. Like me with IAT ;^D!
nj:
Couldn’t resist, could you? Trust me, I know how you feel. But assume the scope of our free will is existentially limited to our comments on RC: Do we say everything we’re impelled to by ‘instinct’, figuratively speaking, or not? You decide, because I apparently can’t.
221 nigelj says:
16 Jan 2021 at 2:31 PM
Killian @220, on letting go. You haven’t got the message. I’m going to be ignoring you from now on with a few limited exceptions that will be short and to the point.
I repeat, ignoring the most prescient, best analysis on these forums is cutting off your nose to spite your face.
*You’re* not listening: I’ve made it clear I’m done with the Peanut Gallery, your past nonsense, etc. You will clean up your act or you will not. Up to you. But you delude yourself when you continue to pretend you didn’t cause the trouble in the first place.
Delude yourself or don’t, up to you.
Reminder:
The economics dragging down effective Climate Change policy:
The appallingly bad neoclassical economics of climate change
https://www.tandfonline.com/doi/abs/10.1080/14747731.2020.1807856
214 nigelj:
15 Jan 2021 at 3:11 PM
I’m not interested in an english lesson. …It wasn’t meant to be combative.
And yet…
Until you realize your limitations WRT expressing yourself accurately, you will continue to make the same mistakes. Perhaps making sure to reread as if someone else had written it before posting would help.
I teach my students to use questions about every point in their essays to see if they missed something, were unclear, or failed to consider something germane.
215 nigelj says:
15 Jan 2021 at 3:39 PM
mike @210
it’s kind of steeped in the old economics of the gold standard and is invested in some very old school economic ideas…
He states his reasons clearly.
I am not going to go into detail because I think a lot of folks are tired of the econ discussion.”
And why he doesn’t do point-by-point analysis.
But you say…
You may not realise this but your response is pretty much an ad hominem.
Because it wasn’t. He clearly stated *why* it is steeped in old economics.
Instead of rebutting their criticisms in detail, point by point
See above.
you attack their history and credentials.
No, he didn’t.
Mike:” We need to talk about taxation in a positive way as a means to address existential crises and a macro-economic tool to provide stability to the economy.”
I am not sure how politically realistic is this, <unless you make the carbon taxes revenue-neutral and make sure that they are seen as such – in Canada Conservatives won or tried to win federal or provincial election after election by deliberately misrepresenting revenue-neutral tax by omitting the revenue-neutral part and portraying it as "tax grab that hard-working Canadian families can't afford", even though most the "hard-working families" would actually gain a net tax-cut.
It's not only a cynical lies, but in fact for political gain they sell their ideology – since of all ways to reduce the GHG emissions, conservatives should be for that one – because it is the most market-oriented and least hand-controlled by governments.
But to work in economies with significant trade (i.e. almost every country now)
you have to make sure that the trading partners also have a comparable price on their carbon, or that you slap the carbon tariffs on those that don't.
#227, Piotr–
Perhaps such Big Lies as you (correctly!) describe need to be systematically countered and refuted. Not that that would be easy…
221 nigelj:
16 Jan 2021 at 2:31 PM
You haven’t got the message.
It’s amusing you think this, but also sad.
I’m going to be ignoring you from now on with a few limited exceptions that will be short and to the point.
I predict otherwise bc you have shown almost zero self-awareness, and without that you are doomed to repeat your patterns over and over.
And since when have you ever admitted any of your own mistakes?
Always. This is the problem here: I have not shied away from saying when insulted I hit back full strength, but you still pretend you are an innocent.
Over and over I react to something insulting you have said only for you to claim it wasn’t what you meant. In your mind, this means it’s all my fault. You don’t use logical fallacies… except, well, you do; you don’t misspeak, but you misspeak, but I should be able to read your mind so your poor communication skills are my fault.
And on and on.
No, I’m not angry. This was just to funny to not respond.
227 Piotr:
16 Jan 2021 at 11:05 PM
Mike:” We need to talk about taxation in a positive way as a means to address existential crises and a macro-economic tool to provide stability to the economy.”
I am not sure how politically realistic is this
I know how realistically existential the threats are that we face. Can you explain why you think people realizing there is a threat to their very lives and/or civilization won’t result in behavioral changes?
Mal Adapted @222, could you please amplify or clarify the last part of your post a little bit? I think I know what you mean, and it sounds interesting but I need a bit more.
————————————
Killian @223
I better define ignoring better since you seem to want that level of precision. I will be scrolling though your material quickly a little bit like KM does. I may read some of it on occasion. I will not be engaging with you much any more, and when I do it will be short like this. I may respond in more detail on links you post.
The reasons are not just tone. Its because Im not interested in all the bickering about language and who said what years ago, the personal stuff, and Im not getting useful responses to my comments on substantive matters related to climate. I dont expect agreememnt but I do expect useful meaningful responses. Ive tried and am giving up. Obviously the internet is full of options, and I contribute elsewhere and without all the drama you get on these pages.
———————–
Killian @225, I realise MY limitations. For example @172 I concede “Maybe I could have been clearer what I really meant.” You dont realise YOUR limitations. And I dont know how to change that so Ive given up trying. Another reason Im scrolling on past your stuff stuff faster now and mostly not engaging with you.
Piotr @227 says “But to work in economies with significant trade (i.e. almost every country now) you have to make sure that the trading partners also have a comparable price on their carbon, or that you slap the carbon tariffs on those that don’t.”
Came across this a couple of days ago. Seems relevant:
https://www.carbonbrief.org/guest-post-how-to-fairly-share-emissions-from-goods-traded-around-the-world
For reasons why people are often reluctant to respond to threats to civilisation please read this:
https://www.npr.org/templates/story/story.php?storyId=5530483
nigelj:
I mean something seems to compel both of us to respond to childish provocation by other commenters, that we would ignore if we were ruled by reason. Our compulsions seem to represent “instinctive” behavior we’re doomed to repeat despite knowing better, even in this virtual arena where we have nothing important at stake. So much the worse for “free will”, no?
Killian: “ Can you explain why you think people realizing there is a threat to their very lives and/or civilization won’t result in behavioral changes?”
We are talking about NOW, not ONCE “people realize”. Science has been saying about the threat for several decades now, yet politicians of the major federal and provincial parties in my country have been running and WINNING their campaigns on being against the carbon-tax – as recently as in 2019.
And we are talking about Canada, a relatively well-educated democratic country AND about a modest in size, REVENUE-NEUTRAL tax – i.e. the one which SHOULD have caused the LEAST resistance, both among the population, and conservative parties that campaign against it.
I thougth it was obvious from my previous post – but judging from your response – not to some – _I_ am not saying not to implement carbon taxes – I am saying that due to the political cynicism and vulnerability of the population to the manipulation (as we have seen over the last 5 yrs in the US) – to have even a chance to be accepted – the carbon tax has to be REVENUE NEUTRAL.
And it has to be a part of an international action among the leading countries, with tariffs leveling playing field with exporters from the countries that do not have one.
And I could add, that not only it should BE revenue neutral, but also should BE SEEN as such – i.e. refund cheques to each household with BIG letters “Carbon Tax Refund”, i.e. NOT via reducing some other taxes at tax time, which nobody would associate with the higher taxes they paid each time they were at the pump – Oil companies make a big deal specifying on the receipt how much th gas would have been cheaper if we only didn’t have to pay our gas/road taxes.
And it has to be defended vigorously against the cynical manipulators who will portray it as “just another tax grab the hard-working families of [enter here your jurisdiction] cannot afford“.
And has to be defended against the politicians trying to sneak in the tax INCREASES under the cover of a carbon tax. Not to look far – my province, struggling under the double whammy of the collapse in offshore oil prices and doubling the costs of a hydrodam in Labrador, introduced a deficit-reducing surcharge of several cents per litre on top of the existing gas taxes. Then the federal government came and told the provinces to implement carbon tax or face federal (revenue-neutral carbon tax). My province simply changed the temporary save-the-prov.-budget gas-tax into a permanent “carbon tax”, and continue keeping the money for itself, i.e. NOT revenue-neutral to the people.
This may poison the well for the carbon tax in the future, when the prov. budget hopefully improves, or when tax has to increase (according to the Potsdam institute simulation, linked recently by D.Benson – it should go up several times, to $100 per ton, to be effective).
And a COVID update – given the massive deficits by all governments due to COVID – there will be a temptation to reach into the carbon tax, in places that currently were revenue-neutral.
This is vitally important to climate change because it means anything we want to do regarding mitigation and adaptation, we can do. There is no economic or financial limit.
VITAL to understand! We will not be able to mitigate and adapt so long as people believe it is because we cannot pay for it.
How money functions. As I said, taxes fund nothing, money is essentially unlimited so long as taxing is possible. The issue is *whom* to tax: Should the wealthy be charged with controlling inflation, or the rest of us?
https://threadreaderapp.com/thread/1337737606688333826.html
This is the key section WRT money creation, taxes, value of money. (It’s very long for a tweet thread, but read it all. This is maybe 25 to 35% of the thread.)
How is it possible that although all money is made by promises – including yours, and mine – the government is so important? First, it alone creates the currency. Secondly, as I noted, it has its own bank. So it can always repay, because it will always lend it money.
So, it’s the government and it’s Bank of England, and their promise to pay that is actually behind the real value of our money. Not gold. Not notes. Not coins. Not how strong the rest of the UK banking system is. The promise that the government makes is what matters.
But why is its promise so good? Because it has the means to back it up. Having a bank is not enough. Having the means to tax changes everything. That, and the ability to pass law to make sure tax is paid. And then only in the currency the government chooses – the pound.
Tax is what gives the pound its value. If the government could just create money without limit it would soon be worthless. But it does not do that. Tax ensures that the government can control the amount of money in the economy.
A lot of that money is created by the government. Every time it spends it tells the Bank of England to pay whoever is required. And it does that, because it trusts the promise the government makes to repay it. Well it would, wouldn’t it? After all, the government owns it.
But what the Bank of England does not do is check whether it’s got money available to lend the government to spend. It does not need to do so, after all. All it need do is trust the government’s promise to repay. And then it creates the money that the government wants to spend.
This is really important though. What it means is that tax does not need to be collected before the government spends. Instead the government always spends the money its bank creates for it when instructed to do so.
But that means something else. It means the government never spends taxpayers’ money.
It also means that tax does not fund spending. That can happen without tax.
So what does tax do? It does something really important. It recovers the money the government has spent into the economy. Enough has to be collected to control inflation and make good on the promise that the government gives when it guarantees all our money.
For those who want to really understand this, read that entire thread. For those who want to bullet points, this is from the end of that thread. (Remember! This is key to dealing with mitigation and adaptation if you believe we must do so via the current economic system. (As you know, I think we need to ultimately transition to a system of nested Commons, but even with that, we must transition, and this knowledge makes it crystal clear it is entirely possible to do so because money, debt and taxation do not function the way we have been told for the last 100+ years.):
But to make sure this is clear, where does this new knowledge that comes from the very simple understanding of how money is created (not printed, or made – created is the right word) leave us?
First, it says the government underpins the value of all our money, because whilst all money is a promise to pay, the government’s promise is the best, and our banks could not function without the support of that promise. We need to remind arrogant bankers of that, often.
Second, whilst cash saving is important to people it’s also pretty important to realise that it is much like dead money. It is not used to fund bank lending or to pay for government spending. That does really mean the state should not be subsidising it with things like ISAs.
Third, spend comes before tax, always.
Fourth, the government always spends its money, and not taxpayers’.
Fifth, tax does not fund government spending. Tax is instead used to control inflation, redistribute income and reorganise the economy, but never to fund spending, and that’s true in any country with its own central bank and currency and that never use another country’s currency.
Sixth, the government does not need to borrow because it can always create the money it needs on overdraft at the Bank of England.
Seventh, the borrowing it does do is a favour to those who want to save with the government. It does never need the money people save with it.
Eighth, that means we need never have a debt crisis. If we don’t need people’s money, because the government can always create its own, where’s the debt crisis? Especially when a government can always repay on demand, simply by asking the Bank of England to make the payment?
Ninth, the amount of savings a government wants to accept, and the interest rate it now has to pay on it, can always now be controlled through the QE system. All this does is regulate the government backed, cash based, savings system. Nothing more, and nothing less.
Tenth, I stress, that means all interest rates are now heavily influenced by the government and many are under its direct control. So where is the interest rate panic?
Eleventh, inflation is not now controlled by interest rates – because we don’t want them to rise. It’s going to be controlled by tax. I admit, right now no one has an ideal tax to achieve this goal. I am working on it. It is possible. And it’s progressive, and so fair.
Twelfth, we can have full employment at fair wages, and it pays for itself.
Thirteenth, there is no need for austerity, at all in that case.
Fourteenth, please go and talk about this. By really understanding something as simple as how money is created – and by being aware that it is never in short supply as a result – we can rebuild from the mess that we are in. We can have the sustainable world we want.
Sorted. The End.
232 nigelj says:
17 Jan 2021 at 2:53 PM
Piotr @227 says “But to work in economies with significant trade (i.e. almost every country now) you have to make sure that the trading partners also have a comparable price on their carbon, or that you slap the carbon tariffs on those that don’t.”
Came across this a couple of days ago. Seems relevant:
https://www.carbonbrief.org/guest-post-how-to-fairly-share-emissions-from-goods-traded-around-the-world
Me: This is simple. Tax at the end-user point, not the source, because then you reduce emissions by the more direct and long-term method of demand destruction. Consumption is the key to dealing with the interconnected crises.
at K at 230: I think you are right that talking in a positive manner about taxes in the US requires some heavy lifting, but hey, that’s ok. I plan to just keep on spreading and repeating the idea that upping taxes is a better way to deal with inflation and an overheated economy than hiking interest rates and cutting spending as Chicago School likes to do. Reagan really beat on the “taxes are bad, government is the problem” message for a long time before folks started to think he was right, so I think it’s to be expected that it will take a long time to correct Reagan’s wrongheaded message.
As to why folks don’t folks don’t get motivated by existential threat: I think there is ideology at work there, So, the threats are posed by folks/scientists who appear to be obsessed by scientific facts and other leftist principles, so folks from center/right to far/right can be convinced by a media giant (fox?) that the threats are politically motivated. There is also a long standing meme in human history that “the end is near” and yet we continue to muddle along. Existential threats suffer the fate of following in the footsteps of folks like the Heaven’s Gate bunch. That sad history is useful if a person wants to engage in a bit of denial about global warming and the sixth great extinction event.
I encourage you to engage with the folks who don’t bait you and to ignore the ones who do. I think it is possible to cultivate a meaningful and useful conversation here and you bring an unusual viewpoint, so what you have to say may be more interesting than a lot of mainstream prattle. It’s not like most of don’t know the mainstream view on things. We can tune in to that everywhere we go, in fact, it’s sometimes pretty difficult to tune it out.
Cheers
Mike
Barton Paul Levenson, I sent you an email about a couple of issues and havent heard back. You might not be interested in them so fine, but perhaps it went to the junk email folder so perhaps check that. Nigel.
Nigel(232) Came across this a couple of days ago. Seems relevant:
https://www.carbonbrief.org/guest-post-how-to-fairly-share-emissions-from-goods-traded-around-the-world
It is directly relevant ONLY IF if the GHG reduction targets were absolute (e.g. per capita), NOT when they are RELATIVE to the country own emissions in the past – say 6% below given country’s 1990 emissions (Kyoto) or whatever % below given country emissions in 2005 (Paris).
(more about using own past emission as the reference – its advantages, limitations, and deniers lies, I’ll write in a separate post)
So for the only game in town, the Kyoto or Paris-like types of GHG targets – this paper has no direct relevance. Indirectly, it might have some – allowing to adjust how many % reduction a given country should be expected to have, with countries that INCREASED their carbon-heavy export over import surplus since 2005 – asked for less step % reduction (and those in the opposite situation – with more steep % reduction target).
But even that would require access to a lot of commercially-sensitive data to allow estimations which part of the profit (and payroll?) of a given company was realized in the country of production, and which in the country it exported to.
The authors admit this major practical limitation at the end of their paper.
On the other hand – the beauty of the carbon tax is that does not require all this
detailed tracking who realizes what % of the profit where – you just slap the carbon tax at the source – when you buy gas or get electricity , then include the cost in your price – and whoever USES the product pays the carbon tax included in the energy it took to make the product.
The main political difficulty of this, how do you apply it to exports – without any adjustment – the carbon tax I pay in the price of a gizmo I bought from China would be collected by the Chinese government – and they are going to keep it – thus
preventing making the carbon tax revenue neutral.
So instead – I suggest that carbon taxes collected on products for export are refunded to the producers AND THEN subject to the carbon-tax tariffs, in lieu of carbon tax, in the country of destination, say – Canada. And Canada then would take all the money from those tariffs + plus all carbon taxes it collected internally – and pay it back to the people of Canada, making it REVENUE-NEUTRAL, thus making the needed larger carbon taxes ($100 a ton according to the Potsdam Institute) politically possible.
The additional selling point of the carbon taxes for the developed countries would be increased protection of the domestic manufacturing – as the lower wages which are the main reason for moving the manufacturing offshore, would make a smaller portion of the product price.
And that’s in addition to:
* the general benefits of carbon taxes:
– putting the price on carbon and using the efficiencies of the market economy to achieve reduction at the lowest price,
– applying it to everybody and not only to large emitters at the cap and trade usually do)
and to the benefits of being REVENUE_NEUTRAL:
– the mentioned political feasibility (falsifies the “we can’t afford this tax grab” counterargument)
– social justice – people who use LESS than average of GHGs – get more money back than they paid in, those who use more – get back less than they paid in. So in effect, those who use more than their fair share, pay to those who use less.
Mal Adapted @234
“I mean something seems to compel both of us to respond to childish provocation by other commenters, that we would ignore if we were ruled by reason. Our compulsions seem to represent “instinctive” behavior we’re doomed to repeat despite knowing better, even in this virtual arena where we have nothing important at stake. So much the worse for “free will”, no?”
Ok thats crystal clear. This is what I think, fwiw. ( A quick “gut reaction” on my part, ha ha) Our responses are indeed compulsive as you say, but presumably we are just defending ourselves which is not inherently wrong. We are evolved to defend ourselves and if we didn’t we would quickly die. But we also have a higher consciousness that knows that responding to this stuff is often futile, a waste of time and that the threat is rather hollow.
The higher consciousness fights with the brains more primal gut reaction, the instinct, the compulsion. And sometimes reason suceeds, because I do ignore some people or at least ignore the taunts and concentrate on the stuff with substance. Its hard doing this, but we are not “doomed to repeat.” I have already vastly reduced my responses to K. I find it hard to resist responding to denialists but on big news media websites where lots of people read the comments I keep my responses brief and these days I avoid engaging them.
Its almost like we are beings with “half a free will” and it requires effort and work arounds. Evolution is messy. Free will is a simplistic concept. I’m not expressing this as well as I want.
Here are some advantages, denier lies and real limitations about Kyoto or Paris GHG emission reduction targets are designed: they are not per capita targets, the same in the world, but their are country-specific – it’s a RELATIVE reduction compared to some reference emission by the SAME COUNTRY in their “base-year”: 1990 (Kyoto, and for some in Paris) or 2005 (others in Paris).
In fact, when possible, countries choose their base-year to make their promised reductions LOOK more impressive:
– Russia in 1990 had higher emissions than in 2005 (the inheritance of the very polluting Soviet Union), so they used 1990;
– Canada, the opposite, had higher emissions in 2005 (effect of the growth of population and GDP between 1990 and 2005, and an increase in oil and tar-sands extraction) – so they chose the 2005 as their “base-year”.
https://link.springer.com/article/10.1007/s10584-019-02494-7
But let’s go back to WHY we use % decrease from base-year instead of the universal per capita emissions. The short answer – to be able to compare apples with apples – to account for the differences in climate, population size and geography between countries.
This is linked to one of my favourite climate denier claim, even repeated at some point on Wikipedia page devoted to Canada’s climate policy, that “ Kyoto (Paris) are unfair to Canada, because we are so cold and sparsely populated country“.
But Canada was already cold and sparsely populated country in 1990 – so our reference point – emissions in 1990 – were already were inflated, thus accounting for both the climate and the distances. Yet, I have keep hearing this “unfair” claim all the time, even from a … conservative former member of the parliament who actually WENT to Kyoto, as an opposition party observer with the Canadian delegation…
In fact – one may argue that if anything – it is “unfair” to others – because our reference point 1990 or 2005 emissions, has been inflated not only by (the valid) considerations as climate and distances, BUT ALSO by our consumer CHOICES – our preference for living in large houses, energy-inefficient houses in the suburbs and our commuting from there by large cars, instead or smaller cars, or public transportation.
So Canada (and to even a larger extent, given the higher excess consumption there, the US) – got a credit not only for our climate and geography, but ALSO … for our excessive consumption choices.
And it gets worse: the first reductions are the easiest/cheapest (the low hanging fruit) – so it is cheaper to reduce by 10% GHG Canadian emissions than it is to reduce by 10% the emission in Europe which was already more energy effective
in 2005. Or in other words, it is cheaper to reduce your emissions if you replaced the large pick-up or SUV your drove in 2005 with a smaller car today, than if you already had a small car in 2005, so now you have to switch to the electric to get even partially comparable % reduction. So we have been rewarded by our reckless choice in the past, and Europe gets punished by their doing the right thing before
their base-year.
One can also argue that we may need a lower % reductions for developing countries – since their 2005 emissions were based on lower degree of development/level of life than the developed countries already had in 2005 so some of their increase is associated with getting people out of abject poverty.
On the other hand, another reservation about applying the lower % reduction there
– that in 2005 the developing countries had lower population, is much more DEBATABLE: my opinion is that NOT controlling the growth of your population is not an external force like geography or climate – but rather a societal choice, the same way as driving big cars and living in suburbs, so for me is not valid reason for relaxing their targets.
<shakes head sadly>
Killian still believes the fairy tale that the currency of rebuilding the world economy to be net zero emissions is money, and we can make as much of it as we like. It’s nothing of the sort. It’s labor (a considerable amount of it skilled) and energy. You can have all the money you like, but if you don’t have energy you can’t run a steel plant, a machine tool or even a hand forge. But with energy, you can run all those things even without money.
This simple fact eludes MMT enthusiasts.
I have a new great idea, I think. How about limiting commentors to, say, 2500 words per week. It’s not like most here read much that ~3 of the most prolific spewers submit here. The equivalent of 10 double spaced pages per week per commentor is certainly enough for anyone here to “inform” us of their intellectual insights, I should think.
Killian(238) “ This is simple. Tax at the end-user point, not the source, because then you reduce emissions by the more direct and long-term method of demand destruction. ”
So let me see if I understood you:
1. you are not interested in using taxes to give competitive advantage to the less polluting consumption over more polluting consumption, BECAUSE one can’t differentiate taxes in proportion to the incurred emission “at the end-user” level – since this would require the detailed knowledge of the life-cycle-emissions of EVERY type of consumed product. (as opposed to my suggestion of taxing at the start, which could be as simple as adding one number in the gas, or power, bill receipt).
2. Instead, you want to use INDISCRIMINATE (see your p.1) taxes to …” destroy demand“, i.e. consumption. To stabilize CO2 we need reduction of emissions by 70-80%, more if we want to reduce CO2. So we would need the destruction of 70-80%, or more of global GDP?
Good luck with running on _this_ platform in the next election. Denier politicians would LOVE you as their opponent. In fact, if people like you didn’t exist, they would need to invent you – so they could use to discredit by association everybody saying about the need to reduce emissions, by painting ALL as the extremists who want to remove 70-80% of people’s consumption.
And good luck with that message in the poorer countries, where people often use MOST of their consumption to just survive (food, heat, shelter).
The perfect is the enemy of the good. So I’d rather stick with my imperfect revenue-neutral carbon tax.
Regarding the commentary promoting MMT.
https://threadreaderapp.com/thread/1337737606688333826.html
In simple terms just to summarise the theory, to me MMT means the government creates money but creating too much money and you get inflation and government services crowd out the private sector like farming and manufacturing, and so the government taxes to stop this inflation. Taxes dont gather revenue as such, its just a control feature. I think the biggest advantage of MMT is that it avoids the problem of borrowing, and the disadvantages are it cannot provide a nirvana, or a great plenty of government spending and programmes, because ALL RESOURCES ARE LIMITED. The other disadvantages are well documented by the critics including the key problem that people just dont like taxes and tax increases (again putting it very simply).
So I’m just not that persuaded by MMT unless its confined to a limited role in govnt. finances in specific situations. Some other problems with MMT . This is really digging deep into the concept and its implications:
https://www.macrobusiness.com.au/2019/04/pros-cons-mmt/
Piotr @241, I only threw in the link on trade related matters for the sake of general interest, and Ive only briefly scanned it, and I’m not a big fan of its approach. Its fiendishly complicated to administer.
I definitely like a carbon tax. You are preaching to the converted. I see carbon tax and dividend as a bit of a compromise, but a good idea because its more politically viable.
For countries that are very ideologically adverse to taxes like the USA government level climate mitigation strategies might have to rely mainly on subsidies for wind farms and other infrastructure and so on. There are different ways of achieving the same ultimate goal.
Your solution to the carbon tax and dividend and trade issue looks quite good. Can’t fault the logic, although I will sleep on it, the problems sometimes jump out a day or so later. So I cant find any reason to add much or have a lively argument with you which is maybe fortunate because you wield a rather sharp scalpel metaphorically speaking.
239 mike:
K at 230: I think you are right that talking in a positive manner about taxes in the US requires some heavy lifting, but hey, that’s ok.
I didn’t raise that point, piotr did. The formatting got screwed up.
As to why folks don’t folks don’t get motivated by existential threat:…
All this is understood, but my point has been they don’t yet understand there is a true existential threat (most here still don’t fully get the risk aspect) but *once they do*, why wouldn’t they change? Conversely, how can we expect change *until* they do?
We have more and more scientists speaking up and saying things are far worse than even most scientists realize. (Where have we heard that for the last decade? ;-) ) As you know, I have advocated a long-tail risk, rapid mitigation approach to the climate conversation all these years. It is finally beginning to happen.
All big changes require tipping points. This tipping point is finally building into a significant wave. It may be too late, of course, but at least it is finally happening.
I encourage you to engage with the folks who don’t bait you and to ignore the ones who do.
Already past tense.
235 Piotr:
17 Jan 2021 at 4:55 PM
Killian: “ Can you explain why you think people realizing there is a threat to their very lives and/or civilization won’t result in behavioral changes?”
We are talking about NOW, not ONCE “people realize”.
This is a distinction without a difference. You aren’t going to get F&D, or anything else of any true significance, until enough of the public understands the existential threat is real and despite the reality the final result may be distant in time on human scales, the prevention of those final results happens now or never.
Science has been saying about the threat for several decades now,
Not so. Some science and some scientists have talked about, and believe, the threat is very short-term. There is nothing approaching a consensus on this at this time, so the public accepts the message that fits what they want to hear: Don’t worry. It’s not going to in your lifetime. We have time. Besides, technology and innovation!
I would argue that is the vast majority of messaging from scientists. Mann, e.g., is technocopian in this way and is very influential. Gavin seems to fit this description, though less explicit than Mann.
I know of no climate scientist who fully embraces natural solutions to climate and encourages massive reductions in consumption. Some come close, but still think the current system can achieve these when it clearly cannot.
So, sure, we agree about F&D if one is going to do a carbon tax, but that tax will ultimately increase consumption, giving us two steps forward and three steps back. But, if one considers it a short-term bridge that will continue ecosystem destruction, yet get some carbon reductions while serving to ease into solution sets that *can* result in a regenerative future, then it has some usefulness.
The problem is people see carbon taxes as solutions, not bandaids.