A climate solution where all sides can win

[miniboes]

Video
https://www.youtube.com/watch?v=ta2Wvy9F_gA&feature=youtu.be

Transcript:
https://www.ted.com/talks/ted_halstead_a_climate_solution_where_all_sides_can_win/transcript?language=en

This policy entrepreneur proposes a climate policy similar to what i advocate. It consists of 4 parts:
1. Gradually rising GHG tax
2. Return money raised to all citizens as 'carbon dividends', like a basic income
3. Eliminate regulations that are no longer needed as emissions fall (this step is mostly to appeal to right-wing people)
4. a 'climate domino effect'; tax imports based on ghg content, which increases dividends, which makes foreign citizens want dividends too.

He argues that the domino effect could take off if just one major power adopted this policy.

What do you think of this proposal? Would you support it, and what would you change?

[brimstoneSalad]

Can you explain #4?

It's very hard to guess at the GHG emissions from finished products, since it depends substantially on the exact process used to make them and their components, and where the power to do so came from.

[miniboes]

Can you explain #4?

If country A has a carbon tax, and country B does not, domestic products of country A are more expensive than imports from country B. Therefore, country A decides to tax the imports based on their estimated greenhouse gas emissions. The revenue from the import tax feeds into the carbon dividends that the population of country A receives, but it's getting paid for by country B. The idea is that the people in country B will want the money not to go to people in country A. Therefore, country B implements the carbon tax as well to get the same revenue for dividends from imports. The logic is that this would create a sort of domino effect where the more countries have a carbon tax, the more attractive it is for other countries to adopt it as well.

[brimstoneSalad]

Aha, I see. Yes, that's a good system if we can rely on country-wide changes like that, but national governments aren't necessarily rational agents, and people aren't necessarily going to see that as lost revenue.

But shouldn't the proceeds be used to subsidize exports to non-taxing countries?
It seems like this could be pretty detrimental to a single country, particularly if they rely on an export economy.
Or maybe only taxing goods to be consumed in the country or which would be exported to other taxing countries would be a better start?
Exports to non-taxing countries could be left tax free to keep the country competitive.

As for the import, a system that encouraged companies to make lower carbon products might be even more effective than relying on government level change. The trick in that is accurately tracking carbon emissions in the production. That's expensive, so maybe that tax could just be dedicated to oversight costs (and exports left untaxed).

[miniboes]

Aha, I see. Yes, that's a good system if we can rely on country-wide changes like that, but national governments aren't necessarily rational agents, and people aren't necessarily going to see that as lost revenue.

That's true, but I think they very well may if it's adopted by a major power like the EU or USA.

But shouldn't the proceeds be used to subsidize exports to non-taxing countries?
It seems like this could be pretty detrimental to a single country, particularly if they rely on an export economy.
Or maybe only taxing goods to be consumed in the country or which would be exported to other taxing countries would be a better start?
Exports to non-taxing countries could be left tax free to keep the country competitive.

Yeah, i think exempting exports from the tax is the way to go, especially if the other country has a carbon pricing system too (you don't want the same emissions to be taxed twice).

As for the import, a system that encouraged companies to make lower carbon products might be even more effective than relying on government level change.

How would you encourage businesses to decarbonize if not through a financial incentive (tax/subsidies)?

[brimstoneSalad]

Yeah, i think exempting exports from the tax is the way to go, especially if the other country has a carbon pricing system too (you don't want the same emissions to be taxed twice).

If the other country has a carbon tax, then you DO tax the production, and the other country exempts imports made in your country because the tax has already been paid.
It's much easier/cheaper to tax at the production level than the import level.

The only time you should exempt the tax on production is when it's being exported to a non-taxing country, so it stays competitive.

How would you encourage businesses to decarbonize if not through a financial incentive (tax/subsidies)?

By taxing imports with precision, so the companies are encouraged to lower their carbon foot prints to make their products more competitive.
Use of more recycled plastic, and even insulating their worker factories so they spend less on climate control.

Taxing at that level of precision would be very expensive, and probably burn through all of the revenue generated from the tax, but it would encourage companies to lower their carbon emissions.
Estimating based on broad product categories doesn't (which was what would have to happen if we were to keep that revenue).