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Comment by NickM | Hacker News Reader

I think all the bastardized carbon accounting, market based solutions are on average quite bad.

I'm curious, do you think the whole idea of a market-based solution is bad, or do you just think that actual real-world implementations have been lacking so far?

I mean, it seems to me that if you tax emissions strongly and uniformly enough, then at some point it has to have an impact. I think existing schemes have just been pretty weak.

I agree that carbon taxes can potentially hit poor and middle class folks unfairly hard, but this can easily be solved via carbon dividend type schemes.

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> it seems to me that if you tax emissions strongly and uniformly enough, then at some point it has to have an impact.

One way to look at that is that you're saying any market-based solution strong enough to be effective is indistinguishable from an outright ban.

We could, for example, discourage smoking by putting a $500 tax on each pack of cigarettes. But at that point, you may as well stop pretending and ban it outright.

Another way to look at it is that bans are fair because they apply to all people equally. Taxes unfairly punish the poor who have less discretionary income. (A $100 tax on cigarettes would drive most of the working and middle classes to quit, but there are certainly a number of rich folks who would keep on lighting up because $100 means little to them.)

> One way to look at that is that you're saying any market-based solution strong enough to be effective is indistinguishable from an outright ban.

I'm not sure I agree. I could easily imagine a range of carbon taxes applied to vehicles where most, but not all, users would switch to electric. There could easily be people who like taking long trips far from major roads and are willing to pay a large premium to do so.

> Another way to look at it is that bans are fair because they apply to all people equally. Taxes unfairly punish the poor who have less discretionary income. (A $100 tax on cigarettes would drive most of the working and middle classes to quit, but there are certainly a number of rich folks who would keep on lighting up because $100 means little to them.)

That's a fair point, but I'm not sure your example is all that compelling. If a small number of rich people are willing to pay $100 in extra taxes to smoke a cigarette, is that really so bad?

The advantage of a ban is that you can also eliminate production and importation. If you have a legal path, that path will be diverted into the black market.

Black market cigarettes, sure. But black market cars? Cars are already individually registered and tracked by the states. You can’t just magic up an illegally imported car and get away with driving it for very long.

> If a small number of rich people are willing to pay $100 in extra taxes to smoke a cigarette, is that really so bad?

What is the rational to "letting" the rich smoke (replace with activity "X" if desired), but not everyone else?

For the most part, that is what the policy effectively ends up doing, and so enacting it becomes to an implicit approval of that result.

It's obviously not the only way of looking at the situation, but I think it has some merit. Interesting to think about, at least.

Smoking a cigarette harms society. Rich people can afford to compensate society for the harm they inflict, so that society comes out ahead.

But do they? Or does their platinum-level insurance pay for the new lungs, which really comes out of the working-persons' pocket?

> equally

Implies everyone is in the same situation. This is never true. For example, in WW2 we had gas rationing. You got a fixed amount of gas, regardless of how much driving you needed to do. The result was a black market in gas, where those who didn't need all their alotment sold it to those who did (at black market prices, of course, since this was illegal).

This is a good moral question. My impression is that some people today, especially here on HN, feel very uncomfortable taking any moral stance and instead have a worldview that says what is right is determined entirely by what the market produces. Basically capitalism is God.

I like capitalism, but I view it as a means to an end, not an end in itself. Instead of evaluating our moral against what capitalism produces, we should evaluate capitalism by how well it supports our morals.

From that perspective, yeah, I think it is kind of bad. If we are placing a high tax on cigarettes because our society has made a moral choice that cigarettes are bad and people who smoke are bad, then I think that moral choice should apply equally to all people regardless of wealth. My moral code states that power does not excuse sins.

On the other hand, if the tax is a pragmatic one to, say, help pay for universal healthcare and offset the higher medical costs incurred by smokers, then the tax is a reasonable approach.

In reality, the tax/law is probably a combination of the two goals, which is why I think a tax is kind of bad but kind of OK.

Regressive taxes are problematic, sure. But never mind any decision on moral grounds. Smoking, for example, has a high cost to society. We seek to reduce it to lower that cost.

No it would massively increase smuggling / crime as Americas experiment with prohibition showed.

You are missing one big advantage of market based solutions. They raise revenue.

For every dollar that is raised from taxing gasoline, is another dollar that can be used paying for social programs or whatever.

This can also be a strong dis-advantage because they incentivize abuse.

Look, for example, at civil seizure in the US. Police agencies are highly incentivized to do it since they get to keep the money, even when doing so is unjust.

In practice, tax-based solutions have pros and cons and you need to think about the incentives and unintended consequences that they lead to on both the enforcement and citizen sides. Law-based solutions do too, of course.

"I'm curious, do you think the whole idea of a market-based solution is bad, or do you just think that actual real-world implementations have been lacking so far?'

My theory is that the people push for market based solutions the most are usually the same people that are against regulations and taxes so whatever they come up with will usually be very weak. They certainly won't support taxation of carbon emissions to the degree that's necessary for real behavior.

I'm one of those people that push for market based solutions. I also support taxation to the degree that it is effective. So your theory is not supported by evidence.

I also support the idea of reducing other taxes in concert, so the tax is revenue neutral.

> I think existing schemes have just been pretty weak.

Most existing schemes seem to have been cleverly designed to avoid hitting certain industries with large enough lobbying power.

Taxing/banning/regulating specific polluters rather than pollution itself is just ripe for regulatory capture.

It sounds like he's arguing not that the policies have been lacking oomph, but that the policies could never really hope to handle all the nuance. If you could only set up the incentives right, you'd get the right outcome, but maybe that's a perilous & incredibly difficult task.

I don't think the whole idea is bad. Market based public housing schemes can be quite good, for example.

I do think that making stuff more market based to avoid "picking winners" is probably a bad idea. We know what the winner is here, more or less. The winner is non-ICE vehicles. We should be backing that, not 25% more efficient engines.

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