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Dylan Florig
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After reading this article, I was shocked just at the number of factors that are damaging our oceans. It truly seems that we are in a catastrophic situation. If we fix only our fishing issues, there will still be pollution, acidity, and global warming threats. The line mentioned briefly in the article about heading toward an "end game" really caught my attention. It seems that in the coming future the only way to fish will be in privately managed fisheries. I don't know what effect this would have on fish as a human food source, but it is obvious that we would lose the marine biodiversity that makes our oceans so intriguing and valuable. As others have mentioned, it can be tough to get people to appreciate what is going on under the sea since much of it is not tangible, nor have many had direct exposure to the oceans. Even if the U.S. takes action on the issue of fishing, other countries that do not will continue to destroy the ocean, and ultimately the U.S. would just be at a disadvantage as a result of our decision, a scenario that sounds much like the global climate change problem. However, trying to convince fishermen or people in third world countries that they need to cut back on fishing seems like it will be a tough task to achieve. The future of our oceans certainly seems bleak to me now that I've read this article and discussed it in class.
As we've seen in class and in many of these blog articles, the long-term benefits of cleaner energy are undeniable. However, pieces throughout the term have also proven that the initial costs of all this new infrastructure are undeniably high. Like others said, it will be difficult to convince New Yorkers or any other Americans that it is worth spending their tax dollars for something that won't have tangible benefits for many years. As I've noted in previous posts, now may be a good time to try to implement these energy infrastructure changes. With interest rates still historically low, the high costs of this potential policy would likely be lower now than they'd be in the coming years. This also reminds me of something we talked about in Professor Goldsmith's Macro Theory class: the difference between government investment and consumption spending. An increase in government investment spending, like this kind of spending, would likely have expansionary effects down the road. If we keep this type of spending up while lowering consumption spending, we could end up with positive effects fiscally and in society as a whole. Again, it is just a matter of convincing millions of constituents that it is worth using their money for benefits they may never see in their lifetimes. That will certainly be a challenge. Then there would also have to be consideration as to how to implement the infrastructure changes, whether through command and control or through economic incentives. Overall, I was impressed by these statistics, and it would be interesting to see if the results of the study are accurate and even remotely feasible.
This article proved just how much of an uphill battle dealing with climate change is and will continue to be. Yes, the Republican party is doing all it can to be the "no taxes" party, but at some point there has to be an acknowledgement of the facts on climate change. I found it intriguing that the 1990 Clean Air Act was passed along geographical, not party, lines in Congress. I think there is a distint difference between today's issue and the acid rain issue, and that is the lack of easily visible evidence for casual observers. If forests were visibly being destroyed by acid rain, I can see how it would be easier to gain support for a measure to stop that from happening. However, with climate change, uninformed citizens (and members of Congress) can turn and look away from the technical and scientific evidence for climate change and its dangers. Some people look outside and see snow and think that's enough evidence against climate change; when members of Congress are catering to these folks plus wealthy lobbying groups heavily invested against cap and trade and carbon taxes, it is tough to get anything meaningful done. I think there needs to be more education on the dangerous effects of climate change even though it's not easily visible now. Maybe when there is pressure from the American people, politicians will have to, once again, take the issue of climate dangers seriously.
Toggle Commented Mar 11, 2013 on Another Political Football at Jolly Green General
After clicking the link to the original Washington Post article, I was shocked at the costs of pollution control and modifying power plants to make them more efficient. The article said it will cost $5 billion to "install pollution controls" and reduce emissions on its East Coast plants. This cost, when actually quantified like this and not just spoken vaguely about, shows just how costly "going green" can be for power companies (at least in the short term - there may be long-term savings). This cost makes me think that we need some forms of government intervention to encourage firms to change their behavior. Market forces and "doing the right thing" probably will not be enough to encourage firms to make changes. This is where I believe the "carbon tax" could be used most effectively. If a tax on carbon were in place, AEP would save dramatically on its tax bill, since it could lower its carbon emissions by over 600,000 tons in the next decade. The carbon tax might encourage other firms to become more efficient as well. As we've talked about in class, maybe lowering income tax while implementing a carbon tax would make our tax system more efficient, as it would incentivize and disincentivize the right things.
One consideration that came to mind while reading this article was that the black carbon-spewing energy sources have to be replaced by something. This could cost huge sums of money in those developing countries where black carbon is particularly prevalent. The decision for the environment's sake is easy, but when it comes to actually implementing these changes, there are costs that could turn out to be particularly tough for many countries and firms to pay. At the same time, we could create jobs and help the climate in the long term if we invested in better infrastructure and incentivized "going green" for companies that have old equipment, particularly in developed countries like the United States. I also thought this article was interesting because it made the logic behind black carbon's heating effects seem so simple. It's strange to think that its dark color that absorbs heat is all it takes to create warming in our atmosphere. I was surprised that I hadn't heard of black carbon before, since it seems like it would be fairly easy for scientists to find that it is coming down on snowy areas of the globe. I'd also like to know just how much effect this has on global temperatures. It's not as if the polar ice caps are half covered with black soot, so it's interesting that a relatively small amount of black particles on the snow can have such a big impact on temperatures.
Toggle Commented Feb 11, 2013 on Worse than we thought.... at Jolly Green General
I was surprised by the U.S.'s lack of energy taxes. I knew from class that the U.S. had a low carbon tax, but I never realized that there isn't a special federal tax on residential heating and air conditioning. It seems to me that a tax on these would do an effective job of encouraging families to keep the heat one or two degrees lower in the winter or the air conditioning one or two degrees warmer in the summer, which could lead to results on climate change if many families and businesses react to the new tax. The author also brings up the idea of investing in better home insulation. One idea that came to mind after reading these comments was to place a small tax on home energy, and use the tax dollars to subsidize new insulation in older homes. This idea could create jobs in addition to limiting our carbon emissions. While the specifics of the plan would have to be determined, it seems that the concept could be logical and efficient. Similarly, an increased tax on gasoline could be levied and used to somehow incentivize cars with better mileage, either by increasing the subsidy on high-efficiency cars or by incentivizing higher mileage car development by firms. Of course, we have to be very careful with excessive taxation in this economy, as lowering incentives to spend could push our economy back into recession. If the author of this post is correct, however, it is difficult to put a price on essentially saving the world from ourselves. Another concern is that just because the U.S. does something about carbon emissions, there is no guarantee that other countries will take action as well. Therefore, even with U.S. policy changes, the world could still be threatened by other countries' policies. It's a bit of a game theoretical issue, since we need cooperation from all nations, but everyone also has incentive to cheat in their own interest.
While the author's explanation of why the Pigouvian tax does not create a deadweight loss is interesting and informative, it seems a bit harsh to say the students are flat out wrong. First, the tax is creating a deadweight loss specifically in the market that it is applied to, ignoring any externalities. In the gasoline/driver market, there is an equilibrium price that gets distorted by the Pigouvian tax, leading to a deadweight loss in that single transaction. I would ask the author to clarify why this is not still a deadweight loss in a way. We may be improving efficiency on a large scale, but individually, transactions with any sort of tax have to create some kind of inefficiency. There may be more nuances and technicalities than the author could have fit into this small blog post. Additionally, as others have said, the government clearly does not use revenue from gas taxes solely for anti-pollution efforts. The gas tax works as a Pigouvian tax, but it is also a fairly easy way for the government to bring in revenue. This seems tied to Nathan's point about what we choose to tax. Obviously we cannot support the government through sin taxes alone, but if we chose to tax income at a lower rate and things with clear negative externalities at a a higher rate, perhaps we could do a better job at encouraging spending on products with little or no externalities (i.e. crayons or e-books). It may be politically challenging but we may get more economic efficiency out of something like this, as these taxes would hit the people causing the externalities the hardest.
Toggle Commented Jan 28, 2013 on My Bad..... at Jolly Green General
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Jan 15, 2013