Ending Planetary Socialism

Yesterday's New York Times published my op-ed under the somewhat provocative heading "Going Green but Getting Nowhere." The point, of course, is not to give up, but instead to look for policy solutions that channel market forces in the right direction. Not because the market should be king, but because it all too often is.

One of the key figures in it is the cost of $20 per ton of carbon dioxide. That comes from an immensely important appendix to an obscure government document. Table 1 summarizes the results of painstaking research, trying to tally the full cost of carbon pollution in the atmosphere. (The exact number is $21.4, of course with lots of uncertainties around it.)

That number is a consensus estimate of sorts. As such, it ignores several important factors that haven't yet found their way into standard models like the risks from low-probability, high-impact events -- the truly scary climate scenarios that typically dwarf all else once included. (By one estimate, the number could be as high as $900 a ton.)

The point, of course, is that in the United States right now, carbon has a price of close to $0. That's the price each of us pays individually for the tons we emit, while society pays the full $20 or more. The term of art often used to describe the cost to society is "social cost of carbon." I prefer "socialized cost."

That's what it is: privatized benefits, socialized costs. It's what caused the financial crisis, and it's what's causing the planetary crisis as well.

It's also the sole origin of the phrase "planetary socialism."

Amazingly, some of the most thoughtful responses I received in reaction to my op-ed seemed to be treatises on the benefits of socialism. So just to be clear: Yes, I realize that "socialism" has many other meanings. Yes, I do like single-payer health care systems as much as the next Austro-American who has experienced both. No, I don't have anything against the exemplary Scandinavians who always seem to be doing the right thing, even if it's not in their self-interest.

Sweden, it turns out, has had a carbon tax for quite a while -- one that's much too small and leaky, but a carbon tax nonetheless. Leave it to socialist economic systems to privatize the cost of carbon pollution.

 

 

 

Follow Gernot Wagner on Twitter: www.twitter.com/GernotWagner

Comments

[Marcus1]

03:15 PM on 09/12/2011

Wagner takes a shot a Sweden while the U.S. is sinking.

[Bryan Seigneur]

12:10 PM on 09/12/2011

I applaud your efforts. There is little analysis, only gut-thinking on the right of the spectrum.Only by simplifying rhetoric and putting it in conservative terms like this, will action to reduce and entirely stop fossil carbon be taken.

Remember:

- Warming is not manmade, it is fossil carbon-caused. Go straight to the point if there is nothing to be gained by going the long way.

- Pricing fossil carbon must put the money back into the economy. E.G., via generic tax cuts.

[deweaver]

08:41 PM on 09/11/2011

A $100 per bbl oil tax would be even better. That would be enough for a major shift away from oil and without oil dependency, most of our military would be irrelevant and could be shut down. If we didn't need oil, we could tell the middle east and Venezuela to go pound sand.

[stacy slay]

02:47 PM on 09/12/2011

Go right ahead democrats, I double dog dare you.

[sheila]

07:43 PM on 09/11/2011

since you are an economist, no doubt you know that these toxic, destructive freebies we hand to Big Energy, Big Chemical, Big Industry, Big Agriculture, etc. are called "externalities" and they represent a complete failure of the free market. it's interesting to me that the most rabid self-proclaimed "free market" fanatics demand that the markets be massively and corruptly manipulated to externalize (aka socialize) the costs of their destruction while privatizing profits.

when you run the numbers, it's not just GHGs you have to count, of course, you must also count land use, dead species and water waste, which means most Big Solar, Big Wind and Big Transmission are also complete boondoggles and efficiency/passive heating/cooling and rooftop - not desert - solar are the only fair and low-impact options.

why then, are we not skipping over the Chevron Solar, BP Wind and Sempra Transmission death, destruction and enormous expense, and heading straight to decentralized, democratically-owned CLEAN solutions right where the power is needed? there is no excuse for killing more wilderness to greenwash a Big Energy handout of monumental proportions...

[Marcus1]

03:13 PM on 09/12/2011

F/F

[TheGreatRenewal]

12:29 PM on 09/11/2011

Words are important and most people use the word 'socialism' to describe anything and everything that is based on sharing or collective actions ... and this is nuts. We have a 'commons' problem ... those parts of our environment we share in common ... with other humans, plants and animals ... our air, water and soil.

We must have new words and take different actions. I'm naming the next paradigm ... the Great Renewal. I'm encouraging people to take their niche passion and start to describe the language, behaviors, policies, laws, institutions and organizations that need to develop around that specific topic. Carbon emissions is just one. Carbon pollution production might be another, materials used that produce carbon emissions will be another. We need to look thoroughly at every aspect of how we continue to live on this planet.

We cannot be sustainable unless we renew and regenerate extensively, constantly, pro-actively, with intent and with delight.

[Angus R]

07:57 AM on 09/11/2011

Mr. Wagner:
I am not sure I understand what your talking about and I am not sure if you know what your takinng about.

[justhinking]

03:07 PM on 09/11/2011

He is saying that by not having a carbon tax that the polluters are socializing the cost of polluting. Meaning regardless of whether or not we tax carbons we (as a society) are still paying for the affects of the pollution. Mr Wagner wants to privatize the costs by letting those that pollute to carry the costs themselves. It is a matter of sematics but that is what makes it an interesting argument.

[Riddley Walker]

03:27 AM on 09/11/2011

Australia is implementing $23 a tonne carbon tax on the major polluters this week, to become effective July 1. Oncosts to the ordinary people will be covered by tax cuts, paid for by the revenue arising. The other part of the revenue goes towards supporting new sustainable energy options.

[aligatorhardt]

08:45 PM on 09/11/2011

Most developed countries are taking action on these issues. UN’s IPCC Releases 900-Page Renewable Energy “Bible”

Australia Plans to be Carbon-Neutral by 2020. - Scitizen

[quillsinister]

11:05 PM on 09/10/2011

I'm glad you clarified that. There is an entire political movement growing around the banner of "ecosocialism" and I'm sure they feel they're doing good work. :-)

[ILoveFiction]

07:54 PM on 09/10/2011

A penny a pound?