“Carbon taxes” are developed based on what is called the “Social Cost of Carbon.” These are elaborate computer models (simulations) that try to figure out how much long-term damage to the environment and health is done through the use and burning of hydrocarbons (fossil fuels – coal, natural gas, oil).
Since this calculation is done based on the projected warming of other computer simulations…and it is not done based on the real temperatures we are seeing (which is only 1/4 of predicted warming.), the ‘Social Costs of Carbon” end up being very high.
As well, the social benefits of the use of fossil fuels are not included in the calculations.
The French economist and demographer Emile Levasseur described how, if one steam horsepower was equivalent to the power of 21 men, in 1840, French industry had a million new workers, thanks to steampower. By 1885-87 that number had risen to 98 million or “deux esclaves et demi par habitant de la France” (two and a half slaves for each inhabitant of France.) - Matthew Sinclair
“Let them eat carbon; The price of Failing Climate Policies and how governments and big business profit from them”
Today, it is estimated that people in the Western world have the equivalent of ~97 men working on their behalf, through the power generated by fossil fuels. Thus life is comfortable, creative, filled with recreation and travel options and numerous time-saving, handy electrical devices. And…reliable power, on-demand.
However, wherever stringent climate change targets have been introduced, along with carbon taxes and cap-and-trade policies, the power that once enriched the lives of human beings has become a burdensome debt, fraught with problems.
⦁ In the EU by 2013, power prices skyrocketed 37% over 8 years above par with the US.
⦁ Millions of ordinary citizens were pushed into heat-or-eat poverty; thousands died in England due to poor nutrition or poor residential heating during the 2013 cold snaps.
⦁ In Germany, wind-farms were subsidized. Carbon taxes were imposed. Power prices rose. Businesses threatened to move off-shore and were given a subsidy incentive to stay. Conventional power providers, ordered to remain operating as renewables cannot function on the grid without conventional power back-up. As an incentive, subsidizes were paid to conventional providers. Balancing market power prices rose 400%. Grid reliability suffered as too much wind and solar came on-line – causing major industries to install their own, on-site power generation systems. The German renewable power transition is expected to cost up to €1 Trillion Euro up to 2030. The cycle of subsidies and taxes fell on consumers.
⦁ Germany is now building more than 20 new coal-fired power plants. For every wind or solar farm, you need equivalent conventional back-up power.
⦁ EU carbon markets were shut down by Interpol for corruption and fraud.
⦁ Organized crime capitalized on the intangible nature of carbon and renewable generation.
⦁ In the end, the environment was not helped one bit.
Canadian economist, award-winning author and professor, Dr. Ross McKitrick, helped us put together this layman’s guide to how the Social Costs of Carbon are calculated.
Dr. McKitrick also talks one-on-one about various aspects of climate change policy, politics and social impacts of Social Costs of Carbon on the economy.