from the this-will-take-some-expaining dept.
Many have argued that Carbon taxes are ineffective, and cause economic disruption resulting in unemployment and flight of manufacturing to less regulated jurisdictions, or that it allows carbon emitters to continue to emit merely by raising prices and paying additional taxes.
In 2001, the U.K. government introduced a new carbon tax amounting to 15 percent of a manufacturing plant’s energy bill. This was called the Climate Change Levy (CCL).
The legislation also, included a less onerous option under which plants in certain energy-intensive industries would have that carbon levy tax reduced by 80 percent (to 3%) in return for adopting quasi voluntary agreement to "specific targets" for energy consumption or carbon emissions. This was called a Climate Change Agreement. (CCA).
The CCA legislation was designed specifically to mitigate possible adverse effects of the CCL on the competitiveness of energy intensive industries.
A research team led by Ralf Martin of Imperial College London found far greater reductions in electricity use and carbon dioxide emissions among those that were taxed at the full CCL 15% rate than those to opted into the customized CCA agreement.
This came as something of a surprise because the Agreements were designed to make compliance easier, less arbitrary, and above all, cheaper. However, it appears that the 15% CCL energy bill price signal sent a far stronger message to industry than the more flexible 3% CCA agreement.
Further, when the economic results were tallied, there was no measurable effect in terms of production, industry exits, or employment impacts.
We find robust evidence that the price incentive provided by the CCL led to larger reductions in energy intensity and electricity use than the energy efficiency or consumption targets agreed under the CCA. The tax discount granted to CCA plants has been justified as a means of preventing energy intensive firms from losing competitiveness in international product markets due to the unilateral implementation of the tax and to the lack of international harmonization. Although this has been widely argued, we find no discernible impact on employment, gross output or productivity across groups, and we cannot reject the hypothesis that the CCL had no impact on plant exit.
The rather rigerous full study was published in the Journal of Public Economics, and the full text is available on ScienceDirect.com.
(Score: 0) by Anonymous Coward on Monday September 22 2014, @02:34AM
.....
(Score: 0) by Anonymous Coward on Monday September 22 2014, @01:45PM
no measurable effect in terms of production, industry exits, or employment impacts.
I find that *very* hard to believe. Considering the *entire* market financially seized up from 2008 to 2009. There was no impact? No change in employment numbers? No change in productivity? That is very hard to swallow.
Employment numbers are typically meaningless. They are super massaged to meet whatever story narrative whoever is in charge wants to tell. A better number is total number employed. Then broken down into two categories part time and full time.
Also they let these companies 'shift' 'cost'. So instead of actually DOING anything they just raised prices and bought the offset. Then declared record gross profits. Then make more even money off the trade of the float.
Take most economic theories with a giant salt lick of salt. They are typically some sort of political agenda trying to sell something.
They usually cherry pick things to make whatever theory they are espousing sound good. In this case they picked 2001 to 2004. The market did decently well during those years. They left out 2005-2014. A cost increase during a point in time where productivity is going up yet they came out aprox even. That does not tell a very good narrative either. They picked a 3 year point in time where something like that takes years to shake out. Many companies that consume large amounts of electricity do not just up and move overnight as they are usually massive operations. It takes 5-10 years at least. For example where I live NAFTA has decimated the job market. It took until 2010 for the full effects of it to show.
This about sums up how I feel about most economics.
http://what-if.xkcd.com/imgs/a/111/summon.png [xkcd.com]
(Score: 2) by kaszz on Monday September 22 2014, @02:42AM
Perhaps those that couldn't make ends meet with a 15% energy tax put some effort into getting into the Climate Change Agreement (CCA)?
Trying to transfer the impact of production, industry exits or employment impacts to the industries currently under CCA may result in a different outcome. Just because method X works on A doesn't mean it works on B.
Retry, Abort or Ignore? ;-)
(Score: 2, Insightful) by Anonymous Coward on Monday September 22 2014, @04:45AM
Something that is seen simply as a cost of doing business doesn't change behavior.
They just tack it onto the price of their deliverables and continue polluting as usual.
Now, a mandate that the penalty comes first out of executive/board compensation and next out of shareholders' pockets might actually change behavior.
-- gewg_
(Score: 4, Informative) by frojack on Monday September 22 2014, @05:24PM
Actually, if you read the study, that is exactly NOT what happened.
Significant and real reductions in electrical (as well as other fuels) consumption was made.
Most of these heavy industries did not have the luxury of price increases, because the UK was one of the first countries to enact CCLs and other market participants would grab their market share if prices rose. Most players did not join the CCA program, as only a certain sectors were eligible, and few found it worth while.
CCAs were phased out in favor of an EU-Wide program some years ago. CCLs still exist.
No, you are mistaken. I've always had this sig.
(Score: -1) by Anonymous Coward on Monday September 22 2014, @02:42AM
Feed the poor
Til there are no
Rich no more
I'd love to change the world
But I don't know what to do
So I'll leave it up to you
== END OF LINE ==
(Score: 2) by The Mighty Buzzard on Monday September 22 2014, @02:56AM
Thank you for that trip down memory lane, Anonymous Looter.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Monday September 22 2014, @02:58AM
Is that from the theme song of Golden Girls?
(Score: 0) by Anonymous Coward on Monday September 22 2014, @04:29AM
Alvin Lee and Ten Years After, youngster.
-- gewg_
(Score: 2) by aristarchus on Monday September 22 2014, @03:24AM
Round up the usual (-suspects-) posters!
(Score: 1, Interesting) by Anonymous Coward on Monday September 22 2014, @03:25AM
It'll have to be introduced in California, then taken up by the two other Pacific Coast states (Washington, Oregon), and then by Colorado and jump to the northeast.
Trying to introduce this at the national level Will. Not. Work. with our political system.
(Score: 1) by lonestar on Monday September 22 2014, @03:31AM
You say that as if it's a bad thing.
(Score: 0) by Anonymous Coward on Monday September 22 2014, @04:02AM
It's uglee.
(Score: 0) by Anonymous Coward on Monday September 22 2014, @04:33AM
First, I don't see what you see.
(All the content appears to be behind scripts and I don't do scripts.)
What I see is a link that says
Screen reader users, click here to load entire article [sciencedirect.com]
If frojack and anyone else linking to ScienceDirect will simply append ?np=y to the URL, I suspect everything will immediately improve.
-- gewg_
(Score: 2) by Blackmoore on Monday September 22 2014, @05:13PM
and eh. he's AC so no response is needed.
(Score: 3, Interesting) by khallow on Monday September 22 2014, @04:12AM
First, the carbon tax is actually an electricity tax [wikipedia.org]. Second, they neglected that UK electricity prices rose 30-40% [www.gov.uk] during the same time period.
And the CCA mechanism may be part of a larger system of incentives for the UK manufacturing industry that swamps any correlation with electricity usage.
(Score: 0) by Anonymous Coward on Monday September 22 2014, @04:38AM
I think this website needs a policy when referring to Green news beginning with the prefix of "Claim: x" because alot of these announcements are scientific enough to pass the to the gate keeper until you, personally, do cursory research into the topic and learn more about the field than the researchers themselves who write the reports.
(Score: 2, Offtopic) by khallow on Monday September 22 2014, @05:14AM
I know you're being sarcastic, but this really is a vast problem with both how the media treats scientific research (including the Soylent summary) and how research is conducted in the first place. I probably could do similar commentary about 90% of any research-based conclusion which makes its way to this site.
(Score: 3, Insightful) by khallow on Monday September 22 2014, @05:08AM
Looks like there is some modest correlation with carbon emissions since renewable and some cogeneration sources are exempt from the levy.
(Score: 3, Insightful) by shortscreen on Monday September 22 2014, @07:17AM
As long as fossil fuels are being extracted from the ground, they will be used somewhere. If you tax carbon emissions in one place, the fuel would simply be used somewhere else would it not?
A tax on fossil fuel production seems like it would have a better chance of reducing carbon emissions. Reducing emissions means taking less of the stuff out of the ground in the first place.
(Score: 2) by khallow on Monday September 22 2014, @10:52AM
Except that it would run counter to the interests of any country which relies on fossil fuel production.
(Score: 2) by TheLink on Wednesday September 24 2014, @06:34AM
Seriously, I doubt the US military is going to want to pay higher prices for oil. Everyone should pay more, except certain parties ;).