Europe must ban Bitcoin mining to hit the 1.5C Paris climate goal, says Sweden
euronews.com
euronews.com
EDIT: I'm not trying to be an ass or "Getcha", just trying to see where you're coming from.
I don’t believe you can have capitalism without rampant global warming. We should already understand these dystopian proposals are just asking for failure.
https://www.lse.ac.uk/granthaminstitute/news/why-carbon-divi...
https://www.scientificamerican.com/article/carbon-dividends-...
The net result is that the people with the lowest carbon footprint make a profit and the ones with the most take a loss. Seems like a reasonable approach to me.
Those who have made decisions leading to massive pollution expulsion while they profited... those are the ones who should pay first.
People such as:
- The Koch brothers
- The Military and the politicians, bureaucrats, and Weapons company executives associated with bases & machines that have spilled the most pollutants
- Executives of Fossil Fuel companies
See, it's like we're playing this game where... a window was open and these executives were able to loot the house and escape. And now they are trying to close that window and run off with their loot.
Nope, bring them back. Hold them accountable. Take the assets they (their family, their estate) earned while polluting our planet.
Do that, before looking at the little guy and saying "Pay your fair share!"
Because my question is "What about those evil sociopathic polluting fat cats who not only got away, but lobbied and legislated to allow their escape"
I like that it would incentivise reduction of power use, I don't like that it shifts the blame lower on the economic scale.
Taxing the point at which the CO2 is created makes the most sense, then you don't have to try back or forward tracking penalties or incentives through the chain to incentivize carbon efficiency.
What makes you think polluting power plants would not pass on costs to consumers?
I'd propose instead a tax at the point of extraction. Our issue lies In the fact that we are adding to the carbon cycle faster than geologic processes can sequester it back into the Earth. Disincentivizing mining and drilling operations, and creating incentives for sequestration, are the only solutions that stick on the scale of a lifetime.
It isn't easy.
> I'd propose instead a tax at the point of extraction.
Is this based on anything serious? The problem is greenhouse gas emission into the atmosphere, not extraction of chemicals containing carbon from the ground.
Where does biological methane emission from farming or GHG release from clearing forests figure in the "extraction"? Why should natural gas that's used to manufacture "blue hydrogen" incur as much tax as that which is burnt directly?
> Our issue lies In the fact that we are adding to the carbon cycle faster than geologic processes can sequester it back into the Earth. Disincentivizing mining and drilling operations, and creating incentives for sequestration, are the only solutions that stick on the scale of a lifetime.
The issue is entirely atmospheric GHG, so taxing at the point of emission is the most efficient way to reduce that, all else being equal. If there are specific cases that are much easier to account at downstream consumption or upstream production then at some point it would be more efficient to account those and pass costs along, but you wouldn't go all the way back to extraction if you could avoid it (e.g., gasoline or domestic natural gas producers or distributors may incur the tax rather than individual people burning it, but probably not the wells).
If a large portion of carbon greenhouse gas emission is from burning of extracted chemicals, and a large portion of extracted chemicals are burned it seems to me simply taxing the chemical extraction itself is a good start, as it is simple to implement. I agree that taxing exactly at the point where emission occurs is ideal, but if that's too complicated to do right away starting with something simpler with a similar result is a good idea.
The implication was that, yes, the price of gas in the US is too low. But it also suggested the price of gas in Europe is already roughly including the estimated cost of fossil fuels. Plus or minus a couple dollars per gallon.
What I don't see people grappling with, is if you talk about externalities, that inherently means there is an objective number, even if it's uncertain and imprecise, that captures the value of avoiding climate change (and other environmental damage) to society.
And there is a completely independent number stemming from peoples' supply and demand curves, which captures the additional cost of fuel that will meaningfully slow or prevent climate change.
If [externalities] <<< [price that will stop people from using fossil fuels], then we've painted ourselves into a corner.
I think some people may be implicitly aware and not admitting it, which is a logical reason for micromanaging the economy rather than going for carbon taxes. I'm not sure everyone is aware though.
Understand, I'm not saying I know the numbers, or that I would accept economic dogma that would say we should do nothing about climate change.
I'm saying that using the language of "externalities", is potentially a trap, given the agreed-on goal. It's such a popular word, but that's when it's not tied to an actual number. Specific numbers can be inconvenient.
With respect to the article though, i feel like there are two possibilities (maybe more): (a) energy is "cheap" and we can only use it for "approved" things, ie we're not really buying it, or (b) it has a higher "sustainable" cost and we decide how much to buy based on the utility we see in it at that cost. As you say, it's hard to put a price on those costs (and even if we taxed it it introduces a whole other set of challenges - this is why in my original comment I said I don't like carbon taxes, but I didn't want to get into a side debate about that, it's a complex discussion). But some "externality" pricing is preferable to option (a) where some power specifies what we're allowed to to with energy.
All told, it's not an easy problem that we can solve with something blunt like banning bitcoin mining. My personal view is that a technological solution is the only actually practical way forward and that's what we should be pursuing, but that's another discussion.
Are you trying to say that it might be cheaper to simply let climate change happen than to prevent it?
My conclusion, then, is it may be bad to talk about externalities. At least as economics jargon, and it's confusing to use it otherwise.
It's a tool that isn't bound to doing what people want it to do.
> just make sure the cost they pay to do it properly reflects the all-in cost of the activity
The "just" here is hilarious, this is the problem that the minds of three generations have not yet been able to solve. Bringing in carbon taxes is excellent, but they are extremely difficult to do right, because any mismatch between price and externality is relentlessly exploited and arbitraged. The most successful schemes have been those that limit their scope to a particular kind of activity within a particular area, not "let people mine or idle their care or whatever other thing they want". You are asking us to levy a carbon tax on literally all human activity... this is truly bonkers. Best of luck administering the scheme.
Until someone manages to do it, we can still do whack-a-mole and ban things outright, in particular when an activity by its very nature so flagrantly backpedals every inch of our hard-fought progress, that any real carbon tax would inflate its prices so much as to immediately spell its demise. COP26 was centered around the "phasing down" (what a shame it could not be "phasing out") of coal-fired power plants. It is literally our best strategy right now, because all the enemies of the planet are still massive beasts of industries that should have to feel their legs crumbling beneath them and be spared no shelter in their collapse. One day, when all this fails and the beasts collapse too late, Earth's enemies will finally be the minor inefficiencies and minor choices, and you can assign them your little weights and measures then.
If the carbon tax is more expensive than it needs to be, how would you exploit or arbitrage that?
So NOBODY wants to tax this stuff unless everybody taxes the same stuff at the same rate and there's a closed system. It's really hard to find a closed system, but you can find them in e.g. electricity generation in one closed area without any electricity imported from elsewhere. Technically if you did this but didn't perfectly match the price to the externality (which would be very normal), it couldn't be exploited. But most markets cannot be that enclosed.
The problem can be seen a bit more easily by looking at carbon credits, where the price is supposed to reflect the value of a unit or emissions reduction. If you are Market A, and you value emissions reduction highly, then what tends to happen is: (1) Market B says it agrees with you, and develops a scheme for trading its credits with yours, (2) Market B allows for people to tell the government "hey, we were going to chop down this forest, and we decided not to!" and gives them credits (3) those people go and chop down a different forest, but not before they repeat the procedure ten more times (4) those people sell their credits to airlines and transport companies and anyone who wants to advertise themselves as carbon neutral (5) millions of clueless consumers tick the "carbon neutral" box when they book their flights, and money flows all the way to people who are now cutting down more forests than ever before, because the operation now finances itself with zero effort, and no difference is made to CO2e whatsoever. This is a description of the REDD+ credit scheme. It's a perfect example of the price being set too high compared to the actual CO2e changes, not on a tax, but on a credit scheme. With taxes, some of those numbers flip their sign, but it is ultimately the same problem.
Finally, think about what it would take for Market A to stop B's goods at the border and go... "Hang on, you produced X amount of CO2e to make these, I'm going to tax you on that!" Say Market A and B are sovereign States. B has deliberately set its taxes too low, so as to improve the profits its local companies can achieve in foreign markets like A's. Basically, B's companies can lie, and B will back them up. A can't really do anything about it. A would then think about incentivising industrial espionage, in order to impose taxes correctly, but if it accuses B of lying, it turns into a diplomatic dispute with B. So one malicious actor, especially an entire sovereign State, can really ruin the whole thing.
(Bringing this back to banning things outright, one big advantage of a ban over a tax is that it is much more difficult for a State to lie about the use of a banned thing, than it is for them to fudge some numbers in a spreadsheet.)
Yeah, perhaps. Is it more or less stupid than almost every country having a military, some of which alone cause more CO2 pollution than BTC? Some of which have the capability of destroying all humans in 30 minutes? Some of which are actually trying to improve that capability right now?
I mean sure, the waste of mining is pretty dumb, but it's gonna be replaced with less wasteful methods at some point. But when are we gonna replace militaries?
I'd trust engineers before politicians.
Or nuclear.
But how would this be enforced?
So I believe that the carbon footprint issue will resolve itself, relatively soon.
I really do hope I'm wrong about where the world economy is heading. It's honestly got me feeling pretty terrified.
Also, modern government deficit spending is just plain tax cuts. The government doesn't actually release additional money into the economy. Republicans and democrats don't want Biden's spending packages.
They will point to some other societal problem and say, "Solve that first." This makes no sense because crypto is just adding a new problem. Whereas before we had one, now we have two.
It is like those who argue for "tech" companies. When faced with the threat of regulation they point to other industries and say "Regulate them first".
This sort of argument is not at all convincing.