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Comment by mousetree | Hacker News Reader

How do you price the externalities?

There are thousands of quite intelligent people studying this and they are writing studies and reports which can be googled. CO2 for example should probably cost in the high double/low three figures, depending on your assumptions on economic growth, the time frame, etc.: https://www.cen.uni-hamburg.de/en/about-cen/news/09-news-202...

Aka no one currently knows, let alone has any sort of defensible formula right now?

No, if you had read the source I linked you'd find out that there are decent models that put firm prices on CO2 based on assumptions of how quickly you want to decarbonize the economy. The assumed externality is the need to decarbonize and thus the cost of achieving this of course scales on the time horizon you want to achieve this in and your assumptions on technical developments in the meantime. Good models usually come with some complexity of this sort.

So what is the positive externality of emitting CO2?

sorry, wrong thread.

The problem is that none of those intelligent people factor in the positive externalities.

That statement makes no sense at all. "Positive externalities" is the benefit someone derives from consuming a product/service so this is usually quite well reflected in the actual price you pay for it. I.e. the "positive externality" of electricity is light, warmth, power, etc. This is why you pay your electricity provider and that price is based on market factors already.

Things that are reflected in the price is by definition not externalities. Which is why we are even talking about negative externalities. To that that all positive externalities are already factored in while the negatives ones aren't is either misinformed or disingenuous.

Externalities are emergent.

So what is the positive externality of emitting CO2?

All the time that gets freed up for more people to create new things instead of being forced to do manual labor.

The benefit of computers, AI, medicin, the ability to save life by being able to drive patients to hospitals and keep babies alive in incubators and I could go on. The ability to produce fertilizers which is why we can keep 3-4billion people alive and who wouldn't be around if it wasn't for that.

The ability to produce steel, concrete and plastic and the resillience that provides us.

The world is greener, we can produce food more places.

Moden life is 100% depending on the burning of fossile fuel and while it creates it's own problems, these are better problems to have than those it solved.

As an externality, the price of emitting 1kg of carbon should be a little greater than the cost of capturing and storing 1kg of carbon.

That's too expensive a target to be realistic right now, so the real question is what's a level of taxation that won't cause social unrest, but that will change behaviour?

For CO2 at least the average price that it costs to pump the CO2 out of the atmosphere.

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