> The most efficient solution is a carbon tax that fully captures externalities.
I'm all for that once someone comes up with a rigorous, apolitical calculation for what that value is. It's much easier to identify the existence of unpriced externalities than it is to quantify them. I know people associated with the IMF have attempted to do so[1], but they still admit the calculations are "contentious".
> I'm all for that once someone comes up with a rigorous, apolitical calculation for what that value is.
Which is just code for "I'll never support this because I'll never believe you". Dismissing something as "policital" is the easiest out. All it takes is for your political enemies to support something and you have a built-in excuse to refuse to believe it. That is exactly the behavior that led to the circumstance we're in right now, where literally half the voting population of the USA straight up refuses to recognize scientific consensus.
So... this isn't helpful. If you really want good analysis, get in there and help with it. Or at least be willing to accept something as "good enough". But what you wrote there is nothing more than a fancy excuse.
I don't believe this is possible for something as wide-ranging as the effects of increased climate change.
Every paper that attempt these estimates use a 'local' projection of (predicted change) * (current prices to mitigate those changes).
But even ignoring the huge error bars around the scale of changes we'll see, the large-scale changes that reach across all of society will also change all the prices as well; not to mention it's not easy to predict far future prices anyway.
This also ignores the fact that the marginal impact of a ton of CO2 in the future depends on how much CO2 is then in the air, which means you're now in the realm of predicting what current politicians will do ... which is inherently political, since it'll make some people look good or bad.
An obvious solution is to use the cost of taking the carbon back out of the atmosphere. You make a mess, you pay the cost of cleaning it up.
Supposedly, Carbon Engineering is on track to do that for $100/ton CO2.[1] One gallon of gasoline produces 20 lbs of CO2.[2] So 100 gallons makes a ton of CO2 and $100/ton would add $1/gallon to the price of gasoline, not counting a little extra for the energy expended by refineries and so on, and the cost of sequestration.
Climeworks is also targeting $100/ton, and Global Thermostat thinks it can do half that at scale, while the CarbFix project has demonstrated permanent sequestration in basalt formations for $30/ton. [3]
> An obvious solution is to use the cost of taking the carbon back out of the atmosphere.
Surely that's more or less an upper bound to the cost of the externality? If it were higher, we would undo it by scrubbing the air, if it were lower, scrubbing wouldn't make economic sense.
I don't think "Let's put the absolute maximum tax on this" is a strategy that works very often.
The whole point of an externality is that the people doing the damage aren't the ones paying most of the cost. There's no rational limit to the cost an economic actor will impose on others for the sake of some small personal profit.
So we can't just say that the cost of damage must not be so high, or we would already be cleaning it up. There is no "we," there's individual actors and messy politics, full of entities making personal profits who are good at influencing politicians.
On top of that, the costs aren't even paid by us today, they're paid partly by our future selves decades hence, even more by future generations, and impossible to exactly predict. That makes it even easier to focus on today's personal profits and ignore the externalities.
Put another way, this is a public goods problem, where individual efforts make little impact unless everyone does them. Everyone is better off if the problem is fixed, but individually profits more by freeloading. The game theory says individual contributions go to zero. Once again, the only solution we have is political.
And finally, the technology to clean up the mess for $100/ton is just now beginning to emerge. We're not doing it already because we can't do it yet.
Most climate economists estimate the cost of carbon at several hundred dollars per ton. So yes, the cost is higher, and yes, we should scrub the air, once we're able.
Inaction is also a choice. The idea that you can opt out of acting on climate change is an illusion. We choose every day. Currently, we choose 0 carbon tax. That is a very political calculation.
You’re already in the game. The clock is ticking and not playing is not an option.
Is it a political opinion to state a fact? The real statement being made though is actually that climate change is bad for humans and should be avoided. This isn't really up for debate as it is proven to have happened multiple times in history and caused the end or decline of major civilizations. We know humans are bad at dealing with massive climate change, especially ones that reduce farmable land or loving space. None of that is political. Politics only comes into play when you ask is convenience and profits now an acceptable payback for damage to future generations. Essentially are we responsible for taking care of future generations or should they take care of themselves? That's the political question.
Why do you need to calculate it upfront? Have a simple feedback loop by setting an initial tax level and adjusting it up or down compared to your target emissions curve.
I'm all for that once someone comes up with a rigorous, apolitical calculation for what that value is. It's much easier to identify the existence of unpriced externalities than it is to quantify them. I know people associated with the IMF have attempted to do so[1], but they still admit the calculations are "contentious".
[1] https://www.imf.org/~/media/Files/Publications/WP/2019/WPIEA...