A sensible ‘carbon’ tax

I know there will be readers who will say vehemently that there is no such thing as a sensible carbon tax, but a proposal floating around the Internet (and elsewhere — it was voiced last month in the House of Lords in the UK) is worth considering. It was developed by Ross McKitrick, a Canadian Professor of Economics who, along with Steve McIntyre, was one of those who showed the weakness of the Michael Mann ‘hockey stick’. You can read about it here.

His scheme bought a lot of criticism from both sides of the issue, as you might expect. I think it is worth examining, nonetheless, because it is quite simple in concept. First, it is to replace all the other ‘carbon taxes’ and regulatory mechanisms, ETSs, RETs and the like, and its intention is to be revenue-neutral. Second, the tax is set to vary with temperature, as measured in a fashion that removes the threat of tampering (a fear that many observers share, as they see that raw temperature data are always being ‘adjusted’).

The beauty of the tax is that both sides of the issue ought to be able to see a benefit. For the AGW orthodox, if the temperature rises, as they expect to happen, then the tax will rise, and producers and consumers will vary their behaviour to avoid the higher tax. For the sceptics, if the temperature fails to go up with the rise in carbon dioxide accumulations, which has been the case for the past decade or so, then the tax will not rise. If the temperature actually declines — if we go into a cooling period, like the one between 1940 and 1975 — then the tax will decline too. Since many sceptics expect one or other of these outcomes, they too have something to gain. If one side or the other is wrong, then — hey —something has been learned.

Why have a tax at all? Well we already have one, and ours is pretty silly both in the way it is constructed and the premises on which it is based. That would go. We also have a lot of other ‘climate change’ regulatory stuff that would go too. In its place we would have a single tax that would vary upwards or downwards according to the movement in measured temperature. All of these regulatory measures operate to distort the market, require a lot of compliance work, and achieve very little. Getting rid of them would be a big improvement.

How would we measure temperature? McKitrick proposes to take the average of two separate measuring systems and five different laboratories in three countries, which would make it difficult for the outcome to be corrupted. What temperature? He argues that since all ‘climate models in use today predict that, if CO2 drives climate change, the strongest and most rapid response will be an amplified warming trend in the tropical troposphere’, we should use the temperature there.

It is a big area, and the troposphere runs from near the surface to about 16 km in altitude. The great advantage of this area is that is not much affected by land-use changes, ozone holes and solar variation. It is also well measured.  ‘So I consider temperature levels in the tropical troposphere to be an ideal place to see the general magnitude of CO2 emissions on the climate.’ And here McKitrick is simply following the IPCC.

What is wrong with that? Nothing much that I can see. Is it likely to be introduced? I don’t think so, but not because the idea is flawed. It is a good idea, but it contains a premise that will be unacceptable to the warmists: that there is any uncertainty in the AGW proposition. They will say that the only way forward for temperature is UP, so why bother with a carbon tax that could go down? And here we have ‘belief’ getting in the way of reason.

For while greenhouse emissions continue to accumulate, temperature has not been rising, so something else must be operating to interfere with the effect of emissions, or the initial proposition that increasing carbon dioxide in the atmosphere must lead to an increase in temperature is inadequate in some way.

For some years now the orthodox have been arguing that the explanation for the pause must lie in aerosols emitted by Chinese and Indian power plants, or that ‘natural variability’ has somehow kicked in. The last explanation runs counter to what I heard several years ago when I became interested in this fascinating subject: all sources of natural variability were known and accounted for, so the increase in temperature could only be due to carbon dioxide emissions. What then if temperatures stop rising?

I like McKitrick’s proposal, and it is useful in debate. But I see no sign of any government’s being likely to put it into practice — yet.