rss feedWill Tim Worstall stick to his principles?
Tim Worstall is a Fellow at the Adam Smith Institute. I first heard of the Adam Smith Institute a long time ago when I took an interest in Henry George’s land value tax. The Adam Smith Institute were looking after his papers for the Henry George Foundation.
I still like the idea of taxing the value of land that occurs – not because of the efforts of the owners – but because of the location of surrounding activity. A plot in Park Lane owes its value to it’s location in London next to Mayfair and Hyde Park not to any effort of the land owners. I also like the start of the Adam Smith Institute’s Planning in a free society which considers London as a case study for a “spontaneously planned future”:
Planning policy has proven to be one of the most resilient pillars of the post-war command-and-control state.
… [It has] an unswerving faith in the ability of a bureaucratic planning process to achieve superior outcomes to those achieved in the spontaneous order resulting from voluntary action.
I suppose I like their Planning in a free society for its criticism of some of my bêtes noires of the planning system such as the ridiculous green belt policy, the product of NIMBY self-interest and muddled thinking.
I am uplifted when I read the Adam Smith Institute’s web page Learning About Liberty – the Adam Smith Institute cares about liberty and freedom – just like I think I do. I met some of their people at a conference arranged jointly between the Fabian Society and the Adam Smith Institute (True! But it was a decade or so ago) and came to believe they have a set of principles that they think will make the world a better place.
I am also impressed to their analysis of issues of pollution as in A free market solution to pollution by Sam Bowman
A free market solution to pollution would, through courts or voluntary agreement, force polluters to compensate the people they pollute against. If the property rights of the polluted-against were upheld, this would lead to a situation where both parties would agree a pollution premium: a middle-point where the polluter is compensating local people enough to continue polluting.
In short, I regard the Adam Smith Institute as a right wing, possibly very right wing, organisation but principled – really quite principled.
This makes the ASI approach to climate change very interesting. Will they stick to their principles when the full force of climate change becomes apparent and their principles dictate actions to the disadvantage of fossil fuel industries? That will put them at odds with most of right wing opinion.
In an article in Forbes Magazine Tim Worstall says
As so many do in fact ask the wrong question about a carbon tax. For while it is true that a carbon tax is the complete solution to climate change it isn’t because it would stop climate change … the very point of a carbon tax: it is not, not at all, in order to stop climate change. It is to enable us to have the right amount of climate change.
He’s right. As he points out in the article, it is possible to pay a too high a price to completely stop the warming of the planet. (For example, it would be stopped by a nuclear war that caused a nuclear winter but I think we would all agree that this price was too high.)
My comment was
An excellent and clear article.
But what if the IPCC is not keeping up with the pace of climate change? What if top scientists and government reports won’t tell us we are heading toward catastrophic climate change?
I judge that your correspondent Chrisy may be correct in that we need a carbon price of $1000 per tonne of CO2e (or more).
Tim replied
I read that paper that Hansen coauthored making the case for a $1,000 per tonne CO2 tax. And I have to say that it was an extraordinarily bad paper.
Essentially, what they did was take the extreme values of everything and then say that if we use these extreme values, all with low probability, then perhaps the optimal carbon tax could be as much as $1,000. It’s possible that that is true as well: if climate sensitivity is much greater than we generally think it is, if emissions roar on at the very peak of current projections and so on.
But note that the finding is that the correct tax “could be as much as $1,000″. If, and only if, we take all of the extreme and low probability numbers from the current literature.
Readers that have seen some of my recent pieces on the Brussels Blog will realise that I believe that “the extreme and low probability numbers from the current literature” are more extreme and much higher probability than official science admits.
The “current literature” lags the real world of climate change by a large margin and this will become increasingly obvious.
The question is “Will Tim Worstall stick to his principles when the official science catches up with the real world?”. I really think he will – but he will at odds with most right wing opinion.
comment
Congratulations! YOUR conspiracy theory is scarier than Tim’s conspiracy theory! Please join the queue for government grants!
WordPress hasn’t let me show a comment from Tim Worstall. Here it is…
[…] What bleedin’ principles? […]
http://timworstall.com/2013/01/03/what-an-extremely-strange-question/
Thanks Tim.
OK, and a more serious reply.
I don’t consider myself right wing at all. I consider myself rather a lefty in fact. Assume, for a moment, that being a lefty means having the interests of the poor at heart. That we’d like the poor to get rich like we are.
So, what policies should we be pushing? Well, the last 30 years of this globalisation/Washington Consensus thing have at the very least coincided with the greatest reduction in absolute poverty in the history of the species. Heck, even global inequality is declining.
At least prima facie we have evidence that market liberalism leads to the poor getting rich. Thus a good little lefty, one who wanted the poor to get rich, would be a market liberal.
Purely and simply for the reason that market liberalism seems to make the poor richer. Which isn’t a “right wing” position.
As to climate change. Yes, there are indeed externalities. Pure unadorned markets do not always provide the optimal solution. Sometimes interventions are necessary to correct those externalities. With climate change a carbon tax is the optimal solution.
The size of the tax depends upon, as you say, the size of the effects of the externality. And as I’ve also said many a time the larger those effects are then the larger the tax should be.
That still doesn’t make Hansen’s $1000 right though.
My opinion, and it is nothing but a personal opinion, is that it’s just not going to get as bad as most to many seem to think. My day job is in weird metals: many of which are used in the various renewables technologies. And I see the costs and prices of those renewables falling dramatically in the years and decades to come. It’s not that I wouldn’t be surprised to see solar (and to a lesser extent onshore wind, to a much greater extent fuel cells) becoming cheaper than fossil fuels. It’s that I fully expect them to do so and within my Biblical three score and ten as well.
And once they’re cheaper of course then we’ll all quite naturally switch to using them and the problem will be over. Yes, this could be said to be “technology will save us”. But it is an informed view from someone who sees the upcoming technologies from within the bowels of the business.
It really wouldn’t surprise me at all if in two decades we had a solar/fuel cell system that would run a house. Capital cost of perhaps £5k, lifetime of 20 years say. Multijunction solar cells running at 40% efficiency, spare power used to electrolyse water, H2 being stored to be run through the fuel cell as needed. You can build one of these today but it would be expensive. But solar cells and fuel cells are really just printing circuits on a substrate and thus subject to a version of Moore’s Law. I really don’t see why it won’t happen (and note that you can run a standard ICE off that H2 as well).
Heck, I’m actually involved in producing the metal for a new alloy for windmill blades that makes them 15% more efficient.
Renewables will be cheaper than fossil. Thus the problem will be over.
If Tim’s left wing, where does that leave me?
Tim seems to think that if we stop pumping carbon into the atmosphere things will return to normal – and he’s right we just have to wait until GHG levels return to pre industrial levels. Say another few thousand years or so.
When you quit smoking, the cancer doesn’t dissipate The damage already done to the Arctic won’t stop when AGG production ceases. Permafrost, ESAS outgassing and clathrates that haven’t yet released their methane are waiting in the wings, they won’t curtail their performance just because the headliner has quit the show.
Albedo changes are enough to complete the melting of the Arctic even if CO2 remained constant. The latent heat of fusion that has been melting more ice every year will be enough to raise the top meter of the Arctic Ocean by .7 C each year – and this is in addition to the energy pumped into the open waters that were previously ice covered.
Hansen is an optimist & Tim is a dreamer.
Terry
BTW – Nice blog!
Here’s my proposal:
1. Apply a fee to all negative externalities (GHG emissions, deforestation, toxic pesticides, pollutions, etc.)
2. Refund the proceeds equally per capita as taxable income.
3. Modify the formulae used for needs-based benefits and the minimum wage to account for both the inflation generated by #1 and the money received from #2.
This should lower unemployment, by lowing both the minimum wage and the disincentive to work caused by large welfare payments — without reducing the purchasing power of the poor.
Tom Fuller: “Plateau in temperatures”? I think not.
See http://www.skepticalscience.com/16_more_years_of_global_warming.html
For several years now people have been arguing over the significance of the recent plateau in temperatures. Some trumpet it as proof of the end of warming, which is nonsense, while others try to ignore it as completely insignificant, which is also nonsense.
The passage of time merely provides perspective for other events.
To make use of it would go as follows: CDIAC monitors annual emissions of CO2 and has computed estimates going back as far as 1751.
According to their figures one-third of all human emissions have occurred since the recent plateau in temperatures in 1998. One third.
This makes it difficult to argue for a higher sensitivity. We recognize that temperatures don’t climb in lockstep with emissions. We really do.
But one-third of all emissions in a very short period without any corresponding rise in temperatures? (It has led to a 10% rise in concentrations of CO2 in the atmosphere–but no change in temperature.)
This would seem to require an explanation.