[3D25157725]

>> In many ways, high energy prices are a positive thing for society (in the long run).

If you don't mind, I wonder if you might expand on this? For me it seems a bit blithe. For instance, we know that higher energy prices cascade into many, if not most, consumer end items, and so I think it follows this decreases the standard of living generally.

I understand the important consideration of negative externalities, and how fossil fuels negatively impact 3rd parties (the world generally/climate change). I think the economic argument that there should be a carbon tax to account for these externalities is quite right. This is true regardless of climate change. So let's assume for arguments sake, we're going to tax above and beyond that to account for climate change as well.

Are we hoping then, by hiking the cost, it ushers in a new discovery of lower cost energy, with fewer externalities? And if this turns out to be the case, then these austerity measures if you like, turn out to be transient, and the temporary lower standard of living sacrifice is made for the betterment of posterity. Or is it simply we must accept a lower standard of living permanently lest we allow climate change to continue unabated, as it were?

Sorry if this distracts from the main point you were making.

[jacobr1]

> Are we hoping then, by hiking the cost, it ushers in a new discovery of lower cost energy, with fewer externalities

Not just discovery. We already have plenty of measure to either use energy more efficiently (such as improved insulation in a home) or things like renewable energy. And as you say, the cascade of energy use into many more aspects of the economy than people expect should trigger a realignment of consumption to means that are less likely to have energy-based externalities somewhere in their supply-chain or operation.

> Or is it simply we must accept a lower standard of living permanently

Depends upon the implementation. If we are replacing existing taxes (like corporate or income tax), or refunding the amount (via a citizen dividend or similar) the net impact shouldn't be a lower standard of living, though the distribution will affect people differently.

[3D25157725]

Thanks, great points. I hadn't at all considered replacement of other taxes. That changes the calculus a great deal, I agree.

[HPsquared]

If it's truly about externalities, the proceeds of a carbon tax should be distributed in the same way as legal compensation for damages. Compensation payments to people affected by climate change, proportional to the increment of damage caused by the amount of GHGs emitted. That's pretty much impossible to calculate though.

[dboreham]

It stops people consuming energy they don't really need, and it makes people more likely to consume renewable energy which is often more costly.

[3D25157725]

Right, and I agree to both. This also lowers their standard of living.

My question was probably too vague. Maybe more directly, is raising costs across the board as a matter of policy more effective in our fight against climate change than other interventions? Like subsidizing research into renewable energies, etc. Have we given up on those?

I am far from qualified in judging the effectiveness of alternatives, I just wonder if these taxes are draconian, and if so, have we given up hope on these alternatives.

This was besides the point the parent was making, however, so I am regretting my digression now.

[lbriner]

You would hope so but it doesn't.

Think about how many people drive half a mile to the shop. They don't care about hidden costs even though all of those short trips might add up to $50 a month that they didn't need to spend.

Visibility of prices is OK on a Smart Meter but it is still disconnected from where energy is used e.g. not obvious that having your 80" TV on all night uses up a tonne of energy although only a little at a time.

And then you have a lot of people, as mentioned elsewhere, who are paying because their landlord won't spend the money on improving the insulation on the house. You can't always vote with your feet so although some people can and do sort things out, a lot of people don't.

Then they complain that the government should help them out!

[leoedin]

Certainly high energy costs, in the absence of any action to reduce energy usage, reduce standards of living. Ultimately almost every aspect of our "comfortable" life comes from expending energy - heating, concrete, entertainment, transport, home appliances, fertiliser, mechanised farming - at the heart of everything is external energy expenditure to make us comfortable.

However, in most cases comfort isn't proportional to energy expended. For a given heat, a well insulated room is as comfortable as a badly insulated one - but with less energy input. A modern computer is as useful (more so) than a Pentium 4, but with less energy input. An LED bulb provides as much light as an incandescent, but with less energy input. When energy becomes expensive, it makes energy saving worthwhile, which makes the return on investment higher, which draws in R&D money.

Honestly - I don't know for sure whether high energy costs will drive innovation, or just lower living standards for everyone. However, it's pretty clear that relying on fossil fuels isn't a good long term strategy, and that at historical energy prices (which don't take into account externalities at all) there's essentially no headroom for new energy saving R&D. High energy prices make efficiency improvements and novel energy production highly lucrative - and then capitalism can do the rest.

[cameronh90]

"For a given heat, a well insulated room is as comfortable as a badly insulated one"

I actually disagree with this. There are factors beyond air temperature, such as air movement and radiation.

Air movement is pretty obvious, if your house is draughty, 20c may still feel chilly.

But radiation is commonly ignored and in my experience contributes more to comfort than air temperature beyond a certain level. If your room is at 20c and your walls are 12c, there's a good chance you will still feel uncomfortable compared to a building with well insulated walls. I've been in old buildings where even at 25c it still felt a little chilly. Worse, if only the exterior walls are cold, you might find one side of you is too hot and the other is too cold!

This is commonly experienced as "why is my house still cold in winter even though the thermostat is at 22c, when in the summer it's too hot even at 18c?".

[3D25157725]

> For a given heat, a well insulated room is as comfortable as a badly insulated one - but with less energy input. A modern computer is as useful (more so) than a Pentium 4, but with less energy input. An LED bulb provides as much light as an incandescent, but with less energy input. When energy becomes expensive, it makes energy saving worthwhile, which makes the return on investment higher, which draws in R&D money.

You're right, and I think these are compelling examples. And climate change need not even be considered for these to support a carbon tax.

Thanks for the response.