Posts by David Haywood

  • Up Front: I Swear, It's True,

    See, Russell tells people it’s MY fault. Lying cock-sandwich.

    Perhaps my memory is playing tricks on me. It does certainly sound like the sort of thing that would be all your fault, now that I think of it…

    Dunsandel • Since Nov 2006 • 1153 posts Report Reply

  • Up Front: I Swear, It's True,

    And give a special wave to the Titirangi Public Library.

    Years and years ago, when Public Address first went on the internets (late 1990s? Early 2000s), it was banned at the Titirangi Library on the basis of RB’s bad bad language. Maybe he mentioned that Doug Myers was an aresehole or similar.

    At any rate, I complained in writing to the powers that be at the Titirangi Library about unnecessary & inappropriate censorship. I never heard back but your comment makes me now wonder if there’s been any policy change…

    Dunsandel • Since Nov 2006 • 1153 posts Report Reply

  • Southerly: A Tale of Two Iceblocks: Part…, in reply to CCH,

    Many thank for your very interesting and helpful comments, CCH!

    I really appreciate all those links. Not being a tax expert myself, I don't know the jargon, and it's hard to even identify the correct search terms for the literature.

    There's a lot to digest in both your comments and the papers you've recommended, so I'll go away and have a good read and spend some time thinking through everything...

    Thanks again!

    Dunsandel • Since Nov 2006 • 1153 posts Report Reply

  • Southerly: A Tale of Two Iceblocks: Part…, in reply to Moz,

    Thank you for your thoughts, Moz. I’ve altered your third quote above to include the full text (which I feel is an important part of what I said).

    I do appreciate your comments, and they’ve certainly highlighted various parts of my blog where I’d made assumptions about pre-existing knowledge. Many thanks!

    Dunsandel • Since Nov 2006 • 1153 posts Report Reply

  • Southerly: A Tale of Two Iceblocks: Part…,

    Ian Dalziel wrote:

    While tropical forests continued to decline, a remarkable change is happening: tree cover on agricultural land has increased across the globe, capturing nearly 0.75 Gigatonnes carbon dioxide every year.

    Just to be clear, Ian, I’m certainly not saying that atmospheric carbon isn’t sequestered in trees – but rather that I don’t think that a carbon tax refund (or a PGST refund in my demonstration proposal) is necessarily a good way to manage it.

    The usual criticism is that it could be used to delay the transition to clean energy. Imagine a coal thermal power station being subject to an emissions tax – but being also able to have that tax refunded by cheaply planting trees. That removes some of the price signal that would otherwise be transmitted to consumers, and allows the coal thermal power station to operate economically further into the future than otherwise – which, in turn, delays the implementation of clean energy alternatives to coal thermal power plants.

    Also often cited are issues with land use for food. Given our finite land area then carbon sequestration via permanent forests is not a permanent solution to continued emissions of fossil fuels. At some point, it’s argued, land used for carbon sequestration via permanent forests will encroach on land used for food.

    None of this is really in my field of expertise. But I know enough to realize there are potential problems.

    I did have a section on this in an earlier draft of my blog (related to the ball park calculations) but it seemed that it was too much of a distraction from the main message. However given that several people have now brought up the subject then it probably does need to be mentioned. I’ve added a brief sentence in my blog that hopefully will be helpful in this regard:

    A PGST scheme could also, in principle, be used via a tax refund to encourage negative emissions, e.g. atmospheric carbon dioxide sequestered as carbon in forests. Various counter-productive results might be possible with such an approach, however, and careful analysis would be required prior to implementation.

    Dunsandel • Since Nov 2006 • 1153 posts Report Reply

  • Southerly: A Tale of Two Iceblocks: Part…, in reply to Bart Janssen,

    but you are expecting to be allowed to apply tariffs to imports which is just as difficult.

    No I’m not, Bart. A consumption tax is not an import tariff.

    GST is a consumption tax (i.e. not an import tariff) as well – hence we can change the rate of GST (or even decide to take it off fresh fruit and vegetables) without recourse to changing trade agreements. As I said in the blog:

    It is important to note, however, that PGST is not an ‘import duty’ since—as with the GST that it would replace—it is also applied to goods and services produced within New Zealand.

    Dunsandel • Since Nov 2006 • 1153 posts Report Reply

  • Southerly: A Tale of Two Iceblocks: Part…,

    Continued…

    How would you modify your PGST to encourage negative emissions? Why have you not done so?

    I’m not sure as to your definition of negative emissions, Moz. Some researchers describe the conversion of a dairy farm to crops as a negative emission – but I (and a PGST) would see this as an improvement in energy efficiency. Crops would attract less PGST than dairy and so that would therefore be incentivized.

    As I said elsewhere there is a finite amount of land in New Zealand that can be converted into permanent forest – and I’m very suspicious of the current approach of buying a photograph of forest regeneration in Uzebekistan and calling it a negative emission for New Zealand.

    Also, as I said elsewhere, this is most easily dealt with by a separate system in my opinion (which perhaps could also deal with sequestration of carbon dioxide as carbon compounds in soil if this approach pans out.)

    [EDIT: Of course, from an administrative point of view it would be trivial to refund PGST for carbon sequestration. I’m just explaining here why I didn’t include it in my demonstration proposal, i.e. because it opens up a whole complicated kettle of fish.]

    I think all your proposed differences from a conventional carbon tax can also be applied to a conventional carbon tax – border controls, including agriculture and arbourculture, wholesale vs retail. The conceptual differences seem to disappear in practice. What have I missed?

    Well only that in New Zealand no-one is suggesting a comprehensive carbon tax that takes into account embodied dirty energy. Hence why I’m pointing it out here.

    And, as I’ve said ad naseum, in my demonstration proposal I’m only suggesting the “ingredients” that such a system would need. The PGST as discussed in the blog is supposed to be a helpful “thought experiment” not a ready-to-implement scheme. (Obviously it hasn’t been helpful in your case, however – sorry about that!)

    Your proposal has a significant time delay built in while the details are tidied up, the relevant treaties are renegotiated, and new legislation drafted. How is your suggestion distinguishable from the “deny defer delay” position in practice? Viz, how would we know whether the government is adopting your suggestion purely as a way to delay action another decade, or with the intention of taking the most effective action as soon as possible?

    As I’ve said, I don’t believe that international treaties have to be renegotiated (indeed the whole raison d’être of my demonstration proposal is to show what can be done in absence of binding international agreements).

    At the moment we have a half-arsed ETS that does the opposite of what it’s intended to do (as far as I can see). That’s our starting point. There’s no more time delay here than with any other proposed solution (and much less than some).

    Dunsandel • Since Nov 2006 • 1153 posts Report Reply

  • Southerly: A Tale of Two Iceblocks: Part…,

    To answer your other questions, Moz:

    you seem to have pre-compromised on 100 years as your CO2e period. Why do that rather than use the more accurate one year figure?

    It’s not me who decided on 100 years as the CO2e period. All the official data is based on those values. That’s the data that governments and other bodies consider to be our official emissions. I used this data to do some ball park calculations of TAX. Nothing else, just TAX.

    Why do you not want to distinguish between embodied energy in a stable material vs an unstable one? Say, meat vs structural timber? If you tax structural timber, that seems like “make emissions worse” at the margins (use a wood substitute with immediate emissions because those are lower “in the long term” than wood).

    Because the lifetime emissions of a product depends on the way it is disposed of (e.g. aerobic vs. anaerobic decomposition)

    – the embodied dirty energy that’s taxed on imports is the dirty energy used to produce the good or service (from which the emissions have already been released to atmosphere by the time of arrival at New Zealand’s border).

    – If something like meat or wood breaks down in a landfill then the methane emissions to atmosphere is accounted for (and taxed) at that point via the landfill operator.

    – If a product doesn’t decompose then there are no more emissions.

    – If a product like meat or wood decomposes aerobically then it simply returns the carbon dioxide to the atmosphere that was absorbed in the first place during photosynthesis at the beginning of the energy chain – and so you don’t attempt to tax that, of course.

    how is a PGST conceptually superior to an ETS, when we have known hard limits on how much we can emit? Allowing “pay to exceed” seems like a major flaw. Political problems only apply here if the PGST has much fewer of them than an ETS, I think.

    Because you can’t implement an ETS in isolation from the rest of the world (or, at least, the vast majority of other countries in the world) for a small exporting nation like New Zealand. The ETS adds a cost to your goods & services that producers in other countries don’t have. Therefore you end up with distorted price signals which may actually increase global GHGs, i.e. as with our current ETS system in New Zealand.

    As I said, a PGST (or similar system) can be combined with an annual (sinking) cap on emissions to meet eventual emissions targets as defined by the “hard limits” of the atmosphere. But I certainly don't see it as the whole solution to GHG emissions by itself, of course (and never claimed that it was). It's only part of the solution.

    Why would a government unwilling to fix the ETS be willing to fix the PGST?

    Because a different government is elected? The Greens are calling for the ETS system to be scrapped, for example.

    Dunsandel • Since Nov 2006 • 1153 posts Report Reply

  • Southerly: A Tale of Two Iceblocks: Part…, in reply to Moz,

    So are there two categories, “organic methane” and “conventional methane” (I kid, I kid, they’re “bio” and “fossil”), which have different effects, so one is taxed and one not? Your statement above admittedly makes me boggle every time I read it, so I might be missing something important.

    Yes, you are.

    I certainly don’t think that methane and carbon dioxide are the same thing; I certainly never suggested that fossil methane should be taxed and biomethane not.

    Those GWP100 values are not my idea. They’re used by thousands of people in the field to calculate greenhouse gas emissions according to the UNFCCC conventions.

    For example, the calculations of New Zealand’s greenhouse gas emissions use these values when they do the “accounting” to add everything up as carbon-dioxide-equivalent tonnes.

    I was querying the official GWP100 values that are used for carbon-dioxide-equivalent calculations of methane in the UNFCCC calculations.

    I won’t repeat my query but you can read it here again if you so wish.

    To put it into the context of your heater example, the IPCC’s GWP100 values appear to assume that:

    – Turning OFF a 500W heater, and then turning ON a 25kW heater for 12 years, and then turning our original 500W heater back on for another 88 years…

    Is the same as:

    – LEAVING a 500W heater ON, and then turning ON a 25kW heater for 12 years, and then turning ON ANOTHER 500W heater for another 88 years…

    The GHG accountants may have a method for taking this into account (they almost certainly do) but I have yet to be able to find out what it is…

    Dunsandel • Since Nov 2006 • 1153 posts Report Reply

  • Southerly: A Tale of Two Iceblocks: Part…, in reply to Michael Homer,

    Written out, my vague sense of unease looks extremely complicated and unlikely.

    I certainly admire your ingenuity, Michael! I hope that you're putting your intellectual energy to work as a tax lawyer or some such.

    Yes, all sorts of weird effects may be possible at hypothetical extremes -- the question is, of course, if there's anything really like that in the economy. It's at such a level of detail that I can't say anything here except that this is the sort of thing you'd have to investigate with your modelling & analysis when deciding on an optimum configuration for your tax system.

    My children have exhausted me today -- I'm off for an early night...

    Dunsandel • Since Nov 2006 • 1153 posts Report Reply

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