by Xelat » Mon 12 Sep 2005, 02:24:34
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')2/. I'd like to introduce an unmentioned player of central relevance prior to addressing a Carbon Tax, namely "Jevon's Mother"
Her role is to ensure that if any nation adopts policies to cut its fossil fuel consumption, other nations will enjoy marginally cheaper supplies until rising demand has mopped up the excess. This may marginally postpone the peak, but does not of itself put funds into sustainable energies' deployment, nor does it control the emssion of GHGs committing us to ruinous Climate Destabilization.
Until both Jevon & his mother are capped, in practice by a global agreement on fossil-fuel usage, they will continue to negate laudable efforts both for energy efficiency and for cuts in energy demand. I've put a half-decent outline of the progress of the requisite global agreement in the "Jevon's Paradox -Death by Conservation" thread for those interested.
I've largely left this site alone for some time but I've been lurking fllwoing Katrina and I noticed this post. I want to respond just t this point.
A nation like the UK has the natural resources (North Sea) and economic/political leverage to sustain, in the medium term, the unsustainable consumption of the United State. What advantage is gained by an unusually high gas tax? I agree that decrease consumption by the UK is likely to be mostly offset by consumption elsewhere. I also agree that this gas tax does little to address the issue of carbon emission.
From a peak oilers perspective it does one other thing - important locally and potentially globally. Essentially they are simulating PO. They artificially raise prices (I guess things like prices are articificial already) to a level they would not likely experience for 2 or 3 years if there is no energy induced recession, and possibly as long as 10 years if there is. The Petrol Tax in the UK is currently 67% of the price of gas creating a situation in which gas is arguably 200% more expensive than it would be otherwise. The "gas tax as simulation" is certainly imperfect in that imported goods will not have associated higher costs, gov't entities will not pay the tax, the gov't gets money that it would not otherwise get if it was PO, etc. However it should act as a brake on consumption.
What is the local effect? Well there is a saying I lie very much - "You don't have to outrun the bear, just your friends". If PO pushes prices hard enough and various economies start tanking then the UK might find itself well positioned because they have already learned a few things about conserving. Economies like the US are heavily leveraged (consumer debt etc), consume wantonly, and although they have many conservation measures that can be taken are too rigid to do so. Thus there is a reasonable chance that the US economy might recess first. In this case we may well see a 10 or even 20% reduction in US consumption. Given the evidently high price elasticity of demand we should expect a pretty sever fall in the Euro denominated price of oil (the US dollar might tank too leaving dollar denominated oil still expensive). In this case the UK should be ok except for the negative effects of having a major trading partner in a shitload of trouble.
But suppose that competition in the "race to the bottom" (like the airlines) is more intense. The US weathers, Katrina, inflation, oil, no real estate bubble etc and other economies do so as well. Now oil production is maybe in slight decline or level and the westernizing of the Chinese and Indian economies continues to force prices higher. Then a country like the UK might be feeling the squeeze pretty badly. But while they might find gas prices to be oppressive all of that tax they paid years ago pays off - the gov't van remove the gast tax and instantly there is less of an economic issue (maybe a budgetary one for the UK though). Now they can weather higher gas prices a few moments longer waiting for some largish consumer to enter recession.
So in that sense the gas tax can potentially save the UK from some of the initial hard shocks of PO.
How could this have a global effect? When the US tanks we'll all be sitting around unemployed trying to figur out what the hell we can do to fix our country. Meanwhile the UK is healthy and provides an example of a way of life not so dramatically different from ours which will weather PO better. They also provide a consumer to sell wind turbines and solar panels too when the US is just trying to scrape together a few bucks for food and basic road maintenance.
So in that sense a high gas tax may provide a kind of insurance with respect to PO.
All that aside the reason they have the gas tax at such astounding levels is probably part of an attempt to meet the req of Kyoto which they take very seriously. They've suspended the last two scheduled raises of the tax exactly because of high prices.
Some US states have recently dropped their gas taxes. It will be interesting and disastrous to see if the federal gov't does this. It will stimulate consumption which we really do not need and more importantly it will create a huge hole in the budget for road maintenance since the gas tax revenues are designated for road maintenance.
The thing I try and remember about Jevon's paradox etc is that not all lily pads are created equal. Thos tat adapt might be able to get out of the pond before it evaporates. This is one reason I've switched to a low energy lifestyle - it gives me a jump on creating some kind of viable life post-post peak.