80beats is a science news blog, and it covers the most interesting findings, events, and conversations in science every day. 80beats is not an “anti-global warming blog” — we agree with the scientific consensus that human activities are warming the planet. Bjojrn Lomborg also agrees with that statement — but he thinks it may not be a complete and total catastrophe, and argues for green tech innovation instead of limits to CO2 emissions.

– Eliza, DISCOVER online news editor

Way to go Discover!!!

That was exactly the point, people drove less because it was too expensive. I’m not advocating for driving around aimlessly, just noting the fact that because gas was so expensive, people didn’t have the money to do so, therefore taking away a bit of their freedom they had when they could afford to do so. That was also a decision based on the markets, not targeted taxes. It’s also a good reason for why the US needs to become energy independent from OPEC since they generally control the world’s supply and can thus drive up prices by purposely limiting production, which contributed to that market spike.

The fact that small cars and hybrids currently do sell well, as well as higher mileage 4 cylinder sedans and small SUVs, suggests that people already care about saving money on fuel costs and the environment. Raising taxes specifically to force people to do that only results in less freedom, let the market decide by offering the choices and people will decide what sells in the market. Prices are then determined by the supply and demand of people, not the artificial market forced upon them by government driving up prices to where people simply cannot afford a mid-sized sedan they need for a family with 2 kids and all their stuff. High fuel prices would negatively impact the middle and lower middle class more than any other demographic, that’s the majority of the country.

Emissions/efficiency regulations are also in place, CAFE standards, in which the government has already used their power to force car companies to build more efficient cars. The difference between CAFE and high gas tax is that CAFE is an average across the product line of car manufacturers, while a tax would affect everyone, specifically those who do not buy hybrids/compact cars, essentially a punishment for not doing so. Furthermore, hybrids are significantly more expensive than their internal combustion counterparts, therefore the guy looking to buy a sedan will likely opt for the non-hybrid. If you do the math, the premium for most hybrid counterparts are typically recoverable around 8 to 10 years and the government cannot afford to subsidize hybrids forever, which is why those subsidies are phasing out for most models. The subsidies were an attempt to draw attention to hybrids and people have been buying (regardless of the fact they cost significantly more than non-hybrid counterparts), which is all good because they had the freedom to choose to do so.

Given that we are in an imperfect world, people are not perfectly rational and do not have perfect information, and many items are subject to externalities: the costs and benefits of many items are experienced by people other than the one buying the item. What I was saying about a perfect market is that a buyer of gas would experience all of the costs associated with that gas, which does not occur now. The market imperfections in the real world allow buyers of gas to not experience all of those costs, and that’s why I suggest that gas would cost more in a perfect market (which does not exist).

In that sense, a “freer” market does not necessarily lead to an economically better result. If I save money by doing without a pollution control device on my car, I don’t feel all of the economic pain caused by my extra pollution. In those cases, regulation is important because rational people in that situation would choose to pollute, since they do not bear all of the costs and consequences of their actions.

This is not to say that regulation is always good either. The US has relatively less regulation than other countries, and yes that is a strength. But freedom from regulation for its own sake only goes so far, especially when there are countervailing concerns.

It is true that not every green tech will solve every problem. But that is a weak way to think about solving the problem. There isn’t a single answer out there right now and to say that useful and helpful technologies should be disregarded because no one of them solves all our problems is just plain silly. Of course a person who needs a truck is going to buy a truck. That doesn’t mean they shouldn’t raise the gas prices. Look at what happened in 07, when gas prices skyrocketed. Funny, Americans drove less vehicle miles in 08 than in 07. What higher taxes will do is, make the people at the edges choose differently. The guy who needs a truck, well he needs it. But the guy deciding between the truck and the cool sedan might choose the sedan, and the guy who wasn’t sure between the sedan with and without the hybrid would be more willing to buy the hybrid and so on.

Oil is a commodity, traded on the market and speculated based on supply/demand, therefore the costs of using oil are indeed reflected in the market price. “Externalizes”, as you refer to, including emissions, do indeed raise the price of products: cars for example, the costs of making cars more efficient are reflected in the selling price. Also note, the state of California has stricter emissions than the rest of the country and, subsequently, cars are more expensive in that state due to the necessary costs of complying with their regulations.

If this were a perfectly free market, gas prices wouldn’t be very different from today because the US is generally free (with the exception of costs associated with regulations and such – which make it less free), but if prices were artificially inflated by taxes, it would certainly cost more to the consumer and force the market to build tiny, powerless econo-boxes to comply with costs and emissions regulations, thus forcing people into tiny, underpowered cars. It would also force people to pay more for fuel, especially targeting those who require trucks for business and those who need a car big enough to haul around families. Therefore, raising the price of gas would indeed take away financial freedom of these people, some more than others. It would also result in higher costs to heat homes and conduct business. Since all additional costs are ALWAYS passed down to the consumer, the consumer would also be paying more for utilities and any products from businesses that use fossil fuels for energy.

Finally, “green” technology is no where near meeting our energy needs and is far from efficient (cost and energy wise) that there’s no way raising taxes on gas will change a thing. People with families or those requiring a truck for work will not buy a tiny electric car simply because gas is so expensive and if trucks were made with powerful hybrid motors, they would cost twice as much as they do now and be negligibly more efficient. What will help develop cheaper and more efficient technology are research and development, period. In fact, our most promising alternative fuel source is currently natural gas – abundant in the US, cheaper than gas, and the technology is already available to implement on a large scale.

I believe you need to read up on the definition of free markets if you believe a perfectly free market would yield higher gas prices: http://en.wikipedia.org/wiki/Free_market

The US is considered a free market under the modern definition, that is: containing regulations and subsidies, but no state control like those in Europe for example. Therefore, adding more government intervention in the economy makes it less free by definition.

A free market is defined by the market alone, not the government “leveling the playing field”. Oil is a traded commodity and thus subject to market speculation, hence periods of inflated prices. Oil trading countries require oil to sell above $50 per barrel to make a profit. It generally sells for around $80 per barrel. Also, see Europe for what happens when fossil fuels are taxed and essentially punished by the government… you get years of extremely high prices and people get forced into tiny cars. Europe also uses primarily diesel because they’re more efficient, however they emit more carbon that an internal combustion engine (exception: last few years of VW’s clean diesel tech). In Europe, the market historically worked to provide better fuel mileage, not better emissions or “green” tech, as a result of government “leveling the playing field”.

Alternative sources have no competition with fossil fuels, not only because the technology is much more expensive, but because no alternative sources are nearly as efficient as fossil fuels. Current technology cannot meet our energy needs without astronomical costs, therefore the market isn’t dominated by such technology. When the tech becomes cheaper and just as efficient as fossil fuels, then the market will see real competition.

http://www.lomborg-errors.dk/

@bskb, Chris: Raising the market price of fossil fuels, whether by a tax or cap-and-trade (which are NOT the same thing), will benefit the environment in the long term by creating a more level playing field for other sources of energy. In the short term, it can also benefit a lot by encouraging energy efficiency and conservation, which are often the most cost-effective ways to reduce emissions.

Currently producers and consumers of carbon-based energy don’t pay anything close to the true costs of these fuels. These externalities cause market failure and give fossil fuels a huge competitive advantage over other sources of energy. So, if you believe in the power of the “free market” to promote rational decision-making and investment, then you should support taking steps to fix what is probably the most broken, distorted, un-free large market in history.

“Many of these so called green shoots are interested in only one thing, pious handwringing while reaching fory our wallet.”

That pretty much sums it up. I’m glad Mr. Lomborg has the stones to bring some truth to the public that all these “green” schemes are nothing more than smoke and mirrors used to garner more tax dollars, much like traffic cams and speeding tickets. Hopefully this will bring about real change like nuclear/geothermal power.

Taxing carbon emissions, setting strict fuel mileage standards, and building more hybrids will do nothing more than cost the consumers more money as all liabilities and taxes are passed down to the consumer. It’s for this reason that the majority of Americans (and those internationally) are skeptical of the measures the governments want to take to curb emissions. The public is far smarter than the “alarmists” portray them to be in the media and such. The biased media sources often take a condescending tone to belittle the opposition and elevate their own “elitist” conclusions.

California’s new cap and trade will do nothing for the environment, it won’t lower the world’s temperature by one 100th of a degree. But it will raise money for an indebted state. Many of these so called green shoots are interested in only one thing, pious handwringing while reaching fory our wallet.