Wake up and smell the crazy: Extremeness aversion, Goldilocks, the Tea Party and the Greens

Paul Krugman has lamented the lack of incentives in US political life to make sense. There are no sanctions, he argues, against politicians saying and standing for completely crazy things – like that tax cuts generate more revenue.

Anyway, I thought about this looking at this post outlining ‘extremeness aversion’ in this vignette.

Simonson and Tversky [1992] describe a marketing experiment in which two groups of consumers were asked to choose microwave ovens. One group was offered a choice between two ovens, an Emerson priced at $109.99 and a Panasonic priced at $179.99. The second group was offered these ovens plus a high-end Panasonic priced at $199.99.

By offering the high-end oven, Panasonic increased its market share from 43% to 73%. More remarkably, the sales of the mid-priced Panasonic oven increased from 43% to 60% apparently because it was now the “compromise” choice. According to Smith and Nagle [1995], “Adding a premium product to the product line may not necessarily result in overwhelming sales of the premium product itself. It does, however, enhance buyers’ perceptions of lower-priced products in the product line and influences low-end buyers to trade up to higher-priced models.”

So maybe one way of seeing the strange eclipse of the narratives of the perfidy of its opponents on the left of politics is that it’s ignoring this phenomenon. Maybe the left should be a little more comfortable with the crazies on the left, softening up the electorate to think of it as centrist (which it is). I had a conversation with a former Hawke Govt senior minister the other day who said it was very difficult for the ALP outflanked on the left by the Greens. I’ve always thought that the Greens could be an asset to the ALP in just the same way that John Howard turned One Nation into an asset for his party (it certainly wasn’t until he embraced his own inner xenophobe). If the ALP could actually own its inner left leaning spirit, it might somehow manage some politically powerful political collaboration as the more centrist party within left leaning political sentiment in Australia with the Greens representing the more extreme wing – in the same way that the Nationals represent the more right wing wing of the Coalition.

The nationals and Tony Abbott that is.  Oh wait . . . .

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Pedro
Pedro
10 years ago

Perhaps the fly in your ointment is that the distance from the centre right to the mainstream far right (as compared to the nazi style) is not nearly so far as that from the centre left to the greens-left. Maybe I’m not the best judge, being more libertarian than anything, but my sense is that the old-fashioned right are prone to being affronted by leading greens-left policies.

As for the experiment, are Bob and Christine the stainless and marble models to the enamel and laminate of Julia and Wayne? My understanding is that the Apple strategy works because the lower level products look like great value, which seems to be consistent with the quote you provided. I can’t see how you could see the same thing happening with pollies, but maybe I’m thinking you’re pushing the analogy further than you intend.

Also, as a long-term liberal voter, I can attest that the marriage to the nationals has made it harder for me to vote for the libs.

conrad
conrad
10 years ago

It is weird that some of the candidates in the USA make some of our worst look moderate. It will be interesting to see what will happen if they get in (why does the word bad come to mind here?). Anyone, I can’t wait for Michele Backmann to do some magic and getting petrol prices to half of what they are now, preferably without causing a major depression.

“Perhaps the fly in your ointment is that the distance from the centre right to the mainstream far right (as compared to the nazi style) is not nearly so far as that from the centre left to the greens-left”

Really? I’m not convinced — the mainstream far right appears to be living on another planet to me, which is not to say the left from the Greens arn’t. I also think that the far right are a far worse proposition than the left from the Greens because they are far more likely to be in position where they can actually do something meaningful.

conrad
conrad
10 years ago

It is weird that some of the candidates in the USA make some of our worst look moderate. It will be interesting to see what will happen if they get in (why does the word bad come to mind here?). Anyway, I can’t wait for Michele Backmann to do some magic and get petrol prices to half of what they are now, preferably without causing a major depression.

“Perhaps the fly in your ointment is that the distance from the centre right to the mainstream far right (as compared to the nazi style) is not nearly so far as that from the centre left to the greens-left”

Really? I’m not convinced — the mainstream far right appears to be living on another planet to me, which is not to say the left from the Greens arn’t. I also think that the far right are a far worse proposition than the left from the Greens because they are far more likely to be in a position where they can actually do something meaningful.

conrad
conrad
10 years ago

oops, sorry about the double post (the first of which went through unchecked — please delete it. thanks).

Steve Dunera
Steve Dunera
10 years ago

This doesn’t work.

The problem is that the ALP now winds up almost in coalition with the Greens and the effect this has on voters.

If Howard had wound up in defacto coalition with One Nation centrists would have deserted in droves. He and his team, in particular Abbott, destroyed One Nation.

As a swinging voter who has voted almost exactly 50/50 over 15+ years of voting I can tell you that given that the Greens have so much influence on the ALP it has substantially altered my voting toward the coalition. If there was independent control of the Senate my vote would be far more likely to shift.

Given current polls it appears this attitude may be common enough to cause a serious problem for the ALP.

JC
JC
10 years ago

Paul Krugman has lamented the lack of incentives in US political life to make sense. There are no sanctions, he argues, against politicians saying and standing for completely crazy things – like that tax cuts generate more revenue.

I’ve noticed of late Kruggers seems to be in love with the 50’s and 60’s, plugging at the notion tax rates were much higher then. They were of course, but Kruggers doesn’t quite tell you that deductions and loopholes during that time were massive and the tax dragnet also caught further down much lower income levels. These were the good old times in the US when you could deduct any interest expense from your taxes- finally disallowed by the Reagan 1986 tax reforms (from then, only mortgage interest was allowed). Perhaps Kruggers would recall the Reagan tax reforms seeing he worked for the administration for a while.

Professor Kruggers may want to explain this long term chart showing that the US federal government tax take has be stuck with super glue at 19%.

rog
rog
10 years ago

How is someone “more libertarian than anything?”

rog
rog
10 years ago

Irrespective of the various assessments of Krugmans competence, the question remains – how do you reduce a deficit with tax cuts?

Paul Frijters
Paul Frijters
10 years ago

what you ask for is difficult, Nick. Aspirational voters have forced left-leaning parties to dis-associate themselves from their more radical cousins who call for higher taxes on the rich and more equality. The main reason is that the dominant political story everywhere for every major party is that they are made up of winners and that you can expect more winning if you vote them in. Under that reality, left-leaning parties are punished for associating too closely with what the aspirationals think of as losers. You can display care for losers from an empathy point of view and thus you can be an advocate for a degree of sharing, but you dont want to make the mistake to be seen as one because people dont believe that voting for losers is going to make them a winner. The key difference is that the right-wing extremists (tea-parties and such) might be seen as nuts, but not as losers and hence less poisonous to be associated with.

conrad
conrad
10 years ago

“spirational voters have forced left-leaning parties to dis-associate themselves from their more radical cousins who call for higher taxes on the rich and more equality”

Funny what we radical these days.

“Of course the left of the Greens will always argue for higher taxes for the wealthy”

I would assume that most of the Greens would actually. If this is one of the defining characteristics that separates the Green left from the rest of the Greens, then I’m not sure who the rest of the Green are.

Paul Montgomery
10 years ago

I think Paul Frijters is right to identify this issue as being Labor’s problems in connecting with aspirationals, people who are at the cusp of embodying that apocryphal Churchillian bon mot about being lefty when you’re young and conservative when you grow up. These are people with adult mortgages and (often) adult family responsibilities, but they’re not always adults in an emotional sense so they can fall victim to dog whistles.

This is the problem, for me, with the thesis in the OP. Howard was able to use Hanson’s call to Australians’ guttural urge to defend their terra nullius from darkies, something which aspirationals with their new McMansions felt at a personal level. Is there a similarly base emotion that Brown stokes in his supporters that Gillard could co-opt to resonate with her “working families”? I am not sure there is, because Brown is too Canberra these days, the Greens don’t talk the language of the suburbs.

Pedro
Pedro
10 years ago

From the centre to the right the differences are mostly economic, but from the centre to the left the differences also include substantial social issues. Yes, you can raise taxes if you are careful, but nobody seems to get much success claiming it as a virtue. I don’t think it is so hard to understand that average people might think avoiding debt a good thing, or that govt spending needs to be constrained because it is often wasteful. What is the core message of the Tea Party if it is not that?

“the mainstream far right appears to be living on another planet to me”
but which planet are you living on? Are you sure it is planet “Centre”?

“These are people with adult mortgages and (often) adult family responsibilities, but they’re not always adults in an emotional sense so they can fall victim to dog whistles.”

I guess it is easy to see some people as crazy when you start from the conceit that they are not emotional grown ups like yourself. I have never believed that Hanson triggered significant underlying racism and I thought at the time that it was exactly Paul’s attitude that was really driving her support. As some woman famously said to Gillard “We’re not stupid”. Even the truly stupid are unlikely to think it of themselves.

“How is someone “more libertarian than anything?””
http://en.wikipedia.org/wiki/Libertarianism

“Irrespective of the various assessments of Krugmans competence, the question remains – how do you reduce a deficit with tax cuts?”

Maybe people are asking a different question: How do you get the economy moving with tax rises?

john walker
john walker
10 years ago

We were in a furniture warehouse in fyswick (looking for a night and day couch) asked a young sales assistant to point us to the night and days , she answered
that ‘ over there were the “entry level” couches , over here are the “premium “level couches and that int the middle were in her exact words the “mediocre level” couches.

The roots of the problem you are discussing go way back to the times that led to Tom Lehrers reason for giving up satire “irony is no longer possible”.

Paul Frijters
Paul Frijters
10 years ago

Nick,

you ask for where the evidence is that to be seen to favour increased taxes for the rich to the betterment of the poor is a bad thing politically. The more recent occasions that spring to my mind are;

1. The mining-tax saga. Within a week or so of launching it, Rudd had to backtrack on his ‘tax the super-rich’ storyline because it wasnt working for him. He understandably struggled to find any other story, probably not quite believing that a tax on the super-rich could be portrayed as something bad for the masses.

2. The recent history of the Labour Party both here and in the UK with the unions: union involvement in the internal party apparatus has had to be hidden from view and in both places have the parties been keen to portray a ‘clean middle class’ image. Suits and powersuits, not ‘beer and sandwiches at number 10’.

3. The recent extension in December 2010 by Obama on the tax-break for the super-rich (http://news.smh.com.au/breaking-news-world/obama-signs-bill-to-extend-tax-cuts-20101218-1913j.html). If taxing the rich more is so popular, why didnt Obama just not sign the bill. If you look at the spending cuts now on the table, what he won with that deal in terms of continued welfare is lost thrice over already.

I dont think either Obama, Rudd, Gillard, or any of the other left-leaning politicians are dumbos when it comes to this issue. I think they feel their hands are forced by popular opinion.

Paul Frijters
Paul Frijters
10 years ago

Conrad,

yes, the most left-wing persons I know are all economists. Sometimes I think we are the last bastion of socialism. Perhaps it is because our training gives us a reason for distrusting the fables told around the protection of economic interests.

Pedro,

I am not sure whether you are defending the tea-party or not. I decided they were on the side of the crazies when their exultant leader called for the assassination of an Australian citizen. It was crazy on so many levels: if ever there was a hero defending free speech and challenging big government it was Julian Assange.
What indeed is the core message of the tea party if it does not support such a clear defender of the American constitution?

rog
rog
10 years ago

Pedro, most average people understand debt, it is how they buy cars, houses and other stuff.

A large majority of the govt deficit arises from the failure of the private sector to pay their debts.

john walker
john walker
10 years ago

Paul
“the most left-wing persons I know are all economists”
Might it be the ‘architect’ – I design , you implement- syndrome?

The founding father of Australia’s very anti-commercial arts policy/funding system was a well known economist. He certainly knew a thing or two about things that were fine in theory.

Paul Frijters
Paul Frijters
10 years ago

john,

yes, there is a great tendency amongst economists to believe society can be reconstructed and purified according to some ideal (just read Quiggin or Clark on climate change). And the ideals are all great: everyone has equal innate value, future generations matter, you get more utility giving a poor person a dollar than a rich person a dollar, etc. Its the nice thing about being an economist: you can remain naive and idealistic.

john walker
john walker
10 years ago

“naive and idealistic.” Because humans are never ideal, the term: ‘idealistic’ can sometimes, become…in-human in action.

Pedro
Pedro
10 years ago

Paul F, I’m not defending the tea party, I’m suggesting that the average person will likely find them more palatable than the greens-left. NG said in his post that: “I’ve always thought that the Greens could be an asset to the ALP in just the same way that John Howard turned One Nation into an asset for his party”. In other words, Hanson was not so different to the average suburbanite while Christine Milne really is. I don’t know anything about your quote, but I’ll bet a green somewhere has suggested some awful retribution for John Howard.

Thinking more about this post this morning, and something I heard on the radio, I realised that most of the “centerists” posting and commenting here don’t belong to a centre that the average suburbanite would recognise. In truth, and not meaning to offend, most sound like typical latte-lefties. If you want to describe the political spectrum in geometric terms then a cirle is the best candidate, but nobody is in that centre. So how do you define the centre, is it some metric based on typical left and right positions? Or by reference to the most popular policies (to the extent that can be determined)? I certainly don’t buy the line that the centre is where everybody is shitted-off in equal measure.

“yes, the most left-wing persons I know are all economists. Sometimes I think we are the last bastion of socialism. Perhaps it is because our training gives us a reason for distrusting the fables told around the protection of economic interests”

All the while missing the lessons about central planning! :-) Seriously, sometime ago I read that a survey of economists had been done in the US and most self-described as liberals.

Rog, really? Ok then.

john walker
john walker
10 years ago

BTW
This is mob stuff; It is not ideological.
People are very cranky about : pokies and ‘their club’, their compulsory supper funds going down the gurgle, more and more compulsory costly training for special certificates needed before you can, knock up a garden feature or run a sausage sizzle , compulsory building warranties that will make being a independent bespoke carpenter building posh cupboards virtually impossible and on and on.

Combine that with the perception that these ‘people who are so sure of what we should be doing’ could not run a chook raffle and bingo. You have a mob.

Paul Frijters
Paul Frijters
10 years ago

Pedro,

I agree that many people will find the Greens more off-putting than the Tea Party and was trying to explain that in terms of whom people wanted to be associated with.

I can live with the latte-label and in terms of redistribution am certainly left of center.

The planning issue is interesting within economics. We teach about the folly of central planning in first year but few of us have worked through macro-models where it really is a folly. If you truly take most macro-models seriously that are now taught and used, you would be all in favour of bringing back socialism, as Stiglitz already pointed out of course. It tells you about the limits of our modeling ability that we cant come up with tractable and estimable models in which we shouldn’t centrally plan.

john walker
john walker
10 years ago

Be surprised if the ‘tea party’ really takes root here.

Deep religious/sociological roots (north German plain) and deep historic roots of violent division ( The Civil War was really the second American civil war ) underpin the ‘tea party’ as a sociological, faith system , they are not common here .

rog
rog
10 years ago

For many in the US the civil war is still a battle to be won.

Even today there is a lot of emotion tied up with the civil war especially in the south. It must have been heartbreaking for families split on the war and experience losses from action on both sides. Like Henry Clay.

rog
rog
10 years ago

Regardless of carbon tax, the deficit, insulation and other issues I see the current government failing on more mundane issues, that being that the PM is living in sin with a hairdresser, there is a poof in the coalition and a leso is telling us what to do with our finances.

It’s just not Australian. (/irony)

Pedro
Pedro
10 years ago

“The main reason is that the dominant political story everywhere for every major party is that they are made up of winners and that you can expect more winning if you vote them in. Under that reality, left-leaning parties are punished for associating too closely with what the aspirationals think of as losers.”

Paul, I think it is more an issue of understanding than identification. Our Cate can sell weekly magazines by being on the cover, but she can’t sell the carbon tax. So people must be interested in her, but not inspired. Cheryl Kernot is another example. And I don’t think people vote with the rich. The MRRT is a perfect example of the sort of fuck up that will turn off average people, but you (I think) still regard as a great idea lost to stupidity. Pig-headed arrogance (Rudd and Swan) and the stupid lying that went with it really do shit the average person.

I agree with JW. I’ve always thought a social democrat party ought to be the natural party of govt, but these guys just can’t get it right. The constant little annoyances, like having to pay some dude to give an enviro-rating for your house before you sell it. You really want to just punch someone in the face. And not just the ALP always, I’d like my old light bulbs back! These fluoros annoy the crap out of me, but more than anything I hate being lectured to.

Pedro
Pedro
10 years ago

Greg Combet explains the problem perfectly:

“Combet accuses Abbott of climate change racism

… “It sends the signal that it’s somehow dubious to trade with foreigners. It’s typical dog-whistle politics, trashing the commitment that’s existed for many years on both sides of politics to economic liberalisation and open trade,” he said.

“It is in effect a white carbon policy designed to harvest more votes no matter what the cost.””

Does anyone really think a fair minded person of at least moderate intelligence will think Combet anything other than a fraud. I don’t really care what he thinks of Abbott, the dope is speaking to us as if we are fools. It’s bad enough having a serial liar like Swan, Combet is supposed to be one of their great hopes.

Pedro
Pedro
10 years ago

More of the rubbish that is sinking the ALP:

“In 2050, Queensland growth will be 4.11 percent lower under a carbon tax, according to Deloittes, with Queensland Treasury estimating it will be 3.5 percent compared to the predicted cut to Australia’s GDP of 2.5 per cent in this year.

Depite the reports’ findings, Mr Fraser told parliament that the modelling showed the Queensland economy will continue to grow with the “significant economic reform” of a carbon tax.”

It’s Orwellian, an economic reform that reduces growth.

rog
rog
10 years ago

Pedro, you are proving Krugman correct.

Deloittes forecast that under a carbon tax growth remains strong in QLD.

Pedro
Pedro
10 years ago

rog, if I chop of your foot and give you an artificial limb, you can still walk, but you would not call that a biomechanical reform. The general idea of a reform is that it leads to improvements. Economic reforms are supposed to make an economy stronger. Deloittes, like the Qld and Fed treasuries, forecast growth being lower than it would be without the tax.

You might call the carbon tax an environmental reform, but not an economic reform unless you are into torturing commonly understood terms.

KB Keynes
KB Keynes
10 years ago

Actually Pedro it is an economic reform.

It is taxing an externality.

The growth is reduced because of the assumptions in the model. if industries do not change their reliance on carbon then yes growth will be lower but if they change so will growth.

I think Combet is onto something. an ETS is perfectly okay in OZ but somehow becomes corrupt in Asia is a strange understanding of the system.

Paul Frijters
Paul Frijters
10 years ago

Pedro,

yes, I think the mining tax was a great idea and dont think it was lost due to stupidity on the side of the politicians or civil servants. It floundered because the wolves managed to convince the lambs to side with them. Money talked.

Fyodor
10 years ago

It is taxing an externality.

Wrong. The mooted negatives predicted by the AGWarmenists will be driven by GHG emissions in OTHER countries. Australia’s contribution to the “problem” is trivial and therefore the taxation of Australian emissions does nothing to address the externality hypothesised to be imposed upon us by other countries.

In fact, by NOT adressing the externality, the government is imposing upon the Australian economy a deadweight loss from lost economic output with ZERO offsetting gain.

This is not a reform, in any sense.

It is nothing but deadweight loss, imposed upon us against our will by a shambolic government with an electoral deathwish.

KB Keynes
KB Keynes
10 years ago

Taxing carbon dioxide is not dealing with an externality?

what an amazing comment

Fyodor
10 years ago

What is the externality, Homerkles?

This time try thinking before you write.

jtfsoon
jtfsoon
10 years ago

Much as I’d hate to defend Homer, he probably also means to say that the introduction of a carbon tax in Australia, insofar as it has a ‘signalling effect’ may hasten the introduction of more multilateral measures to price carbon in other countries. And technically he is correct anway, insofar as Australia makes a near infinitesimal contribution to the stock of CO2 negative externality, the tax is still a tax on said externality.

Fyodor
10 years ago

I think you’re falling for the same flaw in the logic, Jase. C02 in itself is not an externality. Not in any sense. To quote from the Book of Aviaticus, 13-5: “Gaia eats CO2 and shits life.”

Hence my question: “what is the externality”? It’s not CO2, else our respiration would constitute an “externality”.

The warmenists believe that excessive CO2 is the problem – specifically that excess of CO2 (and GHGs more broadly) in the atmosphere which they expect to cause damaging climate change. It is the mooted change in climate that represents the externality, not CO2 itself.

As I said before, that climate change, if it occurs, will be driven by the actions of much larger countries and their emissions. THAT is the externality, not Australia’s emissions, and Australia’s carbon tax does nothing to address that externality.

As for the pragmatic argument about Australia’s powers of persuasion, frankly those countries that count don’t give a fuck what we do because Australia is, again, irrelevant to the issue.

Pedro
Pedro
10 years ago

What Fydor said.

Paul, even the miners said that with proper consultation and so forth a deal could have been done. Instead we got a proposal foisted without consultation and on a take it or take it basis. Swan then went around slandering opponents in his typically disgraceful way and they never gave a second thought to the constitutional issues. Having shot themselves in both feet with a stupid approach they made life very easy for the opponents of the tax. The story at the time was that Ruddd and Swan were deliberating picking a fight for the electoral benefits, being dopes, they lost.

jtfsoon
jtfsoon
10 years ago

Fyodor is playing with words. Yes the issue is an ‘excess’ emission of CO2 (and other greenhouse gases) which is supposed to lead to a bunch of negative externalities. And what contributes to an excess emission of CO2? Umm, CO2. Taxing CO2 is a means of dealing with this externality under the AGW story, which is what Homer said. And as a matter of basic arithmetic, the less that one country contributes to emitting CO2 the less excess CO2 there is. Which is also what Homer said.

Fyodor
10 years ago

Fyodor is playing with words.

No, not at all. Let me restate it more simply: CO2 is not the externality; climate change is the externality.

There is no externality associated with CO2 emissions other than the mooted effect on the climate. It is climate change that represents the externality, not CO2, and, as I stated, the carbon tax will have no effect upon that externality, as Australia’s emissions of CO2 are irrelevant to climate change.

That is, the externality is not taxed. What will be taxed is CO2 emissions in Australia, which make no difference to that externality.

conrad
conrad
10 years ago

“What will be taxed is CO2 emissions in Australia, which make no difference to that externality.”

My tax makes no difference on Australia’s total take. Can I stop paying that too?

Patrick
Patrick
10 years ago

Pedro is right.

jtfsoon
jtfsoon
10 years ago

Fyodor
You are still sophistically playing with words. Yes I know homer did initially say the externality itself was taxed but then he amended this to say the carbon tax was a way of ‘dealing with the externality’ which is technically correct.

The excess CO2 is the cause of the actual externality. There are very few cases where you deal with an externality by actually taxing it. For instance, the US didn’t successfully deal with acid rain as it did years ago by taxing acid rain – if there was still acid rain to tax arguably its policy had failed. Instead it implemented a SO2 cap and trade program i.e. it priced the cause of the externality. We didn’t successful deal with the hole in the ozone layer by taxing the hole in the ozone layer – we just phased out CFCs.

Insofar as excessive levels of CO2 emission are causing the mooted externality of AGW, then each country’s attempt to reduce their emissions will have some impact in addressing the externality.
Claim all you want that the reduction in emissions by unilateral measures is too small to make a difference, claim all you want that the costs of addressing the problem address the benefits in reducing the contribution to the externality. Those are all arguable, intellectually respectable claims. But hyping up such a claim to a claim that any unilateral attempt to put a price on a cause of an externality has ‘no effect’ in addressing the externality is just logically wrong.

Fyodor
10 years ago

“What will be taxed is CO2 emissions in Australia, which make no difference to that externality.”

My tax makes no difference on Australia’s total take. Can I stop paying that too?

Sure. There’ll be consequences, of course, that explain why you won’t, and also explain why your analogy is inappropriate.

Fyodor

You are still sophistically playing with words. Yes I know homer did initially say the externality itself was taxed but then he amended this to say the carbon tax was a way of ‘dealing with the externality’ which is technically correct.

No, there is no sophistry involved. You would be closer to the mark if you accused me of semantics, as the essential question is the meaning of “externality”.

I’ve already defined the externality, and neither you nor Homer has challenged it. CO2 is not a pollutant; it is not the externality, and Australia’s “carbon tax” does not “technically”, practically or in any way “deal” with that externality.

The excess CO2 is the cause of the actual externality. There are very few cases where you deal with an externality by actually taxing it. For instance, the US didn’t successfully deal with acid rain as it did years ago by taxing acid rain – if there was still acid rain to tax arguably its policy had failed. Instead it implemented a SO2 cap and trade program i.e. it priced the cause of the externality. We didn’t successful deal with the hole in the ozone layer by taxing the hole in the ozone layer – we just phased out CFCs.

Yes, line and length response, as expected, except that there was a clear causal relationship between emissions of SO2 and CFCs with observed externalities, i.e. acid rain and ozone destruction. There is no such clear causal link between excess CO2 and the mooted externality, which has not even occurred yet, and is of unknown impact. That is, both the causal relationship and the extent of the externality are arguable and highly uncertain.

Now, you might argue that the evidence, such as it is, warrants preventative action, and thus taxation of CO2 emissions, but the analogy you’ve used falls down when you consider both of your precedents, which involved globally coordinated action against an existing and measured externality. Australian taxation of CO2 emissions will be as ineffective in “dealing with the externality” as would Australia going it alone in banning CFCs, i.e. totally ineffective.

Insofar as excessive levels of CO2 emission are causing the mooted externality of AGW, then each country’s attempt to reduce their emissions will have some impact in addressing the externality. Claim all you want that the reduction in emissions by unilateral measures is too small to make a difference, claim all you want that the costs of addressing the problem address the benefits in reducing the contribution to the externality. Those are all arguable, intellectually respectable claims. But hyping up such a claim to a claim that any unilateral attempt to put a price on a cause of an externality has ‘no effect’ in addressing the externality is just logically wrong.

Heh. Hype? Nice one.

I don’t need to hype or claim anything. It is a simple fact that Australia’s CO2 emissions are a trivial component of the global total, and an even smaller proportion of the mooted increase in emissions that is believed by many will result in global warming. It is thus equally simple – and a logical corollary -to state, not claim, that Australia’s carbon tax will have no effect on the externality. It is “logically wrong” to argue otherwise, though you’re welcome to try.

Mel
Mel
10 years ago

Fyodor:

“There is no externality associated with CO2 emissions other than the mooted effect on the climate.”

False. Ocean acidification is another well documented externality that is, as far as I can gather, widely accepted by scientists with the requisite qualifications.

No doubt you’ve read Lord Marty Feldman saying otherwise.

jtfsoon
jtfsoon
10 years ago

Fyodor
so far what you are really saying is that Australia alone setting a carbon tax will not make a significant difference in addressing global warming because a global agreement isn’t in the works. I would agree with this. Hyping this claim up to saying that a country acting alone will make no difference period is, as I have correctly concluded ‘hype’. Moreover Australia isn’t acting alone strictly speaking as its measures when combined with the impending measures in UK, the ETS in Europe would make some difference which is more than zero, one would think. Moreover you have still ignored the effect being claimed by proponents of the tax, that it may then kickoff more multilateral measures. Personally I am sceptical but once all these things are taken into account, there is a coherent enough story that a carbon tax in Australia will have some non-zero effect on emissions and hence on the probability of catastrophic warming.

jtfsoon
jtfsoon
10 years ago

Oh, and an excellent point made by mel. Ocean acidification tends to be ignored in all this. It’s as serious if not more serious than the probability of catastrophic warming.

jtfsoon
jtfsoon
10 years ago

there was a clear causal relationship between emissions of SO2 and CFCs with observed externalities, i.e. acid rain and ozone destruction. There is no such clear causal link between excess CO2 and the mooted externality, which has not even occurred yet, and is of unknown impact.

I know there are intelligent sceptics around like Lindzen but unfortunately many of the people who kicked up such a fuss about the ozone layer are also to be found in the current sceptics camp.

I am prepared to consider the possibility that AGW may well be manageable through adaptation rather than mitigation. By the same token I’m sceptical of those claiming the skies will fall if we have a carbon tax,

rog
rog
10 years ago

Pedro, the carbon tax is a reform as is giving up the gaspers. But given the evidence so many still want to smoke and we all have to share their habit?