The multifunction carbon tax

I don't know if this is exactly a case of picking losers, but it certainly falls into the category of stupid policy assessments, and they usually end up with more losers than winners. Anyway, it is so stupid that I had to post about it.

I have just watched a recorded episode of Newsnight (from Tuesday, 3 Oct, I think) in which Susan Watts, their Science Editor, made the following pronouncement:

"David Cameron's new green Tories could use a small carbon tax both to pay for new technologies and to raise revenue to let them lower taxes elsewhere."

If it's a "small carbon tax", how far is it going to go towards either "new technologies" or "raising revenues to lower taxes", let alone both? A carbon tax is a good idea, but this sort of half-baked, mathematically-impossible construction will discredit the concept.

The article was arguing (based on the anticipated conclusions of the Stern Review) that tackling climate change would cost around 1% of global GDP, and that therefore governments should be spending 1% of GDP on climate mitigation measures. That's around £10 billion every year. It is a non sequitur to assume that if it costs a certain amount to deal with climate change, government should be spending the whole, or even most of that amount. I am quite certain, also in anticipation of the report of the Stern Review, that Nick Stern does not have it in mind for governments to be responsible for all spending on climate change measures.

But Susan was not asking Nick Stern. She was asking Professor Tom Burke, labelled simply as from Imperial College. Professor Burke was spouting about what economists think, though what he was saying was so far from what I would expect an economist to say that I smelt a rat. So I looked him up. He is not, and never has been, an economist. He is an environmentalist (and adviser to Rio Tinto plc). That's fair enough, but the article was implying that he was an expert on economics, and the whole theme of the article was not about what measures needed to be taken to reduce carbon emissions (which would be a suitable subject for an environmentalist to address), but the need for government to increase its expenditure, though on what was not set out. On this, Professor Burke is not an expert, but the viewer would have gained the impression that he was.

Susan's conclusion included the sentence:

"We may do our bit, but governments are being told they must do the lion's share."

Told by whom? The lion's share of what? What can governments do if people and organisations don't "do their bit", given that government is directly responsible for a small proportion of our emissions?

As it went out, this was a one-sided plea for govenment to write out an enormous blank-cheque of taxpayers' money in order to tackle climate change by means unknown. Newsnight can do better than this, but the people who know their onions (economics-wise) seemed either not to be around or to have been dispatched to Bournemouth to chase non-existent stories about Boris Johnson. The programme editor might like to remember in future that it's a good idea as a rule to get the Science Editor to report on science matters, and the Economics Editor to report on economics matters, and not to get them mixed up.