Friday, July 5, 2013

The real issue

Frances Woolley gets to the heart of the problem with citibike that Mark and I have been discussing:
The biggest losers from a carbon tax are people like my cousins in the exurbs. The map above, taken from a paper by VandeWeghe and Kennedy, highlights the parts of Toronto with the highest per capita carbon consumption in red. These are place where people live in reasonably large houses, and commute long distances to work, generating whopping carbon footprints. The whole purpose of a carbon tax is to discourage this type of lifestyle. But I can see why people are reluctant to give it up. Except for the commute, it's great. The streets are quiet, clean and friendly, and there's lots of green space near by. For a person who wants a garden and ample living space, the alternative housing options in the same price range are clearly less desirable: a small, unrenovated bungalow in Scarborough, say, or a downtown condo.
This is really what is going to be the core issue of carbon reform.  Right now we subsidize the exurbs and the large living space ideal.  If you don't believe me, just think of what the response would be to a plan to stop keeping commuter roads in place in order to save money.   Or to just banning cars in NYC, as they are clearly inefficient relative to alternatives.  It'd be brutal.  Yet nobody has an equivalent problem with massive cuts to public transit

So the biggest problem is that there just isn't a consensus on dealing with this problem.  At the margins, a carbon tax would be purely good news.  It would raise revenue and that would be a good thing in a low tax country (kind of like cigarette and alcohol taxes being very positive revenue generators).  But even a "revenue neutral tax" can be opposed over fears that it might end up generating additional tax revenue.   In what other context would this be rational?  Would we be worried about accepting employment because there might be a pay raise?  Is it not good for the central government to have as many different levers as possible to collect revenue? 

In that context, citibike is an interesting flash point because it illustrates just how entrenched the opposition to meaningful change is (i.e. even when the change is trivial it brings forth strong emotions).  Yet we need to develop meaningful alternatives to the status quo at some point, even if it is just when all of the oil is consumed. 


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