Northeast Multi-state gas (carbon) tax

[Arlington]

I am starting this thread is because we don't seem to be discussing the proposed Northeast regional gas tax. Under different scenarios it would be a tax of $.05 to $0.17 a gallon, and devoted to lowering the carbon of our transportation.

Projects typically discussed include various big ticket regional rail capacity and electrification.

(If you can find an earlier discussion of this please let me know and I will combine the threads)

I am on my mobile right now so although there are lots of good stories from the last 6 weeks if you Google "Northeast gas tax" could I ask others to supply links that they think are helpful?

Charlie Baker's position appears to be that an interstate gas tax would give him good political cover for raising the gas tax.

 

[HelloBostonHi]

"gas tax" is exactly how we are trying not to portray it. The going phrase is Transportation Climate Iniative or carbon tax. The second people hear gas tax they start protesting.

Homepage | Transportation and Climate Initiative

 

[millerm277]

Skimming some articles, it looks to me like the 12 states involved are around ~22% of the US population, and the US consumed 142.86 billion gallons of finished motor gasoline last year according to the EIA. A quick skim of yearly VMT per capita per state makes it look to me like consumption in the region is somewhere in the ballpark of the US average for VMT.

So for some back of the napkin math: We've got probably ~31 billion gallons of gas consumed in the states last year. That tax sounds like it would raise....somewhere between $1.5 and $5.25bn a year at the numbers you cited. Obviously, that's a rough guess, but there's not going to be an additional 0 there if you plug in slightly different values.

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Split over a 12 state region, it seems like a drop in a large bucket of needs. I have trouble seeing how that money is going to produce particularly dramatic results.

I'm not saying it isn't worthwhile, I'm just skeptical it's enough to make a dent large enough to be noticeable.

 

[whittle]

Split over a 12 state region, it seems like a drop in a large bucket of needs. I have trouble seeing how that money is going to produce particularly dramatic results.

I'm not saying it isn't worthwhile, I'm just skeptical it's enough to make a dent large enough to be noticeable.

The goal with carbon pricing is not just to fund other green energy initiatives; it is the green energy initiative.

 

[millerm277]

The goal with carbon pricing is not just to fund other green energy initiatives; it is the green energy initiative.

My point here is that at the quoted numbers, I don't follow how it's accomplishing any of what I typically think of with regards to "carbon pricing".

If it's not high enough to cause any substantial output reduction from emissions sources, and not high enough to enable any particularly substantial offset/other green energy projects, how is this "carbon tax" accomplishing what it's intended to do?

I'm not saying it has no effect, but the idea of this sort of thing to me is to do something substantial, not to make one tiny baby step that's going to be hard to see substantial change from even to an accountant. I can't see how an amount of money that wouldn't even cover a third of the NYC MTA's Operating Budget is an appropriate "carbon price" for the emissions of every internal combustion engine in a 12-state region.

 

[Scott]

No way, Jose. The city and state have taken in more money than ever. There are no deficits. There is also no guarantee where the money will go. The taxpayer is not an ATM machine

 

[jass]

No way, Jose. The city and state have taken in more money than ever. There are no deficits. There is also no guarantee where the money will go. The taxpayer is not an ATM machine

We are a capitalist society. Supply and demand is set by pricing.

Would you prefer a command economy style rationing of gas to lower emissions?

 

[Scott]

That is called a false choice

 

[jass]

That is called a false choice

Then go on then, what's your solution?

 

[DAVE]

I think gas/carbon taxes are good for now, but they rely on stuff that we don't want. The goal is to be carbon neutral, meaning these taxes will not be good sources of funding forever (hopefully!). Its not sustainable in the long run and could create negative incentives to keep carbon producing things as its a source of funding...so yes lets do this now, but what will fund us in the future?

 

[JumboBuc]

I think gas/carbon taxes are good for now, but they rely on stuff that we don't want. The goal is to be carbon neutral, meaning these taxes will not be good sources of funding forever (hopefully!). Its not sustainable in the long run and could create negative incentives to keep carbon producing things as its a source of funding...so yes lets do this now, but what will fund us in the future?

The goal of carbon taxes is not to raise revenue, the goal is to internalize the externalities of carbon. A carbon tax that produced zero net tax revenue (e.g., a carbon tax plus dividend) would still be a policy worth implementing. A carbon tax must tax all forms of non-sustainable carbon emissions equally, however, not just gasoline and diesel.

And if a carbon tax is relied on for revenue and that revenue does end up running dry in the future, I'd still consider that a win. But we can cross that bridge when we come to it.

 

[jklo]

Sort of tangently related, I'm wondering what the plan is for heat without using something dirty. I'm guessing going all Jimmy Carter isn't going to go over well.

 

[DAVE]

The goal of carbon taxes is not to raise revenue, the goal is to internalize the externalities of carbon. A carbon tax that produced zero net tax revenue (e.g., a carbon tax plus dividend) would still be a policy worth implementing. A carbon tax must tax all forms of non-sustainable carbon emissions equally, however, not just gasoline and diesel.

And if a carbon tax is relied on for revenue and that revenue does end up running dry in the future, I'd still consider that a win. But we can cross that bridge when we come to it.

I mean if you're gonna internalize those costs through taxes, I think its assumed that those funds would be utilized to fund alternatives and sustainable options so that there isn't just fewer transportation options. I don't think the program is bad lol I just dont think its bad to think long term cause thats kinda why we're in this mess

 

[tangent]

We are a capitalist society. Supply and demand is set by pricing.

Would you prefer a command economy style rationing of gas to lower emissions?

Rationing road access in congested downtown areas so thousands or even tens of thousands of people aren't idling in traffic for 20 or 30 minutes every weekday. I am in favor of that sort of rationing.

And artificially limiting supply is no more or less of a "free market" than artificially raising prices. In a free market prices are set through a consideration of supply and demand. Supply is always constrained by capacity. The sooner we realize our road networks also have a capacity the better.

 

[tangent]

The goal of carbon taxes is not to raise revenue, the goal is to internalize the externalities of carbon. A carbon tax that produced zero net tax revenue (e.g., a carbon tax plus dividend) would still be a policy worth implementing. A carbon tax must tax all forms of non-sustainable carbon emissions equally, however, not just gasoline and diesel.

And if a carbon tax is relied on for revenue and that revenue does end up running dry in the future, I'd still consider that a win. But we can cross that bridge when we come to it.

The externalized costs of carbon are flooding, future food insecurity, coastal erosion, wars and refugee displacement. I don't object to this sort of gas tax, but don't pretend this in any way addresses the current or future externalized costs.

This tax may provide some money for some worthwhile projects or not. But if it is designed to reduce carbon emissions then it should be judged purely on its ability to reduce overall gas consumption starting now. Which means we shouldn't be relying on it for bonded capital spending or increasing transit capacity because revenue will be going down else the policy should be deamed a failure.

I would say state electric car subsidies should be increased substantially with this. Say an extra $5,000 tax rebate per electric car. Short term rail electrification projects and non-diesel buses should be subsidized.

Otherwise if this is about externalized costs then addressing flood control projects, raising roads near the ocean, maybe subsidies for local farming, housing subsidies for refugees and even increasing the size of the national guard to deal with natural disasters should be the types of things being funded.

 

[whighlander]

The externalized costs of carbon are flooding, future food insecurity, coastal erosion, wars and refugee displacement. I don't object to this sort of gas tax, but don't pretend this in any way addresses the current or future externalized costs.

This tax may provide some money for some worthwhile projects or not. But if it is designed to reduce carbon emissions then it should be judged purely on its ability to reduce overall gas consumption starting now. Which means we shouldn't be relying on it for bonded capital spending or increasing transit capacity because revenue will be going down else the policy should be deamed a failure.

I would say state electric car subsidies should be increased substantially with this. Say an extra $5,000 tax rebate per electric car. Short term rail electrification projects and non-diesel buses should be subsidized.

Otherwise if this is about externalized costs then addressing flood control projects, raising roads near the ocean, maybe subsidies for local farming, housing subsidies for refugees and even increasing the size of the national guard to deal with natural disasters should be the types of things being funded.

That is it -- this stuff has to be relegated to the equivalent of CRAZY TRANSIT Pitches

If you want to be honest about alternatives to Fossil Fuels -- There is no Alternative to Fossil Fuels today except Nuclear Energy -- there is no way to bypass the laws of physics and engineering principles.

All of the rest are today a false set of options

None of what is today available can scale to be a reliable economic source for the part of the world with a "Western Lifestyle" -- let alone lift the rest of the world from abject poverty.

Let's just start with the fact that the modern world relies on Electricity -- the key word is Relies -- in fact the major effort involved with Electricity is to keep it available on demand and at an affordable cost -- that's why the media and all government is so concerned with Outages after a natural disaster -- Society as we know it can not function for long without electricity. There is so much dependency that Electric Reliability Councils exist for the sole purpose of improving the reliability of the existing system of electric generation and transmission.

Putting a tax on the major means production of electricity -- i.e. burning fossil fuels -- Does nothing to increase the supply of reliable electricity -- it just increases the cost -- as today there is no replacement available. The consumer would of course have no alternative except to pay the increased cost to maintain the modern lifestyle. However -- the unintended consequence will be to degrade everyone's life and retrograde our society.

For example -- perhaps you have noticed adds for a product known as Inogen [a brand of a new type of product]*1 which along with its competitors is freeing people with Chronic Pulmonary Obstruction Disease from having to roll or drag around Oxygen Cylinders. These devices use electricity in the form of chemically stored electricity [aka battery power] to extract Oxygen from the Air. Raise the cost of electricity and your great aunt goes back to sitting in her chair at home instead of attending a Political Rally -- etc.

Let's assume that the Planet is Warming significantly -- this suggests that there will be more and longer duration heat waves -- Well raise the price of electricity and some people will have to chose between air conditioning and just blowing about hot air with a fan -- you will Kill elderly people who have trouble regulating their body temperature. Or -- actually just as plausible assume that the earth might temporarily cool - -More cold snaps possible of longer duration -- Well higher cost electricity means -- more pain and suffering and yes premature deaths of older folks.

So given that there is no way today to "Flip a Switch" and magically have Wind and Solar replace Fossil Fuel derived Electricity -- let alone replace all of the other uses of Fossil Fuels -- and assuming its a "Peal Harbor-like" Emergency -- What can we do except "ring our hands and retreat to a life-style of about 100 years ago.

Well -- there is one answer -- NUCLEAR
If were to make a major commitment in 25 years or so we could transition from coal to Nuclear -- it takes quite a while to build today Purpose-Built Nuclear Plant -- and to convert our nuclear industry to mass production of smaller-scale packaged reactors -- such as the Navy uses to power the modern fleet of Submarines and Aircraft Carriers - -that will take time also. In the end though -- Such a system would be as [or more reliable] than the system which we enjoy today. Of course that would also mean that we would need to abandon all of the silliness associated with "Wind and Solar" and stop subsidizing the replacement of locally burning fossil fuels for remotely burning them [aka Electric Vehicles].

*1
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[Arlington]

We are running an irresponsible and unsustainable infrastructure deficit.

Roads (and bridges in particular) are being consumed (by time, weather, and traffic-pounding) faster than they are being replaced.

Even with accelerated bridge repair, we mostly cleared just part of an old accumulated debt, while much of that accumulated backlog remains.

Worse, mobility is a key input for personal productivity and market efficiency, and when we are immobile there are high externalized costs.

I don't know if it needs to be modeled as a carbon tax, but there are reasons unrelated to greenhousy-ness to do it per gram of carbon: innovation.

New tech benefits tech-forward States like MA. Taxing carbon discourages OLD tech and favors the kinds of new tech that MA is good at.

 

[whighlander]

We are running an irresponsible and unsustainable infrastructure deficit.

Roads (and bridges in particular) are being consumed (by time, weather, and traffic-pounding) faster than they are being replaced.

Even with accelerated bridge repair, we mostly cleared just part of an old accumulated debt, while much of that accumulated backlog remains.

Worse, mobility is a key input for personal productivity and market efficiency, and when we are immobile there are high externalized costs.

I don't know if it needs to be modeled as a carbon tax, but there are reasons unrelated to greenhousy-ness to do it per gram of carbon: innovation.

New tech benefits tech-forward States like MA. Taxing carbon discourages OLD tech and favors the kinds of new tech that MA is good at.

Arlington -- we've been through that experiment

The web is littered with the carcasses of Green Start-ups with important innovation in Energy Storage -- the one potential innovation category that could make Wind and Solar more than "Feel Good"

Without a reliable, cost effective and Grid-scale deplorable technology for storage of electricity -- we need to build Nuclear Plants if we want to be "Green"

Absent the above characterized means for Grid-scale electrical energy storage -- Wind and Solar are net negatives to the "Green-ness" of electricity since there is an increasing need to supplement the "inherently unreliable-natured" Wind and Solar with quick-reaction fossil fueled "Peaking-Units"

As you can not make the Wind or Sunlight generated electricity predictable -- you must "back-stop" the full "Nameplate" output and then some to account for other network issues. To put it in concrete terms -- if you have a Nuclear or Coal plant which is 90% available you can schedule the expected and required downtime to a time of the year when you don't need quite so much electricity -- early April to mid May or early October to Halloween. You will still have to buy electricity from someone else to cover some unexpected equipment outages -- perhaps 2 or 3% on an annual basis. If you have a high reliability wind or solar generation platform the relevant numbers are [ignoring the 0% availability of solar at night] in the range of 30% to 50% -- meaning that most of the time you need to get electricity from somewhere else and most importantly [outside of the ) availability at night] that you can not plan for when the energy will be needed from an external source -- except on a annual statistical basis which might help a bit in negotiating the cost of your purchased power.

 

[Arlington]

We are at 6%~7% wind nationally, but some states (OK & "greater Dakotas") are at 20% wind. It seems wrong to say wind is "done", particularly where steady shore winds are available.

Solar on commercial roofs still should have good growth, particularly if "excess" solar can be stored by recharging employee cars which almost by definition have employee paid capital costs and slack storage capacity after the morning commute.

And we will get there on other forms of wind & solar storage (either pumped storage such as the NYSPA has used for peak-shifting at Niagara Falls* for 50+ years, or batteries/supercapacitors)

*Can't store the river, but can pump it 100' uphill into storage overnight that gets released every daily peak

 

[tangent]

We are at 6%~7% wind nationally, but some states (OK & "greater Dakotas") are at 20% wind. It seems wrong to say wind is "done", particularly where steady shore winds are available.

Solar on commercial roofs still should have good growth, particularly if "excess" solar can be stored by recharging employee cars which almost by definition have employee paid capital costs and slack storage capacity after the morning commute.

And we will get there on other forms of wind & solar storage (either pumped storage such as the NYSPA has used for peak-shifting at Niagara Falls* for 50+ years, or batteries/supercapacitors)

*Can't store the river, but can pump it 100' uphill into storage overnight that gets released every daily peak

I think you are both right to some degree. Wind and solar won't be sufficient. The numbers I have seen that say otherwise are all based on installed capacity rather than actual production... so you get competitive per kilowatt capacity before you actually see how much you van produce. That said both wind and solar do have room to grow... they just won't solve the problem without nuclear energy. Canadian hydro might also be of some growth potential, but it is not limitless and not without downsides.

Like I said I am not against a carbon tax (which should also be on diesel for trains and buses by the way with corresponding fare increases). Just that it should be judged by actual carbon reductions and not just all the shiny new things politicians can spend the taxes on.