Germany Plans To Increase The Price Of Carbon, But Is It Enough?

December 17th, 2019 by Steve Hanley

Economics is a lot simpler than most people make it seem. As humans, we are genetically predisposed to seek the lowest available price for the goods and services we want. That desire was once the basis for a Broadway play — I Can Get It For You Wholesale — which debuted in 1951. Go to the supermarket and watch shoppers compare the price of butter or milk.

The entire car buying experience in the United States is predicated on negotiating the best possible price for that shiny new Belchfire 5000 you’ve been craving. If price was no object, we would all be driving electric cars instead of persevering over how expensive they are.

The Free Market Fallacy

In the ‘all government regulation is an abomination’ world envisioned by Charles Koch, the free market is supposed to represent the most efficient way to utilize resources. For an example of how Charles Koch’s plan works in real life, search Google for “Boeing 737 Max.” While there are some economists who dare to suggest his free market vision may not be the utopia he dreams about, there can be little question that pricing signals motivate people to alter their behavior.

One of the fallacies of the World According To Koch is that the free market economic model takes no account of disposing of the waste products that result from commercial or industrial enterprises. To here Chucky tell it, pollution that runs into streams and rivers — or into the atmosphere — is someone else’s problem.

His job is to maximize profits. Forcing him to clean up after himself is a breach of his Constitutional right to liberty. But what else can you expect of a man whose nanny once forced him and his twin brother to produce perfectly formed turds of exemplary shape, size, and consistency at the beginning of every day? It boggles the mind that the United States today is suffering from the ravings of a man whose world view was shaped by a regimen of severe toilet training. See Kochland by Christopher Leonard for more on this dismal subject and more insights into someone who may be the most powerful man few have ever heard of.

Not All Regulations Are Bad

In actual fact, government regulations have done a pretty good job of addressing some significant social ills, such as asbestos, DDT, and healing the hole in the ozone layer but don’t expect the Koch acolytes at the Heartland Institute to acknowledge any such thing.

How odd is it then that the very people who scream the loudest about “free market solutions” and “liberty” also scream the loudest if anyone suggests the economic equation should change to reflect changes in the marketplace. 50 years ago, we didn’t know about the harm that pesticides flowing into our lakes and rivers could cause. We didn’t know that burning fossil fuels could alter the world’s climate in just a few short decades. We didn’t know that particulates from combustion make us sick and shorten our lives significantly.

But we do know those things now and so it only makes sense to build in the cost of the harm done by extracting, shipping, and combusting fossil fuels. Conservatives scream that is adding a tax and golly, nobody likes paying taxes, do they? But it’s not. It’s a market adjustment designed to address new realities.

Some stores charge 10 cents for a plastic bag today. Is that a tax? It is if you listen to those who shill for the plastic industry. In most states, we pay a disposal fee when we get rid of an old car battery. Is that a tax? Sure, if you want to call it that. But what is the alternative? Throw it away in the woods? That’s what Charles Koch would do while thumping his chest and proclaiming the virtues of liberty. And America listens to what this crackpot has to say? Unbelievable.

Putting a price on carbon is the most logical, sensible, and socially responsible way to restrain carbon dioxide emissions. Only idiots and tempestuous tweeters would say otherwise. Germany already has a price on carbon — a paltry 10 euros a ton but rising to 35 euros a ton by 2025. After the embarrassing collapse of international climate talks in Spain last week, Germany is now planning to enact as early as this Friday an immediate increase in its carbon fee to 25 euros a ton starting in 2021 and ratcheting up to 55 euros a ton in 2025. Even at that, some environmental groups are dissatisfied and calling for higher fees on carbon emissions.

The Green Party is one of Germany’s largest and most active political organizations. Robert Habeck, co-leader of the Greens, tells Deutsche Welle,”The government didn’t deliver this compromise. Rather, it came about through persistence, through The Greens’ clever and tough negations against the government. We’re half satisfied, half unsatisfied. But it’s a step forward — the prices are significantly increasing.” The new fees are part of a new 54 billion euro climate action plan from the government following the lack of meaningful action in Madrid.

“It’s foreseeable that the envisioned price trajectory could actually reduce greenhouse gas emissions,” Ottmar Edenhofer, director of Germany’s Potsdam Institute for Climate Impact Research told Deutsche Welle (DW) as news began to circulate of the government’s plans. “Given the poor result at the [UN] global climate summit in Madrid, it’s good that Germany wants to make its contribution to climate stabilization.

The US Kicks The Can Down The Road

“Germany also can’t resuscitate the Paris Agreement on its own,” Sabine Minninger, climate expert with Bread for the World, a German aid agency, told DW. Countries like the United States, Brazil and Australia, which have played “a very destructive role” in climate protection, also need to step up to the plate. “The spirit of Paris is still alive, but it’s heartbeat is weak,” she said.

How disheartening that the United States should be leading the charge toward making the Earth a dead planet. One would have to have the intelligence of a road apple not to know we are in a climate crisis and must take immediate remedial action immediately. But people would rather vote for someone who loathes immigrants, people of color, or anyone else who isn’t a white evangelical Christian than deal with reality. And they think doing so will make America great again? No way on God’s (formerly) green Earth.

Germany can’t do it alone, of course. But it can lead at a time when others lack the will or intelligence to save their own asses from disaster. One plan we may see in the future is countries refusing to let consumer goods pass their borders manufactured in countries that refuse to adopt meaningful climate change mitigation strategies.

Would that be painful for Germany and other countries who follow its example? Absolutely. But then again, extinction will be even more painful. And when it happens, as it most certainly will, we can thank Charles Koch and his perfect, well-formed turds for pushing us all into the blackness of the abyss.









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