In 1989, while the unstable political status in eastern Europe was hindering the fall of USSR leading communist system, it is also the year that the Green Group in the European Parliament won 25 seats in the election. What is more significant, this rather small triumph also marks that the Green Party start to act as a major political group, even though their seats were incredibly small compare to normally 700+ seats. Historically, what they got in 1989 will not be considered as a good start, but for all the green parties who dedicated them to the cause of “Greener Future”, the origin sure did start long before than expected. For carbon tax, it is the rise of European environmentalism and green party that finally brought this Pigouvian tax to reality. EU, on another sense, is also the region where the carbon tax is widely adopted, until 2019, all the major countries adopted carbon taxes. (World Bank, 2019) However, besides its popularity in EU and other part of the world, the real effectiveness for this governmental regulation or taxation is still under suspicion. Considering the vast popularity and passion this issue enjoys around the globe, especially developed world, we have reason to believe that the local green party politicians has enough incentive to alienate this essentially technological problem to political scale. History has showed us that the public agitation toward a certain social topic can very possibly push the topic to worse condition, no matter the topic originally proposed with good hope or evil desire. A close examine should be made to conclude if the carbon taxes are truly beneficial to future or another righteous mistake made under collective zealot.
For the examiner of the tax, I will be using three approaches. First, the tax is designed to terminate the externality of human carbon activity that is detrimental to current earth environment, therefore the actual effect of its presence will be taken into measure. Second, as a global climate trend that has been scientifically proven, global warming is an urgent issue that we must face in our generation. But is it the environment really need protection, or it is our modern life? I will investigate where is tax revenue will be spent on and if they will properly solve the problem. Finally, the legitimacy of carbon tax is still contentious, and that is not the only way to solve the problem.
There is no possible way for me to have mass-data analysis to analyze all states that have adopted carbon tax. Therefore, I will focus on French Diesel tax that recently angered many French and provoked waves of violent protest. A liter of diesel obviously has a fixed carbon emission if it is burnt freely in open air, but many of the European carmakers have developed sophisticated ways of carbon reduction, and the emission between cars are also different due to different technology used and different era the car was made. In this calculation, I will be using the average carbon emission for European diesel engine cars, since the Europeans are so fond of diesel engine and even some of the “sportier” cars have been only limited to diesel version. The newest data of average carbon emission of European diesel-powered cars was 122.3g/KM for average European car emission. The current price for French Diesel is around 1.4 euro/L, and up to 59.3% of the price is tax. (VAT/Gst and Excise Rates, Trends and Policy Issues, 2018), and average mileage for a typical European car per year would be 13000 km. (Odyssee-Mure,215) Average fuel economy for diesel cars is 6.5L/100 km .And average carbon price per ton would be $50 per ton (EDF,219), therefore, the overall carbon emission for a typical European diesel car will be 1.5899 ton, combined with social cost of one ton of carbon-dioxide, $50, the overall cost of carbon pollution in one year for a certain European diesel car will be $79.5, which is equivalent to 71.5 Euros, and the tax extracted from using the car will be 701 Euros. The tax extracted from the using of the car is much greater than the actual social cost the car added to environment. The tax therefore should be cut or reduced for over taxation. The French diesel car will only be one specimen on research of the European carbon tax, but for what we have in the conclusion, I think that all the taxes that needed to be paid for driving in France is too much and exceeds the needed money for eliminating the externality of carbon pollution.
\[ 122.3 \text{ g/KM} \times 13000 \text{ KM} \div 1000000 \text{ g/ton} \times 50 \text{ dollars} \times 0.9 \text{ Euro/Dollar} = 71.5 \text{ Euros} \]
\[ \frac{13000 \text{ KM}}{6.5 \text{ L/100 KM}} \times 1.4 \text{ Euro/L} \times 59.3 \text{ %} = 701 \text{ Euros} \]
I am always a big fan for the British motoring show Top Gear and the three TV presenters, Jeremy Clarkson, James May and Richard Hammond. As a sport or leisure that is highly related with petrol, which is an important carbon resource in our daily life, it is very natural that these three must discuss basic information for cars like MPGs or carbon emission. As three old-fashioned motoring enthusiasts, all of them loath the EU regulations of environmental protection, and for the future of motoring industry, they sincerely do not believe that electric vehicle will be solution. But that was more that a decade ago, in their most recent opinion on the electric vehicle, they changed dramatically. Their drastic change on EV opinion really staggered me, especially compare how they have mocked the EV on several obvious drawbacks of it. And all that got me thinking, the if we really have come to an environmental phase that even the most dedicated counter-environmentalist turned their mind?
One of the most profound stereotype people have on environmentalist would be angry activists waving signs and shouting different slogans that demands governmental action. And one of their most famous stands of point will be “saving the environment”, but if we see through the long period of earth history, we will be found that their argument is flawed. If the environmental disaster really befalls on us, the only thing that will be destroyed will be humanity, not earth environmental. The post-apocalyptic period for earth environment will only gradually recovers to pre-industrial time, without human interference, environment will recover better. Another thing that we must note that carbon-emission related manufacturing is still the main way of industrial economic growth. By cutting carbon-emission, the government is also cutting the growth rate of GDP, for an industry that can reduce the unemployment rate for a large share, it should not be ignored. Once the economic growth rate slows down and start to impact general welfare of common people, their anger and fear will further add pressure to government that firstly decided to cut related emission, the whole thing can be trapped into an evil cycle. If the activists really want to make an impact on environmentalism, they should start with non-governmental efforts that gradually transfer people’s mind. Because all the viable means of environmental protection under current technological level, will be built on a basis that our convenient modern life is harmful to environment; and we must persuade people give up or partly abandon the current way of life. Since the current theory argues that societies are formed with individuals, the average individuals should also bear part of the responsibility of maintaining good environment. The environmental activists should not lobby governmental interference on a non-governmental, public issue.
Finally, no matter how government perform as re-distributor of the social resource, carbon tax or similar governmental act will not be able to ultimately solve the problem. For big emissions from industrial manufacturing like I mentioned in the last paragraph, and the necessary emission from basic transportation, they either have high importance in maintaining our society run or basically impossible to add a regulation on it. Our society cannot afford the price for losing these means of transportation. This Pigouvian tax is not the destination, other technological approach also needs to be addressed in finding clean energy and reducing carbon emission. Clean energy may seem to be intangible under current technology, but they are the final solution to the problem. Technologies like nuclear fission will be good alternative for our current energy source. Once human really harnessed this artificial sun, the world electric fee will become an outdated word. Also, even though the tax is widely regarded as a method to partly mitigate global warming, in its essence, it is still new tax. If the implementation of the tax has any flaw, the dissatisfaction may be amplified through negative elements like economic depression or radical political thought, therefore provoke further social instability. For anyone who is familiar with the history of American independence war will clearly remember the reason that triggered the disastrous (For UK) war, and therefore make considerate decision before new taxes. What is more, we have no evidence to prove that this environmentalist activist movement will make the legislative body have the right decision. The incentive behind these taxed may be good and in consideration for the future generation and environment, but good will does not necessarily lead to good outcome, if the law-making process, which its decision makers must remain clam and rational, are tied with things other than responsibility to the public but public agitation and zealotic passion generated from fear, the triumph of pubic opinion over rationality will not be beneficial to general welfare, but a populist disaster, a self-destruction farce.
Bibliography:
Change in distance traveled by car. From Odyssee-mure. https://www.odyssee-mure.eu/publications/efficiency-by-sector/transport/distance-travelled-by-car.html
Average co2 emissions form EU cars increased to 120.5g/km. From Diesel net https://www.dieselnet.com/news/2019/03jato.php
The true cost of carbon pollution https://www.edf.org/true-cost-carbon-pollution
These countries have prices on Carbon. Are they working? By Brad Plumer and Nadja Popovich https://www.nytimes.com/interactive/2019/04/02/climate/pricing-carbon-emissions.html
Carbon Pricing Dashboard from the world bank https://carbonpricingdashboard.worldbank.org/