The campaign for Initiative 732 kicked off in Seattle on Saturday, April 9. Among those in the audience — PBS economics correspondent Paul Solman and his producer, Lee Koromvokis. Here’s how PBS.org summarizes Solman’s report for Earth Day on PBS NewsHour:
Is making pollution expensive the best way to combat climate change? Economist Yoram Bauman thinks so — he’s spearheading a campaign for a carbon tax in Seattle. But the proposal is raising opposition, and has brought together some unlikely bedfellows on both sides of the debate. Economics correspondent Paul Solman reports.
How to write an effective letter to your state senator and representatives
Our friends at the Washington Business Alliance are giving a bit of push-back against carbon taxes:
Only a high carbon price, in excess of $50/tonne, will materially alter electricity generation given the dispatch order of plentiful, cheap coal and natural gas. Transportation fuels are relatively inelastic, similarly requiring a high price and long-term commitment to meaningfully impact emissions.
If there’s one thing everybody knows about carbon pricing, it’s that there’s not much effect on consumption of transportation fuels. In econ-speak, the explanation is that demand is very inelastic: a price increase of (say) 10 percent reduces consumption by much less than 10 percent. In plain English, the explanation is that driving is something that people “have to do”, so price changes don’t have much impact on how much driving people do. (more…)