Economists use what is called a discount rate to compare income and welfare in the future with income and welfare today. If we forgo just a little welfare today through burning less fossil fuel, even applying a modest discount rate, we can guarantee that there will be no catastrophic loss of welfare in 2050.
That is indeed precisely and exactly correct. It’s what gives us the Stern Review number of $80 per tonne CO2.
Now it is the right’s turn. There is climate change. No gardener, farmer, sailor, festival-goer or refugee from floods doubts it – let alone the scientific community. This requires a response from the state that will include taxation and regulation, however much Tea Party activists, Niall Ferguson and Lord Lawson may deplore it. Reality put the left on the defensive for a generation before it came to its senses. The same is about to happen to the right. Lived experience is about to show how wrong it is – and Britain and the world cannot afford the mistake.
And then the fuckwit entirely ignores the point that he’s just made.
The solution, as all those economists go on to point out, is that we should have a Pigou Tax at $80 per tonne CO2. It is not that we need regulation, the taming of capitalism, the resurgence of the left nor even, whisper it who dares, to live according to the Heorot of Hutton. It is to have the Pigou Tax and nothing else.
And, if you go and do the sums, you’ll see that we in the UK do roughly, around and about, have a carbon tax of roughly the correct amount. We’re done: we have solved climate change. There’s a bit of marginal tinkering to go but nothing major.