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Good for Austria. From the article it seems they figured out a way to pay off rural voters (larger carbon dividend in areas with poor transit) and energy intensive industries (other tax cuts). I'd rather not see such provisions, but they're very pragmatic, and minor relative to the achievement. Copy round the world.
Introduce tax for citizens but reduce taxes for companies that would be affected by it?

Does that sound idiotic only to me? You reduce taxes for these companies... so they can afford to keep polluting the same as before, and place the burden on the end consumer? Uhh, what?

This is exactly how we would want to structure it. The point is not to punish anyone. The point is to simply increase the cost of the unwanted carbon emissions, and then let microeconomics take over.

If you pass a new tax that causes a wave of corporate bankruptcies, job losses, unemployment, and other disruptions, that's a great way to ensure the policy is unpopular.

A carbon tax will not cause corporate bankruptcies. It will just make large polluters pull their weight financially.
Seems like it is serving the loud voter base - climate activists, meanwhile the real impact of climate change through power generation, agriculture, construction industry, aviation, etc. is being swept under the rug.

In California, the last nuclear powerplant was shutdown this week. I am going to do what I can as a responsible citizen for climate change but I am not a fan of this asymmetry.

> In California, the last nuclear powerplant was shutdown this week. I am going to do what I can as a responsible citizen for climate change but I am not a fan of this asymmetry.

Do you realize how myopic it is to have nuclear power-plants along the San Andreas fault line? Have you lived in California for very long? Do you not realize that CA is in a very unique position when it comes to renewable energy? And for what 9% of CA's energy needs? More could and should be done to increase it's reliance on renewables (~33% but growing).

San Onofre was the most dangerous of all nuclear plants in the US and was left operational only due to industry standard vow of secrecy, and it had tons of violations prior to it being decommissioned. Diablo Canyon couldn't keep it's emergency cooling system operational for extended periods of time [0]. This should be a major red flag if you understand what occurred in Fukushima and caused not just the melt-down, but the melt-through and how they had to rely on external water sources to continuously douse the reactors then inevitably ended up in the Pacific Ocean.

I am anti-nuclear, or better said, I'm anti 20th Century Nuclear plants, because of how incredibly bad things get when they do go wrong.

Not to mention the profoundly stupid approach entities like the NRC have taken towards incredibly inept nuclear waste storage policy--paying NC to store it, and leaving what they can't send out in canisters along the Pacific Ocean or in the decommissioned pools.

0: https://calcoastnews.com/2016/12/pge-cited-cooling-system-fa...

The point is presumably to phase out existing taxes on energy usage, or generic corporation taxes, in favour of new taxes on carbon emissions. What this means is that if there are two businesses which both consume lots of energy, but business A emits less carbon than business B, then A pays less tax than B. Under the current system they would both pay the same amount of tax. This means that shifting to a lower-carbon strategy can be a competitive advantage as it reduces the tax burden of the business. Starting up a new operation which will emit high levels of carbon is now _less_ profitable too.
Any well run company will reduce its emissions if it’s cost effective, independent of whether the cost of pollution has been neutralised by a tax break.
Fantastic move by Austria, finally someone get's it, and is going to do it in a fair way instead of crap gimmicks!
Sometimes I think Russia has it right. No one can push them into stupid decisions, like the EU does with neighbouring countries.

That's for Europe, of course. The US is king of pollution per capita and they don't give a flying fuck.

Actually, a lot of US enviro spending is wildly market distorting and of dubious benefit.

Ethanol from corn.

Tons on the "hydrogen superhighways".

etc

I guess, it sounds much like what it is: a compromise between a conservative party and the Green party acting as the junior partner in the coalition.
That will add about $300 to an overseas first/business class ticket. About $90 for economy.
I wish G7,G20 or the whole UN adapt carbon tax. I am afraid that it is something doomed to fail if adapted by individual nations (especially by those who aren’t polluting much by themselves).

If adapted by the whole world it would be such a wonderful thing both for environment and economies because it would incentivize development and adoption of new clean tech. Because otherwise people would simply “outsource” the pollution which is, of course, a ridiculous concept.

Such coordination would be great, but carbon taxes aren't doomed to fail without it. I'd guess that every country has taxes that are worse for competitiveness than a carbon tax, and can be displaced. Additionally, carbon border adjustments can partially impose a carbon tax on producers in countries that won't do it themselves.
Agree, unfortunate such coordination is not going to happen. Carbon border adjustments is a great idea which could make carbon taxes work.
IMO not practical and not needed, just add an import duty from countries without carbon tax to price in the externalities. And the market will figure it out.

The duty can be a flat rate or an average emissions per economic output for the country.

I'm all in regarding this but I see a big issue regarding corruption and nepotism.

For instance, it does not say that in TFA, but it is implied that some sort of fund would have to be created to manage and distribute all that new money. Let's consider that, as a natural consequence, a big part of that money goes to buying carbon credits/offsets; that's a billion euro bill that is going to make "the right person" very rich, very fast.

And before one says something like "but we are not like that", just remember Austria just came out of a huge political crisis a few years ago. Imagine what would happen to this money in other least developed countries.

A possible solution would be to keep things as democratic and transparent as they could possibly be.

Funds collected will be refunded and not kept by the government:

> Each resident in Austria will get an annual reimbursement, with the exact amount determined by where they live to ensure those in rural regions without good public transport don’t lose out. Children are entitled to half their parents’ amount — so a family of two adults and two children in Vienna could expect to get 300 euros ($358) for example.

While the term "tax" is used proverbially, if the government does not keep the money, it is actually a tax?

This was a constitutional question in Canada, and the majority of the Supreme Court ruled that it was not:

> As a final matter, the fuel and excess emission charges imposed by the GGPPA have a sufficient nexus with the regulatory scheme to be considered constitutionally valid regulatory charges. To be a regulatory charge, as opposed to a tax, a governmental levy with the characteristics of a tax must be connected to a regulatory scheme. The first step is to identify the existence of a relevant regulatory scheme; if such a scheme is found to exist, the second step is to establish a relationship between the charge and the scheme itself. Influencing behaviour is a valid purpose for a regulatory charge and regulatory charges need not reflect the cost of the scheme. The amount of a regulatory charge whose purpose is to alter behaviour is set at a level designed to proscribe, prohibit, or lend preference to a behaviour. Limiting such a charge to the recovery of costs would be incompatible with the design of a scheme of this nature. Nor must the revenues that are collected be used to further the purposes of the regulatory scheme. Rather, the required nexus with the scheme will exist where the charges themselves have a regulatory purpose. There is ample evidence that the fuel and excess emission charges imposed by Parts 1 and 2 of the GGPPA have a regulatory purpose. They cannot be characterized as taxes; rather, they are regulatory charges whose purpose is to advance the GGPPA’s regulatory purpose by altering behaviour.

[…]

> [219] In the instant case, there is ample evidence that the fuel and excess emission charges imposed by Parts 1 and 2 of the GGPPA have a regulatory purpose. Ontario does not assert, nor would such an assertion be supportable, that the levies in this case amount to disguised taxation. The GGPPA as a whole is directed to establishing minimum national standards of GHG price stringency to reduce GHG emissions, not to the generation of revenue. As Richards C.J.S. aptly observed, the GGPPA “could fully accomplish its objectives . . . without raising a cent”: para. 87. This is true of both Part 1 and Part 2. The levies imposed by Parts 1 and 2 of the GGPPA cannot be characterized as taxes; rather, they are regulatory charges whose purpose is to advance the GGPPA’s regulatory purpose by altering behaviour. The levies are constitutionally valid regulatory charges.

* https://www.canlii.org/en/ca/scc/doc/2021/2021scc11/2021scc1...

* https://en.wikipedia.org/wiki/Greenhouse_Gas_Pollution_Prici...

Canada is a federation, and the national and provincial governments each have their areas of responsibility. There were challenges whether there was federal over reach, and the court said there was not given the structure of the legislation.

* https://elc.ab.ca/i-read-the-carbon-tax-decision-so-you-dont...

> While the term "tax" is used proverbially, if the government does not keep the money, it is actually on? This was a constitutional question in Canada, and the majority of the Supreme Court ruled that it was not

As far as I can see, the text you quote does not answer your question. It presents an argument based on whether a regulatory scheme exists (step 1) and whether the charges imposed serve to alter behavior (step 2).

It's easy to come up with examples which do answer your question: a large part of tax revenue (especially in Europe) is used to finance social welfare programs, including direct payments to individuals.

As an aside, a government literally keeping tax money (beyond personal compensation packages) is probably not what you have in mind.

My opinion it would be better politically if the government used carbon taxes to help people switch away from fossil fuels. It's one thing to pay a carbon tax as a Calvinistic Punishment for carbon sinning. Another if you think the tax is actually solving the problem.
> My opinion it would be better politically if the government used carbon taxes to help people switch away from fossil fuels.

The province of Ontario originally had a cap-and-trade system where the fees collected would be used towards transit and other 'green' projects. There was an election and that was rescinded, so the province default to the national plan (which they challenged legally, and lost per the above).

If people want "market" solutions, then carbon pricing and cap-and-trade are the two ways to do it. The latter was used by the US and Canada in ~1990 to successfully deal with acid rain.

> It's one thing to pay a carbon tax as a Calvinistic Punishment for carbon sinning.

It's not a sin tax: it's paying for the pollution that is currently externalized. Price signalling is hardly moralistic.

It sounds more like a redistribution of some money based on some carbon criteria than a tax.
At the macro-level, yes. But aren't all taxes the re-distribution (gathering and disbursement) regardless of where the piles of money end up? At the micro/personal-level, it'd sure feel like a tax to me.

The nuance here is Canada's constitution offers a framework to make a technical distinction argument and say

(i) the federal Canadian govt.

(ii) can impose this "tax" because it's a "regulatory scheme" via a catch-all authority provision outside its enumerated powers.

> (ii) can impose this "tax" because it's a "regulatory scheme" via a catch-all authority provision outside its enumerated powers.

The SCC ruled that it was under the federal government's enumerated powers, or rather the "peace, order, and good government" (POGG) provision:

> Notably, the POGG power is a little different from the other subject matters listed under sections 91 and 92 of the Constitution, because it is a residual power, meaning that it allows the federal government to legislate over any subject that is not otherwise assigned to the federal or provincial governments under sections 91 and 92. To sort out exactly what this means, the courts have identified three possible uses of the POGG power, which are referred to as the three branches of POGG. They are: the emergency branch, the gap branch, and the national concern branch.[8]

* https://elc.ab.ca/i-read-the-carbon-tax-decision-so-you-dont...

Different legal and constitutional traditions/fraem works may work differently. (Tautology is tautological…)

> The SCC ruled that it was under the federal government's enumerated powers

To clarify, I said the POGG was the catch-all provision. This is semantics and we directionally agree, but I wouldn't characterize the POGG as an "enumerated power". If the CA constitution explicitly said the CA federal govt. has the ability to place a federal carbon tax, then that'd be an enumerated power. Due to a lack of an enumerated federal carbon tax power, advocates had to rely on the [implied power from the] "catch all" POGG provision.

Your article goes into why it's not an enumerated power (and consistent with my interpretation):

> Very briefly, the federal and provincial governments get their power to pass legislation from sections 91 and 92 of the Constitution Act, 1867 respectively.[7] These two sections list a bunch of subject matters and, essentially, each government can only pass legislation dealing with the subjects that it has been assigned. This is why the provinces deal with health care and education, whereas the federal government deals with the criminal law and the military.

All of your articles were interesting. Thank you.

edit:

Checking wikipedia about the context of Canada's POGG provision[0], there's more explanation as to why POGG's not an enumerated power, but this is all semantics and above my intellect.

[0]https://en.wikipedia.org/wiki/Peace,_order,_and_good_governm...

There is a US campaign for this kind of carbon tax that gets paid back to the people:

https://citizensclimatelobby.org/price-on-carbon/

This is something even conservatives can get on board with.

I suspect it will be seen as wealth redistribution by creating a new tax and thus would not be supported by most conservatives.

I think to get conservatives on-board you would have to mandate that all income from such a tax is used to remove or reduce other taxes.

> I suspect it will be seen as wealth redistribution by creating a new tax and thus would not be supported by most conservatives.

Former Federeal Reserve Chairs Alan Greenspan, Ben Bernanke, Paul Volcker, and Janet Yellen (now at Treasury)—plus thousands of economists and dozens of Nobel laureates—signed support for carbon pricing:

> V. To maximize the fairness and political viability of a rising carbon tax, all the revenue should be returned directly to U.S. citizens through equal lump-sum rebates. The majority of American families, including the most vulnerable, will benefit financially by receiving more in “carbon dividends” than they pay in increased energy prices.

* https://clcouncil.org/economists-statement/

Not that logic is used much nowadays in the GOP, but if Greenspan of all people can sign onto it…

Tithes must be paid. Those who sin more must pay more in their confessionals.
Naturally this means nothing for the ruling class and is devastating to the middle and lower classes.

Why does every single policy lately lead to further consolidation…

No, a straightforward "carbon tax" would do that, but this is a revenue-neutral tax. So poor people who use less carbon (e.g. don't own Ferarris and private jets) will benefit (their carbon taxes will be below average, whereas their carbon bonuses will be average†)

†caveat: looks like in Austria, rural residents will get more bonus than urban - to even out availability of public transport

> e.g. don't own Ferarris and private jets

Sports cars and private jets are only for the one percent, but there's a problem with taxing carbon exhaust alone because the poor can't afford a new all-electric SUV or a plug-in hybrid, they're driving around in 20 or 30 year old cars every day if they have a car.

I'm all for taxing those with unreasonable greenhouse emissions, but not being able to afford a cleaner car shouldn't be taxed. It's why I'm sceptical of proposed CO2 taxes because many (if not most) of them fail to consider this problem.

The problem is the scaling. $10k to a billionaire is tissue paper. It simply doesn't matter to them. $1k to the middle/lower class could mean everything.

My point is that this will continue to unreasonably restrict the lifestyle of middle/lower class while the elites won't even notice a difference. They can happily pay more to continue doing what they've always done.

It's just like every single other "climate" policy that gets proposed. It is as if climate change simply doesn't exist for rich people. Just like covid. Which leads me to reasonably deduce that this is about consolidation and control. We can judge these policies by their fruit.

> Naturally this means nothing for the ruling class and is devastating to the middle and lower classes.

People are getting refunded:

> Each resident in Austria will get an annual reimbursement, with the exact amount determined by where they live to ensure those in rural regions without good public transport don’t lose out. Children are entitled to half their parents’ amount — so a family of two adults and two children in Vienna could expect to get 300 euros ($358) for example.

The price on carbon is simply a price signal to show how much damage the environment something is doing. Presumably people will switch to cheaper, i.e., less damaging, goods and services.

Carbon pricing being regressive is by no means a foregone conclusion:

> The literature on the distributional impacts of climate policies provides ambiguous results. Many studies find an overall tendency for regressive impacts (Araar et al. 2011; Gonzalez 2012). Others detect mostly regressive findings for developed countries while developing countries show an inconsistent picture with a tendency towards proportional or progressive impacts (Verde and Tol 2009; Wang et al. 2016). Nevertheless, progressive impacts have also been shown for developed countries like Australia (Sajeewani et al. 2015), Canada (Dissou and Siddiqui 2014) and Spain (Labandeira et al. 2009).

* https://link.springer.com/article/10.1007/s10640-020-00521-1

Implementation details matter, and there are ways for progressive results:

* https://taxjustice.net/2020/06/30/carbon-taxes-can-be-progre...

* https://thehill.com/opinion/energy-environment/550691-econom...

> So if you’re aiming for the most net-progressive tax, you use the revenue for rebates — helps the low-income, raises taxes on the high-income. If you’re aiming to appeal to the middle class, you use the revenue for payroll tax reductions — helps the middle, increases taxes on either end.

* https://www.vox.com/energy-and-environment/2018/7/20/1758437...

* https://www.energypolicy.columbia.edu/research/report/distri...

Well, you could have calibrated things a bit differently. E.g., domestic heating isn't nice to have in Austria, but a necessity. Also, it's not a major contributing factor, it's just easily accessible by legislative action. On the other hand, if you're not building or renovation, and, if you're poor, the kind of heating you find to have, is kind of fate. Those refundings won't buy you a new heating system for your house. So, well, you could have started with more of a focus on the major, industrial contributors and refocus, when this has yielded as much as could be expected. In the meantime, focus on funding thermal home insolation, as is actually proposed in the program. (There has been done quite some in this direction, already.)

(Disclaimer, I'm Austrian.)

> Those refundings won't buy you a new heating system for your house.

That is true, but grants for replacing old heating systems have been around for a long time. In many cases however people did not take advantage of them because the cost of their old oil heating systems and others were not that bad.

There have been fundings in the other direction, as well. In Austria, if you're running a business, you're automatically member of the Österreichische Wirtschaftskammer, WKO, (Austrian Chamber of Commerce) and paying a fee to run this. A few years ago, when climate awareness was already much a thing and everybody was trying to get rid of those things, the WKO was funding 50% of any costs of an oil fired domestic heating boiler out of these funds, as long as this was installed by a local firm. I had a hard time digesting the self-laudatory letter by the WKO on the matter of this "feat". (As it happens, the party dominating the WKO is also the major partner in the current government.)
Oh I'm very aware. I get to enjoy paying for WKO as well and wish I wouldn't have to.
I'm actually not against the idea, but very much of what the WKO is actually doing. As it happens, the WKO is probably the most pronounced enemy of small businesses in the country. (And it's kind of funny having to pay your enemy. I guess, this is kind of a luxury.)
I feel we'll soon enough have a Brexit/Trump moment with these regressive taxes labeled as "environmental" taxes.
Not sure why this would be downed; it's a real issue, e.g. https://www.economist.com/britain/an-anti-green-backlash-cou...

In a way, it really is a bit of a "no shit" observation: actually effective climate action is incompatible with democracy unless quality of life is broadly maintained or improved. And people shouldn't point at warm-and-fuzzy nonsense like polls claiming to show 80+% support for "saving the climate" and similarly vague statements. Imma just leave this here: https://ballotpedia.org/Washington_Initiative_1631,_Carbon_E...

In fucking Washington. By those margins. Support for climate action disintegrates as soon as people see the personal downside, so we need to figure out how to develop and present lifestyle-positive climate interventions (like the revenue-neutrality of this Austrian thing!) if we want any serious motion in the West. I'm starting to look at the more self-flagellatory proposals as likely false flags from those opposed to serious change: as long as the burden of decarbonization falls on the little guy and his evil evil burgers, they can rest assured knowing that no serious action will ever pass anywhere important.

Yeah, if they manage it like Covid, people will riot. Everyone likes to talk about reducing their carbon footprint and shit, but push come to shove, no one wants to give up their lifestyle. Especially not the middle and upper classes.

In the end, a bunch of people will just have to die, it's the only real solution.

They are trying to reduce carbon emissions, not to be progressive or regressive. It looks like a measure for improving climate, not income redistribution.