I came across the 50 to 1 project today. The premise of the video seems fair enough. Using Australia as an example, enacting a carbon tax to mitigate climate change, if applied to the world, would stop climate change only while consuming 80% of global GDP, while adapting to climate change, such as it´s projected by the IPCC, would cost only around between 0,something to 3% (I assume that´s on the future GDP). Ok, so I have not gone to any lengths to calculate whether this is right or wrong, but these thoughts occur to me:
1. The video is dead wrong about the Australian carbon tax being the most expensive yet, carbon taxes in Sweden are up to 106 USD per tonne, I found it strange that they omitted that.
2. Yes, a carbon tax at current levels where they are applied, will probaby have neglible effects with regards to stopping climate change, but:
2.1: Isn´t it fair enough that the adaptation costs are "paid" by carbon taxes? (No I´m not suggesting a hypothecated fund MW). A couple of percent of GDP isn´t nothing, but it´s still a level of GDP that can plausibly be brought in with carbon taxes.
2.2 One person interviewed said something along the lines of "the best way to adapt to climate change is to increase wealth". Which is an excellent point. So my question is then: if carbon taxes, which is a narrow excise tax on a good that has a notoriously inelastic demand, replace other sources of revenue that are more harmful, say VAT or income tax (Australia did increase the treshold for income tax significantly with the introduction of the CT), isn´t that actually a small, but still worthwile change in the tax-system to increase wealth? Working against my theory, is the fact that increased use of "carbon" also raises GDP, and reducing fossil fuel use, would work in the other direction again. Which is the strongest effect?
Weigh in please.