Lecture Notes: Climate Change and Carbon Taxes

Introduction to Climate Change

• Observable changes: varying wind patterns, rising sea levels.
• Personal observation: noticeable change within a lifetime.
• Core issue: concentration of carbon in the atmosphere.

Economic Impacts of Climate Change

• Difficulty in quantifying economic impacts of events like Hurricane Harvey, California wildfires, Texas cold snap.
• Natural disasters increasing in frequency and severity due to climate change.
• Consensus on human-driven carbon emissions leading to economic unrest.

Impact on Vulnerable Populations

• Extreme weather affects society's most vulnerable the most.

Transition from Fossil Fuels

• Challenge: economy's reliance on fossil fuels.
• Need for tangible economic pressure to drive change.

Carbon Taxes

• Purpose: discourage use of carbon-intensive fuels.
• Controversies: fuel price increases affecting affordability.
• Economic impacts: increased electricity prices affecting all industries.

Policy Considerations

• Balance needed: avoid crippling economy while discouraging high carbon fuels.
• Use of tax revenue: rebates for low-income households vs. tax swaps for corporations.

Research and Models

• Study using MIT and US Department of Energy models (RE-EDS and USREP).
• Scenarios: starting carbon taxes at $25 or $50 per tonne with annual increases.

Findings from Simulated Scenarios

• Electricity prices spike but stabilize as grid adapts.
• High carbon tax scenario eliminates coal, promotes natural gas and wind.
• Direct carbon capture becomes economical as technology evolves.

Revenue Use and Economic Impact

• Three primary tax uses: household rebates, labor income tax reduction, capital income tax reduction.
• Most progressive policy: hybrid system benefiting low-income households.

Alternatives to Direct Carbon Tax

• Cap-and-trade systems: harder to monitor but encourage emission reduction.
• Direct tax more straightforward and difficult to cheat.

Current Implementation Status

• Many countries adopting carbon taxes; the US is lagging with fossil fuel subsidies.
• Potential cost savings by reducing climate change impact through carbon taxes.

Conclusion

• Importance of public understanding of carbon taxation and climate change policies.
• Mention of using 3D animation to make data more engaging.

Additional Learning Resources

• Recommendation for Skillshare classes on Blender and other skills.
• Offer for free trial to Skillshare's online learning community.