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  #11  
Old 12-15-2005, 02:54 PM
Beer and Pizza Beer and Pizza is offline
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Default Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"

I am curious, you and your wife seem to be willing to take active steps to improve the environment as you perceive it. I understand LV has a bit of a shortage of clean water. What do you do in your personal lives to help the water situation? Or is it not an issue.
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  #12  
Old 12-15-2005, 03:20 PM
Ed Miller Ed Miller is offline
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Default Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"

[ QUOTE ]
I am curious, you and your wife seem to be willing to take active steps to improve the environment as you perceive it. I understand LV has a bit of a shortage of clean water. What do you do in your personal lives to help the water situation? Or is it not an issue.

[/ QUOTE ]

We use lots of water, and don't really do anything about the water problem. There are lots of things we could do to live a more responsible life than what we live. We could stop driving entirely. We could go vegan. We could grow my own food and eschew the entire agricultural system. We could use less water.. less power.

We could buy a small plot of land somewhere off the water and power grids and live a subsistence life and donate the rest of our net worth and future income to charities.

We don't do that, nor do I think that doing any of these things is a moral imperative. We do what we can... what fits for us in our lives. And we leave it at that.

I would never argue that being vegetarian or driving a hybrid makes me a better or more moral person than someone who isn't and doesn't. I think that's BS. I think it's basically ok if people act in their rational self-interests, and have no qualm with people who make other decisions for themselves.

What I do have a problem with is a system of laws and a market that actively refuses to internalize externalities when possible. It's the basic principle I learned when I was five, "If you make a mess, you clean it up." Or, in the case where you can't actually clean it up, you pay for it to be cleaned up. Presently our system allows people, companies, everyone to make mess after mess and then throw up their hands and say, "Wasn't me." That's what needs to change. If you pollute the air three times more than I do, you should shoulder three times the cleanup costs. Or if the air can't be cleaned, then you compensate people for their dirty windows, soot-clogged machinery, respiratory problems, etc.

It shouldn't be a voluntary choice. We shouldn't need uppity movie stars in Priuses to make impassioned speeches about the environment saving 20 mpg in their car, but burning 2000000 mpg in their private jet. The cost of pollution should be BUILT IN to the prices of things.
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  #13  
Old 12-15-2005, 03:25 PM
Borodog Borodog is offline
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Default Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"

It would be if the roads were privatized. Ad hoc taxation will not produce the result you desire.
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  #14  
Old 12-15-2005, 03:33 PM
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Default Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"

[ QUOTE ]
[ QUOTE ]
The tax benefits are just Peter stealing from Paul.

[/ QUOTE ]

No they aren't. They are internalizing an externality.

[/ QUOTE ]

No they're not, Ed. Externalities are costs borne by somebody (i.e., society) other than the person responsible for creating the cost (i.e., gas guzzler drivers).

To "internalize an externality" means the gas guzzler pays the cost of the externality, i.e., a gas guzzler tax.

In the case of hybrids, society is bearing the cost (i.e., by spending from the public fisc) to pay for the actions of the gas guzzler driver (who is a free-rider).

Net net, subsidy of hybrid purchases has less to do with making sure that cost-creators bear the external costs for their actions, and more to do with creating incentives through public spending to influence private behavior.

The easiest way of forcing drivers to externalize their costs is to tax gasoline heavily. Subsidies through tax credits for hybrid vehicle purchases deals more with trying to drive volume for technology development.
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  #15  
Old 12-15-2005, 03:34 PM
Ed Miller Ed Miller is offline
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Default Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"

[ QUOTE ]
It would be if the roads were privatized. Ad hoc taxation will not produce the result you desire.

[/ QUOTE ]

How would privatizing roads do this?

I'm not necessarily arguing that taxation is the right or best means to internalize externalities. There might be far better solutions. But to say that modest tax credits for low emissions vehicles is tantamount to stealing is a little silly AFAIC.
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  #16  
Old 12-15-2005, 03:40 PM
ChristinaB ChristinaB is offline
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Default Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"

[ QUOTE ]
I am curious, you and your wife seem to be willing to take active steps to improve the environment as you perceive it. I understand LV has a bit of a shortage of clean water. What do you do in your personal lives to help the water situation? Or is it not an issue.

[/ QUOTE ]

Poker players do a lot to save water. It has been my experience that they often save water by not taking a bath on the morning of the day they sit next to me at the tables. [img]/images/graemlins/tongue.gif[/img]
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  #17  
Old 12-15-2005, 03:48 PM
Ed Miller Ed Miller is offline
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Default Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"

[ QUOTE ]
In the case of hybrids, society is bearing the cost (i.e., by spending from the public fisc) to pay for the actions of the gas guzzler driver (who is a free-rider).

Net net, subsidy of hybrid purchases has less to do with making sure that cost-creators bear the external costs for their actions, and more to do with creating incentives through public spending to influence private behavior.

[/ QUOTE ]

I don't understand your point. It sounds like you are arguing that a $2,000 credit for hybrids is not internalizing, but a $2,000 tax reduction for everyone PLUS a $2,000 penalty for non-hybrids would be. That can't be what you are arguing because obviously they are the same.

I do agree that the present tax code is not designed to internalize automobile pollution. SUVs and trucks get a tax credit too.

Honestly, I think the tax code is so messed up that it needs to be redesigned from scratch. I think that each car should be assessed an "emissions per mile driven" number and be charged a per-mile levy to be assessed every time a car is registered. Just like you pay for power per KWh, I think you should have to pay per mile you drive a car (lower emissions paying less), above and beyond gas prices.

Obviously, there are lots of kinks to be worked out with that, not the least of which being that in our country, such a levy would be extremely regressive right now. It would have to be phased in, or a compensating credit would have to be put in and phased out.

But right now this externality essentially isn't being addressed, and it's not because it's an intractible problem. It's because many with money and power right now have a vested interest in ensuring air pollution remains an externality.
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  #18  
Old 12-15-2005, 03:54 PM
Ed Miller Ed Miller is offline
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Default Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"

[ QUOTE ]
The easiest way of forcing drivers to externalize their costs is to tax gasoline heavily. Subsidies through tax credits for hybrid vehicle purchases deals more with trying to drive volume for technology development.

[/ QUOTE ]

I used to favor a heavy gasoline tax, but now I'm not sure I do. Gasoline isn't the problem... emissions are the problem. It's a tough question, though, and a gasoline tax might be the best way to address the problem because, though imperfect, it's relatively simple.

I dunno. I'm not claiming I have all the answers. I have very few answers... as these are tough questions. But they are questions worth raising and addressing, and unfortunately I see our government entirely unwilling to even discuss this stuff.
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  #19  
Old 12-15-2005, 03:58 PM
Borodog Borodog is offline
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Default Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"

[ QUOTE ]
[ QUOTE ]
It would be if the roads were privatized. Ad hoc taxation will not produce the result you desire.

[/ QUOTE ]

How would privatizing roads do this?

I'm not necessarily arguing that taxation is the right or best means to internalize externalities. There might be far better solutions. But to say that modest tax credits for low emissions vehicles is tantamount to stealing is a little silly AFAIC.

[/ QUOTE ]

Well, I'm an anarchist, so all taxation is theft, IMHO, but that's a different discussion.

If the roads were privatized, their owners could be rightly sued for the pollution they create. In fact they'd be sued so often that they would probably just set up a system to just automatically pay their neighbors without going through the expense of lawsuits. The road owners of course will pass these costs on to their customers. Competition will force them to charge differential rates based on the differing emissions of the vehicles of their consumers. This will provide simple, direct market incentives to purchase lower emissions vehicles. This in turn provides a real, direct market incentive to research, design, and produce low emissions vehicles.

There are a number of other market efficiencies that would come into play that would make the roads cheaper, safer, and cleaner. For example, the technology exists (and has existed for probably a decade) to fully automate the roads, at the very least the highways. 95% of a modern road at full capacity is completely empty. Computer technology could vastly increase the packing efficiency of the roads, which is today limited by human psychological factors. A computer controlled road that is 50% empty still carries ten times the traffic of a modern road. Furthermore, computer control would allow significantly higher speeds. This means that the traffic flux that could be sustained is enormous. The economic implications are enormous. Computer controlled drafting would increase fuel efficiency and lower emissions by a significant fraction (perhaps 20%, although I don't remember the number off the top of my head).

You cannot sue the current owners of the roads for the damage that they do, hence there is no incentive to reduce emissions, other than political pressure. Political pressure, of course, is never applied in the right place to actually solve the problem. Political solutions always create more problems and make the problem worse for a number of reasons (the economic calculation problem, etc).

Currently the system is set up with the wrong incentives. Highway and road bureaucracies recieve more funding when they have more problems, not when they operate better. Hence there is really no incentive for the road bureaucracies to improve the road system. And as you've already noticed the cost of pollution is simply externalized.

By the way, thanks for SSH. Best poker book I've ever read, and I have a stack 4 feet thick.
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  #20  
Old 12-15-2005, 04:07 PM
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Default Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"

Anytime you are trying to make sure externalities are borne by the one creating them, the easiest way to do it is to simulate a use tax. A gas tax (or as one person suggested, a road tax), is a proxy for use.

Emissions = usage x efficiency. By employing a gas tax, you punish people for driving cars, and driving inefficient cars. This gets at what you want.

The big complaint people have with market-based solutions is that they are often regressive. Gas could run $10 a gallon and I would still drive an SUV. On the other hand, some poor guy with a 1982 Monte Carlo would be getting screwed just b/c he can't afford a new Civic.

Tax law always has these trade offs, i.e., tax neutrality, progressivity/regressivity, etc. Im with you in generally favoring market neutral, non-distortive taxation, but then again, I could care less about tax progressivity, and in fact I believe the very concept of progressive taxation is immoral.

Going back to your hybrid vehicle discussion, my main point was to indicate that the purpose of the credit is not internalization of costs. It is to create a government subsidy to drive the introduction of new technology by building demand.
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