On Fox weekend financial news they had Ben Stein and some other folks in their usual panel format. The topic today started off with the IMF saying the USA needed to have an additional $1.40 / gallon gasoline tax. That would make gasoline here, in California, $5.50 / gallon for regular at the cheap stations. Super about $6.10 at the higher end places.
That got me wondering what other plans the International Monetary Fund might have for the USA and the world?
Well, I didn’t run into the story du jour on their web site, but I did find an interesting pdf from 2008. Give an idea what their global plans are.
Is clearly written by folks who are globalist AGW believers with dreams of avarice. Folks ought to read it. I will only be quoting one or two small bits.
The intro basically says the answer to “Climate Change” is taxes and wealth transfer to developing nations. Most of the rest of the document is rationalization for that, and sizing up the Chumps who are to be fleeced and how much can be dolled to the the ‘People Of The Right Color’ POTRC being folks in Africa, Asia, and South America.
The Fiscal Implications of
Fiscal Affairs Department
International Monetary Fund
The title and author pretty much sum it up. “Climate Change” and money. Internationally to be spread around.
Here’s the Table Of Contents. A walk through the TOC of a document often lends insight to motivation. As much by what is emphasized as by what is left out. No mention of “what if AGW is wrong”. Nothing about the damage of breaking economies with hair brained punitive taxes that do nothing. The bulk of the entries about taxes, revenues, “prices” of “carbon”, “equity” as a synonym for “social justice” I suspect.
Executive Summary 1
Chapter 1. Introduction 4
Chapter 2. Climate Change and Public Finance 6
A. The Economics of Climate Change 6
B. Impact Effects and Policy Responses 7
Chapter 3. Fiscal Instruments for Mitigation 9
A. Principles of Carbon Pricing 9
B. Instrument Choice—Taxes, Cap-and-Trade, Hybrids 12
C. Rates, Revenue and International Flows 14
D. Domestic Equity and Compensation 20
E. Fiscal Aspects of International Coordination 22
F. Current Measures of Carbon Pricing 24
G. Innovation—What Role for Fiscal Incentives? 27
Chapter 4. Fiscal Aspects of Adaptation 29
A. Fiscal Implications of Adaptation—Key Elements 29
B. How Much?—Assessing the Fiscal Costs of Adaptation 32
Chapter 5. Implications for the Fiscal Work of the Fund 35
The references and appendices are interesting too.
1. Glossary and Science 38
2. Key Model Features 44
3. Aspects of Instrument Choice 41
1. Carbon Credits and the Clean Development Mechanism 26
2. The Science of Climate Change 40
1. Revenue from Carbon Pricing by Region 17
2. International Transfers under Cap-and-Trade, Using G-Cubed 21
1. Carbon Prices and Global Revenue 16
2. Financial Inflows from Global Cap-and-Trade, Allocation by Baseline, 2020-60 18
3. Financial Inflows from Global Cap-and-Trade, Allocation by Population, 2020–60 19
4. Additional Adaptation Investment, 2030 33
The careful observer will note that the numbers are out of order (the better to prevent observing things like size) and that “The Science of Climate Change” starts on page 40 but end prior to 41 where “Aspects of Instrument Choice” kicks in. (Instrument Choice being a fancy word for “Taxes without saying taxes”… )
Notice too, that of 2 tables, one is about “revenues” (another way of saying Taxes without saying taxes…) and the other is about how to spread it around for political effect under “Cap-and-Trade” (yet another way of saying “Cap-and-TAX” without saying taxes).
There are 4 “figures”, that have the “Revenue” form of “Taxes” showing up again, along with “inflows” as yet another way of saying TAXES! without saying taxes… and more Cap-n’-TAX. Then we get “Additional Adaptation Investment”. “Investment” being the current Lie-Du-Jour for “Buying political favor”.
I’ll quote the entire coverage of the “science” of Global Warming here:
Box 2. The Science of Climate Change
Average global temperature increases with the atmospheric concentration of greenhouse gases (GHGs). There are three main GHGs (other than water vapor, which is little affected by human activity and decays rapidly):
• Carbon dioxide (CO2) currently accounts for about 75 percent of GHG emissions; burning fossil fuels—petroleums, coal and natural gas—contributes 55 percent, and deforestation 20 percent.
• Methane, mainly from agricultural activity, contributes 15 percent
• Nitrous oxides, generated by industrial and agricultural activities (including nitrogen-based fertilizers) account for most of the remaining 10 percent.
Some man-made factors reduce global warming, most importantly aerosols (particles resulting from sulphur emissions and reflecting sunlight), though these decay relatively quickly and have more localized effects.
The concentration of GHGs in the atmosphere—conventionally measured in parts per million (ppm) of CO2 equivalent (CO2e)—has risen from about 280 ppm in 1750 to around 430 ppm now. It is currently rising by more than 2 ppm per annum, and under business as usual (BAU) could increase to around 750 ppm by 2100.
Temperature rises more than linearly with GHG concentration. By the best current estimate (IPCC, 2007), the global average temperature has increased by about 0.75 degrees Celsius (°C) since 1960 (with the cooling effect of aerosols roughly offsetting the warming effect of GHGs until about 1980). Under BAU, the average global temperature might rise by the end of the century by between 2.2 and 6.4 °C above pre-industrial levels (5–95 percent confidence; IPCC (2007)). Strong mitigation might limit this to 1–3 °C.
That’s it. The whole thing. See any doubt or skepticism or even “prudent man” questioning?
Just so you don’t think I’m being pessimistic in an unwarranted way, her’s a sample from page 33 on “investment”.
UNDP (2007), building on the earlier work of the World Bank, estimates an annual cost of climate-proofing development investment, by 2015, of around US$44 billion per annum, with an additional US$2 billion to strengthen disaster response—and a further annual US$40 billion in strengthening social safety nets.
UNFCCC (2007) estimates suggest an annual investment cost for agriculture, health, water and coastal protection, of around US$40 billion per annum by 2030—perhaps half of which might fall on the public sector (Figure 4). It also reports a very wide range for additional infrastructure needs, of US$8–US$130 billion annually. Figure 4. Additional Adaptation Investment, 2030
UNDP is the United Nations Development Programme
As the UN’s global development network, UNDP links people in developing countries to the knowledge, experience, and resources they need to build better lives. To this end, UNDP has established partnerships with NGOs, governments, and fellow inter-governmental bodies across the world.
UNDP’s Washington Representation Office acts as a liaison between UNDP and the U.S. government, think tanks, NGOs, and academic, diplomatic, and media communities, informing them about UNDP’s role, capabilities, programs, and results.
So their “job” is to pick up “resources” from the developed “West” and move it to where it is “needed”. Resources being a more general word than Tax, as it means a slush fund of taxes, fees, creamed off money from just about anywhere, money laundered through NGOs (so that the tax revenue given to the NGO doesn’t look like tax money used to make payments when it goes out…), etc.
Basically, they are in the business of moving money from “rich” to “poor” (where “rich” includes minimum wage tax payers in the USA and EU and “poor” includes Presidents of Countries and their friends and allies as long as they are POTRC who can spin a good cover story and play on historic guilt trips).
They want $44 Billion a year in one bucket and $40 Billion in another; plus $2 Billion more. Sounds smaller than saying $86 Billion / year to start and rising rapidly through $100 Billion / year thereafter…
UNFCCC is the United Nations Framework Convention On Climate Change. Our “friends” who keep burning kilotons of jet fuel flying off to Rio and Durban and other nice places to “conference” with each other. Might be cheaper to just buy them all a cell phone…
They want about $48 Billion to $170 Billion a year to be spent, but are coy about through just who’s hands it ought to flow.
All up (which isn’t stated) running out at about $270 Billion / year. Expected to come from Cap-N’Tax and related “Schemes” from “the west” and flow to the “needy”. (With large cuts lost along the way for those doing the transfer, no doubt).
Noted by the complete absence is any indication of private enterprise and private property owners dealing with their own problems. It’s “All UN all the time”…
Onward Into The Paper
But not too far…
As a ‘taster’ of some of the other more imaginative methods of inserting themselves into the economy, it looks like getting into the insurance and bond business is on the cards. So we can add “insurance” to the words that no longer mean “business of providing shared risk in a private economy” but instead “method for moving money around under political guidance”
Intervention may be appropriate to facilitate private insurance. Insurance does not reduce the physical damage from CC (and through moral hazard effects could worsen it). But it can reduce the consequent welfare losses, including by reducing implicit fiscal risks. One response to the Samaritan’s dilemma, for instance, is to make purchasing insurance mandatory. In many developing countries, however, market insurance may be unavailable or unaffordable at actuarially fair rates. There may then be scope for public intervention to provide or facilitate access to risk markets: in Malawi, for instance, the World Bank and donors provide drought insurance. Strengthening wider social insurance schemes also improves resilience to extreme weather events, as to other traumas.
Like that Federal Flood Insurance has worked out well in keeping folks from building on barrier islands…
Another interesting idea is the “Oh Never Mind about Paying Me Back Bond”
Recent financial innovations point to new ways of coping with some climate-related fiscal risks. The Caribbean Catastrophe Risk Insurance Facility (CCRIF), for example—bringing together CARICOM countries and launched with donor support in 2007—pays out in the event of parametric trigger points (such as hurricane wind speeds) being exceeded. It is estimated to offer premia about 40 percent below market rates, and provides rapid payment if disaster strikes. The scheme is limited in several respects: verification has proved more contentious than expected, for instance, and pooling among countries subject to correlated shocks limits the benefits from risk-spreading. But it indicates scope for addressing fiscal and other risks from CC through insurance
mechanisms (and is an instance of effective regional collaboration in addressing adaptation challenges). Potentially even more promising, as tapping more deeply into global capital markets, is the sovereign issue of catastrophe bonds (for which principal is forgiven if disaster strikes). This is likely to become increasing attractive as the market continues to develop.
Where “donor” now includes “involuntary donor via taxation and NGO money laundry”.
I do have to give them credit for a truly novel bit of PR and packaging. “Catastrophe Bonds”. Just borrow money you intend to never repay (repeat as needed to keep rolling it over) then wait for historically normal “catastrophe” to wipe out the debt.
I’d like to borrow about $10 Million in Catastrophe Bonds, please. I need to build a small mansion on the Florida Keys…
About page 33 we run into the makers vs takers. It is all couched in the obscuration technique of “Percent of GDP”, and ignores that those “small percent” of GDP of the “Wealthy West” are very large numbers.
So “only” a few percent of the US GROSS Domestic Product. (Never mind that total growth is only 2% to 3% and that if you cream off that much capital you will kill all growth of the economy).
Figure 3 shows net inflows as being largely to Africa (6% of GDP) and India (near 5%) with most outflows being from the USA, Former Soviet Union, and Eastern Europe. For some odd reason Western Europe is only shown as about 1/2 % of GDP (it’s hard to read). Latin America gets a small cut of ‘inflows’ at about 1%. These are for the 450 ppm option. As Hansen et. al. have told us we will all be dead and roasted from even 350 ppm, I see no reason to look at the 550 pm and 650 ppm numbers on the graphs.
In the 2060 A.D. graph, they expect fully 7% of African GDP to be flowing in from Taxes and Cap-N’-Tax in the USA, EU, and FSU. But by then, Latin America is a net tax source, not sink, and Eastern Europe is a net sink, not source. One can only wonder why. Oh, and Japan is on the hook for about 1/2% of GDP. China looks like a free ride. Anyone else think that China, in 45 years of 8% Growth will be, um, “a financial issue” for “The rich west”? Table 2 on page 21 shows China in 2040 getting 5.95% of GDP (couldn’t bring themselves to just say 6% ? ) via Cap-N’-Tax ‘revenues’. Anyone else think the idea of the USA borrowing MORE $Trillions from China to give them 6% of GDP from their own money is a bit crazy? Anyone else think that by 2040 we will be lucky to keep the EU from imploding, the Middle East from exploding, North Korea from making both Koreas glow in the dark, and the USA out of Paupers Prison?
Oh, and I just love this little gem about ~”it’s bad to buy people off, but if it lets us get the big cake, well, a few cookies may need to be handed out…”
Earmarking revenue from carbon pricing is generally undesirable—except that it may help overcome political resistance. Since the purpose of environmental taxes is to change behavior rather than raise revenue, pressures arise to compensate the losers and to ensure the proceeds are not spent wastefully—both of which can create calls for earmarking. Tight earmarking, however, can overly-constrain the public finances. The economic rationale, for example, for allocating part of the proceeds from the Clean Development Mechanism (CDM) to an Adaptation Fund is unclear: there is no link between the appropriate revenue from mitigation and the appropriate spending on adaptation. Nevertheless, the acceptability of carbon pricing may be increased by linking spending measures to the revenue it would raise.
So spread the largess around as needed to make it a ‘done deal’…
For me, the more interesting bits start about page 14.
Estimates vary widely, but the starting value of the carbon price path is in many studies often only moderately daunting: in the order of US$15–US$60 per ton of carbon(/tC)—equivalent to around US$2–US$8 per barrel of oil, or 5–20 cents per gallon of gasoline. The technical complexities and judgments required to calculate carbon price paths are reflected in widely varying estimates. One meta-study of estimates of the marginal social damage from carbon emissions9 finds a modal value of around US$20 per ton of carbon (tC), and a median—the distribution being strongly right-skewed—of US$48/tC. (Tol, 2007). The Stern Review (2007) estimate, towards the upper end of the distribution, is US$312/tC; Nordhaus (2007), on the other hand, suggests a starting carbon price of around US$17/tC. (For comparison, the current EUETS forward price (for delivery in late 2008) is around € 83/tC). Since the BAU projections from which they derive implicitly reflect current policies, the corrective carbon prices these estimates imply should be seen as additional to existing measures.
More important than the initial level of the carbon price is its future path—with estimates suggesting substantial real increases.
It sounds so simple. “Just” $2-$8/bbl of oil, or 5-20 ¢ per gallon of gas. So now that $6.10 gasoline (remember, they want it to have more taxes on top of the Carbon Tax) becomes $6.30 gasoline.
Now notice they wander off to €83 toward the end. That’s about $108 / ton at recent exchange rates. Now that 20 ¢ is up to about 36 ¢ and you have $6.46 / gallon gasoline…. Hey, just keeps on rising…
Notice also the clear statement to start out small and less painful and then ‘boil the frog’ later?
I’ll leave it at that. You can read the rest for yourself.
So count the IMF as a True Believer in “Climate Change” and CO2 the magic gas. Looking to rake in $Hundreds of $Billions to ‘redistribute’ for ‘justice’. Wanting you to pay about double the present price of Gasoline and then raise it even more and faster.
That’s what the Central Banker to the world Central Bankers wants. Oh, and “the people” don’t get any say in the matter. Heck, the ‘member nations’ mostly don’t even get much say. The USA (with Obama in charge) has the largest share of the “vote” at about 16%, but voting ‘rights’ are allocated in a strange way. Every country has a representative who can vote, but only some of them get on the controlling committees, and then the guys who chipped in the most currency get more bonus votes. Largest printing press wins?
So now you know. The printing press is mightier than the vote. Get ready for $6-$7 gasoline and a few hundred $Billion in new “Carbon Taxes” if they get their way.