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SpaceX CEO Elon Musk is Dead Wrong on Carbon Taxes


Carbon Taxes Can “Save the Planet”, Elon Musk

SpaceX and Tesla Motors, Inc. (NASDAQ:TSLA) CEO Elon Musk says emitting carbon is “the dumbest experiment in history.” He’s advocating for a bold plan to change that: carbon taxes.

Elon Musk has suggested the nuclear bombardment of Mars poles to create an atmosphere on the red planet also dreams of saving the “blue planet, ” aka Earth. He suggests people must be charged for polluting, specifically for their CO2 pollution.  If we wait too long, implies Musk, the world will experience more destruction than all world wars combined.

Elon Musk would like to colonize Mars and save the Earth. Speaking to students at Paris’s famous La Sorbonne university, the entrepreneur has built a multibillion-dollar fortune running companies that make electric cars, sell solar panels, and launch rockets into space with billions in government subsidies. (Source: “Elon Musk’s growing empire is fueled by $4.9 billion in government subsidies, ” Los Angeles Times, December 4, 2015.)

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Musk’s SpaceX has served supply missions to the International Space Station (ISS) on behalf of NASA and the company competes with Europe’s Arianespace program. Through SolarCity, Musk focuses on renewable energy and through Tesla, he targets the luxury electric car market. Tesla is also building a “Gigafactory” in the Nevada desert in partnership with Panasonic, which will be the largest battery factory in the world, with a goal of 500, 000 units a year.

However, Elon Musk warns we need a carbon tax. During his speech at Sorbonne, Musk argued that the transition from fossil fuels (coal, oil, gas) to renewable energy sources (solar, wind, geothermal, etc.) should be sped up through carbon taxes: “Whenever you have the opportunity, talk to your politicians, ask them to enact a carbon tax, ” Musk prompted. (Source: “Elon Musk: Only a Carbon Tax Will Accelerate the World’s Exit from Fossil Fuels, ” Fortune, December 2, 2015.)


Elon Musk Is Wrong on Carbon Taxes

The carbon tax Musk refers to is a plan whereby the government taxes energy types that result in the release of carbon dioxide in the atmosphere, trees liking CO2 notwithstanding. Advocates of carbon taxes say that industries based on “fossil” energy enjoy an unfair competitive advantage in the form of hidden state aid, because they do not pay for their pollution. A carbon tax world, therefore, is one of the points that delegates from 195 countries at the Paris COP21 conference will include in an agreement to be approved by December 11, the final day of the conference. France and Germany are favorable.

Musk points out that there is no alternative to switching to renewable energy, but the timing is crucial. Should governments wait too long to implement the carbon tax, the world will know more destruction than all the wars in history combined, goes his mantra. A carbon tax would allow the transition to so-called “cleaner” energy to be reduced from 40–50 years down to 20 years.

In theory, a carbon tax would also affect Musk’s own SpaceX, because its rockets, like the “Falcon 9” with its nine engines, emit several gases. As for the waste product resulting from Tesla’s electric batteries… (You didn’t think that electric cars and their production were endowed with magic guilt-free energy, did you?) While Musk would argue that they cannot be compared to pollution from fossil fuels, Ozzie Zehner, who wrote “Unclean at Any Speed, ” a report outlining a 2010 National Academy of Science (NAS) assessment of the hidden costs of energy, suggests, “the lifecycle health and environmental damages of an electric vehicle are actually greater than that of a gasoline-powered car…discounting climate change effects.” (Source: “Are Electric Cars Really That Polluting?Forbes, July 21, 2013.)


Carbon Taxes and the Kyoto Protocol

The carbon tax is the cousin of that other consequence of the Kyoto Protocol, based on an unproven human responsibility for climate change, known as the “carbon credit.” The dubious Kyoto Protocol was created in 1992. While failing to come up with true alternative fuels, the protocol fueled a series of “environmentalist entrepreneurs, ” who quickly became rather adept at milking the available funds.

In the former Soviet Union, for instance, many carbon credit discussions had absolutely nothing to do with the need to satisfy the energy needs, focusing rather on how bureaucrats and politicians might exploit carbon credits through United Nation and European Union programs to reduce nonexistent or low-carbon emissions in order to claim credits.

Now, Musk, a bona fide apostle of “renewable” energy, wants carbon taxes, while having benefited from a California version of the carbon credit, sometimes known as “cap and trade.” Tesla Motors has reportedly earned more than $295 million in green subsidy emission credits from 11 states during the past three years for a battery-swapping technology, which customers weren’t getting, using the Zero Emission Vehicle barter created by California.

Europe’s Emissions Trading Scheme (ETS) has also the brainchild of the Kyoto Protocol since 2005. It allows each member state to grant to businesses and industries a number of carbon dioxide “units, ” which are nothing more than permits to emit greenhouse gases within certain limits. The failure to comply with the ETS and designated units results in significant penalties.

Although research and innovation make it now possible to produce in a sustainable way, companies, especially those with aging infrastructure, need more time to adapt their systems. The crisis has further slowed down these investments. In order to avoid the penalties, participants buy the credits or, to avoid euphemisms, shares of CO2 emissions. These are mostly bought and sold on an actual carbon trading exchange modeled on the mechanisms of a stock exchange.


Carbon Taxes Confuse Finance and Environmentalism

The mechanism of buying and selling has a cost structure, as it serves operators and specialized intermediaries known as “carbon brokers.” The carbon brokers are mostly energy consulting firms that are active on both sides of the existing carbon exchange: legally mandated and volunteer.

Mandated carbon credits are bought by industrial giants, for example, which usually pollute and are therefore required, by law, to adhere to the system of exchange. In this case, companies likeFord, GM, or Chrysler, which make the majority of gasoline-powered vehicles, might buy credits that are then handed over in the form of subsidies to perceived “non-polluters, ” such as Tesla. The ETS monetizes the value of the shares. Under volunteer credits, the proceeds go to green projects by default, such as those related to reforestation. In the mandatory market, the revenues go to the national or state governments and then to the “virtuous” companies like Tesla.

Therefore, carbon credits, carbon taxes, and related schemes are actually more about fueling environmental finance than environmental responsibility. The credits are less about projects and research in sustainable production systems and more about the financial interests underlying the market for carbon credits.

Evidently, these policies or mechanisms require the support of governments and supranational organizations and they rely on their will and ability to impose laws and regulations on manufacturing industries, demanding these pay a substantial carbon tax. Some might describe such a regime as a “green dictatorship” of sorts.

Is there much difference between those trying to convince us that humanity is provoking an environmental catastrophe (the latest concern, read “flavor, ” of the moment being global warming, aka climate change) and those suggesting man is incurring God’s wrath because of moral depravity?

CEOs purporting to be prophets of a new world might be likened to a sort of “Che Guevara of business.” Except that rather than financing their revolution through private donations, foreign powers, or individuals, they’re using your money in the form of carbon taxes or carbon credits. Eventually, Fidel Castro, the chairman of the board who started to sense that Che’s adventurism was becoming a liability, sent the heroic commandant on a virtual suicide mission in Bolivia. CEOs should focus on what is best for the companies they lead and for their investors; they can save the world on their own time and with their money.


Catastrophism Is the Root of the Carbon Tax Idea

Catastrophism is a symptom of a negative view of humankind, one condemned to sin and condemned to pay for that very sin. Remarkably, religious and environmental catastrophism have the same results: death and devastation brought by plagues, rising seas and polluted air, resulting from either the wrath of God or the wrath of the Earth because of humankind’s evil, moral or environmental, depending on the perspective.

Periods of weather anomalies are presented as signs of the coming devastation of the environment, whose symptoms include the extinction of species, disappearing coral, and polar bears floating on isolated icebergs, apparently unable to reach land. In the future, we are told, this will all be even worse, with resources becoming exhausted in a few decades and hundreds of millions of people dying of hunger, breaking loose in bloody wars to grab the latest resources. It is difficult to tell which kind of prophet, the religious or the environmentalist kind, might push this view; the two are indistinguishable.

This catastrophism, as well as an omen of death, drives us to a type of dependence, one might even call it a kind of slavery, forcing us to a series of rituals to appease the wrath of Mother Earth, Gaia Goddess, or God. Accordingly, the rather bizarre notion that we can save the world by replacing normal incandescent 100-watt light bulbs with 40 watts took hold, as has the idea that humans must reduce their output of CO2, even though methane from animals and erupting volcanoes produce far more CO2 than humans could ever imagine to achieve.

Catastrophism is driving the new energy revolution, much like the drive to score military victories has driven technological innovation. Therefore, solar panels and wind farms, so-called alternative energy sources, are driving many otherwise sane humans to encourage the spending of billions to install solar panels and the like, not because they are cost-effective, but because such actions have the effect of a prophetic action, releasing us from our sin. In the 16th century, the Vatican financed the construction of many beautiful buildings by promising people valuable real estate in heaven in exchange for generous donations known as “indulgences.”

Let there be no doubt that climate change is all too real; but it is the norm, not the sign of a problem, and it is also not to be confused with the changing weather we experience. Nature is dynamic, always in motion, and this applies to nearly everything, including the glaciers, for example. Sometimes, glaciers retreat; it has happened before our very eyes, it is true, but it is a global phenomenon. Antarctica, for example, shows no signs of retreat; even if the Arctic has seen some melting, it is part of a cyclical process (withdrawal and extension) and this phase began more than a century ago with insignificant, if any, input from human activities.

Our cities are polluted. Who would deny it? However, today, they are less, not more, polluted than even 20 years ago and less polluted than 300 years ago, when the Industrial Revolution had not appeared in a crystal ball.

Environmental metrics tend to improve, contrary to what environmentalists are implying, in developed countries, while the real environmental emergency comes from underdevelopment. This has been one of the tragedies of environmentalism being appropriated by the climate change alarmists and by technologies fueled by the fear they induce.

The record of doomsayers’ credibility is not good. We cannot travel to the future, but we can check past predictions; after all, catastrophism is as old as humankind. In recent decades, the 1960s and 1970s were rife with catastrophist ideas, the most famous of which was Paul Ehlich’s “population bomb, ” which predicted that in the 70s and 80s, hundreds of millions of people would die of hunger. Just to clarify, the food situation in the world, even in the poorest countries, has generally improved; indeed, Ethiopia, on the brink of the famine popularized by Live Aid, has one of Africa’s fastest-growing agricultural sectors and economies.

In 1972, the study “The Limits to Growth, ” published by the “Club of Rome, ” translated into 20 languages, sold nine million copies, and often cited by environmentalists, warned of the “depletion of natural resources, ” even suggesting that by the early 90s, the world would have no more gold, mercury, zinc, oil, and natural gas. Not only are these resources still available, but modern extraction techniques have also made them so abundant that there is a glut and commodity values today, 25 years after the doom scenario was predicted to hit, are cheap (albeit, perhaps too cheap).


The Bottom Line on Carbon Taxes

George Carlin, the famous comedian, although he was much more than that, offered an irreverent but highly realistic sketch of environmentalism, skewering the very idea of the “save the planet” mantra. Carlin wonders whether the planet really needs saving. Instinctively, many might nod in undivided agreement: the melting of glaciers, the ozone hole, the extinction of many animal species, and so on, being their main “evidence.” In fact, a reflection that is more honest shows that this is far from fact and much of environmentalism is just another example of human presumption.

The Earth, as Carlin points out and many forget, has its own system of checks balances and a history of four-and-a-half billion years marked by floods, volcanic eruptions, earthquakes, tsunamis, asteroid impacts, ice ages, and magnetic pole reversals. If a medium-sized asteroid hit the Earth tomorrow, humans might die, but the planet itself would continue along in its existence, bruised maybe, but it would simply readjust.


Courtesy of Profit Confidential, by Alessandro Bruno



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