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So Nick Stern was right in his Review – we’ve got to do it the cheap way

Summary:
Agreed, this is only polling evidence but still:Soaring energy bills put Britons off paying higher taxes to save the planetThis is a point that the Stern Review addressed in some detail.Sixty per cent of Britons say that they are not willing to pay higher taxes on their energy bills to help reach the Government’s net zero targets, according to a poll.That people dislike paying more is not a surprise to anyone who has paid attention to the behaviour of human beings in the past. But then this is exactly the point that Stern made. Humans do less of more expensive things, more of cheaper. That’s how we derive those lovely demand curves. So, if we do the fighting the climate change the expensive way then we’ll do less fighting climate change. Simply because people - they being humans with this

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Agreed, this is only polling evidence but still:

Soaring energy bills put Britons off paying higher taxes to save the planet

This is a point that the Stern Review addressed in some detail.

Sixty per cent of Britons say that they are not willing to pay higher taxes on their energy bills to help reach the Government’s net zero targets, according to a poll.

That people dislike paying more is not a surprise to anyone who has paid attention to the behaviour of human beings in the past.

But then this is exactly the point that Stern made. Humans do less of more expensive things, more of cheaper. That’s how we derive those lovely demand curves. So, if we do the fighting the climate change the expensive way then we’ll do less fighting climate change. Simply because people - they being humans with this behaviour trait - will do less of the expensive thing. If, on the other hand, we use the cheap ways of addressing the same problem then we’ll do more addressing, fight and deal with more climate change.

This is precisely and exactly the logical walk through that leads to the recommendation for a carbon tax and allow the market to chew through it rather than some plethora of possibly bright ideas from central state planning. Or, as it’s more usually known, government picking losers.

Economic efficiency matters here that is. The more one worries about climate change the more this is so too. Nick Stern should be dancing around the room repeating the Kingsley Amis suggestion to Robert Conquest. That this clear and obvious truth isn’t at the heart of current policy tells us what’s wrong with current policy.

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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