Sunday, August 9, 2009

Quantified Smoking in Canada

I have never smoked, I don't like to be exposed to second hand smoke, and find it unfortunate that a non-negligible fraction of women in my age group have taken up the habit. I'm also glad that smoking in most public places is not allowed.

Government intervention to prevent smoking in vulnerable groups (such as adolescents) also make much sense.

As per John Stuart Mill's "Harm principle", I think people should be allowed to do as they please, as long as they are not harming others too much; for example if they smoke at home or in a well ventilated area.

Smokers in Canada are getting a raw deal from the government. The least the government could do is give tobacco tax money back to them, possibly through prevention schemes. Here are the numbers:

A 1997 study conducted in the Netherlands showed that smoking reduces lifetime health care cost by 14%. In Canada, this means: $5170 * 80 years * 14% = 57904$.

A 2003 study conducted in the UK showed that smoking reduces life expectancy by 10 years. This saves 10 years worth of Old Age Security Benefits: 500$ * 12 * 10 = 60000$.

Finally, lifetime taxes on tobacco represent in Canada: 4.5B$ / (30M * 19%) * 50 = 40000$.

Under the current system, smokers cost the state 160000$ less than non-smokers during their lifetime.

$5170 = health care cost per person, per year (2008)
19% = ratio of population who smoked in 2007 in Canada.
80 years = life expectancy
80 years = life expectancy
30M = population of Canada (1999)
4.5B$ = tobacco tax revenue (1999)

World Government and Climate Utility

Futuristic shows always depict Earth as being ruled by a single world government with sweeping powers. It's fair to say that we are not there yet, not even close. Currently, socialist countries hypocritically embrace wealth redistribution through taxation for the well-being of the poor in their country, yet feelings of sympathy for fellow humans across our national borders are insufficient to mandate sending them our tax dollars in any significant amount.

In fairness, some aid is given to poor countries, especially those who have suffered a natural disaster and were fortunate enough to get media coverage -- thank God the 2004 tsunami didn't occur on August 28th 1996. But this is merely "lets feel good about ourselves" aid, for it is nothing but pocket change in the budget of developed countries.

It's obvious that taxation for the purpose of wealth redistribution should be done worldwide, not at the national level, if fairness is a principal concern. The democratic world chooses not to be fair in this respect, for better or for worse. The discussion about why this is, and about the optimality of the current state of affairs is quite complex -- I will spare you. One thing is clear: national sovereignty and self-interest is how humanity has always worked, is our basis in law and here to stay.

This brings us to CO2 emissions and concentration within the atmosphere. It's debatable how much greenhouse gas in the atmosphere is the optimal amount. Some countries may benefit from a warmer clime, while others will lose out. Even if geoengineering the Earth's climate to reach this optimal weather pattern becomes possible, properly accounting and trading climate utility between nations is an intractable problem. If climate utility trading is not an option, we could simply choose the fair amount, which is the concentration before the industrial revolution (280 ppmv -- in effect the status quo).

In reality, we will end-up with a political amount and some arbitrary settling of climate utility, which will be based on guesswork and pandering. That's life. But the fairness problem does not end there.

It's overwhelmingly likely that the chosen political amount of greenhouse gas in the atmosphere will be higher than today's levels. This concentration will be reached rather quickly, at which point the Earth will have to become carbon neutral. Then on, all countries will have to become carbon neutral, meaning that they remove as much carbon from the atmosphere as they emit (through trading or otherwise). Even with very clean electricity generation, we will always emit a good deal of CO2, so reducing emissions to zero is unrealistic. Unless esoteric geoengineering techniques become available (such as ejecting CO2 into space), the only way to reach neutrality is by increasing biomass or depositing calcium carbonate in the oceans.

How should countries trade this natural resource? Changes in land biomass can be directly charged or credited to the land owners. As always with natural resources, countries with more landmass reap the greatest benefits. Who should own the remaining atmospheric storage capacity? A case could be made in allocating the storage capacity per surface area, as we currently do with airspace.

The biggest CO2 absorption and storage prize comes from the ownership of the oceans, as these have the most CO2 absorption capacity (deposits of calcium carbonate) and atmospheric storage capacity (due to the huge airspace above them). Unfortunately, no one owns the oceans, and this has led to tragedies in the past: blue fin tuna, codfish and corals can attest to this. So how do we divide up the oceans' natural resources (fish, CO2 capacity, oil, etc)? Here are a few options.

1. A war, winner takes all.
2. Increase the territorial water range (from 200 nautical miles), until all water has been allocated.
3. Give international waters to a newly created "World Government".
4. Split the oceans into small blocks, and divide ownership of each block between countries based on population.
5. Split the oceans into small blocks, and divide ownership of each block between countries based on land area.

Option 1 has no basis in law but has occurred very often in history.

Options 3 and 4 split the wealth evenly between persons across the world. This has no basis in law and has never occurred. It goes directly against the national sovereignty and self-interest that the developed world is structured around.

Options 2 and 5 have the most basis in law; they have occurred frequently in history. When natural resources have been discovered (think of oil as an example), all nations have complied with sovereignty rights based on previously accepted geography. India didn't claim a right on Russia's gas resources, despite the asymmetry of population and land area.

Natural resources have never been distributed fairly. Those who argue for splitting CO2 assets based on population should also be arguing for worldwide wealth redistribution through taxation and splitting of all natural resources per capita. That's a big step, and deserves some thought. However, piecemeal implementation of such a world makes no sense on its own.

Note: this debate is framed around CO2 emissions because this is how it is portrayed in the media. The actual issue is climate utility, which we can control through geoengineering. A country which grows white vegetation can reflect a good deal of sunlight into space, thus reducing temperatures in the same way as a country which increases it's biomass and removes CO2 from the atmosphere.