Hi Khebab and Jeffrey,
I think your tax proposal is excellent. I know it seems like a hard sell, but I support your idea 100%, and will do my best to keep it on the front burner.
Good work!
JD
firstly, for fig 3, it is stated:
" Only the data between 1979 and 2004 are used to perform the fit (green points)."
surely there is some mistake here. the first four green points are way off the trend. it is not clear from the chart whether or not this a merely a mistake in colour of some dots. hopefully it is just that.
secondly, the idea that "A critical point to keep in mind is that an exporter can only export what is left after domestic consumption is satisfied." is tautological in a sense but appears to have been used in a misleading fashion here.
As global demand for oil rises, the price of oil rises even for exporting countries, and it is possible to imagine consumption slowdowns at home too, as foreigners outbid locals for supply.
There are several caveats to this. One, as the price of oil rises, this means more income for oil exporting nations, which suggests that demand destruction in response to higher prices may be lower in oil exporting regions. However, the size of this effect would be small, and trivial in the context of a broad analysis.
The second possible caveat is potentially more significant, that is that oil exporting countries frequently subsidize internal consumption. While this complicates matters slightly, the opportunity cost of the decision to protect the local market means that in the face of substantially higher price offers, protection at some point will no longer remain viable.
As an thought experiemnt to illustrate the previous point, imagine that the oil production of every country which is currently an exporter dropped to the levels of that countries current consumption. Do you imagine that there would no longer be any oil exports in this world? That Saudi, Iranian, Nigerian, Norwegian etc. consumption would remain as they were whilst the consumption of USA and Japan takes a major hit. I suggest that this is not realistic.
The point that oil is fungible means that it is not just consumers in importing countries that take a hit when the global supply/ demand balance shifts (but instead consumers everywhere). Your argument appears to rely on this erroneous assumption.
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Good luck modelling. Your years of contributions to peak oil numbers are appreciated.
On the gas tax, what about those on pension and other retirees who no longer pay payroll taxes? Sugges that they should get some sort of equivalent credit to compensate for the fact that they are not getting their payroll tax reduced.
Regarding the chart questions, you will have to talk to Khebab.
In regard the export/import question, my basic point is that the rising price of oil will temporarily stimulate economic activity in the exporting countries, e.g., car sales in Russia are up 15% year over year, thus driving up demand. This is compounded by the subsidies that some oil exporters provide.
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