The case for a revenue neutral carbon tax

In today's Tennessean in an editorial Healthy future may lie with carbon fee writers Teresa Campbell and Pam Jones make the argument that climate change "brings drought that decreases crop yields and shrinks glaciers that provide water for millions of people. It also intensifies disasters that create “climate refugees,” and it turns the oceans more acidic, threatening the base of the aquatic food chain." And, they say, "America’s carbon energy tab is paid for with lost work days, premature deaths, property damage from violent storms and fires, failed crops and droughts."

To combat climate change, they say, "We need a market-based solution that will help our economy, protect American businesses from foreign competition, be simple and transparent enough for all to understand, and encourage other countries to follow suit."

That solution they say is the carbon tax. Now, I know that many on the right are going ballistic and pulling out their hair denouncing "junk science," "Agenda 21," and Al Gore.  If you really believe that global warming is conspiracy of the overwhelming majority of the world's scientist designed to usher in a one world socialist government then I can understand your reluctance to support a carbon tax. However, if you believe that the majority of scientific opinion may actually be correct and that climate change may be occurring, then please carefully consider a carton tax.

A carbon tax is a market approach to applying a cost to a  detrimental externally. I have taken a strong stand in opposition to a carbon cap and trade system because it can be manipulated to pick winner and looser and lacks transparency, will inevitably be subject to corruption, and will drastically increase the scope and size of government. A cap and trade system would reward people for doing things they might have done anyway or reward them for doing things they might have not done anyway. 

I offer the example of saying I would sell you my carbon credits for trips I will not take to Knoxville and I will agree to not take two trips a day.  You can buy my credits and then take a trip and not feel guilty. That is cap and trade. It is bound to be corrupt.

A carbon tax is not subject to such manipulation.  While the details of how the revenue generated from the carbon tax is off set by  a reduction in other taxes or returned to the consumer is an important detail, the concept is one that conservatives should embrace. Many conservatives have embraced the carbon tax, including America's leading conservative economist Aurthur Laffer, Reagan's chief economic advisor and creator of the Laffer Curve, and the free market think tank The Cato Institute.

It is disappointing that so few committed environmentalist have endorsed the carbon tax, preferring the cap and trade instead. For many, their liberalism and support for big government solutions out weights their support for reducing greenhouse emissions.

 

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