A carbon tax is an area of policy of which your editor knows a fair amount. I spent a couple of years talking with some of the most influential people in the space learning about such a tax. For the most part I found these folks, the pro-carbon tax people, to be a legitimately “green” bunch. They seemed to care about global warming, or climate change, or whatever. Most of the people I met around this topic on the Left did not strike me as “watermelons.” That is green on the outside but pink (as in socialist/communist) on the inside. Indeed I met many people from the fossil fuels industry as well as the activist industry (and it is an industry these days) who were pro-carbon tax (yes even people in oil companies) and for the most part they were reasonable if misguided (on this topic) people.
I came at the carbon tax from the perspective of pricing what many economists call “externalities.” The argument had been made to me that if carbon was being spewed into the atmosphere and that this carbon was warming the Earth in an unnatural and disruptive way, then these costs were unfairly being absorbed by the commons. If a coal plant tosses atmosphere warming C02 into the atmosphere the public at large incurs the costs. The solution I was told, and the argument made all over Washington DC, was that the way to solve this problem was with a carbon tax.
I am anti-tax in pretty much all forms and a carbon tax, even with the reasonable argument outlined above didn’t prove an exception to my taxation aversion.
Fundamentally the carbon tax proposals all reeked of unintended consequences. They also reeked of INTENDED consequences. Some people clearly saw a carbon tax as not an effort to really curtail climate change but as a way to extract revenue.
Consider that the percentage of carbon emissions coming from the USA, even with the economy we have, is a small percentage (roughly 15%) of total carbon emissions in the world. Given the size of our economy that is remarkable. Consider also that China has a smaller economy than the US but discharges twice the amount of carbon into the atmosphere (and was allowed to continue this way under the Paris agreement even while the USA was supposed to ratchet back even more on carbon emissions.) Additionally China’s carbon emissions continue to skyrocket while ours have been trending down for many years. Yet there was almost no interest in this issue. China, to me, was the glaring and obvious area of needed focus, yet nothing. Or almost nothing.
It seemed to me that if reducing carbon was the real issue perhaps the Sierra Club and allies should really turn the screws on Beijing.
But over time I realized that reducing carbon wasn’t the most important part of a carbon tax for many of the activists with whom I became friendly. The real focus was on REVENUE. Even more than taking down the fossil fuel companies, getting more money for the government was the goal.
One can see easily how a carbon tax would create bizarre incentives which would actually keep carbon emissions in the atmosphere. Government likes sources of revenue. If ending carbon emissions meant ending a large revenue stream for government agencies (in this case the IRS and the EPA – hooray!) it is very likely that carbon emissions would continue to waft into the stratosphere for many years to come. No one’s going to kill a cash cow. Not even one made of carbon.
Fundamentally the point must be made that regardless of where one stands on the climate change debate the USA is doing it’s part to curb emissions. We are solidly on the downslope and have been for a long time thanks to – get this – FRACKING – and the natural gas fracking makes available to us. Not only that, natgas is cheap! It’s cheaper than coal (at last look). So the market is solving the carbon issue. We should let it continue to solve the carbon issue and we should keep the central planners from screwing things up.
Despite all this, Democrat Deutch just can’t take a hint. Let’s look at the details of Deutch’s horrible bill:
Imposes a massive and continually racheting national energy tax, allowing politicians to raise taxes without ever having to vote.