Thursday, February 9, 2017

Republicans for a Carbon Tax

One thing about which I agree with the Republican platform is that using complex regulations to achieve public goals can be a miserable drag, and we should always be looking for simpler alternatives. And there is actually a better, simpler alternative to Obama's Clean Power Plan and other regulatory attempts to reduce carbon dioxide emissions: a carbon tax. Various right-of-center columnists have been making this argument for years, but very few Republican politicians have signed on, because of the party's aversion to any sort of new tax.

So I was thrilled to read that a bunch of retired Republican office-holders have come out in favor of a carbon tax:
The group, led by former Secretary of State James A. Baker III, with former Secretary of State George P. Shultz and Henry M. Paulson Jr., a former secretary of the Treasury, says that taxing carbon pollution produced by burning fossil fuels is “a conservative climate solution” based on free-market principles. . . .

A carbon tax, which depends on rising prices of fossil fuels to reduce consumption, is supported in general by many Democrats, including Al Gore. Major oil companies, including Exxon Mobil, have come out in favor of the concept as well.

The Baker proposal would substitute the carbon tax for the Obama administration’s Clean Power Plan, a complex set of rules to regulate emissions which President Trump has pledged to repeal and which is tied up in court challenges, as well as other climate regulations. At an initial price of $40 per ton of carbon dioxide produced, the tax would raise an estimated $200 billion to $300 billion a year, with the rate scheduled to rise over time.

The tax would be collected where the fossil fuels enter the economy, such as the mine, well or port; the money raised would be returned to consumers in what the group calls a “carbon dividend” amounting to an estimated $2,000 a year for the average family of four.
Under the plan, a majority of families would actually come out ahead. But that probably won't make any difference to most elected Republicans, who have been putting themselves on record against carbon taxes for years.

1 comment:

G. Verloren said...

The problem with taxes is that they don't necessarily stop a particular destructive activity - they just disincentivize it. Thus, if the level of disincentive is not great enough to outweight other potential benefits, people will just ignore it and accept it as the "cost of doing business".

For example, in the state of Florida, the act of cutting down endangered mangrove trees is penalized with a fine. The intent is to help protect the unique mangrove habitats from destruction, and in theory this is good for the environment. But the fine is a flat amount per tree destroyed, and the resulting effect this has is wildly disproportionate.

Private homeowners clearing vegetation from their land can unwittingly cut down a handful of mangrove trees and face what are, for a single individual, unreasonably large fines. But large corporate real estate developers will knowingly bulldoze entire acres of mangroves and simply not care, because they stand to make hundreds of millions of dollars in profit from the land, which will more than offset the fees they have to face.

So here are the end results. The mangroves continue to be destroyed on a massive scale and the environment continues to suffer for the sake of human greed; the people destroying the mangroves en masse profit immensely regardless of the fees; the private individuals causing environmentally insignificant damage to the mangroves face hugely disproportionate punishment for their actions; and the state directly profits off the fines while at the same time suffering absolutely no obligation to spend any of the proceeds on counteracting or reversing the damage to the environment.

These sorts of taxes don't do anything to actually stop destructive behaviors - they simply impose a price tag on them. The net effect is that certain acts are harshly forbidden for the poor, but are freely permitted for the sufficiently rich.

If a single parent working for minumum wage litters in the street and has to pay a $500 fine, they could conceivably lose their home. If a millionaire carries out the exact same act of littering, they simply pay the $500 fine without batting an eyelash and are completely unaffected. So is it any wonder that Republicans like the idea of merely taxing destructive behaviors instead instead of making them forbidden for everyone, regardless of their wealth?

"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread." - Anatole France