To
Cut Carbon, Tax It
By:
John Horton
Last week, over 300 U.S. cities experienced record high
temperatures. This is no surprise since climate scientists agree the current
levels of pollution and carbon emitted into the environment are causing
temperatures to rise at dangerous levels worldwide. According to National
Geographic, "average temperatures have climbed 1.4 degrees Fahrenheit (0.8
degree Celsius) around the world since 1880." This negative side affect of
otherwise normal business and human behavior must be combated in order to
preserve future food supplies, coastal locales, and polar wildlife. In
addition, scientists report that an increase in dangerous weather events, like
the recent Superstorm Sandy, are more likely in the future if no action is
taken to address our changing climate. While each individual who chooses to
bike, eat local food, or buy a hybrid car helps in their own way to reduce
pollution, it is imperative for a national policy to be enacted to reduce
carbon emitted into the atmosphere. Taxing carbon emissions should be that
policy.
Current attempts at a solution are increasingly impotent.
The Obama administration, arm-tied by public opinion and opposition in Congress,
has resorted to capping emission levels through the Environmental Protection
Agency (EPA). Simply put, business and corporations are allowed to pollute a
certain levels and if found in violation of those levels face fines and
penalties.
Level caps result in no
incentive or competitive advantage to reduce pollution. They merely create an
inconvenience for businesses that must choose between two options. If it makes
economic sense to reduce pollution, a business will choose to do so. But, if it
is less expensive to pay the fine, the businesses will choose this course. Once
this choice is made, nothing more will be necessary. There is no incentive to
keep reducing carbon, only a motivation to cap emissions at a specific
pre-ordained level.
A carbon tax would be economically efficient, spur
innovation, and increase competition. Another plus from a carbon tax is
increased revenue to the federal government. This revenue could be used to
reduce other taxes or balance the federal budget-- both powerfully persuasive
opportunities. Estimates range from 500 billion to 800 billion in additional
revenue a year coming from a carbon tax. This is the same amount of revenue
lost due to the Bush tax cuts over the last ten years. A carbon tax could work
like the income tax by bracketing the amounts of carbon emitted like the income
tax and make businesses pay rates that correspond with the harm of their
polluting.
No new regulators, regulations,
or bureaucracy that too often accompanies new dictates from Washington and can
create economic deadweight would be necessary. The tax would enable businesses
to simply monitor their polluting rate and pay the corresponding tax--
increasing productivity and efficiency. Having differing tax rates for
differing levels of pollution would incite businesses to find innovative
solutions on their own. This incentive for newer and cleaner technologies would
also reduce the need for government sponsored research and development grants,
while allowing those who reduce pollution the most to gain a competitive
advantage over their competitors who pollute more.
Using taxes to correct negative
externalities, or unpleasant side effects caused by normal human and market
behavior, is not abnormal. Every time individuals gas up their vehicles at an
Exxon station they are paying a corrective tax on gasoline that is then
reinvested in road and other infrastructure projects that are needed to maintain
the transportation system. This tax is simply a response to the results of
using a car and is then used to return societal possessions to a more optimal
state. A carbon tax would be no different.
There
is a moral imperative to beginning the process of curing the planet
immediately. Just as complaints concerning leaving debt and deficits to the
next generation are well founded, so is the injustice of passing on a harmed,
depleted, and polluted planet to those citizens yet to inherit the earth. Instituting
a carbon tax is the best response to this known, growing, but yet still
solvable crisis.
