Just tax it

Anne Appelbaum says a carbon tax is the simplest and most effective way to deal with greenhouse gas emissions:

The much-vaunted treaty creates a complicated and unenforceable system of international targets for carbon emissions reduction, based on measurements taken in 1990. Critics of the American president have condemned him for failing to sign it, conveniently forgetting that the Senate rejected it 95 to 0 in 1997, a margin that reflects broad bipartisan opposition. At the same time, few of the Asian and European signatories are actually on track to meet their goals; those that will meet the targets, such as Britain, can do so because their economies rely less on industry than they once did. Canada and Japan aren't even close to compliance; China and India, whose emissions rates are growing most rapidly, are exempt altogether as "developing" countries -- which, given their economic strength, is absurd.

None of which is to say that reduction of carbon emissions is impossible. But the limiting of fossil fuels cannot be carried out with an unenforceable international regime, using complicated regulations that the United Nations does not have the staff or the mandate to supervise, with the help of a treaty that effectively penalizes those who bother to abide by it. I no longer believe that a complicated carbon trading regime -- in which industries trade emissions "credits" -- would work within the United States either: So much is at stake for so many industries that the legislative process to create it would be easily distorted by their various lobbies.

Any lasting solutions will have to be extremely simple, and -- because of the cost implicit in reducing the use and emissions of fossil fuels -- will also have to benefit those countries that impose them in other ways. Fortunately, there is such a solution, one that is grippingly unoriginal, requires no special knowledge of economics and is easy for any country to implement. It's called a carbon tax, and it should be applied across the board to every industry that uses fossil fuels, every home or building with a heating system, every motorist, and every public transportation system. Immediately, it would produce a wealth of innovations to save fuel, as well as new incentives to conserve. More to the point, it would produce a big chunk of money that could be used for other things. Anyone for balancing the budget? Fixing Social Security for future generations? As a foreign policy side benefit, users of the tax would suddenly find themselves less dependent on Persian Gulf oil or Russian natural gas, too.

I'm not sure it's as perfect a suggestion as Appelbaum seems to think, but it's better than an unenforceable, fatally flawed treaty.

Damian P.

Posted by damian at February 6, 2007 04:51 PM