When Liberals attack (each other)

Cherniak strikes first. Kinsella hits back. The rest of us sit back and enjoy the spectacle.

As for the underlying issue itself - Stephane Dion's proposed "carbon tax" - my own belief is that the already-skyrocketing cost of energy is already doing what a carbon tax would do. (This is Kinsella's opinion, too.) Dan Gardner, of the Ottawa Citizen, moots the intriguing (though politically risky) idea of a gas-price floor:

Energy prices fluctuate. Always have, always will.

When oil prices first shot up in 1973, and again in 1979, lots of smart people said they would never come down again. Predictably, western societies started to make huge gains in energy efficiency. Alternatives inched toward viability. The end of our oil addiction seemed at hand.

But in the mid-1980s, the price of oil plummeted. Efficiency gains stalled. Alternative energy withered. And so, 20 years later, we're in exactly the same bind.

Today, some say the world has hit "peak oil" and cheap gas is history. Maybe. But even if production really has peaked, there will still be price fluctuations -- and six months or a year of falling prices could reverse much of the progress stimulated by the current high prices.

Solution? A "carbon floor." Create a carbon tax that takes no bite now. It also does nothing if prices rise. But if prices fall, it kicks in -- raising prices enough to hold them steady at the floor. All revenues raised would be off-set by other tax cuts, of course.

Consumers and industry alike would get the message that the days of cheap energy really are gone. Consumer demand for energy-efficiency -- and energy alternatives -- would soar and never come down. Industry would respond.

And 20 years from now, we won't be in the same bind.

Damian P.

Update: Megan McArdle: "Either we get upset about doing less driving and flying, or we get upset about climate change. We cannot simultaneously fix both problems."

Posted by damian at May 23, 2008 12:35 PM