Climate Bait
Michael Levi sounds almost bemused as he’s filleting the authors of this argument for a carbon tax:
These are very smart guys. The puzzle for me, then, is why they believe what they’ve written. I can’t help but think that there’s a case of climate change myopia at work. A big slice of the political spectrum has been so invested in identifying climate change as the ur-energy problem that whenever another energy problem arises, they look to climate policy for a solution. High gas prices? Carbon tax. Oil revenues flowing to Iran? Cap-and-trade. People driving gas guzzlers? More wind and solar. No one is stopping to ask a pretty basic question: are these policies well suited to the problems they’re being newly touted for? Don’t get me wrong: I’m all for strong climate policy. But if people who invoke climate policies as answers to our other energy woes really take those other energy problems seriously, they’ll start proposing solutions that actually do something about them, rather than trying to sell climate policy as something it’s not.
[…] [4:47 p.m. | Updated Michael Levi of the Council on Foreign Relations revealed some deep flaws in their thesis (hat tip to Keith Kloor).] […]
About their tax, Esty & Porter say “Let’s be clear: the main goal is not to raise revenue”. The use of the tax code for social engineering is just plain wrong. It leads to the ridiculously complex and unfair system now in place as each pressure group, lobbyist and voting bloc gets their own cut out. The main goal – I would argue the only goal – of every tax should be raising revenue.
Also appalling is their cavalier attitude about the effects of their extremely regressive proposal on lower and middle income groups. Talk about solving problems on the backs of the poor.
The purpose of the tax is to shift the economy from low cost fossil fuels to higher cost “clean” energy. Yeah, there’s some handwaving about spurring innovation, but thats speculation. What they are proposing is to artificially increase the cost of fossil energy (via the tax) to make “clean” energy competititve. The tax achieves it’s purpose when the market chooses to not pay the tax but instead buy more expensive energy.
Now, the cost of any thing represents the amount of our limited societal resources that go into making that thing. There is an energy component in the cost of everything. The shift to higher cost energy will increase the cost of everything. But societal resources are limited. We will have less stuff.
This “tax”, if it achieves it’s purpose, does not generate revenue. It destroys wealth.