Carbon taxes vs. carbon markets, latest in a series

Andrew Sullivan, with whom I agree on most things, endorses the idea of a carbon tax and cites the Chicago Tribune’s Steve Chapman as offering good reasons why. Chapman writes sensibly:

Did I say Republicans and Democrats don’t want to impose a tax? I lied. The truth is they don’t want to impose a visible tax. All the subsidies, rules and mandates you hear about don’t come free, but you pay for them without realizing it — and without realizing whom to blame.

Government programs to reduce greenhouse gases are a recipe for waste and abuse. Federal “investment” in alternative fuels? That idea got a full tryout during the energy crisis of the 1970s, with meager results. Tax breaks for ethanol? Largely self-defeating, because they encourage farmers to burn fossil fuels to expand production of corn.

Chapman doesn’t even mention the option of tradeable emissions credits, nor does Sullivan in his brief post, though both say the private sector will work its magic when faced with taxes on coal and oil and other fossil fuels that spew carbon dioxide when they burn, and that a carbon tax is extremely simple.

That’s true as far as it goes, and I’ve no doubt a carbon tax is vastly preferable to a web of subsidies and regulations that nobody can make head or tail of. The last thing the world needs is a U.S. Carbon Bill to match its Farm Bill. And there’s plenty of evidence that carbon markets, implemented badly, can cause more problems than they solve.

But a carbon tax’s deadly problem is that nobody knows where to set it to do the most good, unless it’s absurdly high.

Evaluating the two main options is where conservatives who care about climate change need to focus their efforts.

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