Benefits of a US carbon tax and its implications for the rest of us – NYT

The economics here as argued by the New York Times are straightforward and undisputed.

The beauty of a carbon tax is its market-based simplicity. Economists since Adam Smith have insisted that prices are by far the most efficient way to guide the decisions of producers and consumers.

A carbon tax would be responsible both environmentally and fiscally, simplifying the US tax code and reducing the federal deficit. Fears of upsetting voters with higher gas prices should not take priority; a republic government is elected in part to have greater foresight and expertise than voters. Fears that it would fall hardest on low-income voters can be overcome if carbon tax revenue is used to benefit social policies for the poor. Fears that a carbon tax would affect US competitiveness are shortsighted and ignorant of the fact that many developed countries already have similar fiscal policies in place.

While this article portrays climate change as more of an national issue than an international one, it implies that climate change is most effectively solved by fiscal, market-based policies such as the green tax that influence economic choices (rather than, say, education or awareness campaigns, though those are important too).

Coordination of nations’ policies and goals are important; more important is the transnational sharing of technologies useful in ebbing away climate change. But if key solutions lie in national fiscal policies, then the effectiveness of a global solution (exemplar: the Kyoto Protocol) looks a lot less hopeful.


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