Economist Demotes Economics in CO2 Tax Debate
“‘Whether to do something or nothing’ is quite a retreat from the basic economic principle of realistically comparing costs and benefits. Washington States’ carbon tax proposal is all cost and no benefit. New administrative programs and higher across-the-board energy prices cannot be balanced by virtue signalling.”
“One can only hope that economists would put their game face on and do real analysis–and tell their funders that the right answer is better than the politically correct wrong answer.”
A recent letter-to-the-editor in the Wall Street Journal, “Debating Washington Carbon Tax Initiative,” made a number of points that invite further consideration. The subtitle of the piece was: “The real question in front of Washington voters is whether to do something, or nothing, about the risks of climate change.”
The letter by PhD economist Noah Kaufman of Columbia University’s Center on Global Energy Policy is parsed in red; my comments are indented.
Your editorial “Washington’s Carbon Tax: Take Two” (Oct. 22) points out that some emissions sources are exempted by Washington’s carbon-fee ballot initiative and asks: For those worried about climate change, why tolerate exceptions?
Energy intensive and trade-exposed businesses were excluded because they might have fled the state and brought their emissions elsewhere.
Comment: Short of a federal tax, any state that imposes a carbon tax penalizes its businesses and citizens versus other states that do not have such a levy. A “border adjustment” to penalize free-rider states (akin to a tariff at the international border) is not permissible under the interstate commerce clause. This makes non-federal tax schemes problematic in terms of equity and fairness considerations out of the gate–and one can only imagine what future revisions will add to the complexity of the program.
And there are more exemptions ….
Imposing the carbon fee on the state’s coal plant that is shutting down by 2025 would have violated a previous commitment to the owners of the plant, its workers, and the surrounding community.
The post Economist Demotes Economics in CO2 Tax Debate appeared first on Master Resource.
Source: https://www.masterresource.org/carbon-tax/wsj-carbon-tax-letter-columbia/
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