Carbon Tax Should Be Sky-High to Avoid Climate Disaster, Experts Say

Solving global climate change is a political issue. In the United States, pundits prefer solutions based on a market in trading of carbon-emissions. Organizations will be granted rights to emit carbons based on historical usage. Those organizations that implement reductions faster will be able to sell their carbon emissions to slower-paced ones.

The issue with market-based solutions is the variability in carbon pricing. Many economists prefer solutions based on carbon taxes whose costs are more predictable.

With carbon taxes, the big question, then, is is the price of carbon. This particular analysis suggests that the situation is more dire and carbon taxes should be higher than previous proposals.

I haven’t yet had a chance to review the quality of their research. However, to reiterate previous comments, global climate change is, by far, the largest economic and moral crisis of our era.

Making America Irrelevant Again

President Trump has done it: he has ignored the advice of his saner advisors (i.e. Tillerson, Ivanka) and withdrawn from the United States from the Paris climate deal negotiated by the Obama administration in 2015. The announcement is all over the news cycle.

Global climate change is the greatest moral and existential crisis of our time. Broad scientific consensus is difficult to achieve (scientists are very competitive), but on this issue the consensus is nearly unanimous. Science denialism is prevalent only among US politicians.

Less unanimous is how to address the challenges, because those are largely political questions, therefore involve who wins and loses, who pays, and how to balance long-term and short-term costs and benefits.

How foreign countries respond is up in the air. Already there are calls to boycott America. The most effective mechanism would be a carbon tax, based on the amount of carbon dioxide released in the manufacturing of products and their constituent products. If necessary the taxes raised can be used to offset other forms of taxes and remain revenue neutral.

Moreover, countries that adopt a carbon tax can avoid multiple-taxation by waiving taxes on imports from countries that have adopted a similar carbon tax. Import taxes will be imposed on products from countries that do not comply. American exporters would therefore be placed in a situation of paying the taxes anyway, in spite of the stranglehold of special interests over the US body politic.

According to the New York Times, the withdrawal process will require several years, leaving the final withdrawal up to voters in the 2020 election.