The Carbon Tax: Is There An Alternative?

(cross posted @ Freedom Democrats and Daily Kos)

Fareed Zakaria makes a strong case for the Carbon Tax.

Understanding the causes and cures of global warming is actually very simple. One word: coal. Coal is the cheapest and dirtiest source of energy around and is being used in the world’s fastest-growing countries. If we cannot get a handle on the coal problem, nothing else matters.

He also tackles one of the good reasons for the Bush Administration ducking out of the Kyoto accords.

The administration had several narrow-minded and callous reasons for rejecting Kyoto, but among its main arguments was that the accords did not include developing countries and thus were ineffective. To understand why that is correct, consider one simple statistic. During the Kyoto time frame (that is, by 2012), China and India will build almost 800 new coal-fired power plants. The combined CO2 emissions from those plants will be five times the total reductions in CO2 mandated by the accords.

Here’s the math. These 800 new plants will burn about 900 million extra tons of coal every year. By 2012 they will have emitted about 2.5 billion tons of CO2 into the atmosphere. During that period, if the countries that have signed the Kyoto accords implement them fully—a big “if”—they will cut their CO2 emissions by 483 million tons.

As a gut instinct, I am rarely for raising taxes as a way of solving our problems. But, there are times when it is more than justified: National Security, Police forces, Education, Public Defenders, Roads, (hopefully some kind of Health Care system), etc. The Carbon Tax does what the market hasn’t, provide incentives to business to switch over to more “green” alternatives.

The market has had its’ chance. The Bush administration has stripped and gutted every proposal to advance alternative fuels and promote more efficient ways of doing business leaving the ball in the court of the corporate world (and in the court of the developing world). But, it hasn’t worked. And it won’t. Dirty energy is far cheaper, and as such, far more attractive. Without a clear incentive by way of (something like) a carbon tax, there is little hope for change.

Nandan Nilekani, CEO of the Indian technology giant Infosys and one of the few Asian executives genuinely concerned about environmental issues, says that ultimately the industrialized world will have to provide subsidies to developing countries to build “clean coal” plants. “Right now in India, and I assume in China, plants are built through competitive bidding. The lowest bid usually wins. You will have to create a subsidy for clean coal to make it the lowest bid. Otherwise, the dirtiest will win.”

Potentially, a Carbon Tax could be used as a source of revenue for those kinds of subsidies. We could provide tax breaks to those who would use alternative fuels and tax those that don’t. (a kin to giving tax breaks for people who buy Electric/Hybrid cars rather than the current break for buying an SUV.)

The word “tax” is not a favorite of mine, nor of most people in this country. But, periodically, it is a tool we must use against those who would make the world a worse place for the rest of us. It is one thing to hurt yourself, it is another to hurt others. If we wouldn’t allow individuals to get away with it, the why would we allow Corporations and Governments?

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One response to “The Carbon Tax: Is There An Alternative?

  1. so is carbon tax a good thing or bad thing? you should post the harms and the solvency and inherency of carbon tax. you should also post the plan for the carbon tax. it would be really helpful and will give a whole lot of information to the people.

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