There’s No Such Thing as a ‘Conservative’ Carbon Tax

The so-called “conservative” case for a carbon tax has always been a shell game. Point out that such proposals might not meaningfully address climate change, and defenders claim that they’ll boost economic growth. Note that they won’t boost growth and you’re told that they will save the planet.

The confusion abounds: carbon tax proposals are sold as the key to reducing burdensome red tape, even though that tape can be (and has been) cut absent a sweeping new tax regime. The tax is supposed to be “revenue neutral” thanks to offsetting tax cuts elsewhere—even as that same revenue gets promised to households in the form of a “dividend.” Through careful calibration, the tax is meant to offset efficiently the externalities associated with carbon-dioxide emissions — although no reliable estimate of those externalities exists. As I observed more than three years ago: “If we grabbed the wrists of carbon-tax advocates and demanded they turn over the shells all at once, we would find there was never a marble to begin with.”

Read more at Economics21.

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