Home > carbon pricing > [Update 2] Neocons, conservatives, libertarians and Exxon join Jim Hansen in calling for rebated carbon taxes in lieu of massive cap/trade rent-seeking and industrial planning

[Update 2] Neocons, conservatives, libertarians and Exxon join Jim Hansen in calling for rebated carbon taxes in lieu of massive cap/trade rent-seeking and industrial planning

[Update at bottom.]

Neocons, conservatives, libertarians and Exxon`s Rex Tillerson have recently joined arch-warmer Jim Hansen in calling for rebated carbon taxes in lieu of massive cap/trade rent-seeking and industrial planning.

I`ve blogged extensively on the reasons why I and others view carbon taxes – particularly if rebated to citizens – as a far better alternative to a domestic cap and trade program.

With the Obama inauguration looming, starting late last month a wide range of voices on the right have started to weigh in – each with their own reasons – in support of carbon or similar taxes, in order to shift the debate away from cap and trade and other extensive industrial policy.  Is it too late?  In any case, it`s worth taking a look at what people are saying recently:

Climate scientist Jim Hansen, who with his wife rather boldly sent to Barack and Michelle Obama a personal letter and background paper (with a discussion draft first made public in November).

Neocon Charles Krauthammer proposed a substantial “net-zero” gas tax in the December 27 (now updated to January 5) Weekly Standard, with intentions in part to cut off the flow of oil money to unfriendly (and Muslim) regimes abroad.

Republican Congressman Bob Inglis and economist Arthur Laffer argued in the December 28 New York Times  for a carbon tax coupled with tax-cut stimulus.

On January 9, the Wall Street Journal reported on ExxonMobil CEO Rex Tillerson`s recent speech in DC calling explicitly for Congress to enact a tax on greenhouse-gas emissions as a “more direct, a more transparent and a more effective approach” than cap and trade.  This is not as new as the WSJ would have it; as I note on an earlier post, ExxonMobil came out rather explicitly in favor of carbon taxes a year ago.

Libertarian and natural resources law prof – and NRO and Volokh Conspiracy blooger – Jonathan Adler applauds and explains these developments for various reasons, noting particularly that a train wreck seems headed our way, and that Congressional action is needed to avoid having the Obama EPA attempt to implement climate change policy via the Clean Air Act (for which a Supreme Court case last year paves the way).

Of course there is reasoned (both reasonable and passionate) disagreement, such as from businessman Jim Manzi at NRO on December 30 and blogger Tony Quain in response to Krauthammer, and by Chris Horner of the Competitve Enterprise Institute on January 7.

All are worth a look.


[Update:  Although liberal economists and commentators have tended to diss a carbon tax as a political non-starter, I note that in a December 27 New York Times op-ed, Thomas Friedman voiced support for a revenue-neutral carbon tax or gas tax on roughly the same grounds as Krauthammer.

Friedman and the others noted above join a long list of economists and political commentators on both sides of the political spectrum (including AEIGeorge Will and Barbara Thoring on the right) who strongly prefer carbon taxes over cap and trade.

I note that I do not buy all of the arguments for a carbon tax, particularly the argument that a gas tax would be an effective foreign policy tool.  However, I summarized previously some economists’s discussions of using a domestic tax to limit the flow of revenues to oil-exporting countries.

Dan Rosenblum of the Carbon Tax Center (which is a great complier of information on carbon taxes vs. cap and trade policies) has an excellent summary on recent developments in the December 30 Huffington Post.

My view is that a carbon tax would be much preferable to a cap and trade system and, if rebated or offset by reductions in income or other taxes, may improve incentives for savings and investment.  Further, it would undercut arguments and justifications for other obviously counterproductive market inverventions like the CAFE standards and subsidies for supposedly “green” sources of energy (including ethanol). 

Of course the fact that a carbon tax is much more transparent than a cap and trade and other policies interventions is one of the chief reasons that politicians and rent-seekers prefer more complex and obscure ways to provide favors to various industries and interest groups.]

[Further update: I note that Cato devoted its August 2008 edition of Cato Unbound to a debate over climate change, anchored by an essay by Jim Manzi that specifically advocated substantial government in improved global climate prediction, carbon capture and storage, and  geo-engineering

In addition, libertarians Ed Dolan, Gene Callahan and Sheldon Richman all feel that climate change deserves serious consideration, Reason online`s Ron Bailey and libertarian/energy expert Lynne Kielsing supports climate change actions,  Bruce Yandle, CEI`s Iain Murray, Cato`s Indur Goklany has advanced a specific climate change-targeted proposal, and AEI`s Steven Hayward and Ken Green have provided relatively balanced analyses.]

Categories: carbon pricing Tags:
  1. No comments yet.
  1. No trackbacks yet.