Archive for the ‘Friedman’ Category

Friedman: Energy taxes have destroyed Denmark – not

August 10th, 2008 4 comments

Thomas Friedman has an op-ed at the New York Times that describes some of Denmark’s energy taxation and alternative energy policies.

No doubt these policies created distortions and in some ways left Denmark less wealthy than if such policies had not been adopted – particularly as high energy prices may discourage domestic industry to invest abroad – but as I have noted previously, a wide range of economists, businessmen and think tanks support carbon taxes in the US, particularly if they are accompanied by reductions in taxes on labor and capital.

My question, in connection with Friedman’s piece, is whether recycled carbon taxes, if coordinated by leading industrial nations (to reduce geographic shifts in capital investment), would decrease welfare globally?

I observe that the difficulties of coordination and enforcement make it highly unlikely that nations, absent dramatic climate change, will agree to very high carbon taxes.

I also observe that policies in the US to keep energy prices low bear some relation to both the health of the US auto industry and to our ruinous military engagements abroad.  Further, Denmark’s investments in energy independence have certainly spared it costly expenditures on foreign wars, and position it to make money as demand for clean energy grows. 


Categories: AGW, carbon pricing, climate change, Friedman Tags: