Or is there real evidence that just arguing the need will make a difference in government action? If so, I would like to see it.
-----Original Message----- From: lbo-talk-bounces at lbo-talk.org [mailto:lbo-talk-bounces at lbo-talk.org] On Behalf Of Jordan Hayes Sent: Tuesday, December 20, 2011 11:06 AM To: lbo-talk at lbo-talk.org Subject: Re: [lbo-talk] The Planet is Fine
> Many environmental radicals hate carbon taxes because they
> use the price system rather than regulation or something stronger.
The way regulation is supposed to work is that the government, using data and analysis from a non-partisan source like the National Academy of Sciences, sets targets for something like emissions and then both grants tax subsidies for direct implementation of those targets; and sets punitive costs ("tax" if you like) for not reaching them. You could make the later years pay for the early years, but really the point is to do it vs. not doing it.
The idea that a tax alone will change behavior is barmy.
The whole point is that the current situation must be changed, and the only way to overcome cost resistence is for the government to invest in the change directly. There's no other reason for industry to not want to do it besides that it will cost. So: just pay it. We're not going to get it otherwise. Like building a bridge, paying an industry to change their dirty ways is a public good. The sooner they start, the better the long-run payoff.
In some regulatory environments, unilateral changes like this are rejected because the market will just move somewhere else. Well, the US is the largest consumer of fossil fuels, and that market isn't going anywhere, so it's perfect for this kind of regulation. I've never understood why people think that worldwide agreement is necessary.
They almost have it right for things like the CAFE scores, but it's gotten awfully corrupted over the years. It could easily be more agressive than it is, especially after the recent bailout of the auto industry. I guess this is one of the things that Doug wishes we would have gotten in return for those bailouts: here's your $50B, now let's double the CAFE standards in the next 10 years.