Global Leadership Starting with a Carbon Energy Tax

March 13, 2017
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Global warming is one of the great environmental challenges of our time. It involves scientific, economic and social problems. It involves complex social and economic issues that cannot be fixed by any one country.  The impact of moving away from carbon energy based economies on both wealthy and poor countries will be profound. The cooperation of the entire planet will be required to achieve a final solution. Several countries have made great efforts to reduce carbon emissions particularly in Europe. The United States has been a world leader on many fronts but has not led in global warming. While the shift from coal to natural gas for electricity production has significantly reduced carbon dioxide production, the US remains the second largest producer of greenhouse gases and the largest per capita. The US needs to step up with an effective and comprehensive program but with the current domestic strife, that seems unlikely. Asa simple first step, I propose a carbon energy tax.

The carbon energy tax has been proposed in the past but has been met with severe opposition. One strong argument against the tax is the government shouldn’t be restricting people or companies. The opposition looks to the negative impact of government productivity and innovation. While it is true that government alteration of the free market often reduces efficiency, this argument fails to consider the negative externality of using carbon based energy sources on the environment. While free markets do improve economic productivity and efficiency, they don’t work optimally when large externalities not considered. There is no real adjustment to the negative effects on pollution from burning fossil fuels including global warming. A carbon tax would allow for the free market to optimize the benefits for everyone.

One difficulty is determining the appropriate tax. This is difficult because there is no way to accurately calculate the exact impact of releasing a certain amount of carbon.  With the current limited scientific understanding of global warming and its relationship to carbon dioxide release along with our poor knowledge of fossil fuel pollutions, a true cost cannot be determined. It is also likely that the cost are surprising high and would not be accepted by the government or the public.

I propose a rising carbon tax equivalent to ten cents per gallon of gasoline that increases every two years by ten cents. This would allow for people and companies to adjust but still allow the country to move ahead. The money should be specifically directed towards helping regions negatively impacted by the tax such as West Virginia and Eastern Kentucky and towards reusable energy research and implementation. This would have many potential benefits. It would move America into a leadership position towards reducing greenhouse gases and global warming. A carbon tax will promote clean technologies that should create long term jobs and hopefully exports. Reducing demand for foreign oil will increase US energy independence and improve our balance of payments. 

The carbon tax has many advantages for the country and the world. It allows for the free market system to optimize economic benefits by taking into account externalities such as global warming. For the political left, it reduces US pollution, allows America to be a global leader in pollution control, and aids many poor rural areas affected by economic changes. The right can view this not as government regulation but as a plan to more fully utilize the free market taking into all the true costs associated with fossil fuel usage. The proposal will increase American technology in clean energy and improve security by reducing energy imports. It does this without increase general government spending or the federal deficit. 

The difficulty of the problem must not dissuade us, as the release massive amounts of carbon dioxide could potentially make the planet uninhabitable. The United States needs to once again be a leader by engaging other countries in the world in programs to reduce greenhouse gas emissions. We must lead by example starting with the proposed carbon tax. 

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