December 29, 2008

MR. LAFFER THROWS THE TRUE BELIEVERS A CURVE:

An Emissions Plan Conservatives Could Warm To (BOB INGLIS and ARTHUR B. LAFFER, 12/28/08, NY Times)

CONSERVATIVES don’t support tax increases that are veiled as “cap and trade” schemes for pollution permits. But offer us a tax swap, and we could become the new administration’s best allies on climate change. [...]

Even if the United States extracts more of its own oil — something it needs to do — it will still have only 3 percent of the world’s known oil reserves, and OPEC will still be the cartel with 70 percent of the world’s known oil reserves. Conventional discoveries and unconventional extractions (like shale oil) would improve our standing somewhat, but OPEC’s easily extracted oil makes its members the undisputed kings of crude.

If they’re the kings, we’re the vassals. As long as national security risks aren’t factored into the cost of gasoline and as long as carbon dioxide can be emitted without penalty, oil will continue to have an advantage over emerging fuels in the marketplace, and we’ll continue our ruinous addiction to it.

We need to impose a tax on the thing we want less of (carbon dioxide) and reduce taxes on the things we want more of (income and jobs). A carbon tax would attach the national security and environmental costs to carbon-based fuels like oil, causing the market to recognize the price of these negative externalities.


Key whingeing....

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Posted by Orrin Judd at December 29, 2008 9:36 AM
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