THE ECONOMIC DISADVANTAGE..:

'Carbon tax' is sensible, and perhaps inevitable, advocate says: Dieter Helm of Oxford says climate change policy should focus not on carbon production, but carbon consumption. A tax on carbon-heavy activities places the emphasis where it belongs, he says.(Henry Chu, November 21, 2009, LA Times)

Do you feel a carbon tax is politically possible in the U.S.?

First of all, every major developed country faces the question of raising more taxes. So the question isn't, in the United States, do you have a carbon tax or not? It's, given possible taxes you could increase, is this a sensible one? It almost certainly is.

Secondly, is everybody else doing it? That's a very good protection for politicians. The answer is yes, they are.

And finally, does it deal with the China question? Yes, if it's also a border tax. The objection to climate change policy is you'll just lose your industry and you'll give competitive edge to China and other countries. Well, the border tax solves that problem. And that's politically very important here in Europe and, I suspect, even more politically important in the U.S.

So my hunch is yes.

...lies in not making the alternatives to oil more economically viable. But consumption taxes in America will replace, not augment, income taxes.

Posted by Orrin Judd at November 21, 2009 6:57 AM