March 12, 2011


Carbon Taxes: An Opportunity for Conservatives (Irwin Stelzer, March 2011, Hudson Institute)

Forget about the battle over global warming. The earth either is or isn’t warming. If it is,

that is either the result of human activity or it isn’t. If it is the result of human activity,

either an American initiative will shame China and India into following suit, or it won’t.

No matter. The appropriate policy towards carbon emissions has little or nothing to do

with those controversies, or at least should not for conservatives. They should focus on

multiple opportunities to advance the conservative agenda:

advance national security interests by reducing dependence on oil imports;

stem the flow of dollars to the bad guys;

lower taxes on jobs;

eliminate the rationale for subsidizing uneconomic energy sources;

reduce the drive for regulation of the energy economy;

gain a revenue source that might be needed when the grand bargain over

entitlements is struck.

Not a bad list of gains to be had by rethinking conservative positions on carbon taxes. [...]

A tax on carbon, whether it takes the form of a levy on emissions, or a second-best

substitute, a tax on gasoline, would accomplish a host of conservative goals. First, by

reducing oil consumption it would reduce the security threat posed by the increasing

possibility that crude oil reserves will fall under the control of those who would do us

harm, either by cutting off supplies, as happened when American policy towards Israel

displeased the Arab world, or by using the proceeds of their oil sales to fund the spread of

radical Islam and attacks by jihadists. No one doubts that the execrable Hugo Chávez

survives only because we pay millions for Venezuelan oil, or that Saudi funding of

radical Islam is made possible in good part by our payments for the Kingdom’s oil. If we

curtail our use of oil we reduce our overall imports and, thereby, the flow of funds that end up in hostile hands. Needing less oil, we can concentrate the reduction in our demand

on supply sources we consider the greatest danger to our security and/or have the highest

externalities associated with their use.

A tax on carbon would make all of that possible. And need not swell the government’s

coffers — if we pursue a second, long-held conservative objective: reducing the tax on

work. It would be a relatively simple matter to arrange a dollar-for-dollar, simultaneous

reduction in payroll taxes as taxes on, say, gasoline, increased. Anyone interested in jobs,

jobs, jobs should find this an attractive proposition, with growth-minded conservatives

leading the applause.

Posted by Orrin Judd at March 12, 2011 5:54 AM
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