July 30, 2012

THE PIGOVIAN CONSENSUS:

Carbon tax gets unusual support (Steve Hargreaves, 7/30/12, CNNMoney)

While the carbon tax plan is drawing attention now, the idea itself is not new in conservative circles.

For example, a 2007 paper published by the American Enterprise Institute, an influential conservative group, argued that a carbon tax would be preferable to other ways of reducing greenhouse gases such as mandatory emission limits.

One of the authors was Kevin Hassett, now an adviser to presumptive Republican presidential nominee Mitt Romney. A spokesman for Hassett said he was unavailable for comment. A Romney campaign spokeswoman said the candidate does not support such a tax, saying it would push jobs overseas.

But Inglis and others like the idea because it would let cleaner forms of energy compete with dirtier forms without the need for the complicated mandates and tax breaks that currently support renewable energy.

It could also supersede pending greenhouse gas regulations from the Environmental Protection Agency -- something the business community and politicians of all stripes are leery of but which the courts say the agency must carry out.

While no current Republican lawmaker is thought to support the plan, other influential Republicans are on board.

"We have to have a system where all forms of energy bear their full costs," President Reagan's former Secretary of State George Shultz said in a recent interview with Stanford University News. Shultz now heads a task force at Stanford that is currently studying the feasibility of a carbon tax.

For Shultz there are many reasons to support such a tax. One is making fossil fuel energy sources absorb costs that are currently borne out by society at large, such as through higher health insurance premiums or Medicare bills caused by pollution-induced diseases.

Posted by at July 30, 2012 6:42 PM
  

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