April 8, 2013


Why We Support a Revenue-Neutral Carbon Tax (GEORGE P. SHULTZ  AND GARY S. BECKER, 4/08/13, WSJ)

Americans like to compete on a level playing field. All the players should have an equal opportunity to win based on their competitive merits, not on some artificial imbalance that gives someone or some group a special advantage.

We think this idea should be applied to energy producers. They all should bear the full costs of the use of the energy they provide. Most of these costs are included in what it takes to produce the energy in the first place, but they vary greatly in the price imposed on society by the pollution they emit and its impact on human health and well-being, the air we breathe and the climate we create. We should identify these costs and see that they are attributed to the form of energy that causes them.

At the same time, we should seek out the many forms of subsidy that run through the entire energy enterprise and eliminate them. In their place we propose a measure that could go a long way toward leveling the playing field: a revenue-neutral tax on carbon, a major pollutant. A carbon tax would encourage producers and consumers to shift toward energy sources that emit less carbon--such as toward gas-fired power plants and away from coal-fired plants--and generate greater demand for electric and flex-fuel cars and lesser demand for conventional gasoline-powered cars.

Posted by at April 8, 2013 5:04 AM

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