WE ARE ALL PIGOVIAN NOW:

We already know that we use more energy from oil, gas and coal than we really need. (America consumes the equivalent of about 48 barrels of oil per person per year; Germany, with the healthiest economy in Europe, consumes just 26.) We know that lower consumption would make us less dependent on other countries for energy, a goal every president since Richard Nixon has pursued. We know that oil and coal produce air pollution, which we'd like to reduce. And we know that those fuels emit carbon dioxide, which contributes to global warming.

Economists call the hidden costs of energy consumption -- the prices of climate change, pollution and national security -- "externalities." They're real costs, but they're not included in the price of the gasoline you put in your car or the electricity you use at home.

Even the federal gasoline tax that's now levied doesn't come anywhere near covering its purpose of paying for highways. The gas tax has been stuck at about 18 cents a gallon since 1993; if it had risen with inflation over those 20 years, it would be about 30 cents.

A federal carbon tax, though, would apply to more than just gasoline. It would be levied on any fuel that produces carbon dioxide emissions. That means it would fall heavily on coal, less heavily on oil and only lightly on natural gas. It would make energy efficiency more valuable and alternative energy (like wind power) more competitive.

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