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Friday, June 6, 2008

Tax carbon, don’t cap it

From an editorial on The Journal Times (Racine):

With the emphasis on global warming this week as the U.S. Senate debates a bill to limit carbon dioxide emissions, let us begin with the idea that the bill is fundamentally wrong.

It wants to impose a cap-and-trade system to control greenhouse gases. The government would allow a certain number of tons of carbon dioxide to be emitted every year — with the number diminishing as time passes — and an auction would allow companies with low emissions could sell their excess capacity to industries with high emissions.

The idea is to adhere to current science and cut carbon emissions below year 2000 levels in order to avoid the more extreme effects of global warming. There is a better method of doing this than the Senate plan, and that is with a tax.

It makes more sense, is more uniform, is much more honest, and would achieve the objective more efficiently.

A cap-and-trade system does not impose a real cost — indeed, as long as a dirty plant can buy credits it can continue operation — and thus interferes with market pressure for change. If all carbon emissions were taxed, all of us would have incentive to reduce our consumption of fossil fuels or choose other power sources. There would be more incentive for energy markets to develop alternatives. Better still, a carbon tax could be, and should be, segregated into a pool of money used for alternative energy research and development.

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