One Answer to Global Warming: A New Tax — Gregory Mankiw's Compelling Arguments in the NYT

Gregory Mankiw, former chairman of the current president’s Council of Economic Advisers, current adviser to presidential candidate Mitt Romney, Harvard professor and long-time advocate of a carbon tax presents a compelling argument for a carbon tax in the business section of today’s New York Times business section (Sept. 17).

The thrust of Mankiw’s op-ed, One Answer to Global Warming: A New Tax, is that there is a "broad consensus" among "policy wonks" that "if we want to reduce global emissions of carbon, we need a global carbon tax. Q.E.D." The problem is the "yawning gap that needs to be bridged … between policy wonks and political consultants."

Colorado_Smokestack_Sunset.jpgMankiw notes that using a Pigovian tax (one that internalizes the societal costs of economic activity) to address global warming is an old idea which was proposed as far back as 1992 by former President’s Reagan’s chief economic adviser. As our Supporters pages illustrate, backing for a carbon tax exists across the political spectrum. The problem is the "T" word; and that problem also extends across the political spectrum. As Mankiw puts it:

Those vying for elected office, however, are reluctant to sign on to this agenda. Their political consultants are no fans of taxes, Pigovian or otherwise. Republican consultants advise using the word “tax” only if followed immediately by the word “cut.” Democratic consultants recommend the word “tax” be followed by “on the rich.”

Mankiw contends that a carbon tax is preferable to other carbon-reducing options such as mandated increased fuel efficiency and cap-and-trade schemes. Unlike with cap-and-trade, the carbon tax revenues can be used to leave the distribution of total tax burden approximately unchanged. A carbon tax would also be much easier to negotiate on a global scale.

Mankiw concludes:

Convincing China of the virtues of a carbon tax, however, may prove to be the easy part. The first and more difficult step is to convince American voters, and therefore political consultants, that “tax” is not a four-letter word.

Mankiw is smart and persuasive. As an adviser to Mitt Romney, can he convince Romney to support a carbon tax?

Photo: Flickr / Fort Photo.

Comments

  1. Scott says

    The more I read about a carbon tax, the more sense it makes for our environment and our economy. Mankiw’s article was great. The only problem with it is that it makes no mention of the national security benefit we would derive by weaning ourself off our foreign oil addiction. That alone needs constant repeating. You folks should send a copy of this article to the office of every single congress man and woman.

  2. Wayne Kraus says

    Giving politicians a new tax only provides more money for political graft and corruption. If you really want to reduce CO2 emmissions, just stop using all fossil fuels now. You can work to where ever you go. you can go back to doing your laundry on a rock, nevfer fly in an airplane, never ride in a car. Let’s get Al Gore to practice this draconian life style.
    By the way after we convert 85% of our corn crop to biofuel what are we going to eat?
    Can we cover the entire earth with a shield of solar collectors? That should stop global warming if the sun never strikes the earth again!
    It also seems that the treehuggers are now more concerned about a 2 degree centigrade temperature increase than the risk of nuclear power. I think terrorists will like that choice.
    Sometimes I think the world has gone mad but then I realize it is only a small segment of the population and they have always been insane!
    Canb anyone of you actually think on your own?
     
     

  3. Terry Clausen says

    You say the science is settled, prey you are right. Because if wrong, anyone who profits and conspires in this can plan on being sued to the end. Thats a promise.

  4. Benedict J. Yappy says

    Damn, global warming Again.I’ve got a premise: If the global warming has become a problem, humans will have their way to solve it.Don’t believe me? see: if the global warming has caused sea level to cover New York City, you know what? I think The US will  nuclear warhead to every oil producing places, to end oil production FOREVER. Then they will build converters to convert water and carbon dioxide to water and oxygen, similar to what the plants do (the only thing prevented this to happen NOW is it’s way too expensive. When NYC is the price, the world worths it, right?). Our problem is settled.Silly, we do need airplanes. What we might NOT need in the future is airplanes WITH FOSSIL FUEL!! So, we still can fly without gas, only we haven’t figure out why. Hm. Mankiw is right.But the thing is, other country still love Arab, they don’t want to quickly transform cars to hidrogen cars. I am from Indonesia, imagine, would I sacrifice my prestige driving a Rolls Royce as a gift from my billionaire friend (supposed) to safe the earth? IT ISN’T THAT EASY. So, the whole world will put things to threaten US, such as they wouldn’t trade with the US if it don’t cut off gas taxes. SO, it is real hard.However, what Mankiw said can be taken, only softly, not as surprising as what he said. (I  am one of the joiners of National Science Olympiad on Economy in Indonesia, Makassar, 8 august 2008,  I stay in jakarta)

  5. says

    I think that the carbon tax issue makes sense to all of us. I am very much interesting in sensitive topics like environmental issues because I believe that each one of us should do our share to our environment. Mankiw’s article was great.

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Last modified: June 12, 2014