This page, featuring authors, writers and “pundits” (newspaper and magazine columnists, principally), is one of half-a-dozen compiling expressions of support for carbon taxes (or more targeted taxes, e.g., on gasoline) by notable individuals and organizations. Use Navigation Bar at top of page to access other pages.
New York Times columnists
Many of the Times’ regular editorial columnists have supported a carbon tax. (Former editorial columnist, John Tierney, has written in favor of a carbon tax, but he no longer appears on the op-ed page. Bob Herbert left the Times in March 2011 after nearly two decades as columnist.)
Writing about Obama’s tepid response to the BP oil disaster in the Gulf Coast, Herbert wrote on June 1, 2010:
[W]henever the well gets capped, what we really need is leadership that calls on the American public to begin coping in a serious and sustained way with an energy crisis that we’ve been warned about for decades. If the worst environmental disaster in the country’s history is not enough to bring about a reversal of our epic foolishness on the energy front, then nothing will.
The first thing we can do is conserve more. That’s the low-hanging fruit in any clean-energy strategy. It’s fast, cheap and easy. It’s something that all Americans, young and old, can be asked to participate in immediately. In that sense, it’s a way of combating the pervasive feelings of helplessness that have become so demoralizing and so destructive to our long-term interests…
We also need a carbon tax. The current crisis is the perfect opportunity for our political leaders to explain to the public why this is so important and what benefits would come from it. (Our Epic Foolishness, June 1, 2010, emphasis added).
“Raise taxes on carbon emissions,” urged The Times’ most right-leaning columnist, on Nov. 30, 2006 (Waiting To Be Wooed). Although Brooks favored using the tax revenues to make tax cuts on dividends and capital gains permanent, a stance at odds with CTC’s progressive-tax-shift position, he at least grasped the need to reflect climate-change costs in fuel prices.
In 2009, Brooks wrote: “A crusade for economic self-restraint would have to rearrange the current alliances and embrace policies like energy taxes and spending cuts that are now deemed politically impossible. But this sort of moral revival is what the country actually needs.” (The Next Culture War, Sept. 29, 2009, emphasis added).
In a commentary on the 2012 State of the Union address, Brooks chided President Obama for ignoring the Peterson Foundation’s call to “tax fossil fuels to spur innovation,” among other recommendations. (Hope, But Not Much Change, Jan. 27, 2012).
In a critique of clean-tech subsidies during the 2012 presidential campaign, Brooks wrote: “Global warming is still real. Green technology is still important. Personally, I’d support a carbon tax to give it a boost. But he who lives by the subsidy dies by the subsidy. Government planners should not be betting on what technologies will develop fastest. They should certainly not be betting on individual companies.” (A Sad Green Story, Oct. 18, 2012, emphasis added.)
The Times influential economist-columnist (and economics Nobel laureate) has, curiously, shied from carbon-tax advocacy. During the run-up to the Dec. 2009 Copenhagen COP-15 session, Krugman attacked climatologist and cap-and-trade opponent James Hansen for allegedly failing to grasp that a robust permit-based emissions-control system would lead to the rising carbon price Hansen advocated. (Krugman badly underestimated Hansen’s economics acumen, in our view, as can be seen by reading any of Hansen’s pronouncements gathered on the Scientists page of this Web site or by viewing Hansen’s presentation at the Nov. 2010 Wesleyan Univ. Pricing Carbon conference.) Nevertheless, in a July, 2011 post on his Conscience of a Liberal blog, Krugman came out swinging for putting a price on carbon emissions:
Opponents of a strong policy to curb greenhouse gases tend to be fervent believers in the magic of market economies. Yet somehow their faith goes away when it comes to environmental issues. If you seriously believe in markets, you should believe that given the right incentives — namely, putting a price on emissions, through either a tax or a tradable permit scheme — the economy will find lots of ways to emit less. You should definitely not believe, as anti-environmentalists claim, that the result would be economic disaster. (The Answer, My Friend, July 19, 2011)
His has been the most influential and persistent journalistic voice for breaking U.S. oil dependence by taxing gasoline and for addressing climate change with a carbon tax. His most recent column, The Market and Mother Nature, on Jan. 9, 2013, placed a carbon tax in the politically viable context of fiscal and tax reform:
A carbon tax would reinforce and make both strategies [deficit reduction and climate stabilization] easier. According to a September 2012 study by the Congressional Research Service, a small carbon tax of $20 per ton — escalating by 5.6 percent annually — could cut the projected 10-year deficit by roughly 50 percent (from $2.3 trillion down to $1.1 trillion).
Although a carbon tax needs to grow far faster than CRS’s hypothetical tax — which would take 13 years to double to just $40/ton — Friedman at least shows no signs of backing off his long-time carbon tax advocacy.
Friedman’s Sept. 14, 2011 column in this vein, Is It Weird Enough Yet?, was classic. Friedman set the table:
[H]ere is the Texas governor rejecting the science of climate change while his own state is on fire — after the worst droughts on record have propelled wildfires to devour an area the size of Connecticut. As a statement by the Texas Forest Service said last week: “No one on the face of this earth has ever fought fires in these extreme conditions.”
There is only one effective, sustainable way to produce “green jobs,” and that is with a fixed, durable, long-term price signal that raises the price of dirty fuels and thereby creates sustained consumer demand for, and sustained private sector investment in, renewables. Without a carbon tax or gasoline tax or cap-and-trade system that makes renewable energies competitive with dirty fuels, while they achieve scale and move down the cost curve, green jobs will remain a hobby.
We need revenue to balance the budget. We need sustainable clean-tech jobs. We need less dependence on Mideast oil. And we need to take steps to mitigate climate change — just in case Governor Perry is wrong. The easiest way to do all of this at once is with a gasoline tax or price on carbon. Would you rather cut Social Security and Medicare or pay a little more per gallon of gas and make the country stronger, safer and healthier? It still amazes me that our politicians have the courage to send our citizens to war but not to ask the public that question.
Similarly, but more succinctly, is this passage from Friedman’s Nov. 28, 2010 column, Got to Get This Right:
We need to raise gasoline and carbon taxes to discourage their use and drive the creation of a new clean energy industry, while we cut payroll and corporate taxes to encourage employment and domestic investment.
The same sentiments appeared most recently on Aug. 5, 2012, under virtually the same headline, Get It Right On Gas:
[W]e also need to get the economics right. We’ll need more tax revenue to reach a budget deal in January. Why not a carbon tax that raises enough money to help pay down the deficit and lower both personal income taxes and corporate taxes — and ensures that renewables remain competitive with natural gas?
Friedman was both more expansive and more eloquent in The Price Is Not Right (April 1, 2009):
[I]f I had my wish, the leaders of the world’s 20 top economies would commit themselves to a new standard of accounting — call it “Market to Mother Nature” accounting. Why? Because it’s now obvious that the reason we’re experiencing a simultaneous meltdown in the financial system and the climate system is because we have been mispricing risk in both arenas — producing a huge excess of both toxic assets and toxic air that now threatens the stability of the whole planet.
Just as A.I.G. sold insurance derivatives at prices that did not reflect the real costs and the real risks of massive defaults (for which we the taxpayers ended up paying the difference), oil companies, coal companies and electric utilities today are selling energy products at prices that do not reflect the real costs to the environment and real risks of disruptive climate change (so future taxpayers will end up paying the difference).
Whenever products are mispriced and do not reflect the real costs and risks associated with their usage, people go to excess. And that is exactly what happened in the financial marketplace and in the energy/environmental marketplace during the credit bubble.
And our biggest energy companies, utilities and auto companies became dependent on cheap hydrocarbons that spin off climate-changing greenhouse gases, and we clearly have not forced them, through a carbon tax, to price in the true risks and costs to society from these climate-changing fuels.
“Destructive creation” has wounded both the Market and Mother Nature. Smart regulation and carbon taxation can heal both.
Since the opponents of cap-and-trade are going to pillory it as a tax anyway, why not go for the real thing — a simple, transparent, economy-wide carbon tax?
Representative John B. Larson, chairman of the House Democratic Caucus, has circulated a draft bill that would impose “a per-unit tax on the carbon-dioxide content of fossil fuels, beginning at a rate of $15 per metric ton of CO2 and increasing by $10 each year.” The bill sets a goal, rather than a cap, on emissions at 80 percent below 2005 levels by 2050, and if the goal for the first five years is not met, the tax automatically increases by an additional $5 per metric ton. The bill implements a fee on carbon-intensive imports, as well, to press China to follow suit. Larson would use most of the income to reduce people’s payroll taxes: We tax your carbon sins and un-tax your payroll wins.
People get that — and simplicity matters. Americans will be willing to pay a tax for their children to be less threatened, breathe cleaner air and live in a more sustainable world with a stronger America. They are much less likely to support a firm in London trading offsets from an electric bill in Boston with a derivatives firm in New York in order to help fund an aluminum smelter in Beijing, which is what cap-and-trade is all about. People won’t support what they can’t explain.
We also count a dozen columns urging gasoline and/or carbon taxation in 2006 alone, including Who’s Afraid of a Gas Tax? (“Americans not only know that our oil addiction is really bad for us, but they would be willing to accept a gasoline tax if some leader would just frame the stakes for the country the right way,” March 1, 2006). Friedman subsequently broadened his call to “a gasoline or carbon tax”: And The Color of the Year Is … (“You have to make sure that green energy sources … can be delivered as cheaply as oil, gas and dirty coal. That will require a gasoline or carbon tax to keep the price of fossil fuels up so investors in green-tech will not get undercut while they drive innovation forward and prices down,” Dec. 22, 2006).
Friedman kept the pressure on in 2007, with The First Energy President (“It means asking Americans to do some hard things [including] accepting a gasoline or carbon tax,” Jan. 5), and (A Warning From the Garden, Jan. 19):
“I don’t care whether it is a federal gasoline tax, carbon tax, B.T.U. tax or cap-and-trade system, power utilities, factories and car owners have to be required to pay the real and full cost to society of the carbon they put into the atmosphere. And higher costs for fossil fuels make more costly clean alternatives more competitive… And prices matter. They drive more and cleaner energy choices. So when the president unveils his energy proposals, if they don’t call for higher efficiency standards and higher prices for fossil fuels — take your socks off yourself. It’s going to get hot around here.”
In a 9,000-word cover story in the Times Sunday Magazine in 2007, Friedman stated his preference for a carbon tax over a cap-and-trade system:
The market alone won’t work. Government’s job is to set high standards, let the market reach them and then raise the standards more. That’s how you get scale innovation at the China price. Government can do this by imposing steadily rising efficiency standards for buildings and appliances and by stipulating that utilities generate a certain amount of electricity from renewables — like wind or solar. Or it can impose steadily rising mileage standards for cars or a steadily tightening cap-and-trade system for the amount of CO2 any factory or power plant can emit. Or it can offer loan guarantees and fast-track licensing for anyone who wants to build a nuclear plant. Or — my preference and the simplest option — it can impose a carbon tax that will stimulate the market to move away from fuels that emit high levels of CO2 and invest in those that don’t. Ideally, it will do all of these things. But whichever options we choose, they will only work if they are transparent, simple and long-term — with zero fudging allowed and with regulatory oversight and stiff financial penalties for violators. The Power of Green, April 15, 2007
Friedman reiterated his desire for a carbon tax later in 2007, while criticizing the carbon offsets fad: [W]hen you suggest a carbon tax or a higher gasoline tax — initiatives that would redirect resources and change habits at the scale actually needed to impact global warming — what is the first thing you hear in Congress? “Impossible — you can’t use the T-word.” A revolution without sacrifice where everyone is a winner? There’s no such thing. Live Bad, Go Green, July 8, 2007.
On May 21, 2008, Friedman opined: It baffles me that President Bush would rather go to Saudi Arabia twice in four months and beg the Saudi king for an oil price break than ask the American people to drive 55 miles an hour, buy more fuel-efficient cars or accept a carbon tax or gasoline tax that might actually help free us from what he called our “addiction to oil.” Imbalances of Power.
Eight days later, on May 29, 2008, Friedman argued for a “price floor” to “guarantee people a high-price of gasoline – forever.” As Friedman stated: “… the message going forward to every car buyer and carmaker would be this: The price of gasoline is never going back down. Therefore, if you buy a big gas guzzler today, you are locking yourself into perpetually high gasoline bills. You are buying a pig that will eat you out of house and home. At the same time, if you, a manufacturer, continue building fleets of nonhybrid gas guzzlers, you are condemning yourself, your employees and shareholders to oblivion.” Truth or Consequences.
Friedman’s Dec. 7, 2008 column, The Real Generation X, contained possibly his most full-throated call yet for a carbon tax (emphases added):
It makes no sense to spend money on green infrastructure — or a bailout of Detroit aimed at stimulating production of more fuel-efficient cars — if it is not combined with a tax on carbon that would actually change consumer buying behavior.
Many people will tell Mr. Obama that taxing carbon or gasoline now is a “nonstarter.” Wrong. It is the only starter. It is the game-changer. If you want to know where postponing it has gotten us, visit Detroit. No carbon tax or increased gasoline tax meant that every time the price of gasoline went down to $1 or $2 a gallon, consumers went back to buying gas guzzlers. And Detroit just fed their addictions — so it never committed to a real energy-efficiency retooling of its fleet. R.I.P.
If Mr. Obama is going to oversee a successful infrastructure stimulus, then it has to include not only a tax on carbon — make it revenue-neutral and rebate it all by reducing payroll taxes — but also new standards that gradually require utilities and home builders in states that receive money to build dramatically more energy-efficient power plants, commercial buildings and homes. This, too, would create whole new industries.
Friedman followed that up on Dec. 28 with Win, Win, Win, Win, Win …: “I believe the second biggest decision Barack Obama has to make — the first is deciding the size of the stimulus — is whether to increase the federal gasoline tax or impose an economy-wide carbon tax. Best I can tell, the Obama team has no intention of doing either at this time… But I’ve wracked my brain trying to think of ways to retool America around clean-power technologies without a price signal — i.e., a tax — and there are no effective ones. (Toughening energy-effiency regulations alone won’t do it.) Without a higher gas tax or carbon tax, Obama will lack the leverage to drive critical pieces of his foreign and domestic agendas… The two most important rules about energy innovation are: 1) Price matters — when prices go up people change their habits. 2) You need a systemic approach.”
His Hurricane Sandy cri de coeur, Will Climate Get Some Respect Now?, brilliantly connects the storm’s destructive ferocity to climate change, citing a warmer ocean, rising seas, more moist atmosphere, and the possibility that melting sea ice in the Arctic abetted the unusual atmospheric pattern that kept Sandy from moving back out to sea. His column concluded, “[W]e may need to invest in cleaner energy, impose a carbon tax or other curbs on greenhouse gases, and, above all, rethink how we can reduce the toll of a changing climate.” (Oct. 31, 2012)
Here’s a Kristof sampler from prior years: Extended Forecast: Bloodshed (April 12, 2008): “[T]he United States’ reluctance to confront climate change in a serious way — like a carbon tax to replace the payroll tax, coupled with global leadership on the issue – [is] as unjust as it is unfortunate.” In Search of Cheney’s ‘Virtue’ (“The best way to encourage [widespread implementation of energy efficiency] would be to impose a carbon tax, although a cap-and-trade system is a reasonable backup.” Aug. 20, 2007). Our Gas Guzzlers, Their Lives (“All this [climate-exacerbated drought and famine in Africa] makes it utterly reckless that we fail to institute a carbon tax or at least a cap-and-trade system for emissions.” June 28, 2007). Scandal Below the Surface (“We know what is needed: a carbon tax or cap-and-trade system, a post-Kyoto accord on emissions cutbacks, and major research on alternative energy sources,” Oct. 31, 2006). A Paradise Drowning (“We must encourage conservation and fuel efficiency, support alternative forms of energy like wind, solar and biofuels, and … adopt a carbon tax…,” Jan. 8, 2006).
When op-ed columnist Collins turned her attention to climate change, in early 2013, she zipped off some impressive lines:
There was a time … when the Republican Party was a hotbed of environmental worrywarts. The last big clean air act of the Bush I administration passed the House 401 to 21. But no more, no more. You’re not going to get any sympathy for controlling climate change from a group that doesn’t believe the climate is actually changing … It’s sort of ironic. These are the same folks who constantly seed their antideficit speeches with references to our poor, betrayed descendants. (“This is a burden our children and grandchildren will have to bear.”) Don’t you think the children and grandchildren would appreciate being allowed to hang onto the Arctic ice cap?
Collins acknowledged the Obama administration’s tightening of auto and appliance efficiency standards and then got down to business:
But a carbon tax/fee is the key to controlling climate change. That or just letting the next generation worry about whether the Jersey Shore is going to wind up lapping Trenton. (Cooling on Warming, March 27, 2013)
Burn, Baby, Burn (“The fairest and most efficient way to reduce greenhouse gas emissions would be with a carbon tax on all fossil fuels,” Feb. 7, 2006; similarly on April 23, 2006, in Cheer Up, Earth Day Is Over). In late 2006 Tierney relinquished his column to focus on science reporting. He featured CTC in his Jan. 24, 2007 blog.
NYT Economic Columnist David Leonhardt (“Economix”)
“The simplest idea in economics, I think, is that people respond to the incentives they are given… So if we have decided that we need to use less oil for our own good — which seems to be the case — we need big incentives to change our behavior… A substantial gas tax would be the simplest, with other taxes being cut to keep down the overall burden.” Buy A Hybrid, Save A Guzzler, Feb. 8, 2006.
“[I]f you put the economic advisers, from both parties, in a room and told them to hammer out solutions to the country’s big economic problems, they would find a lot of common ground. They could agree that doctors and patients need better incentives to choose effective medical care. They would probably hit upon education policies along similar lines, requiring that schools be held more accountable for what their students are, and are not, learning. They might suggest a carbon tax — a favorite idea of [former Bush chief economist Greg] Mankiw — to deal with global warming. The Economists are Writing Our Future, April 18, 2007.
“No wonder [with gas now at $4 a gallon] that Americans are changing their driving habits so quickly. With sales plummeting, General Motors said Tuesday that it would stop making pickup trucks and sport utility vehicles at four of its North American plants. The company is also considering selling its Hummer brand, an emblem of the megavehicle. Rick Wagoner, G.M.’s chairman, explained the moves by saying that he thought the shift toward more efficient cars was ‘by and large, permanent.’ The unyielding reality is that price matters, enormously. That’s all you need to know about the car market these days.” Big Vehicles Stagger Under the Weight of $4 Gas, June 4, 2008.
Times Economic Columnist Daniel Akst (“On The Contrary”):
“Let’s face it: nothing but drastically higher prices will deter most of us from consuming more carbon-based energy… Of course, it would be nice not to have to rely on cartels and circumstances to make us moderate our consumption. Hefty taxes on carbon-based energy … would be a much better approach.” The Good News About Oil Prices Is The Bad News, Sept. 17, 2006.
Wall Street Journal columnists and contributors
Business Columnist Holman W. Jenkins Jr.: “… walking upright, with knuckles no longer in proximity to the ground, are advocates — mostly economists — of a carbon tax. A carbon tax would be the efficient way of encouraging businesses and consumers to make less carbon-intensive energy choices. Government would not have to exercise an improbable clairvoyance about which technologies will pay off in the future. There’d be less scope for Congress to favor some industries over others purely on the basis of lobbying clout.” (Decoding Climate Politics, Jan. 24, 2007) Note: While Jenkins’ remarks should be taken with a heap of salt (he’s no climate advocate, to put it mildly), his praise for a carbon tax and vitriol toward the new enviro-corporate climate alliance are both striking.
Political Columnist Kimberly A. Strassel: (referring to corporate lobbying efforts for a cap-and-trade climate program): “What makes this lobby worse than the usual K-Street crowd is that it offers no upside. At least when Big Pharma self-interestedly asks for fewer regulations, the economy benefits. There’s nothing capitalist about lobbying for a program that foists its debilitating costs on taxpayers and consumers while redistributing the wealth to a few corporate players.” (If The Cap Fits, Jan. 26, 2007, not available on the Web).
Op-Ed Contributor Nicole Gelinas, (Contributing Editor to City Journal): At the end of the day, a strict cap-and-trade program would have the same effect as a carbon tax, one that’s high enough, eventually, to encourage switching to cleaner generation, but that’s gradually imposed over a decade so that companies have plenty of time to plan. Such a tax would make emissions more expensive; discourage carbon-intensive power generation; and it would allow the market to decide which environmentally more-friendly technologies would be competitive enough to take its place. A tax per ton of carbon would mean higher power prices, too, but without direct subsidies to developing nations by paying for their power-plant upgrades. Nor would a carbon tax create a new multibillion-dollar global commodity whose value would depend on political manipulation. The feds could use the revenues from such a levy to reduce other taxes—including dividend and capital-gains taxes further to spur the massive private investment needed to build the next generation of power generators—while ensuring that they’re also creating a political and regulatory climate to encourage such mass-scale construction. If it’s true that a global warming consensus really exists — and not just in press releases and speeches — politicians and business leaders wouldn’t be afraid to suggest such a tax. They would insist on it. A Carbon Tax Would Be Cleaner, Aug. 23, 2007
Washington Post columnists
E.J. Dionne (in 2011): Obama should put forward a plan of his own to close the long-term deficit. He should not be hemmed in by his negotiations with congressional Republicans to get the debt ceiling raised. They don’t hold the nation’s credit hostage anymore. He should lay out exactly what he would do and abandon his practice of making preemptive concessions to his opponents. That means Obama should not be shy about urging eventual tax increases, particularly on the wealthy. And let’s be clear: These would not be immediate tax hikes; they’d kick in a year or two from now. Any plausible plan should include at least $2 trillion to $2.5 trillion in new revenue over a decade [largely from additional taxes on the wealthy and super-wealthy]. A carbon tax, partly offset by tax cuts or rebates for middle-income and poorer taxpayers, could provide additional revenue. (Obama: Go Big, Long and Global, Aug. 21, 2011)
Anne Applebaum (in 2007): I no longer believe that a complicated carbon trading regime — in which industries trade emissions “credits” — would work within the United States … So much is at stake for so many industries that the legislative process to create it would be easily distorted by their various lobbies. Any lasting solutions will have to be extremely simple, and — because of the cost implicit in reducing the use and emissions of fossil fuels — will also have to benefit those countries that impose them in other ways. Fortunately, there is such a solution, one that is grippingly unoriginal, requires no special knowledge of economics and is easy for any country to implement. It’s called a carbon tax, and it should be applied across the board … (Global Warming’s Simple Remedy, Feb. 6, 2007)
Anne Applebaum again (in 2009): American politicians who really care about climate change — I’m assuming this includes our president, as well as a majority in Congress — should skip the summits and instead ask themselves why the oil and gas prices that started rising a couple of years ago (creating a boom in alternative-energy research) have once again dropped to an artificial low. Why artificial? Because the price of fossil fuels has never reflected their true cost, either environmental or political. It doesn’t reflect the cost of the U.S. military presence in the Middle East. It doesn’t reflect the cost of treating asthma. And it certainly doesn’t reflect the cost of rescuing bits of the coast of Florida that will be submerged by rising sea levels. Raise the taxes on fossil fuels to reflect those costs, and [T. Boone] Pickens’s [wind farm] project, along with many others, will once again be viable.” (The Summit of Green Futility, July 14, 2009)
Sebastian Mallaby: These days almost nobody asserts that global warming isn’t happening. Instead, we are confronted with a new lie: that we can respond to climate change without taxing and regulating carbon… We already have technologies to cut carbon… The problem is we don’t use them… What matters is not just the technologies we have but the incentives to deploy them. (A Dated Carbon Approach, July 10, 2006)
Automotive columnist Warren Brown: Why is it now more politically feasible to send our sons and daughters, brothers and sisters, husband and wives to foreign soil to fight and die for oil than it is for us to place higher taxes on the stuff at home to help reduce our wanton use of it? It’s time to tell Congress that we’re not stupid, not hopelessly blind or irrevocably self-centered. It’s time to demand that Congress give us a real energy policy, one that addresses industry and consumers, one that demands we do what we’ve historically done in times of crises — work together, sacrifice together to solve the problem. Bring Consumers into the Energy Equation, July 1, 2007.
Charles Krauthammer: Unfortunately, instead of hiking the price [of gasoline] ourselves by means of a gasoline tax that could be instantly refunded to the American people in the form of lower payroll taxes, we let the Saudis, Venezuelans, Russians and Iranians do the taxing for us — and pocket the money that the tax would have recycled back to the American worker. This is insanity. For 25 years and with utter futility (starting with “The Oil-Bust Panic,” the New Republic, February 1983), I have been advocating the cure: a U.S. energy tax as a way to curtail consumption and keep the money at home. On this page in May 2004 (and again in November 2005, I called for “the government — through a tax — to establish a new floor for gasoline,” by fully taxing any drop in price below a certain benchmark. The point was to suppress demand and to keep the savings (from any subsequent world price drop) at home in the U.S. Treasury rather than going abroad. At the time, oil was $41 a barrel. It is now $123. But instead of doing the obvious — tax the damn thing — we go through spasms of destructive alternatives, such as efficiency standards, ethanol mandates and now a crazy carbon cap-and-trade system the Senate is debating this week. These are infinitely complex mandates for inefficiency and invitations to corruption. But they have a singular virtue: They hide the cost to the American consumer. At $4, Everybody Gets Rational, June 6, 2008.
Financial Times Columnist Clive Crook: “If ever there were a case for the maxim, get prices right, this is it. The way to curb carbon emissions is to add the environmental cost of carbon to the price of energy. The current oil price offers a good opportunity: when it falls (as it probably will) a carbon tax could be used to set a floor, making the transition to correctly priced energy much easier. Once the price of energy is right, other decisions become simpler, or can be left mainly to the market. There is no need to legislate fuel economy standards or subsidise conservation and low-carbon forms of energy; no need for an emissions trading regime, with all the waste and complexity and gaming that that entails (witness Europe’s experience); no need to scapegoat oil companies or environmentalists; no need to mislead or pander. For sure, the politics is a challenge – but not, I am willing to bet, as hard as conventional wisdom insists. Carbon is bad: tax it and use the money to cut other taxes. A new kind of politician could do something with that.” Financial Times Online June 22, 2008.
Clive Crook (again in FT): “In the US, cap-and-trade was dead even before the midterm elections. The Obama administration plans to rely on regulation instead. [B]ut … this micro-regulatory approach will be costly. The bureaucratic overhead will be huge, as producers vie for waivers and other special treatment. Effort and resources will be misdirected… Where, then, should the government concentrate its efforts? No prizes for guessing the answer: introduce a carbon tax. … In the US, many dismiss this as a political impossibility. They are wrong. Whether the country likes it or not, with or without an effective climate change policy, Americans will eventually have to pay more in taxes. The state of the public finances decrees it. However you do the political calculations, this unpopular outcome is inevitable. Therefore, start measuring a carbon tax against the relevant alternatives. At worst, a moderate carbon tax would be no more indigestible than higher income taxes or other revenue-raising options. And, in every important way, it would be the best climate-change policy as well… Compared to EPA action, a carbon tax is simpler, more transparent, less susceptible to rent-seeking and more economical in bureaucratic overhead. It also provides an indicator around which future international co-operation could be organised and explained. After their break in Cancún, if the US and other governments want to get serious, this is where they should look.” Stop Talking and Start Taxing Carbon, Nov. 28, 2010. (emphasis added)
Clive Crook (now, late 2011, in Businessweek): Quantity targets enforced by treaty don’t foster effective cooperation, they hinder it… to succeed, measures to curb emissions need to be sustained for decades… Binding emissions targets are too rigid… The best instrument for coordinating climate-change efforts is the price of carbon… For most countries, the simplest and clearest way to hit the price target would be with an outright carbon tax. The economic benefits are well known: By letting markets work, a tax achieves a given amount of emissions abatement at the lowest cost. The world needs to cap its greenhouse gas emissions, but there’s no obligation to do this in the most expensive, painful or disruptive way. Climate-change campaigners made a great mistake early on in opposing this approach — arguing, in effect, that sin should be prohibited not taxed, and that cuts of a certain size had to be assured. The cost of this inflexibility is now apparent: Insist on known and guaranteed cuts in emissions, and the wheels of international cooperation turn too slowly. So far, explicit carbon taxes have not been widely adopted (though where they have been, as in British Columbia, they have worked). It’s not only environmentalists who aren’t enthusiastic. In many countries, especially the U.S., conservatives are bitterly opposed as well. A carbon tax, after all, is a tax. Yet with many countries in a fiscal crisis, a carbon tax is more attractive than before. A carbon tax could lift some of the burden from spending cuts and increases in other taxes. As this sinks in, what was once politically impossible may soon be merely hard. Free Markets, Carbon Tax Best Way to Fight Climate Change: View, Bloomberg Businessweek, Dec. 12, 2011.
San Francisco Chronicle columnist Carolyn Lochhead: “One day, someone’s going to put two and two together and discover that East Bay Rep. Pete Stark’s carbon tax could address global warming and budget troubles at the same time. San Francisco pols are ahead of the curve, proposing a gas tax — a close cousin of the carbon tax — to fight global warming… In policy circles, a carbon tax is a no brainer, embraced by lefties like Stark and conservatives like former Bush economic advisor Gregory Mankiw. It’s a highly efficient way to reduce demand for fossil fuels and induce alternative energy supplies by using market forces. That’s also why it gags politicians: it incorporates the true cost of fossil fuel consumption in prices. Polluting consumers would pay too.” Two Vultures, One Stone, Oct. 15, 2007.
Newark Star-Ledger Columnist Paul Mushine: “We need a new generation of clean energy that will enable us to be liberated from dangerous dependence on dictatorships, effective in worldwide competition and provide for a much cleaner and healthier future,” says [Gingrich's] Web site. These “alternative, renewable energies” that Gingrich is promoting sound the same as the mystery oil Pelosi’s pushing. Like ethanol, these fuels can be manufactured only with huge government subsidies. And those subsidies represent an indirect tax on drivers If we’re going to tax drivers, we might as well do it directly. This is a point upon which most free-market economists agree. Unlike politicians, economists are not up for election, so they can tell the truth about cutting oil imports. And the truth is if you want to cut imports, tax the hell out of gas. The imposition of so-called “Pigovian taxes,” named after the late economist Ar thur Pigou, generates lots of revenue that can be used to reduce other taxes, such as the income tax, that are much worse for economic growth. And such taxes also reduce what Pigou termed “externalities,” the externalities in this case being air pollution, traffic jams and reliance on unstable exporters. On Energy, Dems are Daffy, Newt is Nuts, op-ed, Star-Ledger, August 7, 2007.
Chicago Tribune Editorial Board Member Steve Chapman:
The free market is the best system ever created for providing what we want at the lowest possible cost. The way to get affordable amelioration of climate change is to put the market to work finding solutions. To achieve that, we merely need to make energy prices reflect the potential harm done by greenhouse gases. How? With a carbon tax that assesses fuels according to how much they pollute. Coal, having the highest carbon content, would be taxed the most, followed by oil and natural gas. The higher prices for the most damaging fuels would encourage people and companies to use them less and more of other types of energy, including nuclear, solar, wind and biofuels. This approach also would affect all sources — not just cars, which account for only one-fifth of all U.S. carbon dioxide emissions. Saving the Earth Sensibly, Chicago Tribune, April 12, 2007.
Economists almost unanimously agree that if you want to cut greenhouse gas emissions by curbing gasoline consumption, the sensible way to do it is not by dictating the design of cars but by influencing the behavior of drivers. If you want less of something, such as pollution from cars, the surest way is to charge people more for it. A carbon tax or a higher gasoline tax would encourage every motorist, not just those with new vehicles, to burn less fuel—by taking the bus, carpooling, telecommuting, resorting to that free mode of transit known as walking, or buying a Prius. A Wrong Turn on Saving Fuel – Which Energy Efficiency Plans Hold Up to Scrutiny?, reason.com, July 23, 2007.
[T]he GOP doesn’t have to surrender its principles to confront environmental reality. There is plenty of room for disagreement, for instance, about how to combat global warming. The method most congenial to personal and economic freedom is a carbon tax. Instead of putting the government behind favored forms of energy, as the administration likes to do, it would create strong incentives for people to find their own ways to reduce emissions. It would achieve maximum benefits at minimum cost. It could be revenue-neutral, if the receipts were used to pay for other tax cuts. A carbon tax is hardly a liberal idea. Among its proponents are Gregory Mankiw, who headed the Council of Economic Advisers under President George W. Bush, and Douglas Holtz-Eakin, John McCain’s chief economist during his presidential campaign. But Republican politicians have no interest. During hard economic times, that approach may work. But at some point, voters will conclude that global warming and other environmental problems demand solutions. And Republicans will be left wondering why they didn’t come up with any. Republicans vs. the Environment, June 16, 2011.
Atlanta Journal-Constitution editorial-page editor Cynthia Tucker (writing in the Baltimore Sun): The president should have told Americans years ago that the days of cheap gas were over. If the president had imposed a stiff tax on gasoline at the pump [after 9/11], American motorists would have grumbled, but we would have gotten over it. (Oiloholic Nation Has No Business Lecturing China, April 24, 2006)
Arizona Republic columnist Robert Robb: Economists have long preferred a carbon tax to a cap-and-trade regimen. A small tax would likely have a large effect. Once the infrastructure for collecting the tax is in place, an increased rate is just a vote away. Even with a small tax, carbon emissions would become an unpredictable variable cost, creating a large incentive to reconfigure production processes to reduce or eliminate them …Politicians frequently ignore the preferences of economists, since economists usually prefer a reduced role for the preferences of politicians … However, if serious action is to be taken on global warming, someone in the political class needs to start paying attention to them. (Cool It on Global Warming, Feb. 7, 2007)
New York Observer Columnist Nicholas von Hoffman: “When they talk about conservation at all — which is almost never — [politicians] talk in terms of new tax deductions when they ought to be talking about imposing new taxes. How about a heavy energy-consumption tax on McMansions?… Similar kinds of taxes could be imposed on whole classes of machines that pour filth into the atmosphere and consume frightful amounts of fuel.” (While Politicians Pander, Conservation Is Ignored, May 15, 2006) Although CTC seeks to tax all carbon emissions, not just those from uses deemed excessive, we share with von Hoffman the view that taxing carbon is more important than subsidizing carbon alternatives.
Toronto Star columnist David Olive: Carbon taxes are coming … The carbon tax [is] the single most powerful tool for encouraging conservation of the planet’s finite coal, oil and natural gas resources, and for diminishing the role of CO2 emissions in destroying the earth. Only Carbon Taxes Can Rekindle Conservation, March 9, 2007.
The New Republic
In theory, if the United States ever got serious about tackling climate change and put a price on carbon–through either a cap-and-trade system or a simple carbon tax–we could put an end to much of this anguished contrarianism. Shoppers concerned about melting icecaps wouldn’t have to scratch their heads and wonder how many food miles a tomato has traveled, or fret about whether a tightly packed ship full of produce from Chile emits more carbon than having everyone haul groceries in their SUVs from the local farm. The climate impact would be reflected in the price, and markets could work their magic. Simple enough.OK, so it wouldn’t be that simple. Carbon pricing and markets alone won’t, for instance, produce better public transportation. Nor will they put an end to the vast array of government policies that subsidize suburban sprawl–which include, among other things, easy financing for roads, tax deductions for large McMansions, and various zoning regulations that can prevent mixed-use living and disfavor walkable town centers. Nor, for that matter, will they get rid of the federal subsidies that prop up the nation’s agricultural system. (On the other hand, a carbon tax might convince voters that these policies should be altered.) Second-Guessing the Conventional Environmental Wisdom — It’s Not Easy Being Green, Bradford Plumer, assistant editor, The New Republic on-line, Aug. 27, 2007.
Blogger Megan McArdle (“Asymmetric Information”) used the “local food” quandary to discourse on the capacity of carbon taxes to provide honest information on the true carbon costs of consumer purchases: How much carbon goes into the food we eat? Recently I’ve been beseiged by buy-local fanatics, claiming that if I eat Guatamalan raspberries, I’m killing the earth with the carbon needed to transport them… [T]his … cause[d] me to try to figure out how much energy the various options consume, and frankly, the answer is, I have no clue. There are so many second, third, and eighth order effects that my brain is spinning… Not only has no one done a good analysis of this subject; I don’t think anyone could… That’s why if we’re serious about cutting carbon dioxide emissions, we need a carbon tax, and not CAFE, or other sorts of piecemeal regulatory solutions. The Perils of Buy Local, Oct. 15.
McArdle’s column, including her invocation of free-enterprise philosopher Friedrich Hayek, is worth reading in full.
The Nation published a special issue Surviving the Climate Crisis: What Must Be Done on May 7, 2007. It included a strong editorial, Going Green, stating that in order to reach the “necessarily ambitious goal: 80 percent emission reduction in carbon emissions from their 1990 levels by 2050:
we’ll have to discourage emissions by putting a price on polluting gases like methane and carbon. The best way to do that is through taxation, which would be offset by tax breaks to soften the impact on poor and middle-class households and to encourage green job growth and investment. But such ideas face formidable resistance from a political establishment beholden to entrenched interests–the oil and coal industries–that stand to lose out. Those industries have sunk billions of dollars in investments that would depreciate in value if real carbon reduction targets were achieved. Thus, they fight tooth and nail with lies and canards to keep things as they are.
In the same issue of The Nation, financial journalist Doug Henwoodwrote “Given the risk that a climate catastrophe could hit soon and suddenly … we may not have time for mass movements to develop and force elites to do the right thing. They’ve got to get started now, or all could be doomed. But … there are problems with their favorite strategy: cap-and-trade schemes… Already an entire industry has grown up around the trading system — analysts and brokers and traders who hope to make money from the scheme but contribute not much of anything to saving the planet. Also, cap-and-trade permit prices are tremendously volatile, more so even than the stock market. Volatility makes long-term planning very difficult. A far better approach would be to tax carbon. A carbon tax would be simple — gasoline, coal and other fuels would be taxed based on their carbon content — and nearly impossible to evade. It could be introduced quickly, unlike the multiyear phase-in of the complicated EU cap-and-trade system. The tax rate could start low and then increase, to allow energy users to adjust. Unlike the market volatility of CO2 and SO2 permit prices, a carbon tax would be predictable, making it much easier for businesses and consumers to plan ahead. And as Charles Komanoff of the Carbon Tax Center argues, at least part of the proceeds of the tax could be rebated to poor and middle-income households through the income tax system, neutralizing any inequities.” Cooler Elites, May 7, 2007 issue.
The New Yorker
In “Paying For It,” (December 10, 2012) published in the aftermath of Hurricane Sandy, New Yorker science writer Elizabeth Kolbert forcefully makes the case for a carbon tax both as a way to create the incentives needed to reduce carbon pollution and as a substantial source of revenue, preferable to other kinds of taxes. She explains how the “polluter pays” principle applies to carbon taxes:
One way to think about global warming is as a vast, planet-wide Pigovian problem. In this case, the man pulls up to a gas pump. He sticks his BP or Sunoco card into the slot, fills up, and drives off. He’s got a full tank; the gas station and the oil company share in the profits. Meanwhile, the carbon that spills out of his tailpipe lingers in the atmosphere, trapping heat and contributing to higher sea levels. As the oceans rise, coastal roads erode, beachfront homes wash away, and, finally, major cities flood. Once again, it’s the public at large that gets left with the bill. The logical, which is to say the fair, way to address this situation would be to make the driver absorb the cost for his slice of the damage. This could be achieved by a new Pigovian tax, on carbon.
Noting that “as Washington edges toward the fiscal cliff, it has become obvious to just about everyone, except maybe House Republicans, that Washington needs more revenue,” Kolbert points out recent research showing the fiscal benefits of carbon taxes:
…the Congressional Research Service reported that, over the next decade, a relatively modest carbon tax could cut the projected federal deficit in half. Such a tax would be imposed not just on gasoline but on all fossil fuels—from the coal used to generate electricity to the diesel used to run tractors—so it would affect the price of nearly everything, including food and manufactured goods. To counter its regressive effects, the tax could be used as a substitute for other, even more regressive taxes, or, alternatively, some of the proceeds could be returned to low-income families as rebates (although, of course, this would cut down on the amount that could go toward deficit reduction).
Then she notes the broad bipartisan and even business support for carbon taxes:
Liberals like Robert Frank, of Cornell, and Paul Krugman, of Princeton, support the idea, as do conservatives like Gary Becker, at the University of Chicago, and Greg Mankiw, of Harvard. (Mankiw, who served as chairman of the Council of Economic Advisers under President George W. Bush and as an adviser to Mitt Romney, is the founding member of what he calls the Pigou Club.) A few weeks ago, more than a hundred major corporations, including Royal Dutch Shell and Unilever, issued a joint statement calling on lawmakers around the globe to impose a “clear, transparent and unambiguous price on carbon emissions,” which, while not an explicit endorsement of a carbon tax, certainly comes close. Even ExxonMobil, once a leading sponsor of climate-change denial, has expressed support for a carbon tax. “A well-designed carbon tax could play a significant role in addressing the challenge of rising emissions,” a spokeswoman for the company said recently in an e-mail to Bloomberg News.
But she laments:
One key player who has not embraced the idea is Barack Obama. The White House spokesman, Jay Carney, was asked about the tax last month, en route, as it happens, to visit storm-ravaged areas of New York with the President. “We would never propose a carbon tax, and have no intention of proposing one,” Carney told reporters. This was taken by some to mean that Obama was opposed to the tax and by others to mean just that he was not going to be the one to suggest it.
In either case, the White House is making a big mistake. Pigovian taxes are rarely politically popular—something they have in common with virtually all taxes. But, as Obama embarks on his second term, it’s time for him to take some risks. Several countries, including Australia and Sweden, already have a carbon tax. Were the United States to impose one, it would have global significance. It would show that Americans are ready to acknowledge, finally, that we are part of the problem. There is a price to be paid for living as we do, and everyone is going to get stuck with the bill.
Veteran New Yorker commentator Hendrik Hertzberg wrote in the Feb. 13 & 20, 2006 issue, “The best way to encourage conservation — and the true sign of a serious energy policy — would be imposing a hefty gasoline tax and raising mandatory fuel-efficiency standards.”
Hertzberg broadened this theme in the March 23, 2009 issue: “If the economic crisis necessitates a second stimulus—and it probably will—then a payroll-tax holiday deserves a look. But it’s only half a good idea. A whole good idea would be to make a payroll-tax holiday the first step in an orderly transition to scrapping the payroll tax altogether and replacing the lost revenue with a package of levies on things that, unlike jobs, we want less rather than more of—things like pollution, carbon emissions, oil imports, inefficient use of energy and natural resources, and excessive consumption. The net tax burden on the economy would be unchanged, but the shift in relative price signals would nudge investment from resource-intensive enterprises toward labor-intensive ones. This wouldn’t be just a tax adjustment. It would be an environmental program, an anti-global-warming program, a youth-employment (and anti-crime) program, and an energy program. (emphasis added)
In a New Yorker column entitled “Carbon Taxes vs. Cap-and-Trade” (1/9/09), Steve Coll noted Exxon chairman Rex Tillerson’s speech endorsing a $20/T CO2 tax and suggested that President Obama and Congress consider it.
Newsweek columnist Fareed Zakaria: “Both problems [clean energy's insufficient funding and insufficient incentives] can be solved by the same simple idea—a tax on spewing carbon into the atmosphere. Once you tax carbon, you make it cheaper to produce clean energy. If burning coal and petrol in current ways becomes more expensive because of the damage they do to the environment, people will find ways to get energy out of alternative fuels or methods. Along the way, industrial societies will earn tax revenues that they can use, in part, to subsidize clean energy for the developing world. It is the only way to solve the problem at a global level, which is the only level at which the solution is meaningful. Congress is currently considering a variety of proposals that address this issue. Most are a smorgasbord of caps, credits and regulations. Instead of imposing a simple carbon tax that would send a clear signal to the markets, Congress wants to create a set of hidden taxes through a “cap and trade” system. The Europeans have adopted a similar system, which is unwieldy and prone to gaming and cheating.” The Case for a Global Carbon Tax, April 16, 2007.
Newsweek columnist Robert J. Samuelson: “If we’re going to use price to try to stimulate those new technologies, let’s at least do it honestly. Most economists think that a straightforward tax on carbon would have the same incentive effects for alternative fuels and conservation as cap-and-trade without the rigidities and uncertainties of emission limits. A tax is more visible, understandable and democratic. If environmental groups still prefer an allowance system, let’s call it by its proper name: ‘cap and tax.’” Let’s Just Call It ‘Cap and Tax’, June 9, 2008.
Reason Magazine Science Editor Ronald Bailey: “The problem with air pollution—and global warming is a form of air pollution—is that I don’t see a good, easy way to privatize it. The transaction costs are too large. And if you can’t privatize it, you have to regulate it. So now the question is: What’s the least bad way to regulate? And that is why I’ve come out in favor of a carbon tax….For consumers, for inventors, for innovators, a tax offers price stability in a way that the cap-and-trade markets don’t. For example, in the sulfur dioxide market, sulfur permits have ranged in price from $50 a ton to over $1,000 a ton. And for sulfur dioxide, it’s a smaller market. A carbon market would encompass the world.” Reason.com July 2008
Katherine Ellison (The Mommy Brain): “What our kids need to know most is that adults are acting like grown-ups… If we want to show our kids we mean business about global warming, let’s start by ponying up for a carbon tax. Let our children watch us demand this from Washington with the courage and force of the civil rights movement.” (Global Warming-era Parenthood, Los Angeles Times, Dec. 23, 2006)
Bill McKibben: “There’s another way of saying what is missing here. Almost every idea that might bring us a better future would be made much easier if the cost of fossil fuel was higher—if there was some kind of a tax on carbon emissions that made the price of coal and oil and gas reflect its true environmental cost.” (How Close to Catastrophe?, New York Review of Books, Nov. 16, 2006.) McKibben, author of the classic The End of Nature and a supremely effective and engaged climate activist, has also advocated for carbon taxes in articles in Orion, Grist, Mother Jones and elsewhere.
Gristmill columnist David Roberts: A carbon tax is a huge deal, a game-changer, and if it’s taking root, even tenuously, it needs to be nurtured. Is This the Right Time to Attack Dingell?, June 2007.
Former George W. Bush speechwriter David Frum: Writing in The Wall Street Journal on Nov. 9, 2006, Frum urged Bush to send Congress a carbon-tax bill. In his 2008 book, Comeback: Conservatism That Can Win Again, Frum pressed carbon-tax advocacy at greater length:
There is a simpler and better way to encourage consumers to conserve while denying income to producers: Tax those forms of energy that present political and environmental risks — and exempt those that do not. That tax will create an inbuilt price advantage for all the untaxed energy sources, which could then battle for market share on their competitive merits. What would such a tax look like? … It would look exactly like the carbon tax advocated by global-warming crusaders…You don’t have to believe that global warming is a problem to recognize that a carbon tax is the solution. Under the umbrella of a permanent disadvantage for fossil fuels, markets could figure out freely which substitutes made most sense. (p. 129)