Thomas L. Friedman’s column in today’s New York Times, Show Us the Ball, should be must reading in the White House and on Capital Hill. Following up on a series of excellent columns urging passage of a revenue-neutral carbon tax, Friedman once again incisively states the case for a carbon tax. We quote some of the high points below, but the column should be read in its entirety and then forwarded widely.
Friedman begins by asking the right questions about cap-and-trade
Can cap-and-trade pass? Will it really work? And is it the best strategy, with all the bureaucracy it will require to monitor, auction emissions permits and manage the trading?
He then accurately characterizes cap-and-trade proponents as arguing “that it is preferable to a simple carbon tax because it fixes a national cap on carbon emissions and it ‘hides the ball’ — it doesn’t use the word ‘tax’ — even though it amounts to one,” and then makes it clear that game just isn’t going to work:
In the past two weeks, you could hear a chorus of Republicans, coal-state Democrats, right-wing think tanks and enviro-skeptics all singing the same tune: “Cap-and-trade is a tax. Obama is going to raise your taxes and sacrifice U.S. jobs to combat this global-warming charade, which many scientists think is nonsense. Worse, cap-and-trade will be managed by Wall Street. If you liked credit-default swaps, you’re going to love carbon-offset swaps.”
Friedman’s strategy is right on target, “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?” Friedman then describes America’s Energy Security Trust Fund Act of 2009, proposed by Congressman John Larson, and describes why it’s the way to go:
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.