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Wednesday, May 21, 2008

Time For A Carbon Tax?

Vox Pop (a Chicago Tribune blog) has an article up claiming it's time for a carbon tax in the US to reduce global warming, and discourage the use of carbon based fuels, and help ease oil consumption.

First, the writer ignores (nearly completely) the fact that any carbon tax will be passed on to consumers. Wake up, that's how it works, it becomes a "cost" and prices are adjusted to deal with it.

The other problems are three fold, as we've seen lately more scientific groups are questioning the underlying premises of global warming. Secondly, we have no coherent energy policy in place to reduce carbon based fuels use. Finally, we are no longer the driving force behind energy prices going up. Former third world countries like China and India are driving up the price of oil as their consumption grows.

On the first point, even if global warming is a hoax, development of altnerative, cleaner burning fuels isn't a bad idea. Forcing it through taxation, which is really forcing the choice of staying in the US and moving to China or India or Mexico, without a carbon tax is not great for staying competitive.

As far as energy policy, we need a system that lets energy companies get off of carbon based fuels without the litigation/NIMBY runaround they have now. Why are we building coal fired plants when nuclear are more efficient and less costly over their life? Because it costs less in litigation, and takes less time to get them on line.

States like Wisconsin have mandated 10-15% of electricity sold in the state come from "renewables" in the next decade or so. But the state is also a tort hell, and everytime someone wants to build a windmill the protectors of bats and geese show up to stall them. And let's face it, the north ain't a great place for solar farms.

We also need a policy that encourages domestic production of oil (as pointed out by Vox Pop), instead of hampering it at every turn.

On the final point, our increased taxes will have no effect on the increased use in newly emerging economies in Asia and Eastern Europe. In fact, if behavioral patterns of business hold up, a US Carbon Tax would probably INCREASE use in those countries, as companies expanded or moved to them, expanding their economies.

The biggest problem with the carbon tax debate is that the US editorials and environmental elitists don't get that it's not 1950 anymore. We aren't the only engine in the world economy like we were then. There are places other than the US and Western Europe who are also helping to drive oil prices, and polute the world. Those places will benefit from bad US energy policy, just like the Middle East and Hugo Chavez do today.

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