It’s probably not news that the immediate prospects for a carbon tax aren’t great. I still think that it’s going to seem impossible until, fairly suddenly, it actually happens. Hope springs eternal.
In any case, there has been some news on the carbon tax front this month. Here’s the quick summary. The Climate Leadership Council, everyone’s favorite collection of Republicans who used to matter, released The Dividend Advantage, which provides an excellent and concise summary of 10 reasons why the fee and “dividend” approach that they propose is the best approach. I agree with everything in it. I particularly like point 5, about what they call “regulatory simplification.” I’ll only note that, while I don’t believe the term can be copyrighted, I have long called for a “grand bargain” that would put a price on carbon in exchange for eliminating some of the more cumbersome current air regulations.
If the CLC is not persuasive enough, another conservative group, the Alliance for Market Solutions, has its own report on a carbon tax, prepared by Ernst & Young. The E&Y analysis looks a carbon tax initially priced at $31/ton. E&Y recommends against the CLC dividend, concluding that making the most recent tax cuts permanent would have the greatest positive impact on long-term GDP.
Finally, we have a late entrant, a meat tax. A meat tax would respond to concerns that production of meat, particularly red meat, is a significant contributor towards climate change. I’m all for taxing externalities and I don’t doubt that meat production is more carbon-intensive than other food sources. However, it does appear that at least some of the claims about the carbon intensity of meat production may not be valid.
My vote is for the CLC tax (let’s call a spade a spade) and dividend model, but I’m open to anything that puts a price on carbon. (Should dishes that are charred cost more than steak tartare?)