A Carbon Tax Twofer. A Meat Tax? No, Sir.

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 taxA 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?)

6 thoughts on “A Carbon Tax Twofer. A Meat Tax? No, Sir.

  1. I’m all for taking immediate climate action even if it means far from perfect proposals based on an awful lot of compromise.

    Still, I just can’t imagine supporting any zero sum proposal where climate benefits come at the expense of any increases in conventional air pollutants, given how much more harmful these pollutants are to human health and the environment and their disproportionate impacts on certain communities and ecosystems.

    At the moment, I think we’ll have to settle for the exact opposite approach, as imperfect as it is – fighting like hell to bend the curve on coal usage any way we can, applying downward pressure through CAA regulation and making the transition to zero emissions energy as smooth as possible through subsidies and otherwise. It’s messy and economically imperfect to say the least. But a poorly designed carbon tax? No, thanks.

  2. I agree with Mr. Isaacson, and urge particular caution regarding any over-arching endorsement of “regulatory simplification”. Looking ahead suggests, if anything, a potential need for greater regulatory savvy and complexity. For example, do you push for a more sophisticated approach to the now conventional prescription for oxidation catalysts on power plant smokestacks (which convert one pollutant, CO, to CO2)? Perhaps that’s not the right way to go for power plants far removed from population centers, where localized CO is not a problem, but where the resultant CO2 would add to the global problem…
    The Devil here is in the details, at a time when the rhetoric grows increasingly impressionistic.

  3. Thank you both for your comments, but neither of you have persuaded me. A tax on carbon will have huge benefits for conventional pollutants and we can certainly dispense with a number of regulations that, in my view, have been tremendously inefficient ways of regulating, even apart from the climate issue and the need to find support wherever we can get it.

  4. OK. Can I persuade you that the much larger problem is getting back quickly to a Congress and Administration that are committed to at least head in the right direction rather than accelerate in the wrong direction?

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