by Dr. Roy Cordato
Senior Economist, Emeritas
1. New push for carbon dioxide tax — by conservative economists
This article from the Wall Street Journal reports on a recent push for a new carbon dioxide tax by some Republican/conservative economists, including Romney advisor and Harvard Professor Greg Mankiew and supply sider Art Laffer. Laffer in particular is calling for instituting the new tax as a revenue neutral tradeoff for lower income taxes. The dangers that could be ushered in through adding such an expansive and all-inclusive new tax to the current system, thereby introducing massive government growth, are not addressed. Does anyone really think that a “revenue neutral” tradeoff under this new tax regime would remain revenue neutral for more than the twinkling of an eye? Our last great attempt at revenue neutral tax reform was the Tax Reform Act of 1986, which went into effect in 1987. That was forgotten after about the first 5 minutes of the (first) Bush administration, which came to Washington in January 1989.
But let’s get to the heart of it. Any tax that is not completely draconian, would have absolutely no effect on global temperatures, presumably the point of CO2 taxes in the first place. In this excellent response to these pro-CO2 tax conservatives, The American Enterprise Institute’s Ben Zycher points out this irrefutable fact:
Let us shunt aside the very real continuing questions of the underlying climate science. Instead, if we assume that carbon dioxide drives harmful climate change, is it reasonable to predict that the adoption of a carbon tax would yield economic improvement relative to current policies?
Consider the direct policy goal of the environmental Left: An 80 percent reduction below 1990 levels of carbon dioxide emissions by 2050. (For the United States, this would result in per capita emissions equivalent to those sometime in the early or mid-19th century.) If such a reduction were to be achieved by the United States alone through any mix of policy tools, the effect on global temperatures 100 years hence would be effectively zero, an outcome about which there is no dispute. Moreover, increasing emissions from other nations, particularly still-developing countries such as China and India, will yield growing concentrations of greenhouse gases. Unilateral U.S. policies would be futile regardless of the assumption made about the underlying climate science.
Therefore, unilateral policies cannot be justified as a corrective to this purported externality. That is why any such policies, in order even theoretically to yield measurable effects, must be adopted by a number of nations sufficient to represent a significant proportion of world economic output.
For those who are interested in looking at this issue more deeply, I recommend a paper I wrote a number of years ago for the Reason Public Policy Institute. In it, I argue that not only does such a tax make no practical sense, but it is also based on unsound economic reasoning. It was published as part of a collection of three essays (beginning on page 29).
2. Ozone Report
The 2012 ozone season began on April 1 and each week during the ozone season this newsletter reports how many, if any, high ozone days have been experienced throughout the state during the previous week, where they were experienced, and how many have been recorded during the entire season to date. The ozone season will end on October 31. All reported data is from the North Carolina Division of Air Quality, which is part of the state’s Department of Environment and Natural Resources.
During the period August 27 to September 2 there were no reported high ozone readings on North Carolina’s ozone monitors. Since the beginning of the ozone season there have been 111 high ozone readings over 16 days on North Carolina monitors.
Click here for the Environmental Update archive.