Posted by Jonathan Adler:
"Raise Wages, Cut Carbon":
http://volokh.com/archives/archive_2009_05_10-2009_05_16.shtml#1242276380
Conservative House members Jeff Flake (R-AZ) and Bob Inglis (R-SC),
along with Rep. Dan Lipinski (D-IL), have [1]introduced an alternative
to the cap-and-trade proposal developed by House Democrats: [2]HR
2380, the "Raise Wages, Cut Carbon" Act of 2009. Their proposal is for
a carbon tax that will gradually increase over time, offset by a
reduction in payroll taxes. Here's Rep. Flake's explanation:
If there�s one economic axiom, it�s that if you want less of
something, you tax it. Clearly, it�s in our interest to move away
from carbon. But if we�re going to take the step of taxing carbon,
that needs come with commensurate tax relief.
This legislation forces us to have an honest debate about
protecting the environment, rather than simply raising more revenue
for the federal government. Further, we shouldn't put ourselves in
the position to decide what industries, whether it be nuclear or
wind or solar, come out on top. Let's face it, government just
isn't very good at making these choices.
You can be agnostic on the question of global warming and still
recognize that, as a country, we need to move away from carbon.
Republicans have articulately made the case that the U.S. needs to
become energy independent, but the truth is that as long as we rely
so heavily on fossil fuels, it's going to be awfully tough to get
there from here.
I've been arguing that a revenue-neutral carbon tax is preferable to
cap-and-trade for some time (see [3]here and [4]here). The real
dealing has yet to begin, and already the House cap-and-trade bill is
being [5]watered down to [6]accommodate corporate interests, and it
will only get worse. I have no illusions about the likelihood of a
"clean" carbon tax bill emerging from Congress, but I believe
cap-and-trade is inherently more vulnerable to special interest
manipulation -- a problem made worse since so [7]few people understand
what cap-and-trade means. As actually implemented, cap-and-trade is
also less likely to spur the sort of innovation necessary to meet even
less-ambitious climate targets, particularly if Congress insists on
combining it with energy portfolio standards that constrain the
market's ability to shift toward the most efficient means of emission
reductions. So, in the case of carbon, it's time to consider a
revenue-neutral tax.
References
1. http://www.mcclatchydc.com/homepage/story/68130.html
2. http://flake.house.gov/UploadedFiles/revenue-neutral-carbon-tax.pdf
3. http://volokh.com/archives/archive_2008_12_28-2009_01_03.shtml#1230481897
4. http://www.volokh.com/posts/1177606109.shtml
5.
http://www.washingtonpost.com/wp-dyn/content/article/2009/05/05/AR2009050500350.html
6.
http://washingtontimes.com/news/2009/may/04/green-lobby-guides-democrats-on-climate-bill/
7.
http://www.rasmussenreports.com/public_content/politics/environment/congress_pushes_cap_and_trade_but_just_24_know_what_it_is
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