Carbon: All tax, no benefit

The Obama administration’s decision to use its regulatory authority to regulate carbon emissions has led to renewed interest in a carbon tax as a more effective alternative. Some in the media and business community are trying to give new life to a carbon tax.

Giving Congress the power to tax carbon would be analogous to giving a drunk title to a whiskey distillery. It would be a triumph of hope over experience. Our fiscal problems are a result of Congress’ lack of spending discipline. Even if Congress could be trusted not to abuse a carbon-taxing mechanism, such a tax would represent all cost and no benefit.

Even the Times Dispatch Editorial Page supports such a tax on the basis of “the scientific consensus about humanity’s role in climate change.” That statement is meaningless because all scientists agree that human activities impact the climate system. The unanswered scientific question is how much?

The so-called consensus that human activities are responsible for most of the warming in the past 50 to 60 years has been shown to be bogus, an illusion created by climate zealots. In the May 27 Wall Street Journal, Joseph Bast and Roy Spencer thoroughly discredited the illusion of a consensus. And Richard Tol, a lead author for the Intergovernmental Panel on Climate Change (IPCC), recently said “’The 97 percent estimate is bandied about by basically everybody. I had a close look … As far as I can see, the estimate just crumbles when you touch it. None of the statements … are supported by the data… . The 97% is essentially pulled from thin air, it is not based on any credible research whatsoever.”

The questions of human contribution and natural variability are no closer to being answered than they were a decade ago. What has become clearer and acknowledged by the IPCC is that the climate system is less sensitive to emissions than previously claimed. Relying on models known to be flawed to advocate a radical tax policy is a dangerous act of folly.

Dr. Benjamin Zycher of the American Enterprise Institute analyzed the carbon tax proposed a few years ago by Rep. Henry Waxman, D-Calif. Using a model developed by the National Center for Atmospheric Research, he concluded that “an immediate cut in U.S. emissions by half would reduce global temperatures a century from now by 0.1 degrees,” with a standard deviation of 0.11 degrees. He observed that a policy reducing greenhouse gas emissions 50 percent is a fantasy and that “a carbon tax producing that outcome would offer no benefit, and so cannot improve efficiency.”

Zycher also pointed out that such a tax would be inconsistent with climate science because the effect of increasing greenhouse gas concentrations is logarithmic, not linear. His bottom line, “Because the tax would be hidden in the prices of goods and services, it would obscure rather than clarify the cost of government, a ‘fiscal illusion’ effect inconsistent with the pursuit of fiscal discipline.”

Last year the George C. Marshall Institute published “A Skeptical Look at the Carbon Tax,” by James V. DeLong. DeLong identified the virtually unending practical problems of implementing a carbon tax and why a coalition of environmentalists, crony capitalists and government dependents will shape its provisions in ways that undercut any beneficial effects and accentuate its harmful side.

And, consistent with Zycher’s analysis, a carbon-tax regime that doesn’t include China, India and other developing countries will have only a “miniscule effect, if any, on global temperatures.” It is extreme naiveté to believe that China and other developing countries will adopt a carbon tax, if only we will lead.

Germany has been the most aggressive European Union nation in attempting to reduce greenhouse gas emissions. In the process, it has produced the highest electricity rates in the EU, caused private investment to go elsewhere and crippled its economy. The U.S. on the other hand, thanks to innovation, private investment and the natural gas boom, has lowered its emissions below 2005 levels.

A carbon tax may be an elegant intellectual theory, but it is a tool for political mischief that is best left to economic discussions and journals.


Originally published by the Richmond Times Dispatch at

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