[FoRK] Why is a carbon tax off the table?

Russell Turpin russell.turpin at gmail.com
Wed Jun 9 19:58:01 PDT 2010


After the past two months, it should be pretty clear to everyone that
oil has large externalities, and not just in mideast foreign policy.
Coal's environmental impact may not be as obvious, but is also
serious. So why is a carbon tax still off the political table? The
idea, of course, is to eliminate all other alternative energy
subsidies and rebates for energy savings, relying entirely on the
increment in long-term projected cost of fossil fuels to encourage
both of those. My back of the envelope calculations are that a carbon
tax equivalent to $50/bbl of oil would bring the US government over a
trillion dollars annually, so there are significant government revenue
implications as well.

Yes, the cost of natural gas, gasoline, heating oil, and petroleum
products would all go up, to about what they were when oil prices
peaked. As well as all services and products that depend on these. The
idea is that that would be a "long-term promise," to encourage
alternatives. The price of electricity would go up, initially, moreso
than when oil prices peaked, because the tax applies to coal as well.
But the proposed tax isn't on watts, just on fossil fuels. If you
believe in technology, that is a solvable problem. Better sooner than
later.

Yes, the Saudis would yelp like scalded dogs. Yes, some good guys
would be hurt also. The airlines. But they already survived those
prices once. The Canadians.

OB DISCLAIMER: Moving to the gulf coast. Get monthly oil royalty. As
they say in football: offsetting penalties.


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