Thursday 10 November 2011

Why Not a Carbon Tax? Some thoughts from my students

I assigned parts of my book to my students in my climate change seminar, and challenged them to come up with arguments against a carbon tax, or at least some suggestions on how to implement a carbon tax. They rose to the challenge. Here are some of the best arguments:

A carbon tax needs to be part of comprehensive tax reform, not a stand-along policy. A carbon tax simply is not politically feasible at this point, except if it is offered as part of a comprehensive package of tax reforms aimed at lowering overall tax burden. Income taxation in Canada is too complicated, and in the US is inexcusably complex. A carbon tax to displace some income taxation would be a good thing.

A carbon tax only reinforces the idea that climate change is going to cost people money. There is considerable research now that suggests that people are choosing to discount the costs of climate change because they see it as an unambiguous cost. But if climate policy were more about developing exciting new breakthrough technologies such as fusion, then maybe people would be more willing to engage with the issue instead of pushing it into the "it's too depressing to think about" category.

A carbon tax could be accomplished anyway by focusing on co-pollutants instead of carbon dioxide. Focusing on climate change is that it detracts from the other problems from polluting industries, particularly stemming from coal-fired power plants. The irony is that we just focused on reducing pollution, we would almost certainly reduce greenhouse gas emissions as well.

It is kind of interesting that all of the suggestions I get, and all of the critiques that I get about a carbon tax somehow tie into psychology. Be it "people just don't like taxes," or "people have trouble understanding climate change," or anything else, it all comes back to some cognitive gap when it comes to climate change or taxes.

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