Wednesday, June 12, 2013

Carbon taxation in all its simplicity

I have been doing the nefMythbusters course. There is a post over on Quakernomics about the course (Quakers are involved, along with trade unionists &c).

Here is my comment on a post posing a question about taxation:

Clearly, all taxation shapes the activity going on in the economy, whether intended or not, because it makes that activity more expensive. The old window tax was an example of unintended consequences from a tax, since in taxing windows as a proxy for value of a house, people bricked up windows to avoid the tax.

A carbon tax is the first and most obvious step in decarbonising the economy. The neoliberal/carbon lobby wax hysterical about such a tax. It is true that it is probably regressive (bears more heavily on the poor), so the proceeds of a carbon tax should be earmarked to help the poor, e.g. by insulating their homes, and subsidising public transport. 

We should always remember that global warming is only one, albeit the major, reason to cut carbon. There is also the matter of its finite nature, air pollution, and ocean acidification to be borne in mind.

From a rational point of view, decarbonisation is a no-brainer. Yes it does bear an economic cost, but it creates jobs, and in the long run (that is, in the interests of our children) it saves money. It is a pity that we are still at the discussion stage. We should be doing it already.

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