I don't think that anthropogenic global warming will be substantial enough to justify massive and expensive interventions to limit Co2. I won't go into the reasons for this statement, as I have a whole other blog dedicated to climate. If you are unfamiliar with the arguments that Co2 is likely warming the Earth, but not by nearly as much as alarmists claim, you might start with some of these videos.
However, it seems almost inevitable that the new Congress and Administration will do "something" on Co2, if for no other reason that it has become a self-image issue on the left (i.e. I am a good person because I care about global warming). We libertarians are seldom very good at engaging on issues of how such government interventions should be done best. Every time people ask us our opinion of how to structure such a program to do the least harm, we get about 5 seconds into an answer before we just break down and start yelling, "this is crazy! Do nothing! Leave us alone!" (actually, emissions laws are one of the few areas where government regulation helps to protect private property rights).
Bryan Pick at Q&O points to a number of folks advocating an increase in carbon taxes offset by reductions in payroll taxes (Bryan's plan is more comprehensive than this, and is here). I actually advocated something similar over a year ago. Here is my logic chain:
- The carbon tax is a much, much better approach to reducing CO2 than cap-and-trade systems. Cap-and-trade is bad for the same reason that politicians like it -- it offers a near infinite playing field for lobbying, special rules, influence-peddling, special exemptions, government chosen winners, etc. while hiding the fact that it is in fact a huge new tax. My more detailed argument on this can be found here and here and here.
- A new carbon tax should be revenue neutral. After all, the point in the first place is not to raise revenues, but to provide a pricing signal that Americans need to switch away from carbon-based fuels.
- A good place to offset revenues is the payroll tax. Both fuel taxes and payroll taxes are criticized for being regressive, so it is an easy place to try to forge a compromise with the left. Further, the payroll tax acts effectively as a tax on hiring, so a reduction would certainly be welcome any time, and particularly in a recession.
- We need to create a streamlined licensing program for nuclear reactors. Utilities, particularly ones dependent on coal today, need a realistic option to continue to provide power at reasonable cost in their communities. Solar and wind are just not reasonable alternatives today. Nukes are the only carbon-free scalable generating technology we have.
Again, I don't think the dislocations required here are worth the effort, but this is the best way to do it if we must.
Postscript: By the way, here is one thing no one is telling you. Folks in Congress have tossed around carbon and fuel tax ideas that might add, say 25 cents per gallon. But if we are truly in thrall to the climate alarmists and take their recommendations, then Co2 outputs must be reduced 50-80% in this country. We are talking about reducing Co2 output to levels before 1920! To do this will require a truly massive tax. Just to scale it, over the last year gas prices doubled by about $2 a gallon, and total miles driven fell by less than 5%. Europe is at around $8-$9 gas and are nowhere near these climate goals. I don't think it would be too much to say that gas prices would have to top $20 to reach these goals.
This is why I think the most likely case for climate regulation is that we will have some kind of tax or cap system but that this system will be far short of anything that will really reduce Co2 or even stop its growth. The costs are just too high, and the benefits too shaky. You can see that in Europe, as countries back off Kyoto goals (and even Kyoto goals are far short of what alarmists think we need to be hitting). And any progress they have made against Kyoto goals has mainly been accidents of changing enconomic and political structures rather than the result of any real targeted action. What we will get is something that costs a lot without accomplishing much, but will make the left feel better about themselves. Sound familiar?