From the comments of this post, which wondered why Americans are so opposed to the climate bill when Europeans seem to want even more regulation. Leaving out the difference in subservience to authority between Europeans and Americans, I wrote this in the comments:
I will just say: Because it's a bad bill. And not because it is unnecessary, though I would tend to argue that way, but for the same reason that people don't like the health care bill - its a big freaking expensive mess that doesn't even clearly solve the problem it sets out to attack. Somehow, on climate change, the House has crafted a bill that both is expensive, cumbersome, and does little to really reduce CO2 emissions. All it does successfully is subsidize a bunch of questionable schemes whose investors have good lobbyists.
If you really want to pass a bill, toss the mess in the House out. Do this:
- Implement a carbon tax on fuels. It would need to be high, probably in the range of dollars and not cents per gallon of gas to achieve kinds of reductions that global warming alarmists think are necessary. This is made palatable by the next step....
- Cut payroll taxes by an amount to offset the revenue from #1. Make the whole plan revenue neutral.
- Reevaluate tax levels every 4 years, and increase if necessary to hit scientifically determined targets for CO2 production.
- no loopholes, no exceptions, no lobbyists, no pork. Keep the legislation under a hundred pages.
- Congress lets individuals decide how best to reduce Co2 by steadily increasing the price of carbon. Price signals rather than command and control or bureaucrats do the work. Most liberty-conserving solution
- Progressives are happy - one regressive tax increase is offset by reduction of another regressive tax
- Unemployed are happy - the cost of employing people goes down
- Conservatives are happy - no net tax increase
- Climate skeptics are mostly happy -- the cost of the insurance policy against climate change that we suspect is unnecessary is never-the-less made very cheap. I would be willing to accept it on that basis.
- You lose the good feelings of having hard CO2 targets, but if there is anything European cap-and-trade experiments have taught, good feelings is all you get. Hard limits are an illusion. Raise the price of carbon based fuels, people will conserve more and seek substitutes.
- People will freak at higher gas prices, but if cap and trade is going to work, gas prices must rise by an equal amount. Legislators need to develop a spine and stop trying to hide the tax.
- Much, much easier to administer. Already is infrastructure in place to collect fuel excise taxes. The cap and trade bureaucracy would be huge, not to mention the cost to individuals and businesses of a lot of stupid new reporting requirements.
- Gore used to back this, before he took on the job of managing billions of investments in carbon trading firms whose net worth depends on a complex and politically manipulable cap and trade and offset schemes rather than a simple carbon tax.
Payroll taxes are basically a sales tax on labor. I am fairly indifferent in substituting one sales tax for another, and would support this shift, particularly if it heads of much more expensive and dangerous legislation.
Update: Left out plan plank #4: Streamline regulatory approval process for nuclear reactors.
Update #2: Readers of TJIC wonder if this is effective, calling it just a rebate of the tax. I answered in the comments as follows: