This letter is a response to an op-ed "Why We Support a Revenue-Neutral Carbon Tax" by George P. Shultz and Gary S. Becker from April 8, 2013.
The authors may believe that carbon (dioxide) is a "major pollutant," but nowhere in their op-ed do we find a hint about the actual environmental benefits attendant upon the imposition of a carbon tax. The U.N. Intergovernmental Panel on Climate Change's best estimate of the temperature effect of a doubling of carbon-dioxide concentrations by 2100 is three degrees Celsius. U.S. emissions of greenhouse gases are about 18% of global emissions, so that our contribution would be about 0.5 degrees. If we were to cut that in half---an impossible goal economically---the reduction in U.S. "pollution" would be 0.2-0.3 degrees, the climate effect of which would be unmeasurable.
There is nothing "efficient" about a tax that yields no benefit, and were the tax to be imposed by international agreement (a tax cartel), efficiency would be the least likely outcome. Their call for revenue (actually, spending) "neutrality" would not yield greater efficiency because there is no particular reason to believe that carbon emissions are a useful proxy for the benefits of government spending. Messrs. Shultz and Becker have given us an idea truly half-baked, which on the plus side probably reduced their carbon footprint.
Benjamin Zycher is a visiting scholar at AEI.