Letter to the editor: There are issues with a revenue-neutral carbon tax

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.

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About the Author

 

Benjamin
Zycher
  • Benjamin Zycher is the John G. Searle Chair and a resident scholar at the American Enterprise Institute (AEI), where he works on energy and environmental policy. He is also a senior fellow at the Pacific Research Institute.

    Before joining AEI, Zycher conducted a broad research program in his public policy research firm, and was an intelligence community associate of the Office of Economic Analysis, Bureau of Intelligence and Research, US Department of State.  He is a former senior economist at the RAND Corporation, a former adjunct professor of economics at the University of California, Los Angeles (UCLA) and at the California State University Channel Islands, and is a former senior economist at the Jet Propulsion Laboratory, California Institute of Technology.  He served as a senior staff economist for the President's Council of Economic Advisers, with responsibility for energy and environmental policy issues.

    Zycher has a doctorate in economics from UCLA, a Master in Public Policy from the University of California, Berkeley, and a Bachelor of Arts in political science from UCLA.

  • Email: benjamin.zycher@aei.org
  • Assistant Info

    Name: Regan Kuchan
    Phone: 202.862.5903
    Email: regan.kuchan@aei.org

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