The efficiency of a carbon tax: Broadly accepted and broadly wrong

Article Highlights

  • In short: A carbon tax, whether imposed by the United States unilaterally or by the industrialized world, would have virtually no effect on temperatures over the course of this century.

    Tweet This

  • A carbon tax or other such intervention — regardless of one’s view of the underlying climatology — would be all cost and effectively no benefit.

    Tweet This

The standard assumption about the superior efficiency of a carbon tax relative to bans and energy consumption standards is deeply problematic for both scientific and political reasons.

Making an argument broadly accepted among economists, Sita Slavov, my colleague at the American Enterprise Institute, recently wrote that a carbon tax “set to reflect the spillover costs of carbon emissions” would be a policy more efficient than such interventions as light-bulb bans and energy consumption standards for appliances, sometimes called “command-and-control” policies. The tax would allow consumers to reduce the emission of greenhouse gases (GHG) attendant upon their energy consumption patterns in ways that minimize the costs of doing so. Bans and performance standards, on the other hand, allow for far less flexibility, and thus would achieve a given GHG reduction at a cost higher than necessary.

This standard argument is deeply problematic for reasons both scientific and political. Science first: Let us defer the issues raised by the poor predictive record of the Intergovernmental Panel on Climate Change climate models, the fierce debate in the climate and atmospheric journals about the direction and magnitude of feedback effects, and the problems inherent in the temperature record. Instead, assume that the models’ predictions about temperatures and weather anomalies in 2050 and 2100 — even the most apocalyptic — are correct. The following table shows the amount of warming averted by 2100 were GHG emissions to be reduced by, respectively, the United States and the industrialized world (the OECD90: North America, Western Europe, Australia, New Zealand, and Japan) under the highest temperature sensitivity assumption used by IPCC (a doubling of GHG concentrations would cause an increase of 4.5 degrees Celsius). The model used here is the MAGICC/SCENGEN climate simulator developed at the National Center for Atmospheric Research, and used by both IPCC and the Environmental Protection Agency.

Access the full article at The American.

Also Visit
AEIdeas Blog The American Magazine
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

What's new on AEI

image Getting it right: US national security policy and al Qaeda since 2011
image Net neutrality rundown: What the NPRM means for you
image The Schuette decision
image Snatching failure from victory in Afghanistan
AEI on Facebook
Events Calendar
  • 21
    MON
  • 22
    TUE
  • 23
    WED
  • 24
    THU
  • 25
    FRI
Wednesday, April 23, 2014 | 12:00 p.m. – 1:30 p.m.
Graduation day: How dads’ involvement impacts higher education success

Join a diverse group of panelists — including sociologists, education experts, and students — for a discussion of how public policy and culture can help families lay a firmer foundation for their children’s educational success, and of how the effects of paternal involvement vary by socioeconomic background.

Thursday, April 24, 2014 | 12:00 p.m. – 1:30 p.m.
Getting it right: A better strategy to defeat al Qaeda

This event will coincide with the release of a new report by AEI’s Mary Habeck, which analyzes why current national security policy is failing to stop the advancement of al Qaeda and its affiliates and what the US can do to develop a successful strategy to defeat this enemy.

Event Registration is Closed
Friday, April 25, 2014 | 9:15 a.m. – 1:15 p.m.
Obamacare’s rocky start and uncertain future

During this event, experts with many different views on the ACA will offer their predictions for the future.   

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.