Carbon Conservatism in British Columbia

I have been pilloried in the comments section of this blog before for my support for a carbon tax. It is not because I believe in catastrophic AGW that I support a carbon tax, but because it would help reduce air pollution and could be used to lower income tax rates. Turns out that British Columbia has already gone this route. As opposed to disastrous cap and trade schemes proposed by Democrats or California's horrendous AB32 that targets specific sources of power, this tax is technology agnostic, allowing the free market to influence the best way to reduce carbon based power consumption, whether through conservation, shifting to natural gas or some other means. But best of all the economy has not been harmed, because our northern neighbors on the left coast have used the proceeds to, drum roll please, reduce income taxes for individuals and corporations. I believe that the burning of carbon based fuels is the primary source of air pollution in the world and reducing those emissions is a worthy goal.

The effects on the British Columbia economy of the Carbon tax, implemented in 2008, appear to have been minimal. I believe this is because it was used to offset income taxes. The tax is simple and easy to administer, and has been implemented in a predictable manner; unlike recent tax code changes in the United States. The U.S. income tax is a nightmare of complexity and pork barrel politics. Reducing our federal government's dependency on it, by replacing it with what is essentially a consumption tax also seems like a worthy outcome.

The Case for Carbon Culpability

The ongoing slow motion self destruction of the warmist arguments for catastrophic anthropogenic global warming has hopefully saved the United States from a disastrous "cap and trade" bill. The most recent revelations from Professor Phil would be hilarious if they had not caused the waste of so many resources already. Hopefully some real climate science can now get done, so we have a workable theory of how and by how much CO2 is changing the climate.

In the meantime, we should still consider that burning fossil fuels might not be in our long term best interests. First, and foremost, the demand for oil has a tendency to enrich despots the world over; Saudi Arabia, Iran, China, Russia and Venezuela make the list of top ten oil producing nations. Interestingly, so does the United States, but it is not near as important to our economies than those other nations listed because our overall GDP is so much higher.

Second, burning fossil fuels is associated with air pollution and is the primary cause of air pollution. Air pollution is a factor in increased mortality in the United States, and presumably other countries. It would seem prudent to move away from sources of energy that increase the presence of particulate and noxious chemicals in the air.

Finally, there is still a good chance that we are impacting the global climate. Catastrophically? Probably not, but let's not forget that economic dislocations caused by the effects of global warming would still be painful and cause localized hardship at a minimum.

So why am I opposed to "cap and trade?" The experience in Europe with massive fraud and the heavy give-aways in the current bill in Congress persuade me that "cap and trade" will do nothing but transfer wealth to favored or criminal groups. I want to curb carbon emissions in a way that does not harm the economy. The only way that will work is a slow phase in of a carbon tax, coupled with reductions in the income tax, either by rate decreases or rebates. The Carbon Tax Center has some decent economic arguments about how such a tax could be implemented in a revenue neutral way to prevent bankrupting the economy. The only piece they miss is the need for a global tax, because air pollution is a global problem. See study on Chinese air pollution reaching Los Angeles (how ironic).

Defeating Cap and Trade

Richard Lugar, one of the Republican senators being courted to pass the cap and trade, carbon emissions bill said that such a bill would likely not pass this year due to the ongoing Health Care debate. I tend to agree. I see this as both opportunity and danger. The opportunity is that the Tea Party movement can help build highly deserved disgust towards legislation that hands out exemptions like Halloween candy to the politically favored. The danger is that Green groups will get organized more quickly than our side and blunt the message about the horrible jobs impact of this bill.

I would like libertarians and conservatives to seriously re-think the merits of a carbon tax, when coupled with reductions in the income tax. With regards to global warming, it allows us to avoid a debate over whether global warming is

1. Actually happening.
2. Actually man made.
3. Actually bad.

We can concede on these issues or just say it doesn't matter because even if all three were true, Cap and Trade would STILL BE BAD POLICY.

Second, by proposing to reduce income taxes to offset carbon taxes, it puts the Democrats in a tough spot. (I have also argued the benefits of a consumption tax vs income taxes.) We can make this argument, if global warming is the giant threat you say it is, why wouldn't you reduce income taxes as the price of saving the planet? Are you hypocritical? The countercharge that we are holding the planet hostage to tax cuts, is that we believe that national wealth needs to be preserved to combat the potential crisis.

Finally, Republicans need a serious plan to deal with the negative side affects of burning carbon, I think that just saying no to cap and trade will be insufficient. A carbon tax, because it is simple and predictable will have the lowest impact on the economy and be the least susceptible to log rolling.