Energy Tax


Maya MacGuineas and Adam Caruso make the familiar (yet correct!) argument for a carbon tax. Except they don’t actually favor a carbon tax:

The new tax shouldn’t be a pure “carbon tax,” which would saddle coal-based energy production with steep price increases while allowing us to maintain our national addiction to oil with little abatement. Rather, a comprehensive energy tax ought to discourage in a relatively uniform way the use of all energy sources that contribute to global warming.

I don’t get that at all. If an electric car drawing its electricity from a natural gas power plant (say) contributes to global warming, but does so to a much lower extent than does a car with an internal combustion engine burning liquid coal, surely this difference should be reflected in our tax policy. Our current energy mix is so carbon intensive that there are plenty of technologies that would both “contribute to global warming” and also constitutes progress toward reducing carbon emissions. One wants a tax that rewards such technologies, but rewards them less than even cleaner ones. That means a government-auction of emissions permits, or a simple carbon tax. What’s the advantage of the alternative? It’s a bit more friendly to coal companies that’ll fight you to the death anyway?