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Why A Carbon Tax Would Work

by | 19th, November 2013

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THE are various plans put forward for how we should deal with climate change. Some say we should do sod all, others go to the opposite extreme and demand the dismantling of capitalist industrialism in its entirety.

Certain of the brighter climate change scientists and almost all of the economists insist that it’s really terribly simple. Just add a carbon tax and then wait 20 years. The problem will then solve itself. When I say the brighter of the climate scientists I mean of course those who have been listening to the economists, people like James Hansen.

There’s an interesting illustration of why this would work in the Telegraph today:

Two-thirds of Britons are expecting to cut back on heating their home this winter, with more 25 to 34 year-olds likely to turn down the thermostat than pensioners.

A new report last night claimed 32 per cent of people will “definitely” turn down the heating or switch off lights over the coming weeks in a bid to save money. A further 35 per cent will “probably” act.

Some 88 per cent of households classified among those struggling with the rising cost of living fear they will have no choice but to use less gas or electricity.

If you put up the price of fossil fuels then people will use less of them. In order to beat climate change we want people to use fewer fossil fuels: thus put the price of them up by adding a tax.

The economists go on to point out that climate change doesn’t mean that government should have more money, or that the State should provide more goodies to people. No, instead, other taxes should be cut by the same amount that a carbon tax raises. So we’re not in fact making people poorer: we’re chaging the relative prices of fossil fuels and everything else. Putting up the price of the fuels and lowering the price of everything else that we’re now taxing less.

And this really is the solution. We’ve even had a great big government report that says so: this was the conclusion of the Stern Review.

The only real puzzle is that having had that review, having all said they agree with every page, why the hell aren’t they actually solving climate change by having a carbon tax?

Photo: Protesters show their anger during a demonstration against the Australian Labor Governments proposed carbon tax outside Parliament House, Canberra, Australia, Wednesday, March 23, 2011. The carbon tax is part of Australia’s bid to cut its greenhouse emissions but the protesters said the tax will add to their household bills and damage the economy. 



Posted: 19th, November 2013 | In: Money, Reviews Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink