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Archimedes lever5/16/2023 After all, even if GDP growth remains robust, carbon taxes impose extremely visible costs on a lot of large, powerful constituencies. No government or public in the world has proven willing to tax carbon as much as needed. All else being equal.īut life is not a model and all else is never equal. All else being equal, taxes will achieve carbon reductions with less impact on GDP growth than sector-specific mandates, rules, and subsidies. They disperse a price signal throughout the economy rather than “distorting” markets by concentrating on one sector or another. Offering a lever when no fulcrum’s in sight is not a solution.Įconomists love carbon taxes because they maximize for efficiency in macroeconomic modeling. In the case of a carbon tax, the fulcrum is the political will and power necessary to pass the tax into law with minimum loopholes and consistent enforcement. The key insight here is that you don’t just need a lever, you need a fulcrum if the fulcrum is not strong enough to bear the weight, it doesn’t matter how long the lever is. Make it long enough - i.e., make the tax high enough - and you can move the world. That hope was always forlorn.Ĭarbon taxes are the economist’s version of Archimedes’ lever. The point is, implicit in the long quest for carbon targets is a desire to vault past the grubby, tedious work of changing interests and capabilities - to skip straight to the grand solution. Having the target in statutory law could not have forced the development of stronger policies, but it would have been an incredible legal, political, and moral tool in the hands of those fighting for stronger policies.īut I’m getting off track. The bill was a carbon target coupled with a set of overcautious policies (too many offsets, etc.). I think it was the right call to push for the Waxman-Markey bill and those who say it wasn’t worth passing, or that we’d be worse off if we’d passed it, are f’ing daft. Where I disagree with Victor and other target skeptics is that I still think national targets are worth pursuing. What leaders can credibly promise are policies, and policies, not numerical targets, should be at the center of climate accords, Victor argues. The focus on targets is an invitation to empty grandstanding and lowest-common-denominator agreements. Emissions are determined by too many forces outside governmental control, including fossil-fuel prices, trade, and the pace of economic growth. National leaders cannot credibly promise particular emission levels in the short- to mid-term. I owe a debt to political scientist David Victor, whose work I wrote about here:Ībove all, says, climate campaigners must abandon their scientism and take emission-reduction targets off center stage. That carbon reduction is primarily about national interests and capabilities is not my insight. To support our nonprofit environmental journalism, please consider disabling your ad-blocker to allow ads on Grist.
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