Carbon taxes aren’t terribly popular in some circles, but they work. Discover what a new study found about the results of putting a price on carbon compared to other measures to combat the climate crisis.
There’s something about me that people find odd. Well, there are plenty of those things, but the one I want to talk about in this story is my cheerful attitude toward paying taxes.
Throughout my adult life, people have confronted me about it. Many people have tried to convince me that “taxation is theft.”
Others believe (without evidence) that government, by its nature, is wasteful and inefficient. “Government is the problem, not the solution,” they tell me, along with the joke that the scariest words you can hear are, “I’m with the government; I’m here to help you.”
None of Them Have Convinced Me
None of them have convinced me with their arguments. For one thing, as a travelling consultant for a couple of decades, I saw firsthand how things worked in the bureaucratic and the corporate world. From my point of view, there was hardly any difference.
So, it comes as no surprise to me that climate deniers have been changing tactics. They’re focusing on people’s unwillingness to pay their taxes in their fight to preserve the fossil fuel industry.
Many people have been convinced by the climate denial lobby that the climate crisis is nothing but a tax grab. Campaigners have told them that climate change is a hoax perpetrated by leftists to justify higher taxes and bigger government.
Simplest Encouragement is a Carbon Tax
Yet, economists have been saying for decades that the most straightforward and least intrusive way to encourage people to emissions is through a carbon tax. The way to avoid imposing draconian laws or setting up massive bureaucracies is to simply make fossil fuels more expensive by putting a price on them.
Governments can hand back the money they raise through these taxes through grants that reward people for going green. People can get cheques in the mail for insulating or installing solar panels, for example.
Yet, opposition to carbon taxes is still one of the most rigid stumbling blocks to implementing programs to combat climate change. The strange thing is, we never hear any better policy options from carbon tax opponents.
Carbon Pricing is the Most Efficient Policy
This week, a new study in the journal Current Sustainable/Renewable Energy Reports confirmed the efficacy of carbon taxes. Researchers from Ohio State University found that carbon pricing is the most efficient and least expensive policy change elected officials can make to reduce greenhouse gas emissions.
Ramteen Shioshansi is a professor of integrated systems engineering and the senior author of the study. He summarized the team’s findings this way.
“If the goal is reducing carbon dioxide in the atmosphere, what we found is that putting a price on carbon and then letting suppliers and consumers make their production and consumption choices accordingly is much more effective than other policies.”
Other Policy Approaches to Cut Greenhouse Gases
The researchers looked at other policy approaches for cutting greenhouse gas emissions. These included governments mandating that a certain amount of energy must be produced using green technology in a specific jurisdiction.
They found that these kinds of arbitrary measures were more costly and less effective. Subsidizing renewable energy also proved less useful than simply putting a price on carbon and letting producers and consumers think for themselves.
The researchers based their conclusion on modelling different ways governments could cut carbon emissions in their jurisdictions to 80% below the 2010 level by 2040. Slapping a tax on coal and natural gas production units was about half as costly as tax credits for renewable energy sources.
Potential Carbon Reduction from Five Technologies
The models took into account the potential carbon reduction from five technologies for generating electricity. These were wind, solar, nuclear, natural gas and coal.
The investigators also took carbon reductions from the capacity to store energy into account. This is essential because efficient energy storage enables more effective use of clean energy sources like wind and solar.
I can remember back in the early 80s when acid rain was a primary environmental concern. Taxing the sulphur dioxide emissions that caused the problem was the most effective means of getting it under control.
“Market-Based Solution Can Work on Issues Like This”
Professor Sioshansi explains, ““We have known for the last 40 or more years that market-based solutions can work on issues like this.” Yet, those who want to keep the fossil fuel industry in business continue to insist that a carbon tax works against the free market.
The climate crisis is real and caused by human activity. We don’t have time to convince people of this any longer. We need to act now with specific, practical measures that will effectively cut carbon emissions.
This new study confirms what economists have told us for decades. The best way to get people to stop using something is to tax it. It worked for tobacco, and it worked for acid rain. It can solve the climate crisis as well.
It Worked for Tobacco, and it Worked for Acid Rain
Advocates of government subsidies tend to forget that those subsidies have to be funded by the taxpayer anyway. Professor Sioshansi put it this way.
“If no one had to pay for the subsidies and they were truly free, that would be a great option. Unfortunately, that is not how they work.”
Our generation’s challenge is to usher in a new era where humanity lives in harmony with nature rather than exploiting or actively destroying it. Thomas Berry called this “The Great Work.”
Thomas Berry Called This “The Great Work”
“The Great Work” will never be accomplished unless we get fossil fuel emissions under control by putting a price on carbon. Otherwise, global warming will damage our ecosphere and threaten our own survival.
The research team is now turning their attention to the recent winter storm in Texas. They hope to assess how changes in energy policy might improve the energy system’s dependability in that state.
We always have more to learn if we dare to know.
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