New study pounds carbon tax with preemptive assault

May 13, 2013
A US carbon tax has fallen subject to preemptive assault in a study released by the George C. Marshall Institute.

A US carbon tax has fallen subject to preemptive assault in a study released by the George C. Marshall Institute.

With cap-and-trade crashing in Europe and grounded in the US, the taxation of carbon emissions represents the likeliest political response to global warming.

But the idea, says study author James V. DeLong of the Convergence Law Institute, is "deeply flawed."

A carbon tax is supposed to cut greenhouse-gas emissions while raising money for the government, DeLong points out.

Five considerations "militate against it," he says:

• A US carbon tax will have "minuscule effect, if any, on global temperatures."

• Assumptions that costs of a carbon tax are manageable don't identify specific and feasible energy technologies essential to the displacement of carbon-based energy. They assume technological and economic breakthroughs will occur.

• Economic theory adduced in support of a carbon tax is more complex than it usually is portrayed. Current proposals don't account for the benefits of elevated levels of carbon dioxide in the atmosphere. And they don't reflect all the benefits of cheap energy not captured by energy producers.

• Predictions of climate change and assessments of the costs of carbon taxation rely in inexact, flawed mathematical models that, according to DeLong, "do not provide an adequate basis for action."

• Carbon taxation receives support from "a coalition of environmentalists, corporate profiteers, and government dependents which will shape its provisions in ways that undercut its beneficial effects and accentuate its harmful side." It would lower economic growth and job creation, be regressive in its effects, and encourage energy-intensive industries to leave the US. It wouldn't substitute for other taxes or improve their efficiency. It wouldn't escape political favoritism or substitute for other regulations. And it would require taxes and subsidies "to reflect the actions or inactions of other nations."

Supporters of a carbon tax will dismiss the study as symptomatic of global-warming denial and its warnings as polemic concoction.

They treated opposition to now-discredited cap-and-trade the same way.