Carbon Tax

This is inspired by an LA Times article from some days ago, but it is something worth talking about, a carbon tax. First, lets face the fact that global climate change is a reality and is something we need to face up to and deal with. If we act in the near future the cost of dealing with the issue can be extremely small or even nonexistent. For all of you who believe that acting on global climate change amounts to imposing some additional cost on you, I say rubbish. Use of fossil fuels requires dumping wastes into the general atmosphere. Neither you nor I own, in our own names, the atmosphere, so it is only right and proper that we might have to pay some modest fee to make use of that resource. To date we have been generously subsidized by having the right to dump, for free, our wastes into this general resource. It is high time that that subsidy be reduced or eliminated.

The LA Times article discusses two good methods for getting carbon emissions under control, a cap and trade system and a carbon tax. I agree that of the two the better choice is the carbon tax. We need to get passed the idea that all taxes should be considered radioactive and that the very nature of a tax is somehow wrong or unfair. Taxes are appropriately imposed to charge for the very valuable services provided by the existence of a government. One of the main valuable services provided by a government is the management of general resources, like the atmosphere, and part of that management is to charge for the use of the resource. Hence a carbon tax.

Maryland and the Environment

Good news from the Maryland statehouse. We will be entering into the RGGI agreement with 9 other Northeastern states to create.

..the first "cap and trade" system in the United States to control emissions of carbon dioxide, the primary global warming gas. Starting in 2009, each state will be allocated a certain amount of carbon dioxide its power plants are allowed to emit (for Maryland, it's 37,503,983 million short tons a year). The states would then auction off the credits to electricity producers, who would be forced to stay below the caps or buy unused credits from cleaner power plants.

I believe that this is a promising approach, using market forces where possible, to achieve better environmental results. Attention to Global Climate Change is needed, so it is good to see some people taking the lead (and I'm very happy to see my state be part of that). I also think this is among the best approaches economically as well. It seems that there are studies to back this up

Shari T. Wilson, secretary of the Department of the Environment, said an economic impact study required by the Clean Air Act found that the agreement could reduce utility bills by establishing conservation programs.

"That should be a benefit to consumers as well as address global warming," she said.

Matthias Ruth, director of the University of Maryland Center for Integrative Environmental Research, who conducted the study, said the agreement will provide moderate environmental benefits and with little economic cost - and possibly economic gains from energy efficiency.

I have long been of the opinion that the horror stories of economic collapse favored by the right should be adopt better environmental policies are a crock. I expect some cost, but as the studies above indicate, I would not be shocked to have better environmental controls both clean up the environment and improve the economy.