I’ve been meaning to post some additional thoughts on the conversation I had with Jim Manzi, but it’s been difficult given the financial situation. A new LA Times op-ed by (Ted) Nordhaus and Shellenberger gives me an opportunity to make one brief point. They argue that Democrats are fools for thinking that the best way to approach climate change is by increasing the cost of fossil fuels. Instead, they recapitulate their argument in favor of big time technology and infrastructure investments.
Ok, fine. I support such investments. But their criticism of increasing fossil fuel prices is of a piece with Jim Manzi’s argument that taxes are destined to be hugely unpopular and, in all likelihood, very costly–both directly and indirectly.
But this is silly. As I mention in our chat, a carbon tax of $30 or so per ton of carbon would be extraordinarily advantageous at a minimal cost. We’re talking $160 per American per year spread over thousands of consumption choices. And for that price, we pick all the low-hanging fruit with regard to conservation and innovation, and we insure against well-intentioned climate policy mistakes. But we also get revenue. That’s important.
Jim argued that taxes are basically good-for-nothing boondoggles, but listen. If you ask the majority of Americans whether it was a good idea to levy a gasoline tax and use the revenue to spend $500 billion (in current dollars) to build a national interstate highway system, I suspect that 90% or so would heartily agree. So why, I ask, can’t we adopt a sensible carbon tax, refund a small portion of revenues to lower income households, and use the rest to build a new generation of green infrastructure?