In this latest IER post I walk through a blog from an enviro group in the Northwest, discussing revenue projections for Washington State if they impose a stiff carbon tax. My favorite part:
I encourage the reader to look again at the part I’ve put in bold from Eberhard’s commentary. Notice that she didn’t write, “After 2050, if we consult with scientists and economists and determine that the ‘social cost of carbon’ has risen then we can adjust our economically optimal level of taxing the negative externality.”
No, that’s not at all what she said. Rather, Eberhard wrote: “This scenario is the only one in which revenue tapers slightly in the final years…Washington could choose to continue de-carbonizing its economy even more after 2050 by pushing the price even higher. Doing so might result in a flat revenue stream.” In other words, Eberhard is trying to convince her readers to sign on for a carbon tax, because even if the revenue dries up prematurely, policymakers always have the option to jack up the rate of the tax in order to keep the dollars flowing in to state coffers.