In my latest IER column, I quote from a very revealing Vox article. It is crystal clear that progressive Leftists–whether we’re talking the nerdy wonks or the activist boots on the ground–want nothing to do with a revenue-neutral carbon tax.
I also try a different analogy to get people to see why these state-level carbon taxes are window dressing, and that it’s misleading to calibrate their tax rates to the “social cost of carbon”:
The analysis underlying the “social cost of carbon” implicitly assumes that the associated tax is levied globally. If instead only some jurisdictions levy the carbon tax, then we have to worry about “leakage”—when businesses and individuals transfer their emissions to outside, untaxed jurisdictions.
It should be clear that Washington State itself levying a carbon tax, even a draconian one, will not significantly affect global greenhouse gas emissions, particularly over the course of decades. As such, the “optimal” carbon tax when a state like Washington acts unilaterally is much lower than what the concept of the “social cost of carbon” implies….(The Vox article itself shows a chart indicating that the state of Texas alone has about nine times the carbon dioxide emissions as Washington State.)
For an analogy, suppose someone saw people dropping litter on a beach, and wanted to levy a fine to discourage this behavior. Now people could argue about the appropriate size of the fine; make it too little, like 10 cents per infraction, and it wouldn’t solve the litter problem. But make it too big, like $10,000 per infraction, and tourists might stop going to the beach altogether for fear of accidentally losing a napkin in the wind and having to pay a huge penalty.
Yet we can all agree that whatever the “right” level of the fine would be, it would be nonsense to apply that same dollar fee to only a small section of the beach that covered, say, one-one thousandth of the total surface area of the sand. It is clear that such a policy would be idiotic, because people would simply make sure not to set up their blankets on that tiny fraction of the beach, and would otherwise continue with their normal behavior.
This is analogous to Yoram Bauman’s proposal. His carbon tax would apply to Washington State, which has about 0.3 percent of the total habitable land surface area of planet Earth….Advocates are mixing in hopes that they will achieve copy-cat policies all over the globe in order for their suggestion to make any sense, even taking their own climate models as given.