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A straight tax on carbon emissions is far more transparent and less prone to political abuse and self-dealing. The tax could be totally offset by a cut in the
by ckinnan 18y ago
A straight tax on carbon emissions is far more transparent and less prone to political abuse and self-dealing. The tax could be totally offset by a cut in the payroll tax (as Gore proposes-- tax carbon, not work).
- Shamiq 18y agoThere are a lot of economic reasonings behind supporting either carbon credits, a tax (known as a Pigouvian Tax), and straight up Command and Control (you will only pollute amount X). The failure in selecting the "correct" one depends on issues with how the marginal-damage-to-the-environment curve looks like. Ideally, we want the tax equal to the amount of damage the individual is causing at a given level. But, if the marginal damage curve is very flat, ie an additional unit of pollution doesn't have a large magnitude in effect, then an incorrect tax amount can lead to a lot of "dead weight loss" (ie we're not at optimal levels). This explanation is easier with graphs. Therefore, let me know if this is not very clear, and I'll whip up something appropriate.