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The most important feature of a carbon tax is that it start small and get progressively larger over the next thirty to fifty years. Carbon tax isn't about fair
by paulsutter 14y ago
The most important feature of a carbon tax is that it start small and get progressively larger over the next thirty to fifty years.
Carbon tax isn't about fairness or justice. It's about making investors feel safe allocating long term dollars into alternative energy r&d over a timeline long enough to allow a real transition. A gradually increasing carbon tax is the simplest and surest way for the government to catalyze innovation.
Bloomberg[1] says a current discussion in Washington is for a $20/ton carbon tax increasing by 6% a year. That's $33/ton in 10 years, $60/ton in 20, and $350/ton in 50 years.
[1] http://www.bloomberg.com/news/2012-11-07/obama-may-levy-carbon-tax-to-cut-the-u-s-deficit-hsbc-says.html http://www.bloomberg.com/news/2012-11-07/obama-may-levy-carb...
- rdl 14y agoExactly -- slow and steady increases are fine (in inflation, taxes, etc.); it's risk which might strand capital assets which destroys and economy. Unfortunately, modern democracy (at least in the US) doesn't seem to do long-term sustained slow and steady anything; it's always wait wait wait then overcorrecting (or correcting more in the wrong direction). The Fed, which is quasi-independent, is one of the few organizations which seems to exert constant slight pressure, and that's complicated by the dual mandate.