Climate cultists just refuse to give up on their taxation schemes, evolving them, massaging them, and now, expanding them
Here’s a Smart Solution to Climate Change
There’s a great way the U.S. and the European Union could together address two huge challenges in one policy sweep. It’s to create a transatlantic “carbon club,†which I’ll describe in a moment.
The geopolitical promise of this idea is to resurrect the notion of the “West†at a time when the U.S. and Europe are drifting apart but still hoping to rejuvenate their alliance after Joe Biden becomes president. The even bigger goal is to win the struggle against global warming, which both Biden and the EU cite as their priority.
The only way to slow climate change is to dramatically reduce our planetwide emissions of greenhouse gases. And the best approach to that is to put a price on carbon that’s both high and rising. This signal will make producers and consumers adopt behaviors and technologies to pollute less.
Guess who ultimately ends up paying for this? The average citizen. Their cost of living will skyrocket. I suggest that we implement this tax scheme on all news providers who believe in anthropogenic climate change, starting with the above Washington Post. Let’s see how they like it.
Within a given jurisdiction, we already know how to set such a carbon price. You can tax emissions directly. Or you can limit their overall amount by law, then issue carbon allowances which firms can buy and sell in an open market, at a price that constantly changes. This way emissions will be cut fastest wherever it’s easiest and cheapest to do so.
Of these cap-and-trade systems, the EU, Norway, Iceland and Liechtenstein jointly have the world’s largest. Still, it only covers sectors — from power generators to steelmakers and airlines — that account for 40% of European emissions, so the system must be expanded. Even then it still faces a bigger problem.
It’s that the rest of the world isn’t in the system. This both slants the economic playing field against European companies and leads to “carbon leakage.†Take a European steel company, for example. It must buy allowances to emit carbon, which is a cost. To avoid that cost, it can invest in technology that makes production cleaner, but that’s also expensive.
In other words, countries like China and India will benefit while the US and EU will handicap themselves. Is there something that can be done?
The solution to the free-riding dilemma is the club model proposed by Nordhaus and now endorsed by sharp minds such as Guntram Wolff, the director of Bruegel, a think tank in Brussels. Here a group of countries would agree on a minimum international carbon price.
All club members would then set about reaching that price with either a carbon tax or a cap-and-trade system, the equivalent of their club dues. As long as their domestic carbon prices are high enough and comparable, there’s no need for club members to punish each other’s imports, so they trade freely (if you ignore other tariffs and quotas for the moment).
Non-members of the club, by contrast, would have to pay countervailing carbon duties on their exports to the club. The EU calls this a “carbon border adjustment mechanism†(CBAM). Unlike ordinary tariffs, the surcharges wouldn’t aim at making domestic producers more competitive but at spreading the cost of global carbon abatement. So they should be allowed by the World Trade Organization.
And guess were the extra cost goes for those duties? Correct, right to the consumer! And those countries continue to blow up on “Doing Something” about their own carbon footprints, instead, telling the consumers in those climahysteric nations they should be blaming the climahysteric politicians for the high prices.
And, no, no, this merging of international markets shouldn’t give Globalist conspiracy theory folks any ammunition
If we still have a shot at controlling global warming, this might be it. Moreover, this kind of positive cooperation between rivals in east and west would have other benefits. Anxiety is growing that the enmity between the U.S. and China could one day end as the contest between Imperial Germany and the British Empire once did: in war. A successful collaboration against the common enemy, global warming, could defuse this conflict — and save the planet along the way.
