Sociopolitical Solutions: Carbon Tax, Cap and Trade, False Assumptions

The film, Carbon Hunters was a very well done demonstration of the possibilities of the cap and trade system and also shows some of the negative downsides of the system as well: poor rural women in India subsidizing excess carbon consumption by wealthy people in the global North could be seen as a kind of “carbon colonialism”. I sincerely disagree with the dismissal of the carbon tax out of hand in the film. I also take issue with Jessy’s hypothetical example when I brought this up in class: assuming a tax "in Minnesota" that made a gallon of gas $6, comparable to Europe.

There are a lot of problems with this scenario. First, a state gas tax like this would do little good because we don’t have a large enough population to impact ACC. People especially near border areas would simply drive to Wisconsin, Iowa, and the Dakotas to buy fuel - causing more carbon burning.  To be effective and have a chance of passing Congress, a carbon tax on retail consumers would have to be national and it would have to be small. Second, simply taxing retail gasoline would not relate to the most significant emitters of GHGs. Plus, we know that Americans are driving less already, so this is not a stable source of revenue.

Why is there an assumption that a carbon tax would be on consumers directly? This is a false assumption. Just like the assumption of the false dichotomy: carbon tax or cap and trade, we could do both! Sometimes we need to check our assumptions, as well as our ambitions.

Sure, maybe a small national carbon tax increase on gasoline is a good idea, but you slap significant carbon taxes on out of date coal plants and strip-mining coal operations (which do not employ as many people as they used to, anyway; eastern Kentucky and West Virginia are evidence of this), the Shells and Exxons of the world – or at least take their subsidies away! You go after polluters and carbon burners on the supply side. Yes, costs will filter down to the consumers, surely but it is far less heavy-handed than doubling the cost of gasoline. There will be pain, and unfortunately the poorest of the poor will bear the worst consequences - but this happens regardless of what climate policy we implement, the key for them is wage growth and a more robust welfare state, not holding back on climate policy.

It is better to be poor in the short term than dead from a famine or flooding in the long term.

But sometimes a little pain is a good thing. We need to price carbon and encourage less consumption other forms of energy consumption. The truth is that you cannot have your cake, and eat it too. You can’t have reductions in fossil fuel use unless it is painful to do so and there are more attractive opportunities.