There’s been quite a bit of reaction to the EPA’s plan to reduce poewr plant emissions by fiat. Here are the editors of the Washington Post:
These numbers will be fought over — including by those who believe they do not fully represent the benefits. But the main point is that this plan is a down payment on a comprehensive climate plan, not the most efficient policy nor a suitably ambitious response to climate change. Assuming the proposal survives the inevitable legal onslaught, opponents will no doubt insist that the climate issue is dealt with. Global warming activists got their regulations, so why do any more?
A few reasons (there are many): The EPA’s new plan is a medium-term policy, but the country requires a long-run transformation in how it produces and consumes energy. Its implementation will depend heavily on who’s in the Oval Office; not much would happen in a Ted Cruz administration. The proposal applies only to the electricity sector, but emissions result from activities across the economy.
continuing by pitching a gradually rising carbon tax. The editors of the Wall Street Journal on the other hand point to the contradiction between environmental policy while complaining about rising income inequality:
The EPA claims to be targeting “polluters,” but the government is essentially creating an artificial scarcity in carbon energy. Scarcities mean higher prices, which will hit the poor far harder than they will the anticarbon crusaders who live in Pacific Heights. The lowest 10% of earners pay three times as much as a share of their income for electricity compared to the middle class. If you want more inequality, this is an ideal way to ensure it.
The EPA plan will also redistribute income from economically successful states to those that have already needlessly raised their energy costs. The New England and California cap-and-trade programs will get a boost, while the new rule punishes the regions that rely most on fossil fuels and manufacturing: the South, Ohio River Valley and mid-Atlantic. Think of it as a transfer from Austin to Sacramento.
It should also be mentioned that claims by bakery shop window-breakers notwithstanding manufacturing depends on cheap, plentiful energy. When you impose penalties on energy producers without viable alternatives (wind and solar won’t be viable substitutes for coal for the foreseeable future if ever) you are saying that you prefer reducing emissions to producing jobs that ordinary people can do. Fewer jobs will be created by more expensive energy than were created by coal.
For decades I supported a carbon tax, largely for geopolitical reasons. That was long before such a tax would have meant exporting our emissions to China where a) they’ll spread over here anyway and b) the problem becomes intractable due to China’s social, political, and legal structures. I’ve also become skeptical of the efficacy of a carbon tax for reasons somewhat along the lines the WSJ editors suggest.
Just assume that carbon emissions pose a problem. I don’t want this post to turn into another argument about climate change. Assume it. Carbon taxes are regressive. For them to be effective assumes that everyone’s lifestyle produces the same level of omissions or that emissions vary roughly linearly with income. If, on the other hand, emissions vary exponentially with income a carbon tax would make life increasingly tough for ordinary people but would do little or nothing about emissions. Billionaires fly to Europe on a regular basis and have multiple 25,000 square foot houses. Sales clerks generally don’t.
There are ways of dealing with that but they’d require broad political consensus, something lacking and that neither side seems to have any interest in fostering. And most especially it’s not something that can be done by fiat.
Meanwhile, here’s a modest proposal. Why don’t Bill Gates, Al Gore, and Barack Obama, just to name three, model the behavior they’d like to see in others? They’d have to live more like Warren Buffett. Quelle horreur! It would mean they couldn’t fly anywhere and they’d have to turn off the air conditioning but aren’t those small prices to pay to save the planet?