Less grift, more grist?
Charles Komanoff’s refutation of Bill Chameides’s tirade against carbon taxes does not require repetition by me. However, there is one point I can add detail to — that a carbon tax is more transparent than emissions trading.
This is not just an abstract point. Consider in the Kyoto carbon trading scheme how most carbon credits were given at no cost to major polluters. That is not a necessary part of emissions trading. You could auction off 100 percent of the credits. For that matter, you could rebate carbon taxes to major polluters if you want. The difference lies in how obvious it is — how transparent such schemes are.
In an emissions trading scheme, there are no obvious costs to you as a taxpayer. An artificial property right has been handed out to an influential industry. It’s never going to be high on anyone’s radar — at least not until the utility company raises electric rates to account for the cost of using instead of selling those credits they were given for free.
Imagine trying to pull this under a carbon tax scheme. You are giving away real cash money, almost of all of it paid (directly or indirectly) by households. And you are giving it to major polluters who have already passed their added costs on to consumers. Not impossible, but not as simple to slip by as under emissions trading.
The problem with making scams and giveaways easy to slip in is that you almost guarantee they will slip in. Some politicians may be able to resist an opportunity to give away huge sums unnoticed to a major industry, but I don’t think you want to count on them being a majority.