What are the negative effects of cutting carbon emissions? Can carbon taxes help at all?
Cutting carbon means slowing global warming. But it also means more expensive energy. There are real and immediate consequences when low-income households cannot keep warm in winter or cool in summer because of energy price hikes. Yes, we should focus on cutting carbon emissions, but we should be aware of both the costs and the benefits. Carbon taxes can make a difference, but only in the right proportion. The best estimates from all economic models show that the damage from one ton of CO2 equals about $2. Thus, embracing Al Gore’s suggestion of taxing carbon at $140/ton is bad policy. That is paying $140 to do $2 of good, which is simply a bad deal. We should tax CO2 at $2/ton and cut as much CO2 as is economically sound. What would be a more realistic and cost-effective solution of the problems of climate change? I don’t believe we should do nothing about climate change. I believe we should get smarter. We need to abandon expensive and inefficient strategies like Kyoto and think abou
