Comments on: Carbon Tax vs. Carbon Caps: Dissecting the Rhetoric

By: Bob Kerns

Bob Kerns — Mon, 27 Apr 2009 14:07:58 +0000

Al Gore makes the point that Cap-and-trade is easier to create a harmonized international system for than a harmonized tax. I suspect he’s right.

With a tax, AND with a cap-and-trade system, there’s the question of where the revenues go. The whole thing is dangerous and inefficient if those revenues don’t go into actions (R&D, assistance, etc.) to reduce CO2 emissions. If it relies purely on the deterrent effect of economic pressure to change behavior, you’re only getting half the benefit, but all of the economic disruption. And probably funding bloated government as well.

By: David Schatsky

David Schatsky — Wed, 15 Apr 2009 14:00:04 +0000

Both both carbon tax and cap-and-trade will increase the cost of carbon-based fuels. Neither is inherently worse than the other for low-income households and small businesses. If there are grounds for shielding particular groups from the full costs of these programs, there are a variety of ways of doing so.

By: Charlenne Hal

Charlenne Hal — Thu, 09 Apr 2009 00:43:31 +0000

How do u feel about the impact of increase carbon taxes will effect on low-income households and small businesses?

By: David Schatsky

David Schatsky — Mon, 30 Mar 2009 18:55:22 +0000

Thanks for your nice comment. I welcome any suggestions you might have for other topics to dig into.

By: Sensible City

Sensible City — Mon, 30 Mar 2009 16:45:46 +0000

This is a very useful post among fields of misconceptions. Thank you!

By: David Ocampo G

David Ocampo G — Wed, 25 Mar 2009 21:31:23 +0000

There is one major advantage of the Carbon Tax vis-a-vis Cap’n Trade: price stability. At present, carbon fuel consumption is falling and as a result carbon emission permit prices are falling. This means that fuel prices fall even faster, making carbon-stingy investments far less attractive. This pushes carbon-reduction effectiveness even further down the road.

Conversely, booming carbon fuel consumption would result in rapid increases in carbon emission permit prices, right along with pre-emission fuel taxes, for spectacular increases in energy costs to ultimate consumers. This would spook public acceptance to a fare-thee-well.

By and large I agree with Mr Schatsky. Nevertheless, this one single “otherwise” is enough to knock the entire rationale for Cap’n Trade all golliwompus.