The Carbon Tax Charade

| Sun Dec. 6, 2009 3:59 PM PST

Speaking of climate change, here's Matt Yglesias on the sudden boom in the number of advocates of ditching cap-and-trade in favor of a "simple" carbon tax:

Their basic point, that the kind of carbon tax proposal that policy wonks would dream up would be superior policy to the kind of cap-and-trade plan that would result from the compromises necessary to get 60 votes in the Senate, is very true. But by the same token, the kind of cap-and-trade proposal that policy wonks would dream up would be superior policy to the kind of carbon tax plan that would result from the compromises necessary to get 60 votes in the Senate.

Actually, I'd go even further.  Like it or not, politics is a grungy business.  If you want to pass something big, you have to make lots of compromises and give away lots of goodies.  Cap-and-trade allows this to happen far more easily than a carbon tax while still setting a firm limit on carbon emissions.  It's not pretty.  And it's not the way I'd do things if I were a benevolant dictator. But the plain fact is that in the real world, all the moving parts that make cap-and-trade messy are also the things that allow it to have a chance of passing in the first place.

(There are also other benefits to cap-and-trade, as well as some drawbacks.  My piece earlier this year on cap-and-trade runs down most of the big issues.)

And at the risk of pissing off some decent people, I'll add one other thing.  In the near term, no serious carbon tax will ever pass the U.S. Senate.  Period.  If you believe otherwise, you're just not paying attention to things.  A big part of the surge in interest in a carbon tax is purely cynical, coming from special interests who are afraid a carbon cap might actually pass and want to muddy the waters with pseudo-liberal arguments in order to build an anti-C&T alliance and keep anything at all from passing.  There are plenty of carbon tax advocates who are perfectly sincere, but I gotta tell them: you're being played by people who are the farthest thing imaginable from sincere.  If you win, we're not going to get a carbon tax.  We're going to get nothing.

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