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Carbon Tax?

It has been a pretty busy day at work. In between bouts of business I entertain myself with various baubles like mailing lists. Someone made a statement I found utterly hilarious, that in the context of current events:

“I think it would be politically possible to return to a gold standard.”

I responded that:

“I think a carbon tax would be more relevant to the concerns of the 21st Century.”

To which some else responded:

“Our currency and economy are broken, and the solution is to tax use of fossil fuels, biggest source of productivity the world has ever seen!”

And I though yeah . . . it is hard to advocate an idea like a new “tax” during a recession. Personally, I think calling it a “carbon ration” might be smarter: you get your allotment and if you make good lifestyle choices you can sell your excess at a profit. Anyway, I responded from the basis of an idea I heard at TED last week:

Over a century ago we swore up and down that without the cheap energy afforded by black slaves the national economy would collapse. So, instead of abolishing slavery we made compromise after compromise. Ultimately our nation was plunged into the catastrophe of civil war, and we abolished slavery for International PR reasons and in order to literally free up fresh soldiers for the war effort from among the newly-emancipated populations.

These days we swear up and down that without access to unlimited cheap energy, our economy would collapse and we would be unable to enjoy the “quality” of life we do now. And as each decade passes we find greater and greater evidence that we are living on borrowed time, and that we are multiplying the problem of carbon emissions into the atmosphere, and that we are approaching various global tipping points which bring us closer to catastrophe.

In both cases, abolitionists and environmentalists are ridiculed and despised an know-it-all killjoys out to ruin everyone’s fun. Where the abolitionists had printing presses that would literally be burned down by their detractors, modern radicals warm themselves with flame wars on the Internet.

To go back to your glib response to a carbon tax, it is easier to make radical changes when it is clear that the status quo is broken. A big reason for the present crisis is that we were fueling growth on unsustainable credit models. Debt Debt Debt. Injecting greenhouse gases into the atmosphere is a form of debt against the future, and if we go bankrupt with climate that’s really really not pretty. So, we have a good opportunity to look at how we structure the free market to take natural resources like the atmosphere into account, and price them appropriately so that we can realize economic benefit with the greatest efficiency.

Maybe one way to think of the idea of carbon rationing is that it is like Social Security for the environment: we each make a sacrifice now so as to secure against a future characterized by poverty. In this case the poverty would be a world wrecked by sudden catastrophic climate changes.

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