Monday Post-And-Run: LA Times Carbon Tax Editorial

Yesterday's Los Angeles Times has a long, cogent editorial in favor of serious carbon taxes. Make no mistake, after health care policy, this is the number one issue that will affect the American economy, and global economic and environmental health.

Time to Tax Carbon:

IF YOU HAVE KIDS, take them to the beach. They should enjoy it while it lasts, because there's a chance that within their lifetimes California's beaches will vanish under the waves.

Global warming will redraw the maps of the world. The U.N.'s Intergovernmental Panel on Climate Change predicts that sea levels will rise 7 to 23 inches by the end of the century; as the water gets higher, the sandy beaches that make California a tourist magnet will be washed away. Beachfront real estate will end up underwater, cliffs will erode faster, sea walls will buckle and inlets will become bays. The water supply will be threatened as mountain snowfall turns to rain and the Sacramento-San Joaquin Delta faces contamination with saltwater. Droughts will likely become more common, as will the wildfires they breed.

Californians are serious about this because they know that without their glorious beaches (and beach culture), a hotter, drier California is nothing but 34 million people living in the desert. Bummer, man.

And yet for all its benefits, cap-and-trade still isn't the most effective or efficient approach. That distinction goes to Method No. 3: a carbon tax. While cap-and-trade creates opportunities for cheating, leads to unpredictable fluctuations in energy prices and does nothing to offset high power costs for consumers, carbon taxes can be structured to sidestep all those problems while providing a more reliable market incentive to produce clean-energy technology.

Californians are also a bit edgy regarding fluctuating energy prices. All those Google servers don't run on positive vibrations.

Carbon taxes avoid all that. A carbon tax simply imposes a tax for polluting based on the amount emitted, thus encouraging polluters to clean up and entrepreneurs to come up with alternatives. The tax is constant and predictable. It doesn't require the creation of a new energy trading market, and it can be collected by existing state and federal agencies. It's straightforward and much harder to manipulate by special interests than the politicized process of allocating carbon credits.

Make the invisible visible. Finally put a (state-imposed, yes) cost on those negative externalities and let the market decide. No new trading scheme to be gamed, no regulatory authority to look over their shoulders. Just annual inspections and a bill.