At Davos, Stern Calls for Carbon Tax
"Humankind's failure to pay for damaging the environment is the "biggest market failure ever seen," declared Sir Nicholas Stern, the author of last year's groundbreaking report on climate change and former adviser to Tony Blair.
Sir Nicholas called for higher taxes on fuel to combat environmental damage yesterday at a summit of business and political leaders in Davos, Switzerland.
As reported by The Guardian (U.K.), the issue of global climate change dominated the agenda of the first day of the World Economic Forum's annual meeting.
Making the environment pay is one of 17 sessions focusing on climate change this week. According to The Guardian, a majority of attendees at a standing room-only session yesterday backed Sir Nicholas's contention that carbon taxes were a force for good and twice as many of the high-level attendees said environmental protection should be a priority for world leaders as did a year ago.
Did you see Thomas Friedman also called for a carbon tax in his column on, I think it was Thursday?
Comment by Aaron — January 27, 2007 @ 11:14 am
One thing I haven’t seen mentioned: the matter of international trade. If the U.S. implemented a carbon tax, it would presumably apply to CO2 emissions required to manufacture imported merchandise as well as to the means of production in the U.S.
If so, then it’s a great solution — it means that places like China and India would have a large economic incentive to reduce CO2 emissions, to enable cheap access to the U.S. market. It in effect brings the export portions of their economies into Kyoto! A good analogy for this is how California emissions standards have improved pollution across North America. This is a way in which a carbon tax has a great advantage over cap-and-trade.
If not, then we might find we have not closed down polluting industries, but simply moved them overseas. Rapidly rising seas.
-Phil
Comment by Phil — January 29, 2007 @ 3:30 pm
Aaron - Thanks. Another excellent Thomas Friedman column.
Phil - Good point, although I think you exaggerate how much of the pollution will move overseas. If you have a good way to tax the carbon in imported goods, we’re interested in hearing about it. I assume that it will be next to impossible to do so and that there will be some "leakage" as some emissions shift out of the country. A global carbon tax would certainly be preferable, but we have to start somewhere and a national carbon tax is certainly far better than nothing. In fact, a state carbon tax would be a step in the right direction even though there would be leakage between states.
If you look at our slide show (on our home page), you’ll see in slide #6 that Americans emit in a week what others emit in a workweek. Another reason not to wait for a global tax — we have a lot more to cut here at home.
Comment by Dan — January 30, 2007 @ 8:29 pm