Carbon Taxes Will Actually Increase Global Carbon Emissions

Environmental activists are constantly inventing new, and increasingly impractical ways to stop global climate change—everything from giving rural Indians free solar panels, to re-freezing the Arctic using windmills, to growing new forests and burning them for fuel instead of oil.

But as pointless as all of those sound—and they are pointless—none of them are as bad as a carbon tax.

Specifically, a new report penned by thirteen major economists, led by Professor Nicholas Stern and Joseph Stiglitz (who won the Nobel Price in 2001), recommends the adoption of a global tax on carbon emissions.

The tax would value carbon emissions somewhere between $50 and $100 per ton by 2030—this would raise upwards of $4 trillion.

And although a carbon tax may hurt our economic growth, how could it possibly be worse than lacing the Arctic ice sheet with thousands of refrigeration coils?

A carbon tax is worse because it’s reasonable.

No one is seriously considering some of the more esoteric plans, but governments are considering carbon pricing.

Just look at Ontario, Canada, where power prices are now so high that the government has imposed price controls on electricity costs, in an attempt to ward off green energy poverty.

But let’s not talk about the economic side of things.

Let’s talk about the environment, because isn’t protecting the environment the whole point of a carbon tax?

A carbon tax results in higher carbon emissions, therefore, carbon taxes are pointless.

Why? Because the US economy isn’t a closed system.

In a closed system, the carbon tax would hypothetically work: the government imposes a price on carbon, and everyone needs to pay it. Simple.

But in an open market, major emitters can simply relocate abroad and avoid the tax altogether—why keep your factory in the US, when you can move it to Mexico, or China, and avoid the carbon tax altogether?

This not only results in offshoring, which can have disastrous economic consequences, but it also means that said factory is now located in a jurisdiction with environmental regulations that are more lax than America’s.

Likewise, the power produced in places like China is far dirtier than power produced in America.

This means that carbon taxes actually end up causing higher global carbon emissions than doing nothing at all.

Just look at the environmental degradation in China: it happened because we traded our relatively environmentally friendly factories for dirty Chinese factories.

It was a bad environmental trade then, and it’s a bad trade now.

True environmentalists look at the whole picture, not just what’s politically convenient.