For alter­nate per­spec­tives on this issue, see ​“The Gov­ern­ment Should Write Every­one a Check — Paid for by a Car­bon Tax” by Owen Poindex­ter and ​”Some Econ­o­mists Say Car­bon Tax­es Are a Sil­ver Bul­let. The Real­i­ty Is More Com­pli­cat­ed.” by Kate Aronoff.

The belief that a tax-driven process is possible distracts from the more complex and deep-reaching political changes necessary to drastically cut carbon emissions.

Owen argues that a car­bon tax and div­i­dend could cut car­bon emis­sions while con­tribut­ing to the gen­er­al wel­fare, but the mod­el is deeply flawed. Indeed, any car­bon tax — whether the rev­enue is redis­trib­uted as div­i­dend or not — would be both inef­fec­tive and regres­sive. We should shift our ener­gies toward cli­mate solu­tions that elim­i­nate fos­sil fuels altogether.

For starters, actu­al­ly exist­ing car­bon tax­es from Cana­da to the Nether­lands have, at best, reduced car­bon emis­sions only mod­est­ly. Look at British Colum­bia: In 2008, the Cana­di­an province imple­ment­ed a car­bon tax with rev­enues returned through div­i­dends and income tax rate reduc­tions. While the province’s emis­sions declined in the program’s first year, they rose again in sub­se­quent years.

The envi­ron­men­tal group Food and Water Watch (FWW) indi­cates that the type of emis­sions sub­ject to the tax actu­al­ly increased in British Colum­bia between 2011 and 2014, while untaxed emis­sions went down. As a result, FWW con­clud­ed, ​“It appears that the British Colum­bia car­bon tax has had no ben­e­fi­cial long-term impact on green­house gas emis­sions.” The report spec­u­lates that a lack of ade­quate pub­lic tran­sit (mean­ing indi­vid­u­als rely on cars regard­less of the increased price of gas) and the promise of a div­i­dend and low­er tax­es (which meant peo­ple and busi­ness­es didn’t mind pay­ing slight­ly high­er ener­gy prices) con­tributed to the policy’s failure.

But the prob­lems run deep­er. Mar­ket-based approach­es such as a car­bon tax are accept­ed by the fos­sil fuel indus­try because they do not actu­al­ly threat­en the ongo­ing and con­tin­u­ous extrac­tion of oil and gas. In a state­ment on the 2015 Unit­ed Nations cli­mate talks in Paris, Exxon­Mo­bil endorsed a car­bon tax as ​“the best option” to address cli­mate change while ​“let[ting] the mar­ket dri­ve the selec­tion of solu­tions.” But the mar­ket by itself can­not set in motion a process of reduc­ing car­bon emis­sions toward zero, nor address the larg­er struc­tur­al inequal­i­ties that are becom­ing ever more apparent.

Accord­ing to Basav Sen, cli­mate jus­tice project direc­tor at the Wash­ing­ton, D.C.-based Insti­tute for Pol­i­cy Stud­ies, ​“A price on car­bon is like a sales tax — it doesn’t make pol­luters pay for green­house gas pol­lu­tion. It makes end users pay.” By con­trast, he says, ​“A reg­u­la­tor solu­tion that phas­es out fos­sil fuel extrac­tion and use can be designed to penal­ize those who are respon­si­ble for the prob­lem, not every­one else.” This direc­tion is where we need to go.

Owen argues that the finan­cial bur­den of a car­bon tax could be out­weighed by a div­i­dend, while oth­ers pro­pose that car­bon tax rev­enues should be used to imple­ment cli­mate solu­tions in front­line com­mu­ni­ties. But, as Sen points out (and Owen con­cedes), if a car­bon tax were actu­al­ly effec­tive, rev­enues would decline as emis­sions decrease. The tax itself is not a reli­able source of funds for either idea.

There is no evi­dence that the fos­sil fuel indus­try, with its pow­er­ful lob­by in Wash­ing­ton, would per­mit a car­bon tax to be set high enough to actu­al­ly com­pen­sate for the vast harm the indus­try has done (and con­tin­ues to do) across the globe, espe­cial­ly in com­mu­ni­ties near the sites of extraction.

The belief that a tax-dri­ven process is pos­si­ble dis­tracts from the more com­plex and deep-reach­ing polit­i­cal changes nec­es­sary to dras­ti­cal­ly cut car­bon emis­sions, such as reg­u­lat­ing against the extrac­tion and use of fos­sil fuels and seek­ing the best and most inclu­sive ways of tran­si­tion­ing toward a regen­er­a­tive econ­o­my — one that doesn’t leave vul­ner­a­ble peo­ple and com­mu­ni­ties behind. For instance, gov­ern­ments world­wide pro­vide an esti­mat­ed $775 bil­lion to $1 tril­lion annu­al­ly in sub­si­dies to fos­sil fuel cor­po­ra­tions (not includ­ing the social costs that get shift­ed onto the poor by cli­mate and health impacts and such exter­nal­i­ties as mil­i­tary inter­ven­tions). It can be argued that the fos­sil fuel indus­try would not be viable if it were forced to adhere to a strict busi­ness mod­el with­out sub­si­dies and tax breaks.

End­ing sub­si­dies would be a start. But a car­bon tax is not the answer.

For alter­nate per­spec­tives on this issue, see ​“The Gov­ern­ment Should Write Every­one a Check — Paid for by a Car­bon Tax” by Owen Poindex­ter and ​”Some Econ­o­mists Say Car­bon Tax­es Are a Sil­ver Bul­let. The Real­i­ty Is More Com­pli­cat­ed.” by Kate Aronoff.