Time for a carbon tax?

At the Rappaport Institute's recent Green Cities event in Boston ( http://www.hks.harvard.edu/rappaport/events/greencities.htm ), the presenters were notable not only for their comprehensive approach to "greening" our cities and urban areas, but also for their advocacy of a carbon tax - in contrast to the more traditional 'cap and trade' approach to carbon emissions - to help mitigate global warming.

The carbon tax rationale is that putting a dollar cost on consumers' CO2 emissions is the most effective way to curb fossil fuel consumption (and reduce global warming emissions). And it's pretty simple: if you choose to purchase an energy-inefficient and/or highly polluting vehicle, for example, then you pay for your choice. It's essentially a version of consumption tax, where you pay for your choices as a consumer - it's your prerogative to make high-emitting choices that will cost you more, or lower-emitting and cost-effective choices. For Americans who tend to balk at any mention of a tax increase, that's a key factor, because the choice to increase your tax burden is entirely yours. In addition, most carbon tax plans include tax credits for consumers who choose lower-emissions-producing goods. And as tax time approaches, that sounds like welcome news to all of us.


For an explanation and discussion of the merits of carbon taxing vs. cap-and-trade, visit http://www.carbontax.org/