Friday’s New York Times includes an excellent reminder of the benefits of carbon taxes. Elisabeth Rosenthal’s article reports on Ireland’s experience since it adopted such a tax in 2008. As she describes it, the tax on each type of fossil fuel varies according to its carbon dioxide emissions. Similarly, new cars are taxed according to the vehicle’s emissions. Also, households are charged for any trash not recycled.
Measuring the law’s effect is a little tricky because Ireland was in recession for part of the time since 2008. But it appears to be having the intended effect. In 2011, when the economy grew at least a little, emissions were down by 6.7 percent. Overall, they are down by 15 percent since 2008. Financially, there’s no doubt about its positive effects. In the last three years, including 2012, the tax has generated one billion euros (about $1.3 billion) and been a major factor in reducing the country’s budget deficit.
A single measure that both cuts greenhouse gas emissions and puts lots of money in public accounts; you’d think you’d hear more about it in the U.S., more than the occasional NYT article. But from what I can tell, apart from discussions among some economists -- left and right it should be noted -- and environmentalists, there’s mostly silence. Republicans and conservatives are generally trying to ensure that discussion of this, along with anything else related to taxes, is effectively banned. It’s their own version of political correctness.
The Rosenthal article does point out that the law's success in Ireland didn't do anything to help its original sponsors. The government enacting the taxes lost power in last year’s elections. Nonetheless, the tax law remains in place.
I wonder what it will take to open up the possibility for a similar program here?
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