Cutting emissions sensibly

Everyone so often, I read something so well thought-out that it bears repeating verbatim. This is from the Financial Times March 13 editorial, “Tied up in green tape: We need well-designed environmental policies. Anyone?” Americans should pay attention to countries like the U.K. that are ahead of us in paying attention than we are to these issues.

“The battle for the green vote in the UK grows more depressing by the day…Neither party seems to have much interest in how to tackle climate change at the lowest possible cost.

“The answer to that problem is not elusive. Either a carbon tax, or a credible emissions trading scheme that produced a predictable carbon price, would discourage wasteful activities and encourage innovation to cut down on carbon dioxide emissions.

“The Tories offer micro-management instead, with talk of a ‘Green Air Miles Allowance’ and the possibility that frequent flyers pay more…What matters is that emissions are cut where they can most easily be cut, and no government will ever know where that might be.  Only a tax or trading scheme will uncover the truth.  Consumers will give up what they value little and keep doing what they value most.  Producers will save energy where it is easy to do so and not where it is difficult.

“Mr. Brown [Labor] is even more of a micromanager than Mr. Cameron [Tory]…stretching the tentacles of the state, presenting a list ranging from light bulbs to the standby function on television sets.  He also repeated his commitment to an emissions target for 2050…[but] we need incentives to change now.

“It is best to admit that facing up to climate change is going to mean that we will have to live our lives a little differently.  Yet the differences are sometimes exaggerated – for example, a tax or permit price of £25 per tonne of carbon dioxide would put about £10 on the price of a short haul flight, no more than the current air passenger duty.  A sensibly designed environmental policy need not be impossibly arduous.  The piecemeal approaches on offer promise to be both costly and ineffective.

“Both parties have to get away from their obsession with the distributional effects of any particular green tax…The tax system as a whole should be progressive, but not every measure needs to be.  The potential pain of green taxes could be offset if politicians promised to offset them with tax cuts elsewhere.  This, at least, the Tories have done.  Mr. Brown should follow suit.”

Well said!

-Ross Capon