A Carbon Tax Is Not A Slam Dunk

If you spend much time around economists and the conversation turns to global warming, the odds are high that at least some of them will advocate a tax on carbon to reduce carbon usage and thereby slow or halt global warming. Even some economists who are skeptical that global warming will do much harm often think that carbon taxes are a good idea. When I taught an energy economics class at the Naval Postgraduate School, I, too-- someone who thinks global warming will be far from catastrophic--made a case that if the government is going to “do something” about global warming, carbon taxes are the least bad measure.

I now think I was wrong. Necessarily, therefore, I think the many economists who advocate carbon taxes are wrong. My argument does not rest on the idea that global warming will not be very harmful. Rather, my argument is that taxing carbon makes sense only if reducing carbon is the most efficient way to forestall global warming. It might be the most efficient way, but there’s a good chance that it is not.

— Defining Ideas