All Jim wants for Xmas is a carbon tax

Jim Rose writes:

Few appreciate that once a country introduces an economy-wide carbon tax, it’s time to downsize the Ministry for the Environment and demote the Minister for Climate Change. Their work is done.

A carbon tax puts a price on carbon emissions and leaves it to the market to decide which industries should shrink or grow and where to invest in innovation. Provided the carbon tax was set at the correct initial rate, a competitive market system subject to a carbon tax works itself. No further guidance is required from ministers or ministries.

Jim is quite right. The best policy response to the warming effect of greenhouse gas emissions is a tax on such emissions. Done properly, it is the most effective policy response.

It is far far far better than having Ministers decide on ad hoc policies such as banning gas exploration (which will in fact increase greenhouse gas emissions globally).

There will be layoffs at Greenpeace too because environmentalists no longer need to call for the end of oil or of coal because a carbon tax will decide how much coal and oil should come out of the ground and when. A carbon tax will make the next best alternative fuels more attractive to buy.

Yep.

Canadian environmental economist Ross McKitrick suggested a solution where the carbon tax be automatically increased under a public formula in line with increases in the temperature of the atmospheric troposphere. That’s the first 18km of the atmosphere near the equator.

Linking carbon tax increases to the atmospheric troposphere has the big advantage that it is the part of the atmosphere most affected by greenhouse gas driven warming, it is affected early, and it is subject to reliable independent measurements by weather balloons and satellites.

By announcing the formula for the increase in advance, you take the issue out of politics and make any further attempt to politicise the carbon tax plain to all. This is a much more effective solution than the Green proposal for a reserve bank style carbon commission with the wisdom of Solomon to independently set the pace for carbon reductions.

I’m all for a known formula to set the level of the tax. Far better than a purity war between political parties.