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A
Harvard professor opened an opinion piece in The New York Times,
“During the presidential campaign of 2008, Barack
Obama distinguished himself on the economics
of climate change, speaking far more sensibly about the issue than most
of his rivals. Unfortunately, now that he is president, Mr. Obama may sign a climate bill that falls far short
of his aspirations. Indeed, the legislation making its way to his desk
could well be worse than nothing at all.”
I
would agree with half of N. Gregory Mankiw’s
pronouncement—the present climate legislation is worse than nothing at
all. He goes on to do an admirable job in exposing the scam of
cap-and-trade. But he soon drifts from climate science back to the
“dismal science” he teaches—market economics: “Emitting carbon is what
economists call a ‘negative externality’—an adverse side effect of
certain market activities on bystanders. The textbook solution for
dealing with negative externalities is to use the tax system to align
private incentives with social costs and benefits. ... A carbon tax is
the remedy for climate change that wins overwhelming support among
economists and policy wonks.”
So
instead of the invisible hand of the market we should rely on the
stealthy hand of taxation to save our biosphere. I guess this would
work the same way that steep taxes on booze and tobacco have turned us
in to a nonsmoking nation of teetotalers.
But
carbon emissions, while negative, are hardly mere side effects of market
activities. They are central to present economic production in the
world today. Making them more expensive is not an acceptable substitute
for replacing carbon-driven production methods with available clean,
renewable energy sources. This approach, which is really our only hope
for preserving human civilization, will undoubtedly eliminate many
“private incentives” in order for society to survive. That is why it is
overwhelmingly rejected by Ivy League economists and wonks.
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