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3/Seriously. Economists love carbon taxes. 
4/Here's a thread explaining why economists love carbon taxes, and how carbon taxes are supposed to work.
5/Carbon taxes are good, but by themselves they won't get the job done. Not even close.
Reason 1: You have to pick the level of the tax. How do you do it? Economic models, typically. And these models have...many many limitations.
bloomberg.com/opinion/articl…
Reason 1: You have to pick the level of the tax. How do you do it? Economic models, typically. And these models have...many many limitations.
bloomberg.com/opinion/articl…
6/It's not just the scientific assumptions that can screw up economic models of climate change. There are macroeconomic assumptions in there too.
theweek.com/articles/85063…
theweek.com/articles/85063…
7/Also, as the late great economist Martin Weitzman showed, since global warming involves big tail risks and uncertainty, it's not subject to standard cost-benefit analysis:
thinkprogress.org/harvard-econom…
thinkprogress.org/harvard-econom…
8/OK but suppose that instead of doing a cost-benefit analysis, you simply set carbon taxes really high?
Well, there are still many many problems.
Well, there are still many many problems.
9/First of all, carbon taxes are an incredibly blunt instrument, and there are cheaper more targeted interventions - basically, forcing a switch to green technology in key areas - that get much more bang for the buck.
See this thread:
See this thread:
10/Also, switching to green energy and other green technology requires lots of INFRASTRUCTURE. The private sector won't build much of it. Government has to.
11/And unless you can somehow set a global carbon tax (which you can't), you run into the problem that global warming is GLOBAL, while carbon taxes are only local!
12/Global carbon taxes are probably politically impossible, and local carbon taxes could just end up making oil, coal and gas cheaper for other countries to burn.
13/But does this mean carbon taxes suck? NO! In fact, they're good. They can do stuff that more targeted policies can't do. They can incentivize a ton of small improvements all across the economy.
14/But carbon taxes can't be our main approach to climate change. It's not the silver bullet some people think. It's just one modest piece of the overall solution.
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bloomberg.com/opinion/articl…
(end)
bloomberg.com/opinion/articl…
