Governor Johnson’s “Carbon Fee” Proposal Had Some Merit, After All

Governor Johnson’s “Carbon Fee” Proposal Had Some Merit, After All

by Brett Linley

Nothing will burn through your libertarian street-cred faster than proposing taxes. In reality, it doesn’t matter what kind of tax it is. The tax’s purpose doesn’t really matter, either. All that matters, when rubber hits the road, is that you want more of people’s money.

Gary Johnson made this “fatal” error when he explored what he called a “carbon fee.” Truthfully, this so-called “fee” doesn’t appear any different than a tax. It would essentially function as a tax, and would attempt to reign in the environmental costs of carbon.

Conservatives and libertarians have made their cases against a carbon tax well known. Hard-liners argue that such a tax would hike energy costs across the board. Moreover, many consider such taxes regressive. In theory, the poor would suffer the most of anyone.

This article will not discuss these positions. To put it simply, people already know what they believe. However, carbon taxes have rarely received a fair shake. People can freely assemble their own opinions, and they can take any stance that they want. Noting this, we must recognize that we cheapen the intellectual debate when failing to consider widely-advocated alternatives.

People Should Face Responsibility for the Costs That They Impose on Others

Take a moment, and forget about the carbon tax. Imagine a different scenario. Pretend that, as you’re walking down the street, you see a man buying a pack of cigarettes from a drug store. As a libertarian, you don’t care what people do with their bodies, and keep walking.

However, you stop as the man comes up to you. Before you have a chance to react, he pulls a lit cigarette from his mouth and blows a bunch of smoke in your face. Then, he walks away. Without your consent, desire to join the transaction, or any prior interaction with the vendor at all, you’ve been forced to ingest cigarette toxins without any of the benefit. Welcome to the world of carbon.

This example is obviously ridiculous, but the principles are essentially the same. It’s true, carbon fuels much of our daily lives. However, some people who may not rely on carbon-based fuels so heavily still have to pay a price: pollution.

Pollution is the classic case of an externality. Two people transact, and a third-party bears costs that it didn’t ask for a part of. The third-party didn’t ask to fuel your home, for example, but it has to deal with the negative environmental consequences of it.

A carbon tax attempts to rein in some of these excess costs. As it stands, the law states that buyers and sellers of carbon products should pay a price of $0 for the costs that they inflict on others. From a libertarian standpoint, this hardly seems adequate.

A Level Playing Field is Necessary for Effective Policy

The sad reality is that the market does a less-than-stellar job of covering these situations. Increasing private property rights would undoubtedly be a step forward. More freedom is always preferable to authority.

However, the cost of enforcing these rights when it comes to air pollution could be prohibitively high. It would be hard to prove that traces of air pollution above your house came from any specific manufacturer.

In a sense, a carbon tax acts as a protection on private property rights. Since an individual likely lacks the mechanisms with which to impose a cost on polluters, the government acts to impose such costs on his or her behalf.

Critics will often cite how a carbon tax places an undue burden on a specific industry. All the while, so-called “green energy” sources continue to pile on massive subsidies. This is a fair point, and must be accounted for if a carbon tax is to be taken seriously.

In reality, we should abolish all energy subsidies. “Green energy” should not be given special treatment just because it is relatively new. However, with the carbon tax, the price of carbon would ultimately come into line with the costs imposed on society through pollution.

The Problems With The Tax Are Not Insurmountable

Libertarians are correct to bring up the issues with the tax. It is certainly not a cure-all, and there would be difficulties implementing it. This does not mean that it shouldn’t be talked about at all.

Rising energy costs are regressive, meaning that they disproportionately hurt the poor. However, rebates funded by the tax revenue could correct for this problem.

Global warming is no longer a myth that can be easily discarded. Carbon producers have been, realistically, free-riding. When people don’t have to bear the costs of their actions, there are inefficient incentives. A carbon tax attempts to iron these inefficiencies out.

Of course, it’s hard to say what the proper tax-rate should be. The state lacks the necessary information to make good choices most of the time, as most libertarians recognize. However, we cannot use this excuse to do nothing. Sometimes, we must pursue solutions we may not love to solve serious problems.

A carbon tax is an imperfect solution to a big issue. Economic principles support such a tax. The urgency of climate change supports action. It’s time for libertarians to put down their purity tests and solve a problem.