Where Taxes Fail, Rationing Can Succeed in Protecting the Environment

Reader Contribution by Stan Cox
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In my book Any Way You Slice It, I contend that the only way any nation or the world can halt and reverse

the buildup of greenhouse gases in the atmosphere is to have a strict ceiling on fossil fuel consumption and lower it year by year, with fair sharing of resources via rationing. The most commonly proposed alternative to rationing is a carbon tax, but taxation is too indirect, and just as important, too politically toxic, to succeed.

The depth of resistance to such a tax has been amply demonstrated over the past fifteen months in Australia, where a fifteen-month-old carbon-pricing system—widely viewed, with good reason, as a carbon tax—is racing toward its demise. The system was created by the Labor Party with help from the Greens and has been under continuous attack by conservative politicians and business interests. The law’s repeal has been one of the chief goals of the conservative Coalition party, and its fate was sealed when Coalition ousted Labor in last month’s national elections. The tax will remain in effect for months to come, but its days are numbered.

The Australian scheme requires the purchase of carbon permits by the largest emitters, primarily electric utilities. Those costs have largely been passed on through customers’ utility bills, and the revenues generated have been returned in the form of tax breaks to low- and middle-income Australians. Thus, the system bears some resemblance to “fee and dividend” ideas proposed by, for example, climate scientist and activist James Hansen.

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