Tuesday, February 6, 2007

Global Warming

The Washington Post's Anne Applebaum offers a solution:
Any lasting solutions will have to be extremely simple, and -- because of the cost implicit in reducing the use and emissions of fossil fuels -- will also have to benefit those countries that impose them in other ways. Fortunately, there is such a solution, one that is grippingly unoriginal, requires no special knowledge of economics and is easy for any country to implement. It's called a carbon tax, and it should be applied across the board to every industry that uses fossil fuels, every home or building with a heating system, every motorist, and every public transportation system. Immediately, it would produce a wealth of innovations to save fuel, as well as new incentives to conserve. More to the point, it would produce a big chunk of money that could be used for other things. Anyone for balancing the budget? Fixing Social Security for future generations? As a foreign policy side benefit, users of the tax would suddenly find themselves less dependent on Persian Gulf oil or Russian natural gas, too.
It's an interesting solution, and really a purist capitalist approach: pay as you go. It's a perfect example of Robert. F. Kennedy, Jr.'s proposal that we stop subsidizing polluting industries by having the taxpayers clean up after them. The public costs of the means of their private profits is not only unfair corporate welfare, it inhibits technological innovation. Make the industries bear the costs, and they will either go out of business or be forced to innovate. That's a truly free market approach.

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