Against the carbon tax fad
With the emergence of Extinction Rebellion, climate change discussions in debates, and other trends, climate change has become an object of public inquiry. One popular avenue of "climate change mitigation" is the carbon tax.
The standard reasoning behind the carbon tax as a vehicle for climate change mitigation is given by Alan Thornett in his book Facing The Apocalypse: Arguments for Ecosocialism:
Energy producers would indeed pass carbon taxes on to their customers, and the price would go up -- in the end that is what reduces demand. (p. 103)
It's this logic I wish to challenge here. The assumption behind it is that we're all consuming fossil fuels by choice, because they're cheap, and that we wouldn't consume fossil fuels if they weren't affordable. But we don't consume fossil fuels by choice! For the most part, global fossil fuel consumption is "locked in" -- people don't have the money to buy electric cars, and so they drive to work in their fossil-burning ones. There are of course other ways in which fossil fuel consumption is "locked in," amounting to nearly all carbon consumption. The way to reducing carbon consumption, then, is to reduce that portion of carbon consumption that is "locked in," by creating a new infrastructure. That's the real solution. The carbon tax, in this regard, is at best a nuisance, and at worst an owning-class pseudo-solution.
A carbon tax would effective in mitigating climate change to the extent to which it screws the working class out of the ability to drive to work in fossil-fueled cars. A carbon tax which only limits "optional" carbon consumption is ineffective because "optional" carbon consumption is too little of the sum total. So carbon taxes must become high enough to make it impossible for the owners of carbon-burning vehicles to use them to get to work. The ability of such taxes to force people to stop driving is the measure of their effectiveness, regardless of what reasons they may have for driving said vehicles. But nobody is going to say "I think I'll voluntarily limit my consumption of fossil fuels by not driving to work, so instead, I'll live on the streets and beg for a living because I will be consuming less carbon that way." The prohibitive carbon tax, intending to make carbon consumption unaffordable, tries to make such statements mandatory, getting people to say "carbon consumption is unaffordable, so I will live on the streets and beg for a living." A society of beggars would consume less carbon, no?
Now, the advocates of a climate tax have begun to recognize the regressive nature of their proposals, and so many of them have begun to endorse a "fee-and-dividend" approach, including most prominently James Hansen and the Citizens' Climate Lobby. We mitigate climate change and everyone gets some money back. Win-win, right?
The problem with such logic is that the ability of such a tax to prohibit people from consuming carbon interferes with its ability to provide a dividend for public consumption. A low tax might provide a bit of money for the working class, but how do you all know that we'll all be able to use our dividends buying electric cars? Let's be clear -- the bottom 40% of America lives hand-to-mouth, and so therefore that same 40% can always use a few extra dollars for purposes other than high-minded environmentalism. A high tax, on the other hand, will provide us with small dividends, because people won't be able to pay it. Probably by that point either we will all have bought solar-powered electric cars to get to work, probably most of us on loan, or we'll be on the streets begging for a living. And who will drop coins in our hats? John Bellamy Foster, in his 2013 critique of James Hansen, touches upon some of these points.
Once again, when we examine the dynamics of a carbon tax in its real-world operation, we discover, lo and behold, that physical climate change mitigation requires something other than a carbon tax. What we mostly discover is that the working class needs ways of "making a living" which do not oblige it to use fossil fuels. To be fair to Alan Thornett, whom I quoted above, he's not just recommending a carbon tax by itself. Quoting again from page 103:
Such taxes have to go alongside a range of other measures, of course, such as a complete changeover to renewable energy, a major programme of energy conservation, an end to waste and obsolescent production, a big reduction in the use of the internal combustion engine, both diesel and petrol, the localisation of food agricultural production, fresh water conservation, a big reduction in meat consumption, a shorter working week -- the list could go on. Carbon taxes, properly applied, however, can be the driving force that can bring down carbon emissions rapidly and open the door to wider change.
I am at a loss, however, to understand how what is basically a regressive tax has the magical power to elicit such wonderful things. Here's my question for the carbon tax advocates: why not finance the transition through a progressive tax?