My Commenters Is Smarter Than I: Global Warming Edition

Responding to my pessimism on carbon taxes, Dave Roberts sez:

Ezra, I think you're overlooking three possibilities.

One is the aforementioned larger Democratic majorities. Certainly not all Dems are good on the issue but the closer you get to 60 reliables the closer you get to large-scale policy change.

Two is proposing (and selling) a tax shift rather than a simple tax. This is what most in the Pigou crowd really want. Imagine, e.g., Obama saying: "I'm not going to raise your taxes. I'm going to make your taxes smarter. Right now we tax something that we want more of -- work -- and have a zero tax rate on something we want less of -- polluting the atmosphere. It makes more sense to me to move those taxes from work to polluting so we get more of the former and less of the latter."

Three is that the combination of a mildly good energy bill (like the one going up this week) and a mildly good climate bill (like the one before EPW this week) will create an increasingly large and monied set of constituencies that support, and by that I mean profit from, tough climate policy. The combination of pressure from the private sector with pressure from national security groups and religious groups and hunting & fishing groups and international aid groups and green groups and every other country in the world except fucking Liechtenstein will eventually create an atmosphere in which even Republicans are forced to act.

None all that likely on its own, but maybe in combination ...

That shift rhetoric makes a lot of sense.  Of course, you then run into the problem of people who want to finance the government arguing that this shift reduces funds.  The tax here is meant to make people do less of the thing that gets taxed.  If it functions correctly, revenues will fall.  So it seems like a pretty unstable way to fund your governmnt: Either the tax fails and carbon consumption holds, or the tax works and the government starts going broke.  We tax work, in part, because it's fairly inelastic -- people basically need to work, and so it's a stable activity to tax.  What we're hoping is that they don't need to use carbon, and so taxing it will make them use less.  In either words, we're hoping that carbon use is elastic.  That would make taxing it an effective way to discourage use, but not to run your government.

That said, Dave's points make sense to me, and one of the big elements I left out is the possible and necessary construction of pro-carbon tax constituencies, rangig from the renewable energy sector to businesses who fear for their future.  The question is how long these constutencies take to mature into a counterbalancing force.

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