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Carbon Tax is Pointless and Inflationary

Climate alarmists hope that Hurricane Sandy and President Obama’s re-election will coerce panicky congressional Republicans into a “carbon tax” deal in 2013. But simple math shows the tax would have no effect other than an inflationary one.

A carbon tax would operate as a new sales tax on goods and services that are produced through or otherwise involve the burning of fossil fuels. You might pay the tax in your electric bill, at the gas pump or in the form of higher prices for other good and services.

The purpose of a carbon tax would be to penalize fossil fuel use in hopes of reducing carbon dioxide emissions, which have been hypothesized to cause global cooling (1970s), global warming (1980s-1990s), climate change (2000s) and extreme weather (2010s).

While higher prices for goods and services aren’t inherently evil, their merits must be judged by what consumers and society get in return. So let’s consider a carbon tax from a climatic perspective.

To give a carbon tax the maximum advantage in our analysis, we’ll assume that it would be totally successful in reducing U.S. Big government: big failurecarbon emissions — i.e., the U.S. emits no carbon dioxide whatsoever from fossil fuels. And let’s also imagine that this public policy wonder has this magical effect as of Jan. 1, 2013.

So what would be the climatic effect of immediately shutting down the fossil fuel-based U.S. economy?

Let’s assume that U.S. fossil fuel use results in 6 billion metric tons of carbon dioxide emitted into the atmosphere annually and that, of this amount, about 40% (2.4 billion tons) stays and accumulates in the atmosphere annually.

Atmospheric carbon dioxide is measured in parts per million and one part per million of carbon dioxide weighs approximately 7.81 billion metric tons. Simple division, then, shows that the U.S. might be adding at most approximately 0.31 parts per million to the atmosphere every year.

If the carbon tax could magically stop U.S. emissions entirely as of 2013, then by the year 2100, we would have avoided adding about 27 parts per million (0.31 x 87) of carbon dioxide to the atmosphere.

That may sound like a lot, but consider that the current level of carbon dioxide in the atmosphere is about 391 parts per million. The U.S. Environmental Protection Agency estimates that atmospheric carbon dioxide levels in the year 2100 could range from 450 parts per million (absolute global clampdown on greenhouse gas emissions by mid-century) to 950+ parts per million (no clampdown).

Either way, it’s plain to see that a savings of 27 parts per million over 87 years is trivial, particularly in comparison to its cost (shutting down the entire economy) and would make no meaningful climatic difference even if atmospheric carbon dioxide was the driver of global climate that the alarmists claim it is.

For further perspective, consider that 27 parts per million ago (i.e., 364 parts per million) was, temporally speaking, 1997 — since which time there has been no significant global warming, even according to the alarmists.

But remember we here have been fantasizing wildly about the effect of a carbon tax. No carbon tax enacted into law — even by an Obama-fearing 113th Congress — would come any where close to significantly reducing, much less stopping fossil fuel use in the U.S. anytime soon.

In reality, goods and services would simply be made to cost more. The atmosphere and climate would not be affected in any significant way. Consumer dollars would have less purchasing power — a phenomenon called inflation.

Sadly, some prominent conservative economists support a carbon tax.

Reagan economist Arthur Laffer would support a tax in exchange for a reduction in payroll or income taxes. Bush 43 economist Greg Mankiw supports a global tax. Douglas Holtz-Eakin, senior adviser to John McCain in 2008, wants a tax to provide the energy industry with regulatory “certainty.”

As smart as these guys may be, none of them has apparently done the simple math that shows a carbon tax is a policy futility that buys less than nothing.

Hurricane Sandy shows what life is like without fossil fuels; it’s not a reason to do away with them. President Obama doesn’t care about the realities of climate; for him and his kind, global warming is an excuse to seize greater control of the economy. As to congressional Republicans, don’t panic; do the (simple) math.

Contact the Editor: Joel Johannesen
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