This week, a self-described “who's-who of conservative elder statesmen” launched a new organization, the Climate Leadership Council (CLC), to make their “Conservative Case for Carbon Dividends.” Lest one be confused, the proposal is yet another carbon tax. Lest one be optimistic, it manages only to weaken an already flawed policy.
Carbon-tax proposals have circulated for years with a straightforward rationale: if carbon-dioxide emissions are causing harm, taxing them could achieve emissions reductions while generating government revenue. By raising the tax over time, more and more emissions would eventually be eliminated. For those on the right, the concept of a “revenue-neutral” tax has held particular appeal. If the tax revenue goes toward other tax cuts or cash payments to households, government does not grow. The CLC proposal adopts a pure cash-to-households approach, thus the “dividend.”
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