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Carbon tax

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Carbon tax

Terry Corcoran has written another editorial in the Financial Post (October 5) criticizing the UN and its fixation on climate change. I am in full agreement with Terry that you cannot trust any initiative concocted by the UN or its legions of hangers-on.

I do hope that Terry is right in his prediction: “The slow death rattle of the United Nation’s climate-change apparatus grew a little louder yesterday as thousands of delegates (who are all these people and why are they all needed – my questions) descended on Tianjin, China, for a five-day negotiating session.”

At this point however, Terry and I likely part company.

I do not know if climate change is a serious problem – neither does anyone else really. And if it is, I do not know what might be the best tools to tackle the problem – again, I doubt that anyone really knows. But what if climate change does turn out to be a Black Swan with catastrophic consequences? There may be an infinitesimally small probability of this (Black Swans are by definition, extremely rare events). But we should be prepared.

I am a strong advocate of contingency planning. Do we need to look farther than BP’s fiasco in the Gulf during the summer to appreciate the importance of contingency planning? Thus, we must have plans in place to deal with this possibility, slim as it might be.

I’ll admit that I do not know what these plans should be or who should be responsible for their development and possible implementation – but definitely not the UN or any other international body that operates along the same lines as the UN.

Carbon taxes probably should be part of any contingency plan. Revenues, generated by such a tax, should not be collected by any international body, nor should they be used for any social or income redistribution programs.

However, my primary reason for supporting carbon taxes are geo-political. The US, the EU and possibly some other members of the OECD should introduce very large carbon taxes. They should heavily penalize the users of gas-powered cars and trucks. Most, if not all, of the revenues collected should be returned through lower income and/or sales taxes.

Why punitive carbon taxes? Because it is time to destroy our dependence on fossil fuels. The auto industry is going through or should be going through a major transformation. This should include the development of alternative fuel-powered engines, and much smaller, fuel-efficient vehicles.

I support such dramatic measures because only in this way can we cause oil prices to collapse. This will benefit developing, oil-importing countries – a good outcome. More importantly, this will greatly reduce the incomes of oil-exporting countries, and thus the ability of several of these countries to create havoc through their proxies around the world – also a good outcome. Imagine the geo-political consequences of bankrupting countries such as Saudi Arabia, Iran and/or Russia.

Terry Corcoran might even agree with me. But he would raise a very real concern: could we trust the governments of the major industrialized countries to maintain a hands-off approach to the hundreds of billions of dollars of carbon tax revenues flowing through their hands? Probably not; nevertheless, I still believe it is worth this risk.

The opinions expressed in this blog are personal and do not reflect the views of either Global Brief or the Glendon School of Public and International Affairs.


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1 Comment

  1. klem October 6, 2010

    “But what if climate change does turn out to be a Black Swan with catastrophic consequences?”
    It can’t be a black swan. Black swans are unpredicted, devastating and you can’t see them coming. We know all about climate change, it has been studied to death, we see it coming, it is predictable. Climate change is everything a black swan is not. if there is an envrionmental black swan coming, it won’t be climate change, it will be something else entirely, something unknown and unseen.

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