Jeff Rubin: Warming up to carbon tax

Efforts in the developed world to restrict and replace coal-fired capacity seem downright quixotic when juxtaposed against China’s (and other developing countries’) coal-expansion plans. Whatever reduction in greenhouse gas emissions is achieved in the world’s developed economies from switching away from coal will simply be overwhelmed by the increase in emissions from new coal-fired plants in China and the rest of the developing world.

Saving the world is a noble motive for going green. But there is another compelling reason to want a carbon-abatement regime in place as soon as possible. It is called good old-fashioned naked economic self-interest. If we can’t agree to save the world for someone else’s benefit, we might as well do it for our own.

That’s admittedly not the way Washington has seen carbon policy in the past. Far from it. The recent Bush administration always dragged its feet on putting a price on carbon emissions, fearing that the American economy would suffer too much from the resulting increase in energy prices. But the fact of the matter is that the economy has already suffered from the high cost of energy. Just look what is going on in Detroit these days.

Having already paid the economic costs from triple-digit oil prices, why not reap some benefits from your consequent reduction in oil consumption and hence carbon emissions?

Putting a price on carbon emissions when your emissions are falling and your competitors’ emissions are soaring is compelling economics. And what’s even better, it’s economics that can be wrapped in a very green label.

Montreal Gazette