Sunday, August 10, 2014

What are the arguments against a carbon tax?

The most powerful argument against a carbon tax is that it
raises the prices of just about everything in an economy.  This is particularly a bad
idea if one country imposes a carbon tax on itself while other countries do
not.


A carbon tax increases the cost of essentially
everything in an economy.  This is because everything is produced using energy.  A
carbon tax would increase the price of the energy used to make a product in a factory. 
It would increase the price of the fuel used to transport that product to the market. 
It would increase the price of the electricity used on the lights and the air
conditioning in the market.


Imagine, then, if one country
imposed such a tax while others did not.  All of the products produced by that country
would increase in price.  In the mean time, those of other countries would not increase
because there would be no carbon tax in those countries.  This would put the first
country at a terrible disadvantage in terms of trade.


Thus,
the main problem with a carbon tax is the fact that it raises the cost of living by
raising the price of everything that is produced through the use of
energy.

No comments:

Post a Comment

What is the meaning of the 4th stanza of Eliot's Preludes, especially the lines "I am moved by fancies...Infinitely suffering thing".

A century old this year, T.S. Eliot's Preludes raises the curtain on his great modernist masterpieces, The Love...