Three Votes for a Carbon Tax

In today's NY Times, columnist John Tierney discusses the new Al Gore film, "An Inconvenient Truth." An excerpt:

Gore doesn't mind frightening his audience with improbable future catastrophes, but he avoids any call to action that would cause immediate discomfort, either to filmgoers or to voters in the 2008 primaries.

He doesn't propose the quickest and most efficient way to reduce greenhouse emissions: a carbon tax on gasoline and other fossil fuels. The movie gives him a forum for talking sensibly about a topic that's taboo on Capitol Hill, but he instead sticks to long-range proposals that sound more palatable, like redesigning cities to encourage mass transit or building more efficient cars and appliances.

Gore shows the obligatory pictures of windmills and other alternative sources of energy. But he ignores nuclear power plants, which don't spew carbon dioxide and currently produce far more electricity than all ecologically fashionable sources combined.

A few environmentalists, like Patrick Moore, a founder of Greenpeace, have recognized that their movement is making a mistake in continuing to demonize nuclear power. Balanced against the risks of global warming, nukes suddenly look good -- or at least deserve to be considered rationally. Gore had a rare chance to reshape the debate, because a documentary about global warming attracts just the sort of person who marches in anti-nuke demonstrations.

Gore could have dared, once he enticed the faithful into the theater, to challenge them with an inconvenient truth or two. But that would have been a different movie.

Tierney is right: To the extent that carbon-based global warming is a problem (an issue on which I do not have the expertise to opine), the best solution is a carbon tax.

An economist who has studied the topic of global warming extensively is Bill Nordhaus. Bill was a CEA member during the Carter administration and is now a member of the Yale economics faculty. In a March 2006 article, he wrote

As policy makers search for more effective and efficient ways to slow the trends, they should consider the fact that harmonized environmental taxes on carbon are powerful tools for coordinating policies and slowing climate change.

The two issues that Tierney raises--the carbon tax and nuclear energy--are closely related. One effect of a carbon tax is that it would automatically promote nuclear energy. Right now, production of electricity via nuclear power is not particularly cost-efficient compared to alternatives such as coal. But a carbon tax would make coal-produced electricity more expensive, encouraging utilities to take another look at nuclear power.

So here are three votes for a carbon tax: Tierney, Nordhaus, and Mankiw. The first is a journalist who leans libertarian, the second is an economist who worked in a Democratic administration, and the third is an economist who worked in a Republican administration. What do we all have in common? None of us is planning to run for elected office.