Carbon Tax

With oil prices at their lowest point in years, this would be a good time to introduce a carbon tax. In the US we face a crumbling highway infrastructure and our current gas tax can't afford to pay for maintaining and upgrading it. Larry Summers, writing in the Washington Post, joins the chorus:

The case for carbon taxes has long been compelling. With the recent steep fall in oil prices and associated declines in other energy prices, it has become overwhelming. There is room for debate about the size of the tax and about how the proceeds should be deployed. But there should be no doubt that, given the current zero tax rate on carbon, increased taxation would be desirable.

The core of the case for taxation is the recognition that those who use carbon-based fuels or products do not bear all the costs of their actions. Carbon emissions exacerbate global climate change. In many cases, they contribute to local pollution problems that harm human health. Getting fossil fuels out of the ground involves both accident risks and environmental challenges. And even with the substantial recent increases in U.S. oil production, we remain a net importer. Any increase in our consumption raises our dependence on Middle East producers.

All of us, when we drive our cars, heat our homes or use fossil fuels in more indirect ways, create these costs without paying for them. It follows that we overuse these fuels. Advocating a carbon tax is not some kind of argument for government planning; it is the logic of the market: That which is not paid for is overused. Even if the government had no need or use for revenue, it could make the economy function better by levying carbon taxes and rebating the money to taxpayers.

Might it happen? Surely you jest. We just elected a hard-core anti-tax, drill-baby-drill Congress and Senate, owned entirely by the Koch machine and Exxon Mobile. Forget about it.