Letter: A good approach to carbon

Sunday, December 10, 2017
A good approach to carbon

Reps. Michael Vose and Herb Vadney (Sunday Monitor Forum, Dec. 3) try hard to disparage the concept of a carbon tax, or “carbon fee and dividend,” an idea aimed at reducing CO2 emissions and backed by some well-known conservatives and libertarians due to its market-based approach. They offer a simplistic analysis, multiplying a plethora of hypothetical cost items by 20 percent, but fail to include in that analysis the effect of returning every dollar to the end consumers – the “dividend” part of the carbon tax concept that they themselves mention in their second paragraph.

The point of a carbon tax is that companies would pass along its cost; at every step along a supply chain buyers would tend to choose cheaper, thus presumably less carbon-using, products. For instance, with a carbon tax in place, it might be more (or less!) economical to manufacture and fill mayonnaise bottles in 200 places across the country – employing workers at each one – than to transport filled mayonnaise bottles all over the country from a single large plant. Consumers will ultimately “decide” based on retail price, which will have accumulated all the carbon-tax-based costs along the way from chicken to checkout.

A carbon tax would be implemented gradually to allow businesses to adjust.

There are a lot of details to assess. For example, some businesses might compensate for carbon costs by cutting costs elsewhere, as Vose and Vadney pointed out. Also, it might be better to implement at a national rather than a regional or state level because of issues related to imports from other regions. But because it gets government mostly out of the way, and uses the market instead of regulation to guide decision-making, the concept of carbon fee and dividend is being carefully looked at by people on both sides of the aisle.