Kyoto Vs. Carbon Taxes

If you're going to knock a claimed solution to a problem, it's important to be sure that your proposed alternative actually overcomes the flaws you point out in the solution you reject. A good case study for this problem comes in a column by Anne Applebaum, who is knocking the Kyoto treaty and proposing carbon taxes instead. (Although perhaps writing a whole blog post about this column is giving it more credit than it's worth, since Applebaum makes the inexplicably ignorant claim that America needs Europe's encouragement to give up on the Kyoto Protocol.)

The first thing to note is that Kyoto and national-level carbon taxes are not mutually exclusive. Kyoto sets targets for each country, and establishes some international trading mechanisms. But each country is free to achieve its domestic carbon reductions in any way it likes -- including by implementing a carbon tax.

One of the advantages of a carbon tax, Applebaum says, is that nations can implement it on their own, without worrying about whether other nations are doing so as well. It's unclear why a country can't just as easily start working on its own Kyoto committment (or going beyond it), through whatever mechanism, without worrying about whether the treaty is in force yet. But if this is going to be one of Applebaum's points against Kyoto, she should take a closer look at the US Senate's 95-0 rejection of Kyoto, which she claims shows the political unfeasibility of Kyoto. The Senate rejected Kyoto not because it requires too much international cooperation, but because it doesn't reqiure enough international cooperation. Specifically, the Senate's issue was that Kyoto requires the first world to go it alone during the first period, imposing no emission reduction targets on developing countries like China and India.

The core of Applebaum's beef with Kyoto, however, is that it's unenforceable, complex, and prone to manipulation. And it's not just a matter of the UN's perfidy or ineptitude, since she also rejects the idea of non-carbon-tax programs within the US. One can only imagine Applebaum has never taken a look at the US tax code. Any real carbon tax system would be riddled with loopholes and special tax breaks for industries who give money to powerful legislators.

I think a carbon tax would be a useful component of climate change policy -- as long as it's made suitably progressive so that the incentive falls heavier on the people with the resources to make reductions and innovations, not on Joe Working Class who can barely afford enough gas to drive to work as it is. And I think any developed country has a responsibility to go it alone in reducing emissions even if they can't get other countries to go along. But a national-level carbon tax doesn't solve any of the flaws Applebaum sees in Kyoto.