Home Climate Change This Is The Point Of A Carbon Tax After All

This Is The Point Of A Carbon Tax After All

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There can be complaints about the idea of a carbon tax. You, dear gentle readers around here, tend to argue that the entire climate change idea is a nonsense – or stronger words to that effect.

Over on the other side there are the idiots complaining that this would make consumers pay for dealing with climate change. As here:

New environmental rules imposed by Brussels are set to make air travel more expensive, analysts have warned.

Tickets may rise by between 5pc to 8pc under carbon pricing rules proposed as part of the European Union’s “Fit for 55” scheme, UBS warned.

Jarrod Castle, an analyst at the bank, said airlines would face the highest bills across the transport sector if they were forced to offset their own emissions.

He warned that a new minimum tax on aviation fuel for flights within the EU would also push up costs for operators and “is likely to result in the industry trying to increase ticket prices”.

Well, yes, that’s the point.

We consumers are the people creating the emissions that lead to climate change. So, it’s our behaviour as consumers that needs to be changed – assuming the entire idea isn’t the bollocks that some claim it is.

Now, of course, this is the European Union, they’re going to get this wrong in the details. It’ll be the most appallingly wasteful implementation. But the very point of a carbon tax is to raise the cost of emissions to consumers.

If emissions are a bad thing then we desire fewer of them. Humans do less of more expensive things. Raise the price of emissions there will be fewer emissions.

OK, but how far should we raise the price in order to reduce emissions?

Our goal is to maximise human utility over time. What level of emissions gives us the most gorgeousness of life over the generations? That’s what the calculation of the social cost of carbon gives us. That’s the point and function of that calculation. So, the tax should be at that social cost of carbon – say, a tenner, maybe £20 on an intra-European flight – and we’re done.

Yes, there are some damages off in the future from the flight taken. There’s also some joy now from said flight. The carbon tax at the social cost of carbon balances these two items and leads to hte finest of all possible worlds.

That is, the whole point of a carbon tax is to raise ticket prices.

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