On Sept. 20, protestors gathered at the Arch, hoping to pressure lawmakers into enacting legislation to fight climate change. I was not among the protestors, but I share their desire for stronger legislation to combat this growing issue. The evidence is clear: the planet is warming, and we must reduce our greenhouse gas emissions to address the problem.
The best way to accomplish this goal is through a carbon tax that uses pressure from the free market to encourage more sustainable living and avoids needlessly expanding the government. A carbon tax offers a simple and effective solution to the problem.
Scientists and activists have warned of rising temperatures for years, and this past summer proved their fears to be true. The National Oceanic and Atmospheric Administration declared July 2019 the hottest month on record. And it wasn’t just July that was unusually warm. June 2019 was the hottest June on record, and a high pressure dome helped make May 2019 the hottest May ever in Atlanta. These consistently high temperatures make it increasingly difficult to ignore climate change and its potentially devastating consequences.
According to Investopedia, a carbon tax forces businesses to pay for the amount of carbon dioxide they release into the atmosphere, forcing producers to internalize their negative externalities. Economic theory defines an externality as a cost or benefit from an action that affects a person or group that is not involved in the decision making. Carbon dioxide emissions are considered a negative externality because they hurt society by polluting the atmosphere that everyone breathes and accelerating climate change. Thus, people with no choice in the matter are hurt when a coal-fired power plant releases large carbon dioxide emissions.
A carbon tax forces companies to pay for the harm they are inflicting on the environment and public health. This discourages companies from releasing large amounts of carbon dioxide emissions, nudging them to more sustainable practices.
There is evidence that carbon taxes can be effective in reducing carbon dioxide emissions. According to the Brookings Institute, a carbon tax is a cost-effective policy for reducing greenhouse gas emissions that has worked well in other countries. Further, the taxes did not lead to major economic declines, suggesting the policy is practical.
Carbon taxes may also be more politically palatable than a Green New Deal. A solution that gives the free market control over the outcome would likely be more appealing to conservatives wary of increasing the size of the government than the more radical aspects of the Green New Deal making a carbon tax a more feasible solution in today’s partisan political environment.
In addition, to lessen the economic impact from the carbon tax and prevent the government from growing, lawmakers could simultaneously lower taxes in other areas. Greg Mankiw, the former head of former President George W. Bush’s Council of Economic Advisors, argues that lowering the sales tax while creating a carbon tax could result in a revenue-neutral change in the tax policy. Mankiw believes this would not have a macroeconomic impact, instead merely shifting around economic activity.
While the planet continues to warm, Georgia lawmakers must find solutions that will stop the problem from growing bigger. A carbon tax is an ideal solution to the problem that should please liberals and conservatives by decreasing the state’s environmental footprint without the need for unwanted government regulation.