Since I seem to be stating my position perhaps its time to clarify my position on CO2 taxes. I hear Obama is waiting to hear what I have to say on this burning issue :-)
When I said that heavy, extremely painful carbon taxes weren’t going to happen, some people seem to have misinterpreted it to mean that I thought CO2 taxes were a bad idea. Far from it. But I also don’t think that we should be aiming at any particular number just yet (yes I agree we would need large cuts to stabalise CO2 levels in the atmosphere, but they just aren’t going to happen in the near (next decade or so) future, so for practical purposes we might just as well stop talking about them).
What we should do is…oh, hold on. By “we” I mean any given country. Could be the entire Cold West, could be the UK, could be the US. It doesn’t matter, which is good, because there is no need for that oh-so-difficult multi-national co-operation.
We should have a carbon tax (I don’t believe NN), and we should offset this against income taxes, and it should start at a fairly low and innocuous level and it should slowly ramp up. There should be no exceptions for heavily polluting industries. Having it start low and slowly ramp up gives everyone time to prepare, gives the government time to work out the offsetting-against-income-tax stuff, and should hopefully gain the trust of the citizenry who will see that the overall tax take doesn’t go up, and their income taxes go down. This is important, because at the moment no-one will trust the goverment not to just trouser the dosh. I think we should probably throw away the entire cap-and-trade stuff; but if we (the UK, obviously not the US) have to live with it because of EU rules then I suppose we can have that too: its hardly onerous. When it became high enough we could fold the fuel taxes into it.
That was easy, no?