All the economists – you know, the experts on matters economic – who study what to do about climate change keep insisting that imposing a cost of carbon emissions through a tax or permit scheme is the efficient manner of dealing witih climate change. To which the usual answer is, yes, but that’s regressive. So, instead, let’s have lots of planning and schemes and regulation instead. Well, yes, but.
As it turns out, taxes are so much more efficient that the burden on the poor falls, even if in isolation the taxes are more regressive. This is, obviously enough, the mirror of the argument that a richer country might be more unequal but the poor are still – or can be at least, better off.
A carbon tax would be less regressive than energy efficiency standards
Arik Levinson 05 July 2018