The High Cost of Green

A carbon tax is much discussed as a solution to climate change. It is simple and straightforward: a climate price tag makes industry and consumers take into account the implicit negative effects of their actions, whether it is the aircraft fuel for a vacation, or fossil fuels for food fertilizers or to heat and cool a home.

I have argued for a well-designed carbon tax for more than a decade. But five important caveats, almost universally breached by politicians, affect the likelihood of such a policy working.

The new United Nations report is being talked about as though it portends the end of the world: To avoid catastrophe, we must instantly transform the entire economy no matter the costs.

This is unjustified. The Intergovernmental Panel on Climate Change (IPCC), in its latest major global analysis, estimated that the total impact of unmitigated climate change from extreme weather, changes in agriculture, rising sea levels and so on would be equivalent to reducing the average person’s income by between 0.2 and 2 percent in the 2070s.

Al Gore recently had a telling altercation with a journalist. The Spectator’s Ross Clark wanted to ask him about Miami sea-level rises suggested in the new film, “An Inconvenient Sequel.” The reporter started to explain that he had consulted Florida International University sea-level-rise expert Shimon Wdowinski. Gore’s response: “Never heard of him — is he a denier?” Then he asked the journalist, “Are you a denier?”

When Clark responded that he was sure climate change is a problem but didn’t know how big, Gore declared, “You are a denier.”