I was listening to Vermont Public Radio the other day and heard Thomas Friedman discuss carbon taxes. He is back in the spotlight on this issue because he wrote another op-ed about why the U.S. should adopt this tax. The show was a call-in show, and a number of listeners called in to describe why they thought a carbon tax was a bad idea (several callers supported the idea as well). One of these critical callers provided an oft-repeated argument against a U.S. carbon tax: it would hurt businesses in the U.S., and in particular would harm America’s ability to compete with China in the global marketplace.
This argument has little to no merit because China has announced that it plans to institute a carbon tax. Thus the U.S. could coordinate its own tax rates with China’s tax and suffer no trade inequities with China.
China’s carbon tax will benefit both public health and the environment, both of which are currently in trouble. China’s air pollution problems resulted in 1.2 million premature deaths in 2010. Additionally, Chinese children face increased respiratory disease from the day they are born.
America has similar problems on a smaller scale. As noted in Jamie Myers’ earlier post on this blog, America’s air pollution can “cause increased heart attack rates, cardiovascular diseases, asthma, and decreased lung capacity as well as exasperate pre-existing respiratory illnesses.” If the U.S. implemented a carbon tax, it could mitigate these problems.
A carbon tax would raise the price of fossil fuels used for transportation and energy. Higher prices would incentivize conservation and development of alternative energy and fuel sources. For example, economist Paul Krugman estimates that a ten percent rise in the price of gasoline could reduce vehicle emissions by seven percent. This would hold true for each 10% increase in the price of gasoline. Thus a gradually increasing carbon tax would gradually decrease emissions and accompanying harmful particulate matter.
A carbon tax could significantly reduce U.S. respiratory illnesses. And if Congress and the business community is worried about international competitiveness, they should consider that the Chinese might leave us in the dust on this one.