Cycloptichorn wrote:Also, this doesn't have to be an either/or game. There is no reason why solutions in the middle can't be found.
In this spirit, it is worth noting the results of Yale's William Nordhaus, arguably the most frequently cited economist on this topic. He's the one who found, based on the IPCC scenarios, that Kyoto is more trouble than it's worth. BernardR accepts him and has occasionally cited him as an authority for his position. Nordhaus has calculated the carbon tax rate that best balances the benefits of curbing global warming against the cost of the tax. A draft of his book chapter is webbed (
PDF). I submit his results as a reasonable baseline for compromises.
Now what are Nordhaus's results? If you go to page 7-34 (page 34 of
the PDF document), figure 7-3 shows you the trajectory of the optimal tax over time in 1999 dollars per ton of carbon. It starts at $7 in 2010, rises to $20 in 2035, and on to almost $70 in 2105. Translated into gasoline prices, that would be about 18 cent/gallon in 2010, 54 cent per gallon in 2035, and almost $1.89 in 2105.
How does this compare with current tax policies? In the US, the federal gas tax is about 20 cents/gallon. States charge between 10 and 30 cents on top of that. (Source:
Wikipedia) As I understand it, gasoline taxes in the US are designed to pay for the cost of building and maintaining roads. Because there is no extra markup for environmental purposes, your CO2 tax on gasoline is zero in terms of Nordhaus's model.
On the other hand, there is a significant environmental markup on European taxes.
According to Germany's Wikipedia, our taxes are currently $2.92/gallon for gasoline and $2.11 for Diesel. (Admittedly, our economy is ailing. But it isn't collapsing, and the mineral oil tax isn't the reason it's ailing.) Assuming that European road cost about as much to build as American roads, Germany is overtaxing its drivers by at $1-$2 per gallon, as do other European nations. Meanwhile, America is undertaxing them by $0.18/gallon.
Measured against the cost-benefit optimum Nordhaus and coworkers found, gas tax policies on both continents are non-optimal. But if Europe's current policies are still reasonably responsible, the United States' certainly are, too.