Economists (at least those who believe in global warming) frequently argue that the best way to discourage overuse of fossil fuels is with a carbon tax. A carbon tax reflects unpriced, external or social costs; the environmental damage created by fuel consumption. With a carbon tax in place, people will only consume fuel if the benefits they receive from doing so are greater than the costs – both the private costs, reflected in the pre-tax price, and the environmental costs, reflected in the carbon tax.
Unfortunately, taxes have a negative image. For example, in the US, almost every Republican member of Congress has signed a pledge that they will never vote for a policy that increases tax rates.
When faced with political opposition and image problems, there are three possible courses of action. The first is to argue ones point logically, hoping to change people's minds through reason and evidence.
A second is to admit defeat.
The third is to rebrand, and change the image. For example, Canada's bitumen deposits were once called the tar sands, a name that conjures up a (fairly accurate) image of a thick, sticky, black tar-like substance. They have been successfully rebranded as the oil sands, which sounds like clean sparkling oil, with just a bit of sand mixed in.
Given how well economists have been doing with the first strategy, and that the second strategy gets us no where, I think it's time carbon taxes got a rebranding.
It's not clear why carbon taxes should be called taxes in any event. What distinguishes taxes from user fees or social insurance premiums is the absence of a quid pro quo between the taxpayer and the government. Paying more taxes does not entitle a person to more government services. By way of contrast, paying Employment Insurance premiums is a necessary (though not sufficient) condition for accessing Employment Insurance benefits.
By this definition, carbon taxes are more like a user fee than a tax. There is a quid pro quo: pay the tax, burn the carbon; burn the carbon, pay the tax. Go ahead and contribute to global warming, as long as you pay your dues.
Renaming carbon taxes "atmospheric user fees" would be a start, but people are smart enough to see through purely cosmetic name changes. If funds raised through the charges on fossil fuels go into general government revenue, it is hard to argue that they are anything other than taxes. If, on the other hand, the revenues are earmarked for tax refunds, low-emissions transportation, tree planting, and initiatives to combat climate change, it becomes much easier to argue that a $0.20 per litre charge on gasoline is, in fact, a user fee.
One strength of economists is that we see through framing, and focus on underlying structures and incentives. Our weakness is that we can easily forget that framing matters.
Worthwhile Canadian Initiative 
Lindsay – when you say “constitutionally required elements of a user fee”, which constitution/jurisdictions are you speaking of?
Ryan,
“You merely IMPLY that climate change is a major issue in my life.”
You do understand the concept of an externality do you. You seem to be taking methodological individualism to a new extreme here. Maybe the effects on OTHER PEOPLE might be important as well.
P.S. Those other people might be your descendents.
As a general comment here – especially when talking to Canadians (who arguably are likely winners in the medium term) – climate change should be seen as (to a significant extent) a moral issue, not just an economic issue. It is a bit like an argument about vaccination. In a population with effective heard immunity and individual not being vaccinated may actually gain by avoiding the small risk involved in vaccination. But if enough people do that, then the heard immunity disappears and everybody (including the refusnik) is worse off.
“climate change SHOULD be seen as (to a significant extent) a moral issue” (emphasis added)
Maybe it should be, but it isn’t. That’s the reality of the policy environment people have to deal with.
Hyperinflation fixes this (pledge brain) eventually.
Canadians likely winners?
Plants adapt not only to cliamte and weather but to soil. Here, there are mountains and the soil is thin on the granite. Would a warmer climate enable us to grow wheat, apple orchards or palm oil tree instead of black spruce? Or would we simply get a dead desert?
Jacque Rene – I read reason’s comment as Canadians being winners from action against climate change, because of the impact on the North, but I think you’re right.
I really think a lot of people have no idea the extent to which Canada is, in the immortal words of the Arrogant Worms, rocks and trees and trees and rocks. There are plains around Hudson Bay, could these ever be arable, or are these just peat bogs?
Mostly peat bogs. Solid enough to bear spruce groves which are beginning to appear…
Longer growth season in the prairies? (Dirty) oil supplier?
Ryan, why does a carbon tax have to be the best utility of cash? Why can’t it just be better than whatever the tax takes resources from? It is a simple binary choice: tax carbon or give the revenue to who gets taxed. A carbon tax doesn’t have to be a prepaid redheaded hooker coming to your door by accident.
We are in structure permanent deficit. The Dion shift works even less now. I get alot of crap from people (not offering a job or understanding welfare is a dartboard, isn’t a GAI for single men) to be cleaner and work more. I’ve given the job search a full, 75% and 1/2 hearted as the last yr evolved…employers are dumb not to use their petro/banking corporate tax-cut profits to hire. When people elect retards, others try to volunteer their jobs for them. If you want to know why I can’t get laid or relax anymore, look in a mirror. With little spare time, reading about batteries, thermoplastics (a recyclable oil fraction), 85% plastic
producing shockwave ethane reactor….I’m about 3/60 asking women out. Bad time ROI for me. Go find some overpaid idiot to lay and don’t make me S.Penn. by magically expecting me to be smooth.
Buying up the most carbon intensive (including peat) oil sands properties is my preferred option. I don’t like Harper making Canadians dumb (beyond no WMDs no regressive technologies/brainwashing) on the AGW portfolio. It makes it harder post-CPC to fix the mistakes of those who believe Revelations is our near-term destiny.
The carbon shift was attacked by Layton. Forget Duceppe’s position. If NDP supported it I’d guess it would be inevitable. lol, Loughheed was the one who didn’t get one of 8 port Provinces on board as owners of AB petro products.
Steve: that is brilliant. Do what Norway is doing (AB’s about 1/3 of this says Pembina). Does Norway have Stockholm Syndromw? The most common method of oil production is nationalized. Better trickle down in Venezuala than here. My Cgy electricity bill was $80/month, $20/month in Wpg. SK is missing out on cheap power.
F.Wooley, the Hudson’s Bay Lowlands are flat. Peat moss hold water. HBLs after the ice age ended, are isostatically rebounding, forming rdiges parallel with the cost. The 2nd best peat moss reservoir of carbon next to a plain/bog in Northern Russia. I googled cdn estimated of 227GT of C, or 20x global annual emissions. The cold temps allow the peat (esp Sphagnum fuscum) to accumulate (unlike breakeven warmer peat and rainforests) at, after squished for 30 yrs, 1mm/yr for 15000 years (15M deep potentially). There is also permafrost to consider…
Everything is drying out, not considering Arctic Ocean melt or other AGW effects. So bogs become spruce. Spruce become grasses, desert.
For agriculture, it is tough to make estimates with out AGWprecipitation estimates. We might be the only country the makes out better under light (+2C) AGW, but by mid century we probably lose, less likely if a taxpayer funded investment in agriculture (AB has announced this). I like agri-plastic products instead of diesel and gasoline. Did someone here say cars can’t be battery because gas is a magic juice?! Jet fuel maybe. An expert thinks can be liquid hydrogen, I am bearish on anything but the hydrogen salts at present, though have a few papers done in a week (instead of enjoying life).
Francis, if we turn our lowlands into farms, our civilization will be immediately wiped out. Why??? I like dams up north as preserved water, but too much water is bad for crops and fuscum. I’d like to find a way to sequester trees in existing peat bogs or novel ones…
You are not right. I can prove it.