A neutral answer to global warming

March 11, 2007|by ROBERT GARY

Global warming can be solved by taxing carbon dioxide sources according to the amount they release into the atmosphere and using the money raised to subsidize zero carbon dioxide alternatives.

The model for this policy is the Social Security system, which is one of the only federal programs that actually works, at least so far. The reason it works is because it is astonishingly simple.

Working people pay their FICA taxes, and the money goes into a trust fund. From that fund, Social Security checks are written for retirees. So the government is functioning merely as a bookkeeper. It is an automatic taxing authority, and an automatic check writer.

This is how the carbon dioxide problem needs to be addressed. The federal government taxes, at the point of sale, electric power, gasoline and natural gas, and it subsidizes at the point of sale, conservation (such as fluorescent light bulbs), zero emissions energy (such as wind power or solar power), and energy use avoidance (like telecommuting).


Why at the point of sale? Because that relegates government to a pure bookkeeping role, taxing at one side and subsidizing at the other, with no management skill or imagination required.

This robotic participation by the government is really just getting out of the way and letting the free market do its thing based on price theory. You get more of the things you subsidize (solar, photovoltaic, hydro, conservation, and energy use avoidance) and less of the things you tax (burning coal, or other fossil fuels). If the tax or the subsidy applies at the point of sale and at the moment of the sale, then price theory gets a chance to work its magic.

For this to be viable, many electricity generating firms must be permitted to provide power to the grid. Put creativity to work, let the entrepreneurs figure out how to make electric power with a relatively low carbon footprint, or none at all. If the carbon emitted into the atmosphere is low, the companies get their subsidy by giving the subsidy to the customers at the point of sale - like with the hybrid cars. No checks went to Ford or Toyota, the checks went to the customers who bought the hybrid cars.

Same on the tax side. You tax the customer who buys the electric power made by burning fossil fuels. Because of price theory this tax get fed back up the line and affects the businesses that sell high carbon impact electric power and fossil fuels. Those businesses become less profitable at the same time the low-carbon-impact businesses become more profitable. Over time, with big enough numbers of transactions, the results are predictable - carbon dioxide emissions released to the atmosphere go down.

What about the other greenhouse gases such as methane, or ethane or carbon monoxide? It's safe to say that not less than 75 percent of the global warming problem is caused by carbon dioxide and probably closer to 95 percent. So first things first. The perfect is the enemy of the good. The fact that the whole problem can't be solved at one stroke must not paralyze us into inaction.

What about nuclear power? Nuclear power should not be taxed by this proposal and should not be subsidized. It should be neutral for now. Clearly it is a zero-carbon dioxide source, so it can play a major positive role in quelling the global warming problem. Just as clearly, there is no repository for high level nuclear waste and it would be extremely irresponsible to subsidize an industry that is creating a national security problem by storing high-level wastes in auxiliary buildings and dry casks at or near nuclear power plants.

If Yucca Mountain ever opens, or some other high-level waste repository, then nuclear power could be a socially acceptable form of power that is sustainable and reasonably safe.

The global warming problem is actually secondary to the global caring problem. Why should you care about global warming? Well, you might have relatives in New Orleans for one thing, or in Florida, which is going to be half submerged in 25 years if global warming continues at the present rate.

You might know somebody in New York City, or your 401(k) or IRA might be managed from there - you don't want that to be under water. About 90 percent of the U.S. population lives in areas that are going to be flooded or submerged or subjected to devastating storms if the global warming problem is not abated in the next 25 years. Even with a complete lack of altruism, caring would still be possible for many people. But we do care about other people and what happens to other people, right?

What about other countries? Do they care? Most of the industrialized countries have done more already. We are the laggards among the developed nations in taking meaningful action to quell global warming. The only actors in the U.S. that can be effective on this issue are the customers, the citizens, you and I, not the government. The government needs a nano-sized and robotized role that it can constructively play, while it stays out of the free market's way. Good casting makes good policy.

Robert Gary is a Hagerstown resident who writes for The Herald-Mail.

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