Reality in Carbon Policy

Arnold Kling comes up with a good article one more time, presenting a number of points about the practice of subsidizing Alternative Energy; the most important actually being the recognition that Taxation, not Subsidies, are more efficient at curtailing the use of bad energy. He basically states that no one but the Politicians and Lobbyists actually benefit from the current Subsidy programs, and nothing works directly on slowing use of bad energy forms. It brings up the question of what exact type of Taxation, or form of Subsidy, could alter this basic condition.

A combination of Tax and Subsidy might be a law to limit rapid conversion of land at below actual external Costs. Something on a law requiring Tree-replanting equal to the land area Developers use for new construction. The land consumed in Construction must have an equal area of deforested area replanted to get both Building Permits and Mortgages. Arnold says in his article this might cause heavier Carbon emissions due to the use of heavy equipment; this would be true under current practice, but such a law creates a new industry of Business devoted to Tree-replanting, who are subjected to Carbon emissions standards as well. The law could also stipulate that a certain percentage of Property Tax be devoted to such Reclamation Costs, until the exact area required is forested for old construction. The beauty here is the fact We get a genuine reforestation program properly funded, and long-term fixation of Carbon can be achieved. Here is another Case where We have to define economic Costs; I personally think such a program could be set up costing less than 15% of the initial Mortgage, and about the same for the Property Tax increase. Recognize that this will place a Penalty on new Construction, and implants a subsidy on Renovation construction even though the tax rates may seem the same (I let the Readers figure that one out–hint: think of the cost of reforestation land).

Arnold is very accurate in his evaluation of Carbon offsets and Alternate Energy subsidies. The Former will actually increase Carbon emissions (devotion of Energy production to intense Energy-usage industries, reducing bad energy Production Costs in the long-term), while any industry that need be subsidized will never develop the Capital revenues to become a self-sustaining entity (another form of Government taxation through bad Policy implementation); recognize no political organization can subsidize an entire major industry, and subsidized industry must be economically inefficient to the degree it will never replace current practice. Readers must understand We need an Energy source which can replace Carbon burning, or a process which at least draws the Carbon for Carbon burning for energy from Carbon deposits already on the surface of the Earth (We are talking of growing Our Energy source here, but ethanol will never do it; think trash Carbon). lgl