Revisiting A Price On Carbon
Larry Summers (credit: Harvard Magazine)
Larry Summers, former Treasury Secretary, White House economic advisor, and past president of Harvard, has called for placing a price on carbon. While there are many reasons to favor a price on a pollutant, Summer's clearly states the most important is that of 'environmental externalities':
“The core of the case for taxation is the recognition that those who use carbon-based fuels or products do not bear all the costs of their actions.”
Unfortunately, most economists have shirted this reality with their stated reason being "environmental factors are too complicated to properly quantify". What Summers has done in this statement changes the stale dynamic and it should satisfy conservatives and progressives alike.
By placing a set fee, on an increasing scale for a pollutant, would allow consumers large and small to make decisions on a more efficient and proper market price for various products. This approach is what conservatives have always championed. Likewise, if a carbon price were included in the price of goods made from fossil fuel sources, agrochemicals, and innumerable manufactured items, the environmental will not be the garbage bin for discarded waste from their use, something liberals should champion.
What's not to like in Summer's concept so perhaps it is the perfect time to re-visit his opinion. Check in with your senators and representatives as they haggle over making laws and regulations in state houses and Washington on how to build back a better economy. WHB