Implementations vary, but the most efficient design is to tax carbon as far upstream as possible (e.g. oil refineries), rather than at the manufacturer or household level. So, it’s not a direct tax on consumers the way a sales tax is. In theory, this cost is then passed on down the chain in the form of higher prices for carbon intensive products and processes.
A carbon tax is overwhelmingly considered to be the most efficient solution by economists for Econ101 reasons—pricing negative externalities (correcting a market failure is more efficient than doing nothing), and enabling competition and comparative advantage (more efficient than command-and-control policies).
The idea of taxing things we want less of is known as a Pigouvian tax, by the way—and it’s considered a no-brainer even by the most conservative economists (e.g. Mankiw).
> good luck getting people to swallow a doubling of their tax bill even if you give it back.
Not so! Public opinion on climate change has shifted dramatically in the last several years. This poll from last year (and from a top Republican pollster to boot) found that people support a carbon-tax-and-dividend policy 4-to-1. 75% of GOP voters (!) under age 40 support this type of policy. Read all of the results, they are remarkable. It’s a winner in the eyes of both economists and the public. https://www.clcouncil.org/media/Luntz-Carbon-Dividends-Polli...
Stop deliberately misrepresenting the truth and make an actual argument. “It will never happen” is not a logical argument. Clearly, the level of action is below what is needed—but that does not imply it is impossible. The US is the major domino that needs to fall (and has been for decades).
* “As of April 1, 2019, 57 carbon pricing initiatives have been implemented, or are scheduled for implementation. This consists of 28 ETSs, spread across national and subnational jurisdictions, and 29 carbon taxes, primarily implemented on a national level. In total, as of 2019, national and 28 subnational jurisdictions are putting a price on carbon”
* “Of the 185 Parties that have submitted their Nationally Determined Contributions (NDCs) to the Paris Agreement, 96—representing 55 percent of global GHG emissions—have stated that they are planning or considering the use of carbon pricing as a tool to meet their commitments.”
Initiatives implemented or scheduled for implementation:
* National ETSs: Australia, Austria, Belgium, Bulgaria, China, Croatia, Cyprus, Czech Republic, Germany, Greece, Hungary, Italy, Kazakhstan, Lithuania, Luxembourg, Malta, the Netherlands, New Zealand, the Republic of Korea, Romania, and Slovakia.
* National carbon taxes: Argentina, Chile, Colombia, Japan, Mexico, Singapore, South Africa,
and Ukraine. Both national ETSs and carbon taxes: Canada, Denmark, Estonia, Finland, France, Iceland, Ireland, Latvia, Liechtenstein, Norway, Poland, Portugal, Slovenia, Spain, Sweden, Switzerland, and the United Kingdom. Subnational ETSs: Beijing, California, Chongqing, Connecticut, Delaware, Fujian, Guangdong, Hubei, Maine, Maryland, Massachusetts, New Hampshire, New York, Nova Scotia, Québec, Rhode Island, Saitama, Saskatchewan, Shanghai, Shenzhen, Tianjin, Tokyo, Vermont, and Washington State.
* Subnational carbon tax: Prince Edward Island.
* Both subnational ETSs and carbon taxes: Alberta, British Columbia, Newfoundland and Labrador.
Note that an ETS (emissions trading scheme, aka cap-and-trade), is effectively equivalent to a carbon tax in terms of economic theory, though their implementations obviously differ.
You’re right, that is the technical terminology (because the government does not directly collect the sales tax from the consumer, the stores do).
Still, from the point of view of the consumer it’s “direct” (in ordinary language, not economese). As in: “concretely and transparently makes product X more expensive for me”.
With an upstream carbon tax, it’s unclear how it affects the prices of consumer goods since it has to filter through the entire supply chain first. It’s not like “this pack of gum produced 3.14 pounds of C02, so you—dear consumer—will be taxed an additional $0.42”. That would be a nightmare to administer.
A carbon tax is overwhelmingly considered to be the most efficient solution by economists for Econ101 reasons—pricing negative externalities (correcting a market failure is more efficient than doing nothing), and enabling competition and comparative advantage (more efficient than command-and-control policies).
The idea of taxing things we want less of is known as a Pigouvian tax, by the way—and it’s considered a no-brainer even by the most conservative economists (e.g. Mankiw).
> good luck getting people to swallow a doubling of their tax bill even if you give it back.
Not so! Public opinion on climate change has shifted dramatically in the last several years. This poll from last year (and from a top Republican pollster to boot) found that people support a carbon-tax-and-dividend policy 4-to-1. 75% of GOP voters (!) under age 40 support this type of policy. Read all of the results, they are remarkable. It’s a winner in the eyes of both economists and the public. https://www.clcouncil.org/media/Luntz-Carbon-Dividends-Polli...