The only reform that would make any difference is one that would cause lower consumption of fossil fuels, i.e. a large tax on fossil fuels. It would especially negatively impact “middle America”, as it would cause prices for everything to rise, and hence they would be forced to consume less (which is the goal), and hence it wouldn’t be palatable.
Anything short of forcing people to consume less now is pie in the sky thinking.
Not necessarily. Tax carbon heavily and then redistribute the tax equally among all citizens. Anyone using above average carbon net pays into the system, anyone using below average gets a net payout.
Then markets, our most advanced coordination/optimization method can be utilized to figure out how to reduce our carbon emissions.
I wonder if paying out the dividend on a weekly or monthly interval might help with this some degree. Only getting paid at the end of the year tax refund style feels a lot more like a bonus than a reliable paycheck.
The goal is to reduce total use of carbon based fuel sources, not just redistribute wealth.
While I agree that redistributing wealth should also be a goal, any solution that doesn’t lower total consumption is useless, so the pain of less consumption would be felt by anyone consumer more than average (which is probably everyone in the developed world).
Redistribution is just a technique to avoid a conflict of interest. They may end up redistributing between more- and less- wealthy people, but that's just a side-effect. Considering that low-carbon technologies are more capital-intensive than high-carbon tech, the redistribution may actually be from less-wealthy to more-wealthy actors.
We want the tax rate to be high enough to disincentivize carbon-emitting actions relative to carbon-neutral (or carbon-capturing) actions. But if government's ability to finance public operations is also affected, then we have a problem. The revenue-maximum tax rate is based on a completely different optimization problem than the carbon-minimum tax rate.
Making carbon taxes revenue-neutral decouples the two policy objectives.
Even at a neutral tax, carbon use should go down since it becomes more expensive than non-carbon alternatives. There two obvious knobs:
1) tax rate: $/ton of CO2
2) wealth distribution: 100% goes to state vs 100% goes back to population or anywhere inbetween.
The two knobs are independent. You could crank tax rate of co2 way up while still equally dividing the revenue generated and heavily discouraging co2 emissions.
Anything short of forcing people to consume less now is pie in the sky thinking.