Thoughts on the carbon tax

Published on 2024-03-26

In Canada, we have a tax on carbon. I'd be lying if I said I knew exactly how it works; most of my understanding of it comes from propaganda. A few days ago, I was talking with an old friend about how I pivoted into environmental science, and they asked me what I thought about it.

Having read a little more into it, however, I do think my intuition is mostly correct: the carbon tax is a tax you pay on goods that accounts for their CO2 emissions. Putting a carbon tax on goods means that, in a sense, the price we pay for goods "accounts" for the effect their production has on the atmosphere's CO2 content.

I think my answer to this person went something along the lines of this: the carbon tax isn't great, but its heart is in the right place, and it probably works. There are trade offs to having a carbon tax (namely, things will get more expensive, but that's more of a question of "when," carbon tax or not) and there are important questions that ought to be answered (namely, will this disproportionately affect poor households?). But ultimately, the goal of having a carbon tax is to account for the downstream effects of this production that would otherwise be "free" to industrialists.

Whenever I'm working in a statically typed programming language, one of my favourite things to do is to try and bend over backwards to make sure that the type system makes it literally impossible to use my code incorrectly. That is, if you use my code incorrectly, the compiler will yell at you and refuse to do what you ask of it. And this is a pretty key principle that a lot of programmers take seriously: the best way to deal with "bad states" is to make bad states impossible to achieve. The type system provides a surprisingly effective mechanism to make these guarantees at compile-time.

I suppose the root of my problem with the carbon tax is that it feels more like a patch. Studying forest management (ew) has genuinely opened my mind to the fact that we could "solve" the climate crisis without completely throwing out capitalism. That is, there are economic tools we could duct tape onto the current social order to make it work the way we want. And they look a lot like the things the current social order is working to implement: things like, say, the carbon tax.

Sandra describes externalities as a "bug" in capitalism, which I think is spot on:

"Externalities" (idiomdrottning.org)

Now, for what it's worth, I really don't think my preferred solution for the climate crisis looks anything like capitalism. While "patching" this bug would solve the immediate problem of everything seeming to be falling apart, it'd miss the mark on all the other intimately related problems of the broader "climate justice."

Externalities aren't the only threat that capitalism poses to the environment. I'd say that it is fairly intrinsic to the way capitalism seems to reduce everything to checkpoints in a profit-maximizing function that it fails to see a lot of the intrinsic value of nature, many of which wouldn't be so easy to patch. Were we to resolve the immediate problem of too much carbon going into the atmosphere, then I'd fear there'd be other problems, like humans transforming the whole planet into a simple ecosystem, extremely susceptible to trophic cascade. Or, the deeper, more spiritual fear of the biosphere being intrinsically dependent on human interaction to survive.

I think my ideal scenario, capitalism or not, would involve pushing this accounting deeper into the system. We need industrial ecology: production systems that fully account for things like externalities on their own. Such a system would be way more robust than a single entity extracting rents on companies' carbon residence time in the atmosphere.

But, a carbon tax is easy, and it probably works, and it's here. Considering how carbon emissions are going I feel like I've got to be at least a little bit happy that they managed to find something they could roll out.

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