Editor’s note: This commentary is by Skyler Bailey, of Burlington, where he works in medical administration.
[T]here is a strong push within progressive circles to enact a carbon tax in Vermont. A variety of proposals have been put forward, initially with climate-related earmarks for the raised revenue, then with plans to use some of the funds to mitigate other taxes to varying degrees. The most recent proposals have been “revenue neutral,” as proponents seem to have accepted that increasing taxes is a political non-starter. In all cases, emphatic claims are made that carbon pricing in Vermont is the best and fastest way to reduce carbon emissions. When one looks at the available evidence, the truth that emerges runs starkly counter to these claims. There is no evidence that carbon taxes reduce emissions, and some very strong evidence that they may have the opposite effect.
It is all too easy to note a decrease in emissions following the passage of a carbon tax and then credit the tax with causing the decrease, but causation cannot be established without further inquiry into the surrounding context. It is necessary to compare trends in emissions within a jurisdiction before and after the implementation of a carbon tax to look for a change in the trends that can be attributed to the tax. There must also be comparisons between trends in emissions in countries that have instituted carbon taxes with surrounding countries that have not, to look for measurable differences between them. Without such comparative examination, claims about the effects of carbon pricing on the environment are baseless.
Europe provides an interesting case study, consisting as it does of a significant number of developed countries both with and without carbon taxes, some of which were implemented over 25 years ago. Europe provides a large setting for making valid comparisons both temporally (comparing trends in one country before and after a tax) and geographically (comparing trends in countries that have taxes with trends in countries that don’t).
The German carbon tax took full effect in 2003, and is claimed to have caused a 7.5 percent decrease in per capita greenhouse gas emissions in the 10 years after its implementation. Belying that achievement is the fact that Germany experienced a 21.2 percent decrease during the decade prior to the implementation of the tax. The same pattern holds true for other “success” stories. The emissions of the United Kingdom, Ireland and France decreased faster before the implementation of their carbon taxes than after. Norway and Iceland saw no noticeable change following the implementation of their carbon pricing initiatives, and Latvia and Estonia have had rising emissions since the passage of carbon taxes. Taken as whole, European countries with a carbon tax have seen their emissions decrease, even if in many countries less rapidly than had been the case prior to the tax.
If temporal comparisons constitute at best ambiguous evidence for progressive claims about carbon taxes, geographic comparisons are far more decisive. The Netherlands began pricing carbon in 1990, and during the following 23 years, per capita emissions decreased by 15.9 percent. This would be quite the achievement were it not for the fact that neighboring Belgium never passed a carbon tax, and during the same period saw emissions decrease 32.9 percent. Slovenia instituted a carbon tax in 1996 and saw a 2.3 percent decrease in emissions in the following 17 years. Slovakia had no tax and saw a 20.6 percent decrease during that time. Since 1990, European countries without carbon taxes have seen per capita greenhouse gas emissions decrease 37.5 percent faster than those countries with carbon taxes. And since 2005, non-carbon taxing countries’ emissions have fallen almost twice as fast. Looking only at the numbers, carbon taxes appear to cut a country’s ability to decrease emissions in half.
It is difficult to know what to make of such surprising findings. That the result is in fact so resoundingly against carbon taxes requires some explanation, and it is to be hoped that further study may determine the cause. It is enough for the purpose of the discussion about a carbon tax in Vermont that it has been demonstrated for once and for all that there is no evidence that imposing increased costs for gasoline and heating oil decreases greenhouse gas emissions. There is no evidence that carbon taxes have any positive effect on climate change at all. There is strong evidence suggesting that instituting carbon pricing may instead cut in half the effect of all future initiatives to decrease Vermont’s greenhouse gas emissions.
Sources:
https://www.eia.gov/todayinenergy/detail.php?id=19191
https://www.epa.gov/sites/production/files/2017-09/documents/co2ffc_2015.pdf
http://www.wri.org/resources/data-sets/cait-historical-emissions-data-countries-us-states-unfccc
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