Kudos to Adam Ozimek for writing:
I will take Brad’s new advice and try to convince the readers of Forbes that a carbon tax is a good idea…. I am a proponent of carbon taxes…. [S]urely higher gas taxes are a good idea. In his Pigou Tax paper Mankiw cites on study that shows of the $2.10 optimal tax on gasoline, only 6 cents was due to global warming. The rest came from other externalities like congestion and accidents. Gas taxes also show us that international “coordination” is possible…. Noah [Smith] is correct that efficiently taxing a globally traded externality producing commodity does require global cooperation. But… many developed nations… [set] high gas taxes, and it’s time we got on board. This will be many times more efficient than CAFE standards…. I am also on board with Noah’s larger suggestion though that we should be heavily subsidizing basic research for clean energy….
[W]hile Noah is correct that carbon taxes and gas taxes are unpopular, so are the taxes that would be needed to raise the money for the research he wants. As Matt Yglesias points out, this money needs to come from somewhere. Better to be tax an activity that generates an externality to raise this money than to tax income or capital gains.
A final important reason conservatives should support taxes and research is because it will help the government get out of the energy regulation business in the long-run. If innovation drives solar and battery prices low enough, the energy sector may become no different than any other industry in producing limited externalities. Thus the special regulatory consideration it merits will no longer exist. That and of course it will help reduce the risk that we destroy the planet. Conservatives should care about that too.