Is there a carbon tax in our future?
Political scientists are skeptical about the feasibility of a carbon tax. Why would Congress raise taxes on a broad section of the American public?
I may not live along enough to find out if a carbon tax eventually becomes a reality, but I suspect that it is more likely to occur than many people assume. Before discussing carbon taxes, let’s consider another product with an interesting history.
When I was young, a very large proportion of American adults smoked cigarettes. People smoked almost everywhere, and even nonsmokers like me didn’t much mind. We were used to it. You had to be there to understand that it seemed much less bad than you’d think. Cigarettes were taxed, but nowhere near as heavily as today.
Then cigarette smoking gradually went out of style. The proportion of adults who smoked fell steadily, and is now a fairly small fraction of the population. Smoking became associated with lower class workers. More and more people saw smoking as a dirty habit with nasty negative externalities. (The negative externalities are overrated, but I’m looking at perceptions.) Smokers were seen as anti-social. Society responded with very punitive and hugely regressive taxes on cigarettes. (There were also large implicit taxes associated with the legal settlement agreed to by the major cigarette companies.) These punitive taxes would not have been politically acceptable in 1960s, when a large proportion of Americans of all classes smoked cigarettes.
When I first moved to southern Orange County I was shocked at the number of Teslas I saw on the road, especially in affluent areas. Five years later there are predictions that electric cars are the wave of the future, and even the traditional car companies are planning to dramatically ramp up production of electric vehicles. Many experts predict that in a few decades most new cars will be electric. Indeed many areas are planning to ban the sale of gasoline cars in another decade or two. The price of car batteries has been falling rapidly.
Let’s say these plans for an electric car future come to fruition, and that in 2040 or 2050 only relatively poor people who cannot afford new cars are still driving old clunkers using gasoline. How will society regard those people still driving cars with gasoline engines?
You might not think there’s anything disgusting about a car driving by you belching exhaust out its tailpipe. Fair enough, but in 1965 I didn’t think there was anything disgusting about someone sitting next to me at a bar smoking a cigarette, it seemed normal. What we find disgusting is almost purely subjective.
[I’m repulsed when I read of all the horse manure on the streets of NYC in the 1800s. But when I grew up there was lots of dog poop that people didn’t bother picking up, at least in Wisconsin. My daughter’s generation would find the 1960s to be disgusting. Another example is spitting on sidewalks, which used to be common. One or two more generations and Americans will be disgusted that people of the 2020s wore their shoes indoors.]
In my view, by 2040 or 2050 the politics of a carbon tax will begin to look a lot like the politics of a heavy tax on cigarettes looked in the late 20th century–increasingly feasible.
PS. I realize that a carbon tax hits more than just gasoline, but the political opposition to a carbon tax comes mostly from the fact that Americans are heavy users of this highly visible product, and also that there are huge regional differences in gasoline consumption. By 2040, I suspect that not much electricity will be generated in the US using coal.