The leading Pigou enthusiast makes his case for a carbon tax.
Notice that
- "Free markets" are not complete, in the broad sense of the term.
- Consumers can have unmet demands in a "free-market economy", which requires a government to help it along (through tax interventions).
- Consumers are not rational.
If all those things are willing to be conceded, then either (a) this carbon tax thing must be the best thing since sliced bread or (b) there is something about the alternatives that are really, really vexing the guardians of capital.
One diagnosis of the key problem: cheap energy is keeping us from polluting less.
The demand-side solution: tax energy consumption, Pigovian-like or otherwise, so that people use less energy or are forced into more efficient methods to the same at a lower cost (except that for most in the middle-to-high income, gasoline use, at least, is typically taken to be an almost inelastic demand. How high do we set this tax, therefore, to get the more-tax=less-use equation and how does that tax level affect those at the lower end)?
The supply-side solution: stop building coal-fired energy plants, mandate efficiencies in cars and appliances and home/office construction and renovation - if there is any free lunch, it is efficiencies, strictly speaking.
humm... you make the call: one, the other, or both - and where to start.
here's a little something to, for those who dare to dream:
First Solar-Hydrogen Fuel Cell Residence to be Built on Grand Cayman
Press Release from Renewable Energy International
June 19, 2007 - New Jersey, USA:
..
This unique renewable energy system provides complete energy production, indefinite storage, and delivery with no emissions or carbon footprint whatsoever. Unlike most hydrogen fuel cell systems, this one is powered only by solar energy, making it the cleanest hydrogen generation system in the world.
