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In Praise of Carbon Fuels

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Here’s a letter to the Wall Street Journal:

Editor:

The roster of economists who signed the letter calling for a steadily increasing revenue-neutral carbon tax is impressive (“Economists’ Statement on Carbon Dividends [2],” Jan. 17). Yet the case for a carbon tax warrants far more skepticism than their letter suggests.

The chief reason for skepticism is, ironically, one that these economists themselves give for their support of a carbon tax – namely, market failure. It’s true that the absence of enforceable and tradable private property rights in air quality prevents the emergence of market prices that both convey accurate information about what level of carbon emissions is ‘optimal,’ and give incentives to people to emit no more than this optimal level.

But because of this very same market failure, there’s no way that government officials either can know the optimal “emissions reductions goals” or have any real incentive to be guided by them. Any such chosen goals cannot possibly be based on accurate economic knowledge. Such goals would at best be arbitrary, with a good chance of being set too high given political-elites’ long-standing proclivity to focus on carbon-emissions’ downsides while ignoring the upsides.

And these upsides are significant; they are, in a word, modernity. Carbon-based fuels have powered modern economic growth – growth that is, by far, history’s greatest benefactor of humanity. Modern economic growth has ended starvation. It has put solid roofs above our heads, solid floors beneath our feet, indoor plumbing and safe emissions-free electric lighting throughout our homes, and potable water at our fingertips. Our immense prosperity shields us from toxic bacteria, as well as from deadly indoor cold and heat.

The production of these, and many other, health benefits of modernity was powered by carbon-based fuels. I, for one, am far more reluctant than are the letter’s signers to authorize the state to dramatically reduce our access to a fuel whose record to date is unambiguously and magnificently positive.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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