Cheap Oil Makes ‘Overwhelming’ Case for Carbon Tax: Summers
The latest argument for a carbon tax is coming from Lawrence Summers, former U.S. treasury secretary and past president of Harvard University.
“The case for carbon taxes has long been compelling. With the recent steep fall in oil prices and associated declines in other energy prices, it has become overwhelming,” Summers writes in the Washington Post. While the drop in energy prices has boosted incomes, “it has also exacerbated the problem of energy overuse. The benefit of imposing carbon taxes is therefore enhanced.”
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Summers argues that a carbon tax’s disproportionate burden on low and middle income earners would be offset by falling energy prices, and that a well-designed tax would penalize carbon-intensive imports as well as domestic products.
“The United States can make the case that such a tax is compatible with World Trade Organization rules,” he argues. “Such an approach would have the virtue of encouraging countries who wished to avoid the U.S. tax to impose carbon taxes of their own, thereby further supporting efforts to reduce global climate change.”