Future historians will almost certainly regard the failure of the
United States to lead in global environmental policy as an even greater
mistake than the invasion of Iraq. The first thing the next American
president should do upon taking office is to insist that the U.S.
Congress pass a huge increase in gas taxes. To be more precise, the
United States should implement steep carbon taxes that hit coal,
heating oil, and natural gas. The tax should be enough to raise the
price of gasoline by at least $2 a gallon. But unlike Europe’s
consumer-oriented gasoline tax, it should hit everyone in the economy,
including manufacturers.
No other specific policy action will be half as
effective in changing America’s engagement with the world. No other
presidential directive would so clearly disown the United States’
record of lamentable and self-centered head-in-the-sand energy
policies. There is no way the United States can hope to persuade China
and India to adopt more environmentally friendly growth strategies
without first acknowledging its own responsibility—and then doing
something about it. At the same time, a carbon tax might finally
convince the rest of the world that the United States does not aim to
invade countries to preserve cheap oil.
Such a tax would raise massive revenues that will
help reduce current and prospective U.S. deficits. The revenues would
help ease the pressure that excessive American borrowing is putting on
international capital markets, pressure that is now contributing to a
dangerous collapse of the dollar. Of course, some of the new tax
revenue should be earmarked for scaling back other taxes and for
providing subsidies to low-income citizens to offset the burden of the
carbon tax. It also demonstrates the right way to...
