We Simply Don’t Know

Source: Cafe Hayek
by Don Boudreaux

“How do we know that we’re not already taxing carbon optimally, or perhaps even super-optimally? There are currently in place taxes — in the U.S. and elsewhere — on carbon fuels (and on activities that emit carbon). The fact that carbon continues to be emitted, and the fact that these emissions plausibly generate ‘costs,’ does not imply that carbon emissions today are excessive. The gains from using carbon fuels are real, and it’s practically impossible to calculate the additional costs that would result from any government-engineered further reduction in carbon emissions. The economy is too complex, and human ingenuity is too great, to permit any such calculation that would be remotely accurate.” (11/11/21)