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Minnesota Introduces World's First Carbon Tariff
hollywoodb writes "The first carbon tax to reduce the greenhouse gases from imports comes not between two nations, but between two states. Minnesota has passed a measure to stop carbon at its border with North Dakota. To encourage the switch to clean, renewable energy, Minnesota plans to add a carbon fee of between $4 and $34 per ton of carbon dioxide emissions to the cost of coal-fired electricity, to begin in 2012 ... Minnesota has been generally pushing for cleaner power within its borders, but the utility companies that operate in MN have, over the past decades, sited a lot of coal power plants on the relatively cheap and open land of North Dakota, which is preparing a legal battle against Minnesota over the tariff."
This isn''t a tax on trade between states. It's a tax on carbon. It's perfectly neutral in theory -- no matter where your carbon-based energy comes from, it gets hit with the tax. Now, it's true that much of MN's coal-based energy comes from ND, so the law will impact imported power more than local power, but a luxury tax on high-priced wines is not unconstitutional because more wine is grown in California and imported to Minnesota rather than grown in Minnesota. This is no different. There's nothing unconsitutional going on here, it's a spurious argument being raised by people who oppose a carbon tax in principle.
"Convictions are more dangerous enemies of truth than lies."
Why do governments so often fail to consider the effects of disincentives? For example, when raising taxes, they calculate expected increases in revenue while underestimating changes in the behavior of the taxed. They always act surprised when the expected additional revenues don't materialize, or indeed revenues fall.
Perhaps it has something to do with most elected officials being lawyers and not businessmen, engineers, etc.