A Carbon Tax becomes a Basic Income

Photo by Sam Jotham Sutharson on Unsplash

Yesterday’s post (Giving freely: Experimenting Basic Income in Kenya) highlighted an interesting non-profit that is investigating the potential effect of a basic income in Kenya. While the impact is meaningful and the potential for conclusions influential, their work won’t answer a critical questions; where will the money come from?

An opinion post in the Wall Street Journal opinion post in the Wall Street Journal (Economists Statement on Carbon Dividends) signed by a breadth of economists suggests a four-part carbon tax policy recommendation that might answer that. Their fourth point calls for the collections from the carbon tax be distributed via “equal lump-sum rebates” as a “carbon dividend”, thus making their carbon dividend like basic income.

While many economists see a carbon tax as a potentially effective solution (in theory) to carbon dioxides impact on the environment (e.g. “climate change”, pollution, etc) there are reasons to be skeptical of the ability to execute on this idea (Big Names Bake a Climate Pie in the Sky). In fact, some early bids to legislate this have failed in recent months, Washington State Voters Reject Carbon Tax. Whether a carbon tax would help reduce pollution and protect the environment is uncertain, but it is at least an interesting potential solution worth considering.

To support the idea of a carbon tax, you can visit the Carbon Tax Center website, and find other organizations that support the idea. If you feel strongly against a carbon tax, and legislation is drafted, you can always contact your representative or start a petition similar to what was done in Canada. Before you do either though, I hope you’ll consider the idea independently, reading arguments both for and against the idea.

Shout out to John Cochrane at The Grumpy Economist for the post that brought my attention to this. He has another carbon tax post worth reading here.

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