Might Global Warming Imply that We should LOWER Gasoline Taxes?

To summarize the contrast: The Stern Review calls for a carbon tax of $350 per ton of carbon in 2015. Nordhaus’ model, which has been peer-reviewed many times, calculates the optimal carbon tax in 2015 to be ONE-TENTH of that, or only $35 per ton carbon. I find it useful to put these quantities in terms of something we understand more readily: $350 per ton carbon converts to $1 per gallon of gasoline, while $35 per ton carbon converts to 10 cents per gallon of gasoline. We are talking big differences here.

If you read the discussion that Bob has, you will see that the $1 per gallon tax on gasoline is not very serious. If we are talking about 10 cents per gallon, we already have gasoline taxes that are over 6 times greater than that. Even if we are accepting everything here as correct (and I think that the 10 cent estimate is probably high), there is an argument to be made that gas taxes should be cut.

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