In my discussion yesterday of the shortcomings of the Climate Superfund Act, I actually ignored arguably its biggest flaw.
While the Act certainly looks much like a tax, I failed to point out that the Act omits what is typically the biggest selling point of a carbon tax – its impact on prices and consumption behavior. Putting a tax on the future consumption of fossil fuels raises their price and decreases consumption. However, the Climate Superfund Act taxes production that's already occurred. It thus fails to send the price signal necessary to decrease fossil fuel consumption going forward.
It appears that lawmakers are still wary of trying to get consumers to recognize the social cost carbon in their own purchasing decisions.
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