Economist Supports Chamber's Views on Carbon Taxes
Top Economist Supports Chamber's Views on Carbon Taxes
The latest pronouncement from one of the world's top economists that a carbon tax is better than an emissions trading scheme to fight global warming is welcome news according to the Wellington Regional Chamber of Commerce.
"We have consistently argued a carbon tax is preferable to an emissions trading scheme and we are pleased that Jeffrey Sachs has supported the Chamber's view," said Chamber CEO Charles Finny.
"Energy prices under a carbon tax charge would be more stable than they would under emissions trading. Price certainty is important for business for planning and investment purposes. A carbon tax would also enable scrutiny from the media and political process whereas emissions trading would be complex and less transparent as it would be hidden in volatile prices," he said.
Jeffrey Sachs, a special advisor to the UN secretary general and director of the Earth Institute at Columbia University recently told a panel that a straight carbon tax on energy production would be simpler and cheaper than putting a cap on tens of thousands of polluters.
Mr Sachs also alluded to the current financial meltdown when he said a carbon tax would be more efficient than spreading the trade of permits across the financial system.
"Having a lot of people engineer financial instruments for carbon when there are much more direct ways to do this strikes me as not really a great investment," Mr Sachs said.
"Ever since the release of the 2006 draft energy strategy, we have urged the government to focus on a broad-based greenhouse gas charge accompanied by a corresponding reduction in income tax as an alternative to an emissions trading scheme", said Mr Finny.
"We hope that this latest pronouncement and mounting evidence that the EU is backing away from emissions trading give the incoming government reason to take stock and consider the follies of the proposed ETS," Mr Finny concluded.