Carbon Tax: A Penalty for Emitting Rather than an Incentive to go Clean

On January 1st, 2012, the European Union passed into law a carbon emissions tax that affects global airlines to and from Europe. Each tonne of carbon dioxide would incur a 100-euro fine, and repeat offenders face an operator ban. The amount of the penalty is set to increase progressively. Previously, carbon costs were targeted at European industries and utilities. Let’s see what happened.

China declared vehemently that it would not pay any carbon costs. The United States, India and pretty much everywhere else followed suit. Why would they agree to pay the EU to fly to their place? Chinese officials estimate that these taxes would cost Chinese airlines $120 million for the first year and more than $360 million per year by the turn of the decade. No wonder no one wants to pay.

Europe evidently cannot ban airlines; China has threatened a “trade war” if its airlines are banned. Europe can’t afford to enforce its carbon tax policy. This law will turn into a paper-toothed tiger, like many others before it. Why has it failed?

The European Union’s carbon emission taxes put a price on pollution. These policies acknowledge that emissions are increasing and the way to prevent them is to discourage polluting agents by whatever means necessary. This is like telling a people that the only way it can prosper is to adopt a policy of austerity and save money. Humans are by nature resistant to restrictions. The carbon tax is a temporary and rickety solution to a problem that is much larger than any single tax or policy. We cannot stop every car, every plane, every factory in the quest to reduce emissions. Humanity cannot go back and forget the technology it has mastered.

We are racing against the clock to improve efficiency and develop clean, sustainable energy sources. I firmly believe this is the only permanent solution to climate change and greenhouse gas emissions.

Remember that for every tonne of carbon emitted, diplomats, scientists and advocates are flying to meet each other and come up with solutions that will not require us to abandon our lifestyles.