Why carbon taxes won't save the environment

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“There is no economic mechanism that can substitute for the initiative of an aroused populace.”

Socialist scholar and historian John Riddell has kindly given us permission to publish this letter, which he wrote to a Canadian green activist who supports carbon taxes as a means of fighting greenhouse gas emissions.

It was so good of you to take time today to talk to me about your work on global warming….

I am looking forward to discussing some of these issues further. In anticipation of that, here’s a thought on carbon taxes.

Whether extracted at the source or at point of consumption, carbon taxes aim to alter behavior by changing the price structure. The idea is that if fossil-fuel energy is more expensive, we will turn to alternatives.

We are experiencing a big experiment with this notion: the enormous increase in the price of gasoline. It has indeed produced a change in behavior, but only a very small, marginal one. Price increases of this sort will not persuade very many people to turn away from automobiles. The response to price stimulus is far too slow to generate change at the pace needed to meet global warming.

Why is this? Because most people have no alternative to automobile use. A minority, in the central city, can turn to public transit or bicycle – but even there, a shift is blocked by stagnant and decaying public transit services, bicycle-unfriendly streets, and chronic traffic congestion that halts all traffic except subways.

For those outside the city centre, they are stuck with their cars. More broadly, carbon taxes will reduce the standard of living of working people without giving them any option to change their lifestyle and improve its quality.

Of course, we can give the tax revenue back to those who are affected. But in that case there is no stimulus. Yet if we do not give it back, we will be robbing those of modest means for the benefit of the more advantaged. This is not ethicaly defensible; it will never be accepted.

Carbon taxes can only be one element in a rounded policy that includes creation of alternatives. This requires society-wide initiatives. And if that is to be done democratically, it requires recruiting large numbers of people to help in planning and executing these initiatives.

I fear that many are overestimating what carbon taxes can achieve. There is no economic mechanism that can substitute for the initiative of an aroused populace.



By coincidence, we received this letter from John just as were about to post the following passage from Marxist economist Paul Burkett. In it he explains, in more theoretical terms, why carbon taxes and other schemes to commoditize nature cannot overcome capitalism’s anti-ecological nature.

The tension between the system’s economic signals and the environment is not a matter of ‘missing markets’. The problem is that economic signals and incentives generated by the wage-labour relation do not, and cannot, encompass the requirements of a healthy and sustainable economy-environment interaction. They can only encompass the environmental requirements of value accumulation with all its ecological contradictions.

No matter how efficient, complete, or undistorted the price system may be, there is no way that its one-dimensional measuring rod of money can be an adequate the measure of, or guide to, the sustainable production of use-values by human labour enmeshed with nature. There is no way that the system can reverse its anti-ecological reduction of wealth to abstract labour, or the dominance of markets and money over life-values.

A system based on exploitation of labour must also exploit nature. A more ecologically sensitive system would have to overcome the separation of workers and communities from the conditions of production and put sustainable human development, not money and capital, in command of production.

That’s from Paul Burkett, Marxism and Ecological Economics: Towards a Red and Green Political Economy, Haymarket Books, 2009. pp. 293-4



  • I strongly agree with Ben’s attitude but feel he understates.

    Whilst it is worthwhile to discuss the shortfalls and consider improvements, Carbon tax is a massive
    gain if considered as a step in transition and getting corrupt capitalist governments to TAX consumption AND production is a great achievement.
    Whilst it would be lovely to have a mandate, no such thing exists, certainly in the UK. The last ten years we have gained much in preparing the populace for sacrifice and the job has been done well against all odds.

    Making it less affordable to utilise fossil fuel whilst raising funds for investment in renewable energy is surely plain logic under current conditions and if seen as just one step up the ladder to sustainability, should be applauded.

    I don’t understand how something being regressive is automatically unacceptable ? sometimes you have to go back to go forward.

  • Carbon taxes are consumption taxes, and therefore by definition regressive in nature; on that ground alone they are unacceptable.

    They are also predicated on capitalist market mythology – the notion that consumption behaviour can be regulated universally by price signals. Not the least of the problems with this market mythology is that we are not all equal players in the marketplace; the wealthy have the means to pay the higher costs of fossil carbon, while the poor do not. As a result, the latter are forced to curb their consumption of carbon in order to leave more for the wealthy to consume.

    Governments don’t pay carbon taxes to themselves, and yet they are among the biggest consumers of fossil carbon, particularly in their military and police operations. Carbon tax regimes do nothing to curb this enormous waste of non-renewable energy.

  • There is another aspect of this that is “politically missing the point”…that is carbon taxes are a totally market-oriented, supply-side paradigm.

    IMO, it completely avoids the real issue: if we want to lower carbon, we lower carbon by *mandate*. We don’t allow NOx from gas and coal plants to exceed a certain amount *by law*. We don’t ‘trade NOx credits’ we don’t “tax NOx” in the US, we BAN them.

    Thus a perspective of actually phasing out carbon polluting sources by direct regulations based on total generation fleet laws are what is needed.

    Transportation carbon is a bigger issue of course but has to be dealt with in long term technological and political way.

    Here in the US only 5% of Americans use public transit. We are not, I repeat, not moving away from the car culture we have without a huge investment in regional transit lines (not intercity transit which is not as important, IMO) but by reducing those huge Interstate Hwy commute lines by getting regional transportation seriously expanded.


  • This is all very well but I think an abstract notion of “the populace aroused” is missing a reading of the balance of forces at any one time. A carbon tax may be won as a concession, perhaps not a very good one, and if the populace remains aroused then perhaps it will be only one skirmish in the larger battle.

    John Riddell correctly points to the inelastic demand in the transport system. Without an alternative, commuters simply cough up the extra cost and keep driving. Here in Melbourne, rising fuel prices saw a big increase in train passengers though – up until no more people could fit on the trains!

    In the case of carbon polluting energy sources, Australia’s carbon pricing debate has partly hinged on how much of the revenue raised will go to renewable energy. The Greens have just announced that the amount is to be $2bn per year instead of $1bn so that is a small victory. By building up the alternative (public transport, or renewable energy sources) some momentum can be generated.

    Of course most of the detail of Australia’s carbon price (an ETS with fixed price, like a carbon tax, for the first 3-5 years) is pretty terrible. It’s a measure of the balance of forces and the neoliberal ideas that permeate the movement. The question is, will our minor victory around renewable energy funding demobilise the movement, or spur it on?

    The other factor in this, independent of popular forces largely, is that renewable energy industries have a certain momentum of their own in market terms which is to our advantage: they are becoming cheaper and more competitive. That in itself can reinforce illusions in the market but also it does help us to win people over that a change from fossil fuels is do-able.