In the marketplace of ideas, the carbon tax behaves increasingly like a government-run utility. It doesn’t care about competition. It ignores complaint with impunity. Its business model depends on the strength of its political connections, not the quality of its product. Elder statesmen often sit on the boards of such entities. Rarely do they achieve positive change.
If an insurance salesman promises his policy is not-too-expensive but tells you nothing concrete about the benefits, walk away quickly. If Ip wants us to believe 'you'll be glad action was taken,' he would need to show (a) how much climate change would cost if not mitigated, and (b) how much mitigation his policy achieves. He doesn't, because he can't.
The only problem is that British Columbia's carbon tax did not reduce emissions. True, emissions declined upon implementation of the tax in 2008. But something else happened in 2008 ? a global recession that sent GDP (and, with it, energy use) declining in British Columbia and around the world. Emissions then grew in 2011, 2012, 2013, and 2014.
If a U.S. carbon tax depends on global impacts, and the only global impact comes not from the tax but from a different policy (wealth transfers) that has not been defended, the benefits are hard to see.
A good policy does not repeatedly hide in the alternative. When the carbon-tax shells finally stop moving, one turns them over to find a sharply regressive tax likely to harm the economy while failing to meaningfully reduce emissions or insure against catastrophe, poorly suited to the important goals of spurring innovation and protecting public health, and deeply unpopular and inconsistent with basic principles of policymaking.
There are political points to score with a carbon tax, and profits to capture, too. But these won't benefit society; they will come at its expense.
There is no reason to limit this mode of thinking to energy policy. The bureaucrats could build an economic model claiming to identify externalities in any market and insist that theirs is the one, true price. From this perspective, market prices are artificial and inefficient, while administrative reports know what prices should be. Any elected official who dares to deviate from a report's conclusions simply by choosing not to take new government action on behalf of the bureaucratic agenda shall be branded a distorter of markets.
Claims of 'revenue neutrality' make a carbon tax sound like a free lunch, even though it imposes costs on the economy very similar to those that accompany cap-and-trade plans or command-and-control regulation.
If carbon emissions actually had a quantifiable, linear, ton-by-ton cost then the Sophisticated Objection would make no sense because the value of action at home could be measured independent of what action was or was not taken abroad. If we gain the same benefit every time we reduce emissions by another ton, why would we care what China does? But of course, as Sunstein acknowledges by taking the Objection seriously in the first place, this is not how climate change works.