Better solutions than carbon tax for climate change

Two weeks ago, Yale economics PhD Dominika Parry suggested reducing carbon emissions with a Carbon Tax and Dividend, a proposal of the Climate Leadership Council. The plan is a liberal/progressive dream: a new tax and a new entitlement. By the time technology has solved the carbon emissions problem, the entitlement has grown into a $10,000 to $20,000 annual grant to every family; that will be politically impossible to eliminate or reduce. 

Last week Will Irby, professional engineer, stated the case against carbon dioxide as a source of climate change and global warming.

Climate activists’ policy proposals are predicated on the rise in temperature predicted by their climate models. The climate is a complex adaptive system; such systems are exceptionally difficult if not impossible to predict. The predicted range of temperature rise in the forecasts have changed with each new forecast and the confidence bands are wide. As the Nobel-winning physicist Niels Bohr (and later Yogi Berra) said: “Prediction is very difficult, especially if it's about the future.”

We won’t know which side is right until it is too late to reduce temperature with currently existing technology. There is a credible risk that greenhouse gas emissions could cause unacceptable climate change and temperature increases; we should explore cost effective means of reducing the risk. With a carbon tax 90 percent to 95 percent less than proposed by the climate lobbies, we may well be able to eliminate the risk of climate change and global warming.

Instead of a payment to individuals, use the proceeds for climate technology; target the money to finding better, cheaper, and especially, more powerful means of reducing emissions, neutralizing their impact and removing them from the atmosphere. The current wind, solar and battery/energy storage technologies require massive subsidies and often have their own environment or energy security challenges.

Numerous other potential mitigation technologies exist in all stages of development, but they don’t receive much attention or funding because the activists want their society changing policies and the climate change opponents don’t admit to the problem or risk. I say, acknowledge the risk and cover it.

One such potential technology - marine cloud whitening - is described in Bjorn Lomborg’s article “Geoengineering Climate Change” column on the Project Syndicate website ( A 1,900-ship fleet of ocean-going ships (cost $9 billion) sprays seawater droplets into marine clouds to make them slightly whiter and reflect more sunlight. This augments the naturally occurring process by which salt from the oceans provides the condensation particles for water vapor, creating and boosting the whiteness of clouds. Lomborg’s team estimates the fleet would reduce the entire global warming forecast this century, deliver $20 trillion of benefits globally, and avoid the $1 trillion annual cost of the December 2015/16 Paris Agreement. If marine cloud whitening proves out, $9 billion program eliminates the need for the Carbon Tax/Dividend with a 90 to 95 percent cost reduction.


Both the Climate Leadership Council whose plan Dr. Parry endorsed and the Citizens Climate Lobby, for which she is Mississippi state leader, propose a carbon tax (or fee) of starting at roughly $200 billion with the proceeds distributed to each U.S. family, net of administration costs. The specifics of their plans differ and the economic analyses on their websites used different starting tax rates and increases.

The Leadership Council website seems to be proposing tax and transfer of $194 billion in 2019 ($49 tax per ton) rising to $250 billion in 2028 ($70 a ton); the numbers are from the supporting Treasury Department analysis.

The Citizens Lobby website tax starts small, at $15 a ton, increases by $10 annually, reaching $105 per ton in the 10th year. The dividend starts at $2,000 per family of four, increases annually by $1,333, reaching $14,000 in the 10th year. While “revenue neutral” it is certainly a massive income redistribution.

The carbon tax and dividend is premised on promoting technology solutions to global warming. Assume it is successful and the tax becomes unnecessary for that purpose. Is it politically feasible to take away a $10-20,000 annual entitlement?

The carbon tax and dividend proposal is 10 to 20 times more expensive than necessary, badly structured, and creates a permanent new entitlement along with a permanent tax requirement. If you put a carbon tax in place, spend the money on research and development.

Rich Sun, CFA has advised on or funded more than $5 billion of energy-related financings and was the environmental compliance officer for a $400 million infrastructure fund backed by the World Bank. He is a Northsider.


Wouldn’t you love to sell something for $50 million and only be required to pay back $5 million if you failed to deliver? What a deal!


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