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Home Publications Blogs Beat the Press Blocking Keystone Is Like a Carbon Tax

Blocking Keystone Is Like a Carbon Tax

Tuesday, 28 May 2013 04:57

My friend Jared Bernstein rightly points out that blocking the Keystone pipeline will not keep the tar sands oil in the ground. There are other ways to bring the oil to market and the industry will undoubtedly pursue these channels if opponents of the pipeline are successful.

But there is an important point here. These other methods of getting the oil to consumers are more expensive. We know this because the industry would not be pushing the pipeline if it was not the lowest cost way to get the oil to the market.

In this way opposition to the pipeline is effectively raising the cost of tar sands oil. That is exactly what we should want to see. In a sane world we would have a carbon tax, which would discourage the use of oil in general and in particular oil that was associated with large amounts of carbon emissions.

For political reasons, a carbon tax seems a non-starter at the moment. With the failure of Washington to act responsibly, the Keystone protesters are effectively imposing their own carbon tax on tar sands oil by raising its price. It's far from perfect, but it's certainly a reasonable course of action under the circumstances. 

Comments (6)Add Comment
Masters of the Universe Finally Meet Their Master
written by Last Mover, May 28, 2013 5:49
It is fitting as nations of the world join the global suicide pact heading over the cliff of climate change, America can stand tall among them as the beacon of liberty in defiance of yet another tax on freedom to commit economic suicide from which there is no escape, even by the 1%.

In the famous words of Patrick Henry, Give us the Keystone of liberty. Give us climate change over other forms of premature death.
Strange for Progressives to Support such a Regressive Tax
written by Rick Beckley, May 28, 2013 7:14
While a carbon tax might curtail the use of oil and oil derived products, it does so in the most regressive way possible, by taxing those who can afford it the least. Surely these extremely intelligent progressives can come up with a better way to deal with climate change than taking food from the mouths of the working poor?
So many reasons to block the pipeline
written by Jennifer, May 28, 2013 10:44
There are so many reasons to block the pipeline, it will not create many jobs http://grist.org/news/the-keys...erm-jobs/ and it put communities at risk. Ask the people in Arkansas how that oil spill clean-up is going. But think the argument that "it will happen" anyway is awful. Alberta is landlocked, there are not a lot of other alternatives, seriously does anybody think they can get a pipeline through the Canadian Rockies? Extracting the oil is incredibly expensive, if there was any kind of market swing it could require some major adjustments. There is a reason they are really fighting for it.
written by Brendon Bernard, May 28, 2013 7:44
Unfortunately now all the Canadian oil is going by rail - bad for emissions
Yes, it's a regressive tax. But in California, it's also a piggy bank for the privledged
written by Rachel, May 28, 2013 10:09

The privledged, however, have persuaded themselves that few will be injured by a carbon tax, and anyway, they deserve it, and if they have to they can go on food stamps, or maybe some training program.

That's what happens when social mobility is so reduced. The people of privledge have less and less contact with the poor, and so they (the privledged) are able to overlook the suffering they cause.

(Dean, of course, is among the best, both in terms of mind and compassion. But on this issue, I suggest that he is quite, quite wrong.)
Carbon tax, yet less effective
written by jfreed27, June 02, 2013 2:07
If we deny Keystone permission to borrow America, and IF it results in raising oil prices, it is perhaps similar to a carbon tax. Far better is to legislate a tax on all carbon sources, collect revenue and return it to the taxpayer. Free market will shift to low carbon efforts, emissions would go down (the whole point in reversing our self-destruction) and about 60% of the taxpayers would get back more than they pay out in higher dirty energy prices.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.