In the face of uncertainty over the accessibility of shale oil and gas, the Bloomberg Editors make the case for a national carbon tax.
“This uncertainty [can] hinder the development of renewable power. Investors find it hard to look ahead to see whether green power sources will be squeezed out by cheap oil and gas or be in great demand because the price of oil and gas is so high.”
“So how to encourage … the development of advanced biofuels and electric vehicles, as well as wind, solar and geothermal power? … The most efficient strategy is to put a predictable, long-term price on carbon, through a national carbon tax.”
“Ideally, such a tax would make sure the price for emitting a ton of carbon was equal to society’s cost of dealing with that carbon. With the environmental costs of greenhouse-gas pollution thus factored into the cost of oil and gas, the market can better determine which renewable-energy projects make sense.”