Oldfart,

Alas, there’s still no such thing as a free lunch. If the government the people elect believe that ‘X’ is bad, and legislate to penalize it, then until the government is changed, the penalization of ‘X’ will continue. In this instance, the ‘X’ is producing electricity by burning fossil fuels, specifically coal. Some work upon the assumption that producing electricity by burning coal is bad.

Taking that as a given, then to encourage alternative, “greener” sources of electricity, the cost of the subsidies required to make those alternatives economically competitive with coal must be paid. One way of paying for those subsidies is to add their cost to the taxes paid by the electricity suppliers. This additional cost is then passed on to the consumer. A criticism one might raise in re a scheme of this sort is that it is the government, rather than the people who ultimately select the coal replacement, another example of “the government knows better than you” issue.

The Carbon Tax is simpler than a subsidy. It merely penalizes the use of coal by raising the price of everything produced with it as a raw material. As electricity is ubiquitous in our developed nations, that decision then means pretty much everything. This engages the attention of the people who, by seeking to avoid the higher costs, may well cast a wider net in their search for reasonable alternatives than might a government office whose concern is limited to subsidizing this or that particular alternative to fossil fuel generated electricity.

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Eudaimonia