Guess what?! I've got a fever, and the only prescription... is more cowbell!

Like Christopher Walken says in the Saturday Night Live sketch, leftists around the world say about taxes. However, it really goes something like this: "There is some made up crisis, and the only prescription is more taxes!" Or government control, but you get the picture.

In a previous post, "I'm the Taxman, Yeah the Taxman," I detailed how the United Kingdom is looking for more taxes to make the UK more "green." Not to be outdone, the wild man from Tennessee, Al Gore, according to CNN, "...has pushed for polices that would reduce the emission of carbon dioxide, such as greater energy conservation and the development of alternative energy sources like wind and solar energy. Gore has also advocated for governments to tax the emission of carbon dioxide."

Why is Al Gore promoting this? Because he is a big fan and shareholder in a carbon credit business, but I digress.

Green taxation, according to the Institute for Local Self-Reliance, has been around for 15 years. It seems that they want taxes to:

* to generate revenue to pay for damages created from past pollution and for measures to reduce future pollution

* to change behavior

* combine(s) a significant pollution tax with a major restructuring of the tax system to make the overall economy more efficient. This process is called "tax shifting."

While they recognize green taxes are regressive, that is they hurt poor people the most, and not folks like Ted Kennedy and Barbara Streisand, the ILSR states: "One way to deal with the inequities resulting from an across the board carbon tax would be to return a significant portion of the revenue to the low income community for energy efficiency."

Well look what we have here. It is all just another income redistribution scheme with a helping of Nanny State on top. So there you have it, the earth is falling apart! Tax everybody! Leftists have the answer! Do I need to put in a sarcasm tag?

Carbon Offsets

Whether you believe in global or warming or not, money is being made selling what are known as carbon offsets. According to TerraPass,

A carbon offset is a certificate representing the reduction of one metric ton (2,205 lbs) of carbon dioxide emissions, the principal cause of global warming. Although complex in practice, carbon offsets are fairly simple in theory. If you develop a project that reduces carbon dioxide emissions, every ton of emissions reduced results in the creation of one carbon offset. Project developers can then sell these offsets to finance their projects.

Of course, TerraPass doesn't do this out the kindness of its heart, one has to be a member, which is either pay as you go, or business programs.

What will not be discussed is whether carbon offsets is a moral good or not, rather this is a discussion of whether it is or isn't economically efficient.

In one respect, TerraPass follows the existing model of the market for pollution credits in the US. Power plants and major industrial entities receive pollution credits and are able to sell them to more polluting entities. The incentive to become a lesser polluter is there. However, the incentive must be greater than or equal what that capital could earn versus other projects. It has proven to be a successful program, to one degree or another.

While this program may work for businesses, as there may also be government subsidies, whether it makes economic sense for individuals is another matter entirely. Consumers must be willing to part with $9-$26 to "reduce their carbon footprint." Does that purchase make economic sense?

Arguably, the answer is "no." That money could be used to finance home conservation projects, like installing weather stripping or building a cistern. What TerraPass is making money on is a sense of moral guilt. Those who are most concerned with global warming are buying feel-good credits to tell their friends they live a "carbon neutral" lifestyle.

As stated above, if you are really concerned about reducing your carbon footprint, consider conservation and home energy efficiency projects. I maintain another blog that discusses green roofs, which I think is economically efficient at reducing air pollution and storm water runoff (http://www.cleanerairforcities.blogspot.com)