This is a continuation of the article, ” Carbon tax: Three Choices.”
So, I’ve concluded a carbon tax is – in my opinion – appropriate. And, that’s the easy part. The hard part is determining how to invest the tax money collected. Where does the money go?
Under the current carbon tax proposal, the government is responsible for both collecting the tax and then redistributing it.
To me this is not exciting. And, doesn’t seem like any way to solve the carbon pollution problem.
Why?
Well, let’s start by asking what it’s going to take to solve the carbon pollution problem?
Words come to mind as follows:
- Efficiency
- Motivation
- Innovation
Now, as I’ve said before, I believe the government is very well qualified to collect taxes. They’re experts. They know how to do it. They’ve mastered it.
But, what about spending the tax money collected?
Can we really give the government high marks when it comes to efficiency? How about motivation? How about innovation? When you think of government, do these words come to mind?
Speaking of effeciency, for every dollar the government receives in tax, what percentage makes its way to the “pointy end” of the project? The business end? The part of the project where something constructive and value adding gets done?
Don’t say it! I know what you’re thinking! When it comes to efficiency, the government gets a very bad score.
Everyone knows this. Even the people in government know it. It’s no secret. We haven’t discovered anything new here. No state secrets are being revealed. But, it’s like the big white elephant in the room, everyone sees it, but nobody says anything. They act as if it’s not there.
Be Gone White Elephant!
Well, I’m saying it. The white elephant is in the room and may I suggest we get him out! May I make the preposterous suggestion that we unceremoniously get this big, dirty, smelly, ravenous creature out! Be gone. Get out of the room! You’re not helping!
Then, when the white elephant is gone we can start working on solving the problem. Any problem.
Isn’t it easier to work when the white elephant has left the room? Doesn’t it create a much better work environment? No more smell, no more having to feed the beast every 5 minutes, no more having to listen to the noisy elephant calls, no more being squashed in the corner. Just a much better work environment. Much more conducive to problem solving.
Give $100 to the government …
Let’s do a thought experiment. Let’s say we give the government $100 to solve a problem.
You come back in a week and ask, “How’s it going?”
Your jaw drops as you listen to the answer, “Oh, we spent $99. We only have a dollar left. We need more money.”
“How far along are you on the solving the problem?”
“We haven’t even started!”
“Where did the $99 go then?”
“We had to blah, blah, blah ….”
“But, you’ve got nothing to show for this effort. There’s no added value. You haven’t got anything for your money. Why?”
“Look, it doesn’t work that way. We have to follow procedure and procedure says we have to do all this meaningless, non-valueadding stuff or we can’t proceed.”
10 years and $1 million later …
“Any progress …?”
“No, we’re still waiting on paperwork from Canberra.”
“How close are we to solving the problem?”
“No idea. But, we need more money!”
I realize this is a bit of an exaggeration, but anyone who’s seen the government “in-action” first hand can relate to the story.
Bottom line, give money to the government and most of it ends up in buying “red tape.” Rolls and rolls of red tape. And, red tape my friends is non-value adding. Government red tape is the most expensive tape ever made. And, it doesn’t even have a sticky side!
All the Kings Horses …
Let’s look at a more concrete example. The invention of the airplane.
The United States government funded some of the best and brightest scientists and engineers to attack the problem. All the King’s horses and all the King’s men …
The project ended in disaster; in full view of an onlooking public. A grand spectical was staged for the launch of the experimental aircraft. Launched from a staging rig on the Potomac River. The plane started down the rail. Excitement loomed as folks wanted to witness history in the making.
The plane built up speed as it raced to the end of the platform. Then as the nose reached the end it tipped downward. Then the body followed. Then the tail. The plane exibited the same flying characteristics as the Ford Model-T automobile. It just crashed down into the river.
It was an embarrassing moment for aviation.
And, an embarrassing moment for the government. All the king’s horses and all the king’s men couldn’t get the project started again.
The government virtually cancelled all work on airplane develoment and you could hear grumblings like, “we’re about 100 years away from powered flight.”
This was late November 1903.
Nine days later, two brothers from Dayton, Ohio, successfully piloted the first powered airplane at a place called Kitty Hawk, North Carolina.
The brothers received no government funding.
Major newspapers were hesitant to report this earth shattering achievement as it was hardly believable. After all, some of the giant scientifice minds – with government funding – couldn’t figure out the mystery of powered flight. So, how on earth could two bicycle shop owners – without high school diplomas and without government funding – possibly do it.
But they did.
Who should drive clean energy, government or the free market?
So, I’m not sure I like the idea of government handling the drive to clean energy. My fear is that 10 years down the track we’ll still have a massive air pollution problem and all we’ll have in return for our carbon tax is mountains of red tape!
I can’t help but think that the drive to cleaner energy may be better left in the hands of the free market.
Let the free market work on the problem; let the free market come up with ingenious ways to generate cleaner energy.
Does the Government play a role?
Absolutely! A big role.
But, I feel its role should be in line with the talent it brings to the table. Would you call a plumber to fix your television? If you wanted to develop a new cleaner automobile engine, would you call the government to build it for you?
The government is probably not the best at inventing, designing, and/or developing new technologies. Let industry and the free enterprise system loose on the problem.
I feel the government can play a big role through encouragement. Encourage clean energy production. Provide incentives. Provide the free enterprise system with motivation and incentives leading to cleaner energy production.
I’ll have more to say about the government role in my follow-on article. Stay tuned!
In the meantime, what’s your feeling about the government role in the carbon tax debate?
Read follow-up article Carbon Tax: Government Role?