Among my Christmas gifts received this year were a stuffed polar bear from my roommate (which was a Hanukkah present, but that’s beside the point), a little tiny stuffed polar bear holding a Coke bottle and wearing a Coca-Cola scarf from my little brother and a set of flannel sheets emblazoned with cartoon polar bears engaging in wintry fun.  I’m a complete sucker for anything polar bear themed.  Seriously, who can resist this much cuteness?

“But Marianne,” I can hear you asking.  “As a conservative, aren’t you devoted to the destruction of the environment and the polar bear extinction that will result from global warming?  How can you love polar bears and vote Republican?”

Fine, I’ll admit it: I have a more nefarious interest in polar bears than mere cuteness.  I’m hoping that, like the death of a baseball player inflates the value of baseball cards bearing his likeness (no pun intended), the extinction of polar bears will inflate the value of my polar bear paraphernalia.  I think of it as a long term investment strategy.

But it looks like even the conservative elite are going to try to foil me: along comes AEI scholar Kenneth Green with an environmental strategy that I could support: a revenue-neutral carbon tax.  In other words, we get rid of (or cut drastically) the normal corporate tax, and replace it with a carbon tax.  This would ameliorate the concern that imposing a steep carbon tax would reduce the competitiveness of the US economy.  As the author explains it:

As we argued in a previous AEI Environmental Policy Outlook in June[iii], a revenue-neutral carbon tax, offset by reductions in taxes on productivity is a superior policy option to carbon emission trading in virtually every dimension. Revenue neutral carbon-centered tax reform would: be more effective at reducing GHG emissions than emission trading; create a revenue stream to offset economic damage of higher energy prices; shift a portion of the tax base from productive endeavor to consumption; be less prone to corruption; require no new collection mechanisms; be predictably adjustable and be self-moderating - nobody is likely to want the tax to be higher than absolutely necessary.

Putting forward a program to get the price right on carbon emissions would allow Republican candidates to argue for regulatory streamlining and the removal of such things as CAFE standards, appliance standards, construction standards, light bulb standards, and so forth, all of which become totally superfluous in an economy that is properly pricing carbon emissions through a carbon tax.

I’m going to have to look into this more, but I like the sound of it.  It should be self-evident that you tax the things you want less of, but in this country (as in many), we tax productivity and success.  Better to tax the thing we want less of, without actually increasing total tax collections.  It certainly gives businesses wishing to remain competitive an incentive to invest in environmentally-friendly technologies (which I like a lot better than government-directed investment).

The real trick, though, will be in the political implementation - keeping it revenue neutral.