‘Advocating for a regressive tax that would hammer the poor is probably not the best look for a proud socialist like Ocasio-Cortez.’
Alexandria Ocasio-Cortez has taken a lot of twitting from the right over her recent performance on “The Daily Show,” when host Trevor Noah interviewed the left-wing political neophyte likely to become a Democratic member of Congress from New York. After Noah asked how she was planning to pay for her platform, which includes Medicare for All, a jobs guarantee and free college, Ocasio-Cortez offered the comparatively paltry revenue that could be raised by upping taxes on the wealthy and suggested that a carbon tax could pick up most of the rest of the tab.
“If we implement a carbon tax,” Ocasio-Cortez said, “that’s an additional amount . . . of . . . of . . . a large amount of revenue that we can have.” She also wildly misstated the military budget. Conservatives went to town.
To some extent, episodes like that are to be expected: Ocasio-Cortez is the latest fad in progressive politics and her political opponents are going to try to knock her down a peg, or eight. Even if she isn’t fluent yet in Bland, the evasive lingua franca of Washington, she is hardly alone on the left in longing to fund favored policies by taxing carbon, mostly in the form of industrial emissions. But how large would that “large amount of revenue” actually be?
The obvious answer: as big as you want, with a big-enough tax. Consider one of Ocasio-Cortez’s proposals for which the projected costs are known: Medicare for All. According to both the right-leaning Mercatus Center and the left-leaning Urban Institute, Medicare for All would cost about $32 trillion over 10 years. Meanwhile, according to the Environmental Protection Agency, the United States emitted an average of 5.4 billion metric tons of carbon over the three most recent years for which data is available. Using the highly scientific method of mindless trend extrapolation, we get roughly 54 billion metric tons over a decade. To cover that $32 trillion Medicare for All bill, a tax of $592 per metric ton of carbon would be required.
Note the assumption that jacking up the price of carbon to nearly $600 a metric ton will have no impact on the amount of carbon emitted. That assumption is . . . heroic. In 2013, the Congressional Budget Office estimated that a carbon tax of a mere $20 a ton would lower carbon emissions by about 8 percent. We can probably assume that a tax 30 times that size would prompt a significant reduction in emissions.
Which is good! But with every 1 percent decline in carbon use, the tax must be raised by a little more than 1 percent to compensate. If carbon emissions declined by 25 percent, to roughly 40 billion metric tons a decade, hiking the tax to $800 per metric ton would be needed to hit the $32 trillion target.