Friday 24 Sep 2021 | 21:08 | SYDNEY
Friday 24 Sep 2021 | 21:08 | SYDNEY

Carbon and incentives


Sam Roggeveen


10 August 2011 11:51

Janet Albrechtson's latest column describes a recent carbon tax debate held in Sydney:

Curious about the assertion by the climate change proponents that the carbon tax will drive innovation, one young man said he was all in favour of innovation "but when one looks back on the history of human innovation, when Henry Ford invented the mass-produced automobile, he didn't need a horse tax to do it. When Thomas Edison invented the light bulb, he didn't need a tax on whale oil to do that". So why do we need a heavy-handed carbon tax to drive innovation?

In other words, when it comes to innovation, incentives don't matter. Hmmm.

I do agree with Albrechtson that an international climate agreement is very unlikely, but that's all the more reason to focus our efforts on R&D. A relatively modest carbon tax seems like a sensible way to encourage that type of activity and perhaps even pay for some of it.

Photo by Flickr user Presidency Maldives.