What A Gas Tax Can Do

Ryan Avent counters Jim Manzi:

If demand for carbon or oil is relatively elastic, then a tax on carbon or oil is a great way to reduce dependence on carbon or oil. If demand for carbon or oil is relatively inelastic, then a tax on carbon or oil is a great way to generate revenue. After all, a tax on those negative externalities will reduce their output a little bit, and given the choice between reducing carbon a little bit and reducing income a little bit, wouldn't we prefer to reduce carbon?

Even if you think humanity should do absolutely nothing to stop global warming or reduce oil dependency, governments will want to spend money to handle the inevitable costs of warming or oil-dependence, and it would be far better to fund that spending with as efficient a tax system as possible. And there's no question that a system more dependent on taxes on negative externalities is more efficient than one more dependent on taxes on income.