Economists hate all taxes except for one: the carbon tax. This is a tax that promotes long-term investment, incentivizes instead of inhibits growth—and whose revenue goes to shrinking the deficit or investing in other vital national programs. And, of course, it manages to fulfill its purpose of correcting the huge negative externality of greenhouse gas emissions.

On climate change, the Obama administration most recently proposed the usage of royalties from drilling on federal lands to fund clean energy research. This is a good start, but it is not enough. If we are honest with ourselves, two billion dollars over the course of ten years is not nearly adequate to our research needs. Other proposals, such as for a carbon tax, are not being seriously considered by the politicians in Washington.

Meanwhile, across the Pacific, China—a country that many thought would be the last to tackle pollution—has proposed its own carbon tax. It is also setting up seven pilot cap-and-trade programs in major cities in the country.

This should give us pause. The fact that such an industrially intensive country—one that prioritizes efficiency and economy over almost all else—can overtake us in battling global warming is concerning.

Instead of punting the climate change issue down the road, Obama should use the Chinese proposal to do two things: 1) Establish a carbon pricing consultation, as proposed by Brookings’ Morris, McKibben and Wilcoxen, in which countries would share best practices about carbon taxing; 2) Reinitiate the public debate on carbon taxes.

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