Carbon tax is critical to economic justice --- essential to economic reform to preserve civilization

Hsu, 21 --- D'Alemberte Professor, Florida State University College of Law (Summer, 2021, Shi-Ling Hsu, ECONOMIC JUSTICE: Carbon Taxes and Economic Inequality, 15 Harv. L. & Pol'y Rev. 551, Nexis Uni, JMP)

Progressive ambivalence about carbon taxation is both understandable and misplaced. It is understandable because carbon taxation is widely believed to be regressive. 5 It has become standard fare that a carbon tax increases energy costs, which make up a larger portion of a poor household's [*552] budget than a rich household's budget. 6 As it turns out, this perception is inaccurate: carbon taxes actually hurt fossil fuel industries, which are owned by relatively wealthy shareholders, more than they injure consumers. 7 Moreover, carbon tax revenues can be redistributed in such a way that overcompensates most poor households for increased energy costs (resulting from carbon taxation) and undercompensates most rich households, in which case some progress can be made toward economic equality. That said, that redistribution would be fairly modest at the carbon tax levels currently under discussion--on the order of a few hundred or a few thousand dollars per household annually. 8 So at best, carbon taxation can only advance modest gains toward greater equality.

At the same time, progressive ambivalence about carbon taxation is also misplaced because climate change itself is the ultimate un-equalizer, amplifying economic inequality to potentially apocalyptic extremes. The most important policy that can be adopted to stave off climate change, as much as possible, is a carbon tax. Without a broad price in the form of a carbon tax, it will be impossible to induce the many changes that must be made to wean humankind off fossil fuel usage. Conventional environmental laws and regulations can accomplish much, and in any case are needed to fill the gaps left by a carbon tax. But, without a policy foundation in the form of a carbon price, the necessary scale of changes will not occur. Carbon taxation is thus a critically important component for economic justice, just by virtue of being the most important policy to minimize climate change. While carbon taxation has only modest potential to advance economic justice, it is critical for minimizing the backsliding that would inevitably occur in a climate-changed future.

The case for a carbon tax for the sake of economic justice is thus compelling, if nonobvious. It is important to recognize, as some justice advocates seem to recognize or intuit, that the core goals of carbon taxation and economic justice seem to point in orthogonal directions: the preservation of human civilization and the reformation of human civilization. However, both of those goals require economic reform, and it so happens that carbon taxation is effective reform for advancing policy in both of those directions. Most importantly, reforming human civilization to achieve economic justice [*553] depends upon saving human civilization from climate change. Without that, there will be no justice for anyone at all.