Is There a Carbon Tax in Your Future? 

“A man walks into a bar. He orders several rounds, downs them, and staggers out. The man has got plastered, the bar owner has got the man’s money, and the public will get stuck with the tab for the cops who have to fish the man out of the gutter.”

It's no joke. The above scenario reflects the kind of problem posed by British economist Arthur Pigou, who published “The Economics of Welfare” in 1920. Society often ends up paying for private investments (or folly) that impose costs on others. So why not impose a Danger-of-getting-arrested tax on alcohol? In fact, today's alcohol and cigarette taxes are considered “Pigouvian” (or “Pigovian”) in honor (or honour) of the man who came up with the idea. The diseases, treatments and other problems they cause often end up as a burden on society as a whole, so governments punish such behavior with a tax that will relieve some of the public burden.

A New Yorker commentary by Elizabeth Kolbert suggests that, based on this philosophy, the U.S. Congress could impose a Pigouvian tax on carbon. That, of course, assumes that enough representatives accept the link between atmospheric carbon produced by humans and climate change, and not every politician does—or likes the idea of adding new taxes.

And, in fact, Kolbert writes, “the possibility of a carbon tax has come to seem more likely than ever, that is, not very likely, but also not entirely out of the question.” 
Why? The Congressional Research Service has reported that a “relatively modest” carbon tax could cut the projected federal deficit in half over the next decade (assuming that the money is actually applied toward the deficit.) Although itself regressive, it could replace other, even more regressive, taxes.

Fill your tank with gas, you're pouring carbon into the air, so add a tax to gasoline. A utility uses coal to generate power, add a tax—which means, of course, the cost of energy goes up, encouraging a reduction in energy use and more use of renewable energy. Given the amount of energy used by high-performance computing centers and the energy's rapidly rising cost, that ought to give a big push to the greening of America's datacenters. 

Some prominent economists and politicians from both the right and the left support the idea. M.I.T. researchers describe it as a “win-win-win" scenario; liberal economists Robert Frank of Cornell and Paul Krugman of Princeton favor the concept, as do conservative economists Gary Becker of University of Chicago and Greg Mankiw of Harvard (Mankiw was an economic advisor to President George W. Bush and Mitt Romney.) Bob Inglis, a former Republican representative from South Carolina backs the tax. Even corporations ExxonMobil, Royal Dutch Shell, and Unilever favor the idea.

So far, however, one politician has remained mum on the idea: President Barack Obama. “We would never propose a carbon tax, and have no intention of proposing one,” said White House spokesman Jay Carney last month. But then, there was an election going on at the time. It's a possible trend worth looking out for.