Carbon taxes - including swaps - are a tired and discredited gimmick that's been proven in other countries to distort markets and thwart economic growth. Following Rahm Emanuel's dictum to "Let no crisis go to waste" is cheap, tawdry political gimmickry, and both we and the president deserve better.

It is necessary and it is sufficient to allow the full economic costs of using petroleum fall upon the users of petroleum, however. Personal responsibility is always a good idea, if you can figure out how to accomplish it, and in this case, it's fairly simple.

What We Need

What we need is an insurance fund modeled on Workman Comp to cover the costs of petro-disasters. We know that disasters occur both with the production - as in the Gulf - and in the transportation - as in Prince William Sound - of petroleum. All we really need to do is to assess a fee on the production and/or importation of petroleum. Charging the fee on a per-gallon basis means that we are playing fair with small companies, and that's important, because small companies provide the bulk of all new job creation.

How big does the fund need to be? I'd say $30 billion to begin with. That's a subject that good men could dicker about. Maybe you think $60 billion is more reasonable.

Generating The Funds

We should allow the fund to grow and shrink. Inflation means it should grow. If more petroleum is being used, it should grow. If we are making changes in regulations and technoiogy that reduce loss, the fund should shrink.

So each year, the amount assessed to go to capitalize the fund would vary. If no losses are incurred, the amount should amount to 1/25 of the fund total, so that fund will grow to the required size without painful economic adjustments. When the fund reaches full funding, that would stop. In addition, there would be an experience assessment that covers the prior year's losses.

Paying Losses

If you experience a loss, you apply directly to the fund for reimbursement. Since the fund would be owned and operated by the government, rather than by the industry, those incurring losses should be able to expect fair treatment. And that's what the industry should want, too - fair treatment, neither punishing nor overly generous. And being administered by someone with no interest in the matter, rather than by an industry group, should minimize the need for lawyers and all that layer of expense.

Broken Promises

Mr. Obama showed so much promise when he ran for President. Those promises were based on the idea of change and working together to reach solutions. Instead, we've seen many stupid Bush-era policies continued, and many inane Democratic gimmicks promoted.

That's sad. We had such hopes. We need to mail the carbon credits idea a dead fish - or an oil-covered gull.

Other Bloggers On Related Topics:
carbon credits - dead fish - gimmicks - Mr. Obama - oil spill - Rahm Emanuel - simpler solutions - small companies - workman compensation