In my last article, I explained that two years ago the Manhattan Institute's Senior Fellow Oren Cass wrote a masterful critique of the typical arguments for a U.S. carbon tax. His essay, "The Carbon Tax Shell Game," is so good that I decided to spend two posts here at IER amplifying some of his strongest points. As I've been illustrating over the years with my own work (e.g., here and here), the case for a carbon tax falls apart once you start picking at it.
In the previous post, I focused on Cass's claim that the carbon tax in U.S. politics is a "shell game," because its proponents promise contradictory things to different groups. In this post, I'll focus on Cass's sophisticated critique of superficial justifications for a U.S. carbon tax based on the concept of a "negative externality."
