Will Carbon Taxes Bring Paris Protests to Pa?

“Nothing reveals the disconnect between ordinary voters and an aloof political class more than carbon taxation,” write the editors of the Wall Street Journal. As French “yellow vest” protesters swarm the streets of Paris over high gas prices and big-government environmentalism, Pennsylvania veers closer to a carbon tax of our own.

Notwithstanding its good environmental intentions, the Pennsylvania Nuclear Energy Caucus presumes to know what’s best for Pennsylvania’s energy industry—and all energy consumers.

The caucus proposes subsidies for nuclear power plants whose existence is threatened by less expensive gas-fired electric generation. The subsidies would be issued via a carbon tax or some hybrid of one. Whatever the mechanism, the end result is more expensive fossil fuel-derived electricity and more competitive nuclear energy.

While the caucus’s report focuses on the benefits of jobs saved, at least temporarily, and preserving “zero emission” energy, it ignores the costs.

Rod Williamson, executive director of Industrial Energy Consumers of Pennsylvania (IECPA), details the costs in the Pennsylvania Business Report:

It is our understanding that the cost of these bailouts is significant.

For example, New York State Energy Research and Development Authority filings reveal that, in the first nine months of the program, electricity consumers were charged upwards of $354 million via surcharges on their monthly bills to support nuclear reactors in 2017.

He goes on to say that the bailout could amount to an extra $1 million per year for IECPA members, i.e., manufacturers. That means a bailout would cost jobs too:

This cost would dramatically impact job retention and job creation initiatives at Pennsylvania’s largest employers, diminish funds for innovation, reduce investment, minimize energy efficiency efforts and generally diminish the competitiveness of Pennsylvania companies.

Leaving aside the dubious argument that carbon taxes will prevent dangerous climate change, it is wrong to force higher energy bills on masses of people and forego manufacturing jobs to sustain nuclear jobs. 

Instead of nuclear bailouts, lawmakers should consider eliminating existing subsidies and regulation that put nuclear energy at a disadvantage. This summer I wrote about reforming federal nuclear regulations, eliminating state “green subsidies,” and reducing business taxes that make all Pennsylvania companies less competitive.

Let’s focus on removing government-imposed barriers on nuclear energy before punishing consumers and other energy producers.

In the meantime, non to subsidies and vive la marché libre!