Last month the International Monetary Fund (IMF) recommendedthat the United States “introduce a broad-based carbon tax.” In the summary of its annual report on the U.S. economy the IMF thus echoes the climate alarmism of the Obama Administration, which has been calling for carbon-cutting policies ever since taking office.
The IMF report was followed by another study issued by Wall Street heavyweight Hank Paulsonand former New York City Mayor Michael Bloomberg titled “The Economic Risks of Climate Change in the United States.” It also advocates for the imposition of U.S. carbon taxes.
Not surprisingly, IMF managing director Christine Lagarde—a long-time advocate of carbon taxes—seems to be lending a hand to this latest high-profile U.S. political push. As French finance minister, Lagarde was on a 21-member United Nations panel that produced a 2010 report calling for the mobilization of “$100 billion a year by 2020 to help poor countries adapt to climate change and reduce emissions of carbon dioxide trapping the sun’s heat.”
In fact, the IMF was advocating higher energy taxes in the U.S. long before Lagarde arrived—since at least 2004—and began aggressively pushing specifically for carbon taxes after the Obama Administration took office in 2009.
In the case of carbon taxes, though, all three—Obama, Wall Street, and the IMF—have got it wrong. As Heritage analyst Nick Loris put it, a “carbon tax would be an enormously high, regressive energy tax that would needlessly destroy jobs and economic growth.” To make matters worse, the tax would not make a dent in reducing global greenhouse gas emissions and therefore have no noticeable impact on global temperatures. And as Heritage’s Derrick Morgan points out, carbon taxes are regressive and fall most heavily on the poor.