I recently said on Twitter that regulations would might be better than a carbon tax, but as soon as I tweeted it I wondered how easy would that be to implement worldwide and whether a tax might work better?This article addresses that question.Why not just use regulations instead of taxes, like mileage standards for cars? Economists know regulation is complicated. Regulations by nature have to sort between what is a target and what isn’t. The regulatory process contains numerous opportunities for lobbyists to get their particular interest excluded. Fuel economy standards are a perfect example. The miles-per-gallon rules first applied to motor vehicles in 1978 (Corporate Average Fuel Economy or CAFE) were subject to massive lobbying by automobile companies, who succeeded in having light
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This article addresses that question.
Why not just use regulations instead of taxes, like mileage standards for cars? Economists know regulation is complicated. Regulations by nature have to sort between what is a target and what isn’t. The regulatory process contains numerous opportunities for lobbyists to get their particular interest excluded.
Fuel economy standards are a perfect example. The miles-per-gallon rules first applied to motor vehicles in 1978 (Corporate Average Fuel Economy or CAFE) were subject to massive lobbying by automobile companies, who succeeded in having light trucks (mostly pickups) given a lower standard. This exclusion meant less effective reduction of pollution, and also helped feed the growing market share of pickups and SUVs while helping to kill off station wagons and other car models.
Forbes
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