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Re: Taxing Energy


Ramesh, I can’t speak to the national-security costs of oil except to say that I suspect they generally may be overestimated (how much of our current engagement in Afghanistan is related to oil, for example?) but when it comes to climate change, the best research suggests that the tax should be at most about 22c per gallon, and probably lower than that. Anything more would be punitive and inefficient. It should also replace all federal fuel economy standards. I might be willing to put up with that exchange — and Detroit would find it a significant relief — but the enviros wouldn’t stand for it, which shows you exactly how much respect they have for real economic analysis.


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