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The “cow tax”: not now, maybe not ever

In December, ranchers fell into a panic over a nonexistent E.P.A. proposal to tax methane emissions from cows. By February, panic was replaced by giggling: how could they every have worried over something so crazy as a “cow tax?” And now, to demonstrate how badly misplaced their fears were, a Democratic and Republican Senator have joined together to enshrine in law the sacred principle that American cows shall never be taxed. Smell the bipartisanship.

Including cattle in a cap-and-trade system is, of course, a fine idea. From an environmental perspective, cattle are a major source of a wide range of ills: methane emissions, land use changes, nitrous oxide emissions, ammonia emissions, etc. If you tally up the negative impacts of beef on human health and productivity, the societal cost of cows climbs even higher.

From an economic efficiency perspective, it generally doesn’t make sense to exclude sectors from a carbon cap. We want emissions reductions to come from the fastest, lowest-cost sources available, and it’s hard to imagine anything cheaper or lower-cost than reduced beef consumption. It takes decades to shut down a coal plant. It takes no time at all to not eat a strip steak. Moreover, energy is a primary input to just about every sector of the economy. The same can hardly be said for tender, delicious short ribs.

Finally, pricing is really the only policy implement up to the task of curbing beef consumption. The government might be able to fiddle around at the margins through consumer awareness campaigns and school lunch programs, but anything more heavyhanded would raise a justifiable backlash. (And, sadly, even these modest government interventions are ferociously resisted by industry.) Of course, the entire system of subsidies that keep beef so cheap needs to overhauled, but the end result is the same: when burgers fall off the dollar value menu, chicken nuggets start looking a lot better.

Anyhow, ranchers need never have worried. A cow tax is a political non-starter, simple as that. The tale is a reminder that market-based solutions to environmental problems need more champions, because when the meal is over, no one ever wants to pick up the check.

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