The following piece was co-authored with Bob Inglis, the founder and executive director of the Energy and Enterprise Initiative.

If conservatives don’t begin to engage on the important issue of climate change, we’ll cede the debate. The result will be a larger, more intrusive government that hurts business and job creation.

President Obama is readying a major push of administrative action on climate change. There will be new regulations on power plants, new subsidies for clean energy and a number of other big government programs in the name of solving climate change.

To conservatives like us, complicated new regulation is our worst nightmare. There is a conservative approach to dealing with climate change — one that can actually achieve conservative goals: the government-shrinking carbon tax.

Currently, U.S. tax law embodies everything that’s wrong with the federal government. It’s too big (about 17,000 pages), too burdensome (Americans spend nearly $50 billion a year complying with it), and too prone to manipulation. Working toward a simpler, fairer system with lower overall rates has long been a worthy conservative goal that deserves continued support from all liberty-loving Americans.

But amidst all the talk among conservatives about tax rates and tax-compliance costs, activists should focus on what may be the most important flaw in the current system: it taxes the wrong things.

If conservatives want to inject new ideas into the political debate and win elections, they should look at what the government taxes, as well as how the taxes get collected.

Over 90 percent of federal revenue comes from charges imposed on income, labor (payroll tax) and investments (capital gains tax). These taxes punish socially beneficial behavior; everyone agrees that society should have more income, jobs and investment. If there is any hope of moving the budget towards balance while cutting existing taxes, political leaders will have to find a better way to generate revenue.

Taxing the things we want less of and eliminating taxes on things we want more of is a common-sense solution. It’s hardly a new idea. The American founders funded the early federal government with sin taxes and a few import duties.

This doesn’t mean that existing sin taxes should necessarily go up–cigarette taxes are already more than 100 percent–or that taxes should be used to regulate personal behavior. It does mean that political leaders should look to tax things that are undesirable.

Taxes on pollution offer an attractive way to fund government while adhering to conservative principles. For example, carbon dioxide, the most important atmospheric pollutant, gets regulated largely via heavy-handed Washington bureaucrats but isn’t subject to a tax right now. Because power plants and factories emit a lot of it, replacing payroll or capital gains taxes with a carbon tax could reduce regulation, shrink government and stimulate the economy by cutting other taxes.

No tax, of course, is perfect. Proposals from the political left to use pollution taxes as a way of funding ever bigger, more intrusive government deserve strong opposition. Likewise, any effort to raise taxes on pollution should include reductions in regulations and taxes — particularly those imposed under the clean air act — as part of a political trade off.

Conservatives ought to take a close look at what American taxes, not just how it taxes. They’d be wise to do it quickly. Otherwise, we’ll miss the chance to establish a truly conservative approach to climate change. The question is: Isn’t it better to tax emissions rather than income?

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