A World tax on oil

Here is one heck of a good idea from Alex Tabarrok, as channeled through Brad DeLong:

Marginal Revolution: It's quite surprising that the major consumers of the world's oil have not been able to agree to an oil tax under the auspices of something like the Kyoto Protocol. It's surprising because if the major consumers of oil all increased taxes they would end up bearing very little of the burden.

The result is a simple application of the theory of tax incidence. The burden of a tax falls on those who can least afford to escape the tax. The world's demand for oil is inelastic but the supply is even more inelastic. What is Saudi Arabia, for example, going to do with its oil except sell it? The oil is already fetching a price well above cost so if there is a world tax on oil that's like a tax on land - Saudi Arabian land to be precise - and a tax on land is born by land owners not by consumers...

I suppose OPEC's response might be an embargo, but I doubt it. It's certainly worth a try.