Who'd have expected a Republican from South Carolina to emerge as one of the clearest voices for effective climate policy? After a trip to Antarctica where scientists showed him ice cores that record the jump in CO2 levels now warming the Earth, Congressman Bob Inglis (R-SC) is convinced: "The evidence is compelling: Global Warming is a real, human-caused problem."
Inglis addresses skeptics with a science experiment:
“This is an egg... from the grocery store that’s been sitting there in some vinegar. Vinegar, as you remember from high school science, is an acid, and when it encounters the calcium on this egg, the calcium gets dissolved by the acid of the vinegar. This is essentially the problem with carbon dioxide levels rising in the atmosphere and the ocean being a sink for that carbon dioxide.
“...CO2 levels in the atmosphere are causing the ocean to become more acidic, and potentially dissolve the shells of the calcium based plankton. We would open a hole in the bottom of the food chain, and the result would be a very serious impact in human life on this planet.
“Unlike the models which really are very complicated, this is really a very simple chemical equation, and it will happen any time you have calcium coming in contact with an acid. So it’s more certain and something that therefore should cause us to act.
Inglis points out that we can take action without hurting ourselves. Now, we dump CO2 into the air as a free good. If we price it, and use the money to reduce other taxes we can gain in three ways. Less pollution, more jobs and better national security.
He explains, "Start with a tax reduction, that’s something conservatives can warm to, and make it a payroll tax reduction, something liberals are excited about... Reduce the taxes on payroll, and then in equal amount, apply a tax on carbon dioxide, so there’s no additional take to the government. There’s no tax increase there, it’s reducing one tax, and imposing a tax on something different. It’s reducing taxes on something we want more of which is Labor, Industry and income, and imposing a tax on something we want less of, which is carbon dioxide.
“If we do that, and then apply that mixture to imported goods as well as domestically produced goods, so we’re not simply exporting jobs and exporting the problem, what we can do is change the economics, so that incumbent technologies no longer have a free good in the air, and a free pass on the national security implications of that product. If you internalize those externals, attach those external costs to the products - to the fossil fuels - then the competing technology has a chance to win.
“[W]e can do for energy what Microsoft and Apple did for the PC and the internet. We can break through to a future that’s not dependent on fossil fuels, and that uses newer, cleaner, job-creating fuels that also improve the national security of the United States. It really is the triple play of this American century... improve the national security of the United States, create jobs and clean up the air."
See the full report at Congressman Bob Inglis: How to Engage Republicans, even Skeptics, on Carbon Legislation and Inglis' NY Times op-ed with economist Arthur Laffer, An Emissions Plan Conservatives Could Warm To.
Inglis isn't the only one who's getting the idea. The House Ways & Means Committee is catching on, too: see Ways & Means Weighs Bypassing Trading, Going Straight for Carbon Price.
Showing posts with label Carbon Tax Center. Show all posts
Showing posts with label Carbon Tax Center. Show all posts
Monday, April 6, 2009
Monday, March 10, 2008
Who will say the "T" word?
Enjoyed a delicious lunch with economist Ken Green at the (conservative) American Enterprise Institute two weeks ago. Green and his AEI colleagues published a terrific analysis: "Climate Change, Caps vs. Taxes" concluding that a carbon tax would be a "no regrets" economic policy creating a level and stable playing field. A tax would avoiding the scramble for polluting rights inherent in a "cap and trade" system and would provide incentives for everyone to reduce greenhouse gas emissions. And it would not handicap the US compared to our trading partners as a "cap" would.
While Green is most concerned about damage to the economy, I'm most concerned about run-away climate change. But we agree from both perspectives that a carbon tax would be far better than "cap and trade," the only approach most politicians and environmental groups even mention.
Last month, in "Policy Options for Reducing CO2 Emissions" the Congressional Budget Office concluded that emissions reductions under a tax would be roughly five times as high as those under inflexible cap. Incentives for innovation are one of the key benefits of pricing emissions. CBO found that a tax would create the needed incentives better and sooner than cap and trade.
Cap and trade systems are a (complex) way to create new markets to trade the right to pollute. A carbon tax is a (simple) way to use EXISTING markets to create incentives to reduce carbon emissions and to maintain the resources (rainforests, for example) to sequester carbon. Both will increase fossil fuel prices. A tax would increase fossil fuel prices predictably and gradually, emissions trading would add volatility and unpredictabilty to prices.
So why aren't the mainstream environmental groups and the politicians even talking about a carbon tax? They seem afraid we'd hang them for mentioning the "T" word.
But this "tax" is more like a user fee. When we pay our water bills, we pay for disposal and treatment of the waste water-- a sewer fee for every gallon of water we use. It reminds us not to waste water-- because there are costs of bringing the water to us, and there are costs of taking the waste away. Similarly, carbon tax (or fee) is a way to build in some of the cost of disposal of greenhouse gases into the atmosphere and would put non-fossil fuel energy sources, like wind, on a more equal footing. (A very small carbon tax would very quickly make wind cheaper than coal as a source for electricity generation.) We could use carbon tax funds to provide incentives for preservation of tropical rainforests, the biggest carbon sinks on Earth, which are now being burned to clear land for (government-subsidized) biofuels and beef.
A carbon tax can be revenue-neutral. The Carbon Tax Center suggests a "progressive tax shift" -- distributing an equal share of the carbon tax revenue to every tax payer. Those who use more than the average of fuel would pay more tax than their share (refund) payment. Those of us who use less than average would get a bonus. Everyone who spends money would have incentives to choose less carbon-intensive products and services because prices would reflect carbon footprint.
How to break the sound barrier on carbon taxes? If the Carbon Tax Center, the CBO and the AEI all agree that they'd work so much better than cap and trade, can't we at least start a political discussion about carbon taxes? The silence is deafening, and at least to me, a bit maddening.
While Green is most concerned about damage to the economy, I'm most concerned about run-away climate change. But we agree from both perspectives that a carbon tax would be far better than "cap and trade," the only approach most politicians and environmental groups even mention.
Last month, in "Policy Options for Reducing CO2 Emissions" the Congressional Budget Office concluded that emissions reductions under a tax would be roughly five times as high as those under inflexible cap. Incentives for innovation are one of the key benefits of pricing emissions. CBO found that a tax would create the needed incentives better and sooner than cap and trade.
Cap and trade systems are a (complex) way to create new markets to trade the right to pollute. A carbon tax is a (simple) way to use EXISTING markets to create incentives to reduce carbon emissions and to maintain the resources (rainforests, for example) to sequester carbon. Both will increase fossil fuel prices. A tax would increase fossil fuel prices predictably and gradually, emissions trading would add volatility and unpredictabilty to prices.
So why aren't the mainstream environmental groups and the politicians even talking about a carbon tax? They seem afraid we'd hang them for mentioning the "T" word.
But this "tax" is more like a user fee. When we pay our water bills, we pay for disposal and treatment of the waste water-- a sewer fee for every gallon of water we use. It reminds us not to waste water-- because there are costs of bringing the water to us, and there are costs of taking the waste away. Similarly, carbon tax (or fee) is a way to build in some of the cost of disposal of greenhouse gases into the atmosphere and would put non-fossil fuel energy sources, like wind, on a more equal footing. (A very small carbon tax would very quickly make wind cheaper than coal as a source for electricity generation.) We could use carbon tax funds to provide incentives for preservation of tropical rainforests, the biggest carbon sinks on Earth, which are now being burned to clear land for (government-subsidized) biofuels and beef.
A carbon tax can be revenue-neutral. The Carbon Tax Center suggests a "progressive tax shift" -- distributing an equal share of the carbon tax revenue to every tax payer. Those who use more than the average of fuel would pay more tax than their share (refund) payment. Those of us who use less than average would get a bonus. Everyone who spends money would have incentives to choose less carbon-intensive products and services because prices would reflect carbon footprint.
How to break the sound barrier on carbon taxes? If the Carbon Tax Center, the CBO and the AEI all agree that they'd work so much better than cap and trade, can't we at least start a political discussion about carbon taxes? The silence is deafening, and at least to me, a bit maddening.
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