The Carbon Tax Debate: About To Heat Up with Obama as Prez

By Ucilia Wang

When the new U.S. Congress convenes next year, it will get a chance to consider levying a carbon tax that its backers say will prompt polluters to cut greenhouse gas emissions.

Rep. John Larson (D-Conn.) plans to introduce a piece of carbon tax legislation next year in the hopes that it will gain more support with a Democratically controlled Congress and White House. Larson introduced a carbon tax bill in 2007 that failed to generate enough support.

Compared with carbon cap-and-trade, a more popular concept to curb emissions, a carbon tax would be simpler to implement and generate revenues sooner, argued Larson, who was recently elected the chair of the House Democratic Caucus. He is advocating using the carbon tax revenues to offset payroll taxes.

"We can have middle-income tax relief while serving the purpose of cleaning up the environment," Larson said at the briefing.

Larson hosted a policy briefing in Washington, D.C. Tuesday that was sponsored by the Environmental and Energy Study Institute, Carbon Tax Center, the Climate Crisis Coalition, Friends Committee on National Legislation and Friends of the Earth.

Larson joins a scientist from NASA, an economics professor from Tufts University, a former U.S. undersecretary of commerce and the chair of the David Suzuki Foundation in Canada to discuss the merits of carbon tax. Canada's British Columbia province enacted the first carbon tax in North America earlier this year (see Carbon Tax Debuts in Canada).

The British Columbian government is taxing fossil fuels, including transportation and heating fuels. Understandably, that policy didn't go well with consumers who already were facing high oil prices when the regulation went into effect in June.

Larson isn't advocating hiking gasoline prices for consumers. He wants to tax industrial polluters such as coal processors and oil refiners. In his previous bill, he proposed levying a tax of $15 per metric tons of carbon dioxide emissions and increasing the rate by 10 percent per year. The tax would be phased in over 10 years.

Gilbert Metcalf, the economist from Tufts University and a briefing participant, is suggesting a $17 per metric tons of emissions. He said this tax would nearly double the average price of coal and nudge power plant operators to find alternative, more environmentally-friendly fuels to generate electricity.

Although Larson wouldn't have to contend with tax-fearing Americans, he will sure find stiff opposition from industries that will have to pay to pollute. Carbon tax opponents also have argued that any taxes will find their way to consumers as businesses pass along the added costs to goods and services.

Carbon tax has some big name supporters. Al Gore likes it. And recently Gore has offered some advice to president-elect Barack Obama. The two men met in Chicago Tuesday to discuss energy and climate change policies.

Ralph Nader supports carbon tax, too, and co-wrote an opinion piece in the Wall Street Journal last week to promote the idea.

But will Obama go for it? The incoming president has repeatedly said he wants a carbon cap-and-trade system to help reach his goal of cutting greenhouse gas emissions to 80 percent below the 1990 levels by 2050. Making our planet healthier is nice, of course, but the real incentives to put in a carbon trading system is the revenues the government would generate to fund a variety of initiatives (Obama is focusing on job creation for now).

Under Obama's cap-and-trade proposal, polluters will have to pay for permits that would allow them to emit emissions below a government-set limit. If they emit more, then they will have to buy permits from those that pollute less.

Europe has had a similar program in place since 2005, though it gives the permits away for free to be traded among businesses and member nations. The European Union is mulling a change to sell those permits instead (see U.N. Climate Talks Poses Big Impact on Greentech).

Comments

[bluesmoke:]

Yesterday on CNBC Dylan Ratigan raised a good point - why are we adding more potential taxes to our own employers, and not taxing the oil producing countries that would like to kill us?

2008 Dec 10 08:52 AM

[patio:]

Astonishing that this political junk science BS still has legs, in the face of all data showing the Earth cooling since '98, and signifigantly so in '08.
CO2 a pollutant is just laughable.

2008 Dec 10 09:21 AM

[Texas A&M E...:]

I agree with patio. The science clearly shows that the warming trend during the 19th and 20th centuries is part of a naturally reocurring cycle every few hundred years. In another 100 years or so, the world will be cold again. And as patio points out, CO2 has been steadily increasing for the last dozen years, even as the world has steadily cooled down. This proves that there are natural forces at work that overwhelm any global warming effect of CO2. Stated another way: If CO2 has any global warming effect at all, it is small because it has been demonstrably overwhelmed by natural forces over the last dozen years. This whole carbon tax/carbon trading proposal is just a money/power grab by politicians.

2008 Dec 10 10:33 AM

[Robert Nabloid:]

Man made CO2 is actually very LOW in comparison to what the Earth produces. CO2 is actually required for life on Earth and is not in-and-of-itself a pollutant! Without CO2, plant life would not exist. Too many of anything is bad, but we don't make very much CO2 compared to what the Earth makes. CO2 actually increases plant growth (go ask any horticulturist) which then would also help combat any "extra" CO2 as plants breathe CO2 and exhale oxygen and they grow much more aggressively with increased levels of CO2.

Also I would like to add a few things. A lot of scientists have said they do not believe in man made global warming - A lot!!! But the main stream media just keeps putting the same man made global warming shills on who just dismiss the notion that other scientists have evidence to the contrary. Not very scientific of them!

BTW, an increase in temperatures, man made or natural, would cause more evaporation and cause more rain and clouds. The increased clouds would actually block some of the heat energy from the Sun. In addition, as a result of increased evarporation there would be increased RAIN and SNOW. Snow also reflects much of the heat energy.

We had massive ice ages and glaciers that covered much of the area I now live at. Man made global warming did not melt those glaciers or cause the Earth to warm. Any chance it could be just part of natural cycles? We can't predict the weather accurately but they now claim to know what is going to happen over the next 10, 20, 50 years? C'mon. This is all nonesense. They don't even pay much attention to the SUN or the temperatures on other planets. This isn't science. This is political BS.

They are using this to increase the number of taxes on us all (on a global basis). Now we'll have carbon tax. Soon they'll put a methane tax on farmers. Then they'll tax the air we breathe... I'm all for the environment - please don't take this the wrong way. But there are HUNDREDS, no, thousands of pollutants we pump into the air each day - and of all the things we do the government wants to make CO2 out to be the worst? We need to clean the air we breathe from toxins and chemicals.

By the way, perhaps you should stop buying pepsi and coke products - and sparkling wines. After all carbonated beverages contain CO2.

Oh, and here is a quote for you: "Plants require carbon dioxide to conduct photosynthesis, and greenhouses may enrich their atmospheres with additional CO2 to boost plant growth, since its low present-day atmosphere concentration is just above the "suffocation" level for green plants." (wikipedia).

2008 Dec 10 06:23 PM

[Robert Nabloid:]

The real travesty of it all is that they aren't focusing on the real chemical and toxic culprits responsible for polluting the air we breathe and the water we drink. CO2 is not the enemy.

2008 Dec 10 06:28 PM

[Jrbarnes:]

Considering CO2 as a pollutant is about like treating oxygen as a pollutant. Life on earth is not possible without CO2, which is as vital for platns as oxygen is for mankind. Out of every million molecuels in the atmosphere, 235 are CO2, and they have minimal impact on global warming. It is just a sneaky BS scheme for the biggest tax increase in world history.

2008 Dec 11 10:50 AM

[Erich J Knight:]

BREAKING NEWS!

Biochar, the carbon-negative soil-improving energy biproduct, has made an incredible series of breakthroughs at the UN Climate Change Conference in Poznan, Poland.

The International Biochar Initiative, biochar-international...., announced today that Biochar is now being examined by the UNFCCC (United Nations Council on Climate Change) for status as part of the CDM (Clean Development Mechanism.)

It's verifiable, it produces clean energy, it improves soils, it reverses desertification, it improves water quality, it could drive millions out of poverty, and it may be one of humanity's single greatest tools for mitigating and adapting to climate change.

A copy of the proposal is posted on the IBI website at
biochar-international.....

2008 Dec 11 11:27 AM

[Ferdinand E...:]

Everything is relative in this old world. Carbon taxes are better than cap-and-trade. I'd love to go into details, but when I tried I couldn't find anyone to print them.

2008 Dec 12 09:37 AM