Carbon tax is best climate-change fix - Marshall's Letter to USA Today
July 15, 2009
by Marshall Saunders, President, Citizens Climate Lobby - Coronado, Calif.
Carbon tax is best climate-change fix The recent cap-and-trade debate was disappointing. I presumed the question would be how we go about reducing greenhouse gasses, not whether climate change exists ("Cap and trade — and you," Common Ground, The Forum, Thursday).
Let's look at the drawbacks to the cap-and-trade approach and an alternative that shows greater promise. Cap and trade would create a trillion-dollar market in carbon futures and derivatives. If you thought the housing bubble was a mess, wait until the "carbon bubble" bursts. Under the Waxman-Markey bill, we're unlikely to see any reduction in carbon dioxide emissions until 2020, far too late to slow the avalanche of climate change that is gaining momentum. The bill that passed in the House squeaked through by the slimmest of margins and stands little hope of passage in the Senate.
A more effective approach is to tax carbon and return the revenue to consumers through income and payroll taxes, offsetting increased energy costs. By increasing the cost of fossil fuels, alternative energy sources would become more competitive. We'd produce new jobs, lower our dependence on foreign oil and significantly reduce emissions.
Carbon tax bills have already been introduced in the House and present a solution both parties seem willing to get behind.
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All of this debate is missing
All of this debate is missing the point. Both cap and trade and carbon taxation systems will serve to raise the consumer price of high-carbon items. I think most of the resistance to the idea of a carbon tax is simply a fear of the word "tax", but if the cap and trade credits are issued by auction the end result is effectively the same. The main issue with cap and trade is if credits are /not/ issued by auction -- if they go to existing polluters, for example, then the result is like a carbon tax where the tax monies are paid to existing consumers south carolina real estate These issues aside, there are a few minor differences between carbon taxation and cap-and-trade systems: 1) Carbon taxation makes it much easier for industry planners to predict the future price of carbon. Since tax rates will be less volatile than the price of pollution permits, it makes it easier for example for a utility company to build a new natural gas plant over coal-fired with the knowledge that the price difference will be the same in several years. 2) Cap-and-trade, on the other hand, guarantees a particular level of emissions, which is important from an environmental perspective. Unless the carbon tax is set higher than the cost of carbon sequestration under current technologies, it's possible that the tax would have to be raised or environmental needs compromised new hampshire real estate. The main things to look for in carbon legislation, though are completely unrelated to the trade vs cap debate, and are: 1) A regulatory trial that lasts a long time -- at least 15 years -- to ensure that the regime can affect long-term capital investments. 2) Open regulations that do not discriminate based on the pollution source (e.g., coal carbon emissions should be taxed/capped to the same degree as truck carbon emissions) 3) Any assistance offered to those affected by carbon regulations should be made directly to the affected individuals, on a needs-tested basis, and not in cash. No corporate handouts should accompany the scheme in any form wyoming real estate. Sadly, I expect all three of these criteria to be compromised in any federal regime. These are the things nobody is talking about (because they create clear losers) but failure in these areas will likely result in a carbon regulation scheme that, much like our tax and campaign finance regulations, is broken by design mexico real estate.