What A Carbon Tax Proposal Looks Like
May 14th, 2009Posted by: Roger Pielke, Jr.
A bipartisan group of legislators has introduced in the U.S. Congress a proposal for a revenue neutral carbon tax. To get an idea of what it is about see this description (in PDF).
It starts out by taking issues of science off the table:
The economic downturn calls for action to stimulate the economy, such as reducing the amount of taxes taken out of each paycheck.
Our ongoing dependence on foreign oil from hostile nations also calls for action to reduce that dependence and move to fuels of the future.
Even if you disagree with the science of climate change, everyone agrees that less carbon in the atmosphere would not hurt us.
Will such a proposal gain attention?
May 14th, 2009 at 9:02 am
No cut off the trading for old friends.
No revenue for new programs.
No cooling for the deep blue sea.
No chance for the borrowed tax scheme.
May 14th, 2009 at 11:32 am
If you remove climate change from the equation, you remove contention linked to the uncertainties of climate change science.
Also, instead of concentrating in the area of disagreement you concentrate on the what everyone agrees upon.
answer: yes, this would get my attention.
May 14th, 2009 at 1:49 pm
“Even if you disagree with the science of climate change, everyone agrees that less carbon in the atmosphere would not hurt us.”
What a strange sentence. I don’t “disagree with the science of climate change.” I disagree with SOME of the science of climate change. Also, less carbon MAY WELL hurt us by decreasing plant productivity. We are undoubtedly benefitting, foodwise, by the higher CO2 levels. See CO2 Science.org for hundreds of articles that demonstrate this.
May 14th, 2009 at 7:05 pm
“Even if you disagree with the science of climate change, everyone agrees that less carbon in the atmosphere would not hurt us.”
That is indeed a strange statement. One *can* agree with the “science of climate change” (what there is of it) and still not agree that “less carbon in the atmosphere would not hurt us.”
If the sun drops down to Maunder Minimum values for the next 5-20 decades, it would be good to have a lot of carbon in the atmosphere.
On the other hand, governments can do incredibly stupid things. If there is indeed a modest tax on carbon, coupled with a reduction in income taxes, at least that would be one of the less-stupid things the federal government could do. It would at least be better than cap-and-trade.
May 15th, 2009 at 3:45 am
Response No. 2:
Unbelievable, a response like that coming on a scientific (policy) blog….absolutely unbelievable !
This world is in no way in an environmental crisis, it is in a political crisis and thought processes that disregard initial scientific truth will lead us into what politicians (and their leaders, lobbyists) want.
Taxation depresses creativity and increases control.
We are in a battle of minds and it looks like our spirits are being beaten (to a pulp !).
May 15th, 2009 at 9:45 am
I don’t think that such a proposal builds on areas of agreement, but rather on a classical political compromise. Democrats want to tax carbon emitters. Republicans want to reduce taxes. Why not do both? Shift the tax burden from sympathetic Americans to the populists’ villains. It may or may not be sound policy, but it could be a political win for both parties.
May 15th, 2009 at 12:05 pm
“Even if you disagree with the science of climate change, everyone agrees that less carbon in the atmosphere would not hurt us.”
Putting aside the scrambled logic of the first clause, everyone does not agree that less carbon in the atmosphere would not hurt us. If the cost of lessening the amount of carbon in the atmosphere is greater than the benefit produced, then we are hurt. We’ve reached the point where “foreign oil” is the last refuge of scoundrels. It’s been over thirty years since politicians have been buying votes with that bugbear, and in thirty years we have increased our dependence on foreign oil.
And anyone who thinks that ANY tax will be revenue-neutral – I can only shake my head. I understand people who will lie in order to get their political program into effect. I don’t understand people who believe the lies.
Think about this: if parking ticket fines were “revenue-neutral” and the city gave you back the money you paid in fines, would you stop parking illegally? And please – a tax on “emitters” is a tax on consumers, so don’t even go there.
May 16th, 2009 at 12:59 pm
Jon,
The idea is transferring the costs. You are absolutly right that any tax on producers will become a tax on consumers. These consumers will be, however, getting, on average, tax cuts equal to the amount that their energy costs increase. While the money from these tax breaks will just go back into purchasing energy, since wind, solar, geothermal and non-carbon sources of energy will not be taxed, consumers will be more likely to purchase among these (in theory). It’s market manipulation-not substantially different from subsidizing certain politically preferred energies to provide them with a competitive advantage over those not so publicly favored. It is, however, a politically smart suggestion. No net tax increase and polluters are punished.
May 16th, 2009 at 6:15 pm
So you’re going to somehow keep track of the premium I’m spending on energy, and cut my federal tax the same amount? Really? The government is running a massive deficit as it is, and borrowing – at interest – to pay for current expenses. Social Security and Medicare are going to explode starting about ten years from now. And somehow, Congress is going to keeps its mitts off “my” money? For as long as the energy costs are being artificially increased?
In a dream world. “Politicall smart” is another way of saying a lie. Do you really want to base the policy you favor on a lie?
May 17th, 2009 at 6:53 am
Jon,
“So you’re going to somehow keep track of the premium I’m spending on energy, and cut my federal tax the same amount? Really? ”
-For the love of man, please read what I wrote. The tax cuts would “on average” equal the increased energy price burden. Those who use a high comparative amount of energy would not be fully compensated while those who use comparatively little carbon based energy would receive more.
“The government is running a massive deficit as it is, and borrowing – at interest – to pay for current expenses. Social Security and Medicare are going to explode starting about ten years from now.”
-I wouldn’t argue with you on these points.
“And somehow, Congress is going to keeps its mitts off “my” money? For as long as the energy costs are being artificially increased?”
-You are correct in suggesting that selectively taxing companies is a market manipulation. The logic is that manipulating the carbon market is necessary. I never suggest that this is or isn’t the case. My point is that this kind of revenue neutral proposal could really have legs.
“‘Politicall smart’ is another way of saying a lie.”
-Yes, almost always.
“Do you really want to base the policy you favor on a lie?”
-Whatever policy you prefer, you can rest assured that someone is selling it with lies. In any case, I never say that I favor such a proposal. Please read carefully.