So, We’re All on the Same page Then? Marin County, Exxon and the Washington Post Support Carbon Tax.
January 14, 2013
THE FISCAL conservatives in Congress may be right when they say the $60 billion for Hurricane Sandy relief and reconstruction should be paid for without adding to our national deficit. Fortunately, there’s a way to do so that could unite green-leaning climate realists (such as Marin’s Jared Huffman) and red-ink deficit hawks in both parties.
But first, to get a sense of the magnitude of disaster funding that needs to be addressed, add to the Sandy expense the mounting public tally for last year’s other record-breaking storms, droughts, wildfires and floods. And the $114 billion deficit-funded cost of Hurricane Katrina that’s still rolling forward on the federal books, wrecking hopes for more balanced budgets and more useful public investments.
Expensive as they are, these disasters represent only small down payments on the ballooning costs of climate disruption brought on by our unbridled burning of oil, coal and gas. By blanketing the planet with carbon pollution, fossil fuels have ushered in a state of perpetual climate emergency.
But if carbon is the core cause of climate disruption, it can also be the core solution. Carefully ratcheting up existing fees on the use of fossil fuels could offset the public expense triggered by these storms, droughts, fires and floods. It could also help fund clean-energy innovations and climate-ready infrastructure.
The smartest hedge would be a national carbon tax. It would marshal the market’s power to wring carbon out of the economy, putting decisions about the direction of energy and manufacturing in the hands of consumers and businesses that meet their demands, not Congress and interest groups that lobby lawmakers. When people must pay something for their pollution, they pollute less and invest in cleaner alternatives. A carbon tax would provide more certainty to industry and investors who currently can only guess at what climate policy will look like year to year.
But, given the dim debate on global warming in Congress, another consequence of a carbon tax might be more appealing to policymakers: revenue. Resources for the Future estimates that a tax set at $25 per ton of carbon dioxide would raise $125 billion annually — more than would be saved by eliminating the mortgage interest tax deduction. Even if much of that were rebated to ensure that low-income households weren’t unduly hurt — the right policy — a sizable chunk would be left to shrink the deficit or ease the major tax reform that Washington’s leaders have been promising.
Implementing a national carbon tax would be only one step toward addressing climate change, a problem that must ultimately be dealt with globally. But it would be a big one.
Conservative economists and fossil-fuel lobbyists united in 2009 to fend off climate-change legislation that would have established a cap-and-trade mechanism. They are now locked in a backroom debate over a tax on carbon-dioxide emissions that could raise an estimated $100 billion in its first year.
A carbon tax would force electricity producers, refiners and manufacturers to pay a fee for the greenhouse gases they emit. It is gaining interest as lawmakers and President Barack Obama pledge to simplify the corporate tax code and raise revenue to narrow the deficit. The devastation from superstorm Sandy following the wildfires and drought of this summer have also increased concern about global warming.
“It does fit with the Republican idea of cleaning up the tax code, and to have a clean instrument for addressing this problem,” John Reilly, co-director of the Massachusetts Institute of Technology’s Joint Program on the Science and Policy of Global Change, said in an interview. Given this year’s weather disasters, “it’s hard to stand up and say global warming is a hoax,” he said.