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A Call to Paris Climate Negotiators: Tax Carbon.

On November 29, 2015, the eve of the UN climate summit in Paris, the Carbon Tax Center unveiled a letter signed by 32 notable individuals, urging Paris climate negotiators to focus on national carbon taxes, both for their intrinsic value and as a gateway to a global carbon price.

The group includes four Nobel Laureates, three former U.S. cabinet secretaries who served under four presidents (from both major political parties), two former vice-chairs of the Federal Reserve System’s board of governors, and three distinguished faculty members from Harvard University’s economics department. It also includes leading carbon tax advocates from across the political spectrum: Jerry Taylor of the Niskanen Center, Mark Reynolds of Citizens Climate Lobby, and Charles Komanoff of CTC.

The text of the letter is directly below, followed by the names of the signatories.

Released in Paris and New York, Sunday, November 29, 2015

Taxing carbon pollution will spur everyone ― businesses, consumers and policymakers ― to reduce climate-damaging emissions, invest in efficient energy systems and develop low-carbon energy sources.

This single policy change — explicitly using prices within existing markets to shift investment and behavior across all sectors — offers greater potential to combat global warming than any other policy, with minimal regulatory and enforcement costs.

We urge negotiators at the upcoming UN Climate Conference in Paris to pursue widespread implementation of national taxes on climate-damaging emissions.

We endorse these four principles for taxing carbon to fight climate change without undermining economic prosperity:

1. Carbon emissions should be taxed across fossil fuels in proportion to carbon content, with the tax imposed “upstream” in the distribution chain.
2. Carbon taxes should start low so individuals and institutions have time to adjust, but then rise substantially and briskly on a pre-set trajectory that imparts stable expectations to investors, consumers and governments.
3. Some carbon tax revenue should be used to offset unfair burdens to lower-income households.
4. Subsidies that reward extraction and use of carbon-intensive energy sources should be eliminated.

 

Signed,

Frank Ackerman Kenneth J. Arrow Jim Barrett Alan S. Blinder Dallas Burtraw Steven Chu Richard N. Cooper Robert H. Frank Shi-Ling Hsu Charles Komanoff N. Gregory Mankiw

Donald B. Marron Jr. Aparna Mathur Warwick McKibbin Gilbert Metcalf Adele C. Morris Robert Reich John Reilly Mark Reynolds Alice M. Rivlin James Rydge Thomas C. Schelling

Robert J. Shapiro George P. Shultz Joseph Stiglitz Steven Stoft Chad Stone Jerry Taylor Richard Thaler Eric Toder Martin Weitzman Gary Yohe

(Institutional affiliations are for identification purposes only, and do not connote any organizational approval.)

Frank Ackerman, PhD
Principal Economist, Synapse Energy Economics

Kenneth J. Arrow, PhD
Nobel Prize in Economics, 1972
Joan Kenney Professor of Economics and Professor of Operations Research, Emeritus, Stanford University
Convening Lead Author, Intergovernmental Panel on Climate Change

Jim Barrett, PhD
Chief Economist, American Council for an Energy-Efficient Economy
Former Senior Economist, Joint Economic Committee

Alan S. Blinder, PhD
Gordon S. Rentschler Memorial Professor of Economics and Public Affairs, Princeton University
Vice Chairman, Board of Governors, Federal Reserve System, 1994-1996
Member, President’s Council of Economic Advisers, 1993-1994

Dallas Burtraw, PhD
Darius Gaskins Senior Fellow, Resources for the Future

Steven Chu, PhD
Nobel Prize in Physics, 1997
U.S. Secretary of Energy, 2009-2013
Elected to Royal Society, 2014
William R. Keenan, Jr. Professor of Physics, Professor of Molecular and Cellular Physiology, Stanford University

Richard N. Cooper, PhD
Maurits C. Boas Professor of International Economics, Harvard University
Deputy Assistant Secretary of State, 1977-1981
Former Senior Staff Economist, Council of Economic Advisers

Robert H. Frank, PhD
Henrietta Johnson Louis Professor of Management, Cornell University
Professor of Economics, Samuel Curtis Johnson Graduate School of Management, Cornell University

Shi-Ling Hsu, PhD
John W. Larson Professor of Law and Associate Dean, Florida State University College of Law

Charles Komanoff
Director, Carbon Tax Center

Gregory Mankiw, PhD
Robert M. Beren Professor of Economics, Harvard University
Chair, President’s Council of Economic Advisers, 2003-2005

Donald B. Marron Jr., PhD
Director of Economic Policy Initiatives, Urban Institute
Member, President’s Council of Economic Advisers, 2008-2009
Congressional Budget Office, Deputy Director 2005-2007, Acting Director 2006

Aparna Mathur, PhD
Resident Scholar in Economic Policy Studies, American Enterprise Institute

Warwick McKibbin, PhD
Non-resident Senior Fellow, The Brookings Institution
Professor of Economics, Australian National University and Centre for Applied Macroeconomic Analysis

Gilbert Metcalf, PhD
Professor of Economics, Tufts University
Deputy Assistant Treasury Secretary for Environment and Energy, 2011-2012

Adele C. Morris, PhD
Senior Fellow and Policy Director, Climate and Energy Economics, The Brookings Institution

Robert Reich, PhD
U.S. Secretary of Labor, 1993-1997
Chancellor’s Professor of Public Policy, Goldman School of Public Policy, University of California, Berkeley

John Reilly, PhD
Co-Director, MIT Joint Program on Science and Policy of Global Change
Senior Lecturer, MIT Sloan School of Management

Mark Reynolds
Executive Director, Citizens Climate Lobby

Alice M. Rivlin, PhD
Senior Fellow, The Brookings Institution
Visiting Professor, Georgetown University
Vice Chair, Board of Governors, Federal Reserve System, 1996-1999
Director, White House Office of Management and Budget, 1994-1996
Founding Director, Congressional Budget Office, 1975-1983

James Rydge, PhD
Lead Economist, Global Commission on Economy and Climate, New Climate Economy

Thomas C. Schelling, PhD
Nobel Prize in Economics, 2005
Lucius N. Littauer Professor of Political Economy, Harvard University (Emeritus)
Professor of Foreign Policy, National Security, Nuclear Strategy and Arms Control, School of Public Policy, University of Maryland

Robert J. Shapiro, PhD
Chairman, Sonecon
Under Secretary of Commerce for Economic Affairs 1997-2001
Senior Fellow, Georgetown University School of Business

George P. Shultz, PhD
Thomas W. and Susan B. Ford Distinguished Fellow at the Hoover Institution, Stanford University
Secretary of State, 1982-1989
Secretary of the Treasury, 1972-1974
Director, White House Office of Management and Budget, 1970-1972
Secretary of Labor, 1969-1970

Joseph Stiglitz, PhD
Nobel Prize in Economics, 2001
Elected to Royal Society, 2001
John Bates Clark Medal, 1979
Professor of Economics, Columbia University
Former Senior Vice President and Chief Economist, World Bank
Chair, President’s Council of Economic Advisers, 1995-1997

Steven Stoft, PhD
Convenor, Global Carbon Pricing Symposium, Economics of Energy & Environmental Policy
Founder and Director, Global Energy Policy Center

Chad Stone, PhD
Chief Economist, Center on Budget and Policy Priorities
Council of Economic Advisers, Chief Economist 1999-2000, Senior Economist 1996-1998

Jerry Taylor
President and Founder, Niskanen Center
Vice President, Emeritus, Cato Institute
Task Force Director Emeritus for Energy, Environment and Natural Resources, American Legislative Exchange Council

Richard Thaler, PhD
Ralph and Dorothy Keller Distinguished Service Professor of Behavioral Science and Economics, Booth School of Business, University of Chicago

Eric Toder, PhD
Institute Fellow, Urban Institute
Co-director, Urban-Brookings Tax Policy Center

Martin Weitzman, PhD
Ernest E. Monrad Professor of Economics, Harvard University

Gary Yohe, PhD
Huffington Professor of Economics and Environmental Studies, Wesleyan University
Senior Member, UN Intergovernmental Panel on Climate Change

(Institutional affiliations are for identification purposes only, and do not connote any organizational approval.)

For Immediate Release:
January 12, 2016

One Month After Paris: Climate Experts Continue Push for Carbon Taxes

Non-profit that convened letter from 32 notable experts including Nobel prize winners and former cabinet secretaries says carbon taxing is what’s next after COP21

Today marks one month since the landmark Paris climate agreement, where 196 countries agreed for the first time to work to reduce carbon emissions that cause climate change.

As policy makers and the public ask, “what’s next” after Paris, the Carbon Tax Center, a leading solutions-focused nonprofit, issued the following statement, which can be attributed to Director Charles Komanoff:

One month after the COP21 agreement, we are already fighting an uphill battle. Cheap gasoline and political resistance threaten countries’ abilities to meet the goals set out in Paris. Both the global climate and the political climate require policymakers worldwide to move swiftly to tax carbon pollution –– a move that expert scientists and economists agree offers our best chance to avert catastrophic global warming without destabilizing the global economy.

The Carbon Tax Center made headlines last year after it organized a letter to the Paris climate negotiators signed by 32 leading economics and science experts, including 4 Nobel prize winners and 3 former U.S. cabinet secretaries. The signers outlined how world leaders can tackle climate change without undermining economic prosperity or harming the poor.

The bipartisan list includes Steven Chu, Nobel Prize-winning physicist and President Obama’s first Secretary of Energy; Robert Reich, President Bill Clinton’s Secretary of Labor; George P. Shultz, President Nixon’s Secretary of Labor and President Reagan’s Secretary of State; Nobel Prize-winning economists Joseph Stiglitz,Thomas Schelling and Kenneth Arrow; founding Congressional Budget Office Director Alice Rivlin; Greg Mankiw, chair of President George W. Bush’s Council of Economic Advisers; and Jerry Taylor, president of the Niskanen Center.

Last month, following the Paris agreement, the Carbon Tax Center published an analysis highlighting the climate threat posed by cheap oil, but also released a groundbreaking report underscoring the promise of British Columbia’s revenue-neutral carbon tax.

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The Carbon Tax Center launched in January 2007 to give voice to Americans who believe that taxing emissions of carbon dioxide and other greenhouse gases is imperative to combat global warming. CTC is a clearinghouse for research, analysis and advocacy to establish a carbon tax as the centerpiece of U.S. policy to combat catastrophic climate change. It has been the leading NGO advocating for carbon taxing as the key to unlocking low and non-carbon investment and innovation to drive the global energy system away from fossil fuels to renewable wind, sunlight and efficiency.

For Immediate Release:
December 12, 2015

Prominent Climate Policy Analysts React to Paris Climate Agreement

Science and economics experts applaud the agreement and point to the next step: taxing carbon pollution

Today negotiators from 195 countries came to a landmark agreement that commits nations to a plan to decrease greenhouse gas emissions that cause climate change. The Carbon Tax Center, a leading U.S. advocacy group that organized a letter to the Paris negotiators signed by 32 experts including 4 Nobel prize winners, applauds the Paris agreement, while urging governments to adopt national carbon taxes to achieve the ambitious goals in the new agreement.

Carbon Tax Center director Charles Komanoff said, “Now that all nations have committed to reducing emissions, the next step is for each and all to enact and implement transparent and robustly-rising carbon taxes. No other measure can both harmonize individual policies into global ones and scale up renewables and energy efficiency fast enough to avert the worst catastrophic scenarios.”

Two notable signers of the letter also reacted to the historic agreement:

“Today’s UN agreement shows laudable global concern and ambition to confront the climate challenge. A clear next step is for nations to enact broad, persistent and rising prices on carbon pollution to catalyze efficiency, low-carbon energy investment and innovation,” said former Secretary of Labor, Robert Reich.

Renowned Harvard Economics professor Martin Weitzman agreed, adding, “British Columbia’s popular revenue-neutral carbon tax offers a very good starting point.”

Other signers of the letter organized by the Carbon Tax Center include Steven Chu, Nobel Prize-winning physicist and President Obama’s first Secretary of Energy; George P. Shultz, President Nixon’s Secretary of Labor and President Reagan’s Secretary of State; Nobel Prize-winning economists Joseph Stiglitz, Thomas Schelling and Kenneth Arrow; founding Congressional Budget Office DirectorAlice Rivlin; Greg Mankiw, chair of President George W. Bush’s Council of Economic Advisers; and Jerry Taylor, president of the Niskanen Center.

View the letter and a complete list of signers here: https://www.carbontax.org/blogarchives/2015/11/29/a-call-to-paris-climate-negotiators-tax-carbon/

The Carbon Tax Center is encouraged by the global momentum emerging from the Paris talks and will continue its work educating policy makers and the public about the need for carbon taxes and the political path that will make them possible.

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The Carbon Tax Center launched in January 2007 to give voice to Americans who believe that taxing emissions of carbon dioxide and other greenhouse gases is imperative to combat global warming. CTC is a clearinghouse for research, analysis and advocacy to establish a carbon tax as the centerpiece of U.S. policy to combat catastrophic climate change. It has been the leading NGO advocating for carbon taxing as the key to unlocking low- and non-carbon investment and innovation to drive the global energy system away from fossil fuels to renewable wind, sunlight and efficiency.

FOR IMMEDIATE RELEASE
November 29, 2015

32 Leading U.S. Experts Urge Paris Climate Negotiators to Tax Carbon

Four Nobel Prize winners, three former cabinet secretaries, and two former vice-chairs of the Federal Reserve Board of Governors are among the open letter’s signers.

Thirty-two leading U.S. experts in economic, environmental and climate policy today released an open letter urging negotiators at the 2015 Paris Climate Conference to pursue national carbon taxes the most meaningful action to address climate change. The signers, assembled by the nonprofit Carbon Tax Center, outline how world leaders can tackle climate change without undermining economic prosperity.

The signers include Steven Chu, Nobel Prize-winning physicist and President Obama’s first Secretary of Energy; Robert Reich, President Bill Clinton’s Secretary of Labor; George P. Shultz, President Nixon’s Secretary of Labor and President Reagan’s Secretary of State; Nobel Prize-winning economists Joseph Stiglitz, Thomas Schelling and Kenneth Arrow; former Vice Chairs of the Federal Reserve System Board of Governors Alice Rivlin and Alan Blinder; Greg Mankiw, chair of President George W. Bush’s Council of Economic Advisers; and Jerry Taylor, president of the Niskanen Center.

View the letter and a complete list of signers here: https://www.carbontax.org/blogarchives/2015/11/29/a-call-to-paris-climate-negotiators-tax-carbon/

The letter states, “Taxing carbon pollution will spur everyone ― businesses, consumers and policymakers ― to reduce climate-damaging emissions, invest in efficient energy systems and develop low-carbon energy sources. This single policy change — explicitly using prices within existing markets to shift investment and behavior across all sectors — offers greater potential to combat global warming than any other policy, with minimal regulatory and enforcement costs.”

“We are seeing the beginning of a global transformation to sustainable, clean energy,” said Steven Chu. “A clear, rising carbon tax in as many countries as possible is the best way to accelerate this revolution.”

Signers endorse several measures to ensure that national taxes on greenhouse gas emissions can bolster both environmental quality and economic growth. That includes using some carbon tax revenue to offset “unfair burdens to lower-income households” and ending subsidies that “reward extraction and use of carbon-intensive energy sources.”

“Turning the Paris Conference into a true milestone for global climate policy will require negotiators to focus sharply on creating a price for carbon,” said Joseph Stiglitz.

Harvard University Economics Professor Martin Weitzman added, “Focusing on carbon prices could avoid the free-rider trap that has hung up past climate negotiations.” In contrast to the “volunteerism” embodied in cap-based approaches, such as the Kyoto Accord, national carbon taxes apply the universal discipline of price to “attack the critical externality of global warming,” Weitzman noted.

Read the full letter and complete list of signers here: https://www.carbontax.org/wp-content/uploads/2015/11/CTC_carbon_tax_sign_on_letter_28_Nov_2015_posted.pdf

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The Carbon Tax Center launched in January 2007 to give voice to Americans who believe that taxing emissions of carbon dioxide and other greenhouse gases is imperative to combat global warming. CTC is a clearinghouse for research, analysis and advocacy to establish a carbon tax as the centerpiece of U.S. policy to combat catastrophic climate change. It has been the leading NGO advocating for carbon taxing as the key to unlocking low- and non-carbon investment and innovation to drive the global energy system away from fossil fuels to renewable wind, sunlight and efficiency.

This page is a catch-all repository of expressions of support for carbon taxes or other forms of carbon pricing by individuals who no longer occupy the positions of influence (as office-holders, editorial columnists, etc.) that they held at the time those statements appeared. For more current expressions, go to the individual pages (Public officials, Economists, Scientists, and so-forth) listed in the pull-down menu under Supporters.)

Public Officials

Former Energy Secretary Stephen Chu

In a February 2009 New York Times interview, Secretary Chu said “that while President Obama and Congressional Democratic leaders had endorsed a so-called cap-and-trade system to control global warming pollutants, there were alternatives that could emerge, including a tax on carbon emissions or a modified version of cap-and-trade.” Chu was one of four Nobel prize winners (he was awarded the Physics prize in 1997) to sign CTC’s Paris letter calling upon the UN climate negotiators to endorse national and global carbon taxes.

Paul Volcker, chairman of the U.S. Federal Reserve, 1979-1987

Volcker, who died in 2019, was revered in the business and financial community for shepherding the U.S. economy out of the “stagflation” of the 1970s into the long-term boom of the 1980s and beyond, as chairman of the Federal Reserve under Presidents Carter and Reagan (1979-87). Speaking to the U.S. Chamber of Commerce in Egypt, earlier this year, he stated: “[The argument that taxes on oil or carbon emissions would ruin an economy is] fundamentally false. First of all, I don’t think [such a step] is going to have that much of an impact on the economy overall. Second of all, if you don’t do it, you can be sure that the economy will go down the drain in the next 30 years,” Volcker said. Referring to the new report by the UN Intergovernmental Panel on Climate Change, Volcker added:

What may happen to the dollar, and what may happen to growth in China or whatever pale into insignificance compared with the question of what happens to this planet over the next 30 or 40 years if no action is taken… The scientists seem pretty well agreed that [global warming] is still potentially manageable if we act decisively, beginning now into the next decade or so, by taking measures that are technically and economically feasible.

(All quotes attributed to Mr. Volcker, above, are from an article published in the International Herald Tribune on Feb. 6, 2007, US: Economist Paul Volcker Says Steps to Curb Global Warming Would Not Devastate an Economy.)

Senator Bill Nelson (D-FL, 2001-2019)

Pope Francis’ June 2015 encyclical, calling for urgent action to equitably respond to the dangers of global warming and urging policies requiring polluters to pay for climate damage, prompted Senator Bill Nelson to speak out on the Senate floor. Nelson explained the need for a carbon tax whose revenue could be used to reduce other taxes that impede economic growth.  (Video.)

Senator Christopher Dodd (D-CT, 1981-2011)

Dodd anchored his 2007 presidential candidacy to a Corporate Carbon Tax. As he explained: “Until you deal with the issue of price, until you impose a corporate carbon tax, we will never get away from fossil fuels. It’s the only way this can be achieved. You have to advocate that if you’re serious about global warming.” (NY Times, 7/24/07.)

Bill Bradley (D-NJ, 1979-1997)

From Bradley’s op-ed, We Can Get Out of These Ruts, in the April 1, 2007 Washington Post (written a decade after he left the Senate):

We also need to change our tax system to reduce our oil dependence. In general, we ought to reduce taxes on things we need, such as wages, and raise taxes on whatever is dangerous to us, such as pollution and resource depletion. We could implement a $1 per gallon gasoline tax; or an equivalent carbon tax … After a few years of adjustment in the case of a gasoline or carbon tax, cars would be more fuel-efficient, so consumers would pay what they used to pay for the same amount of driving, and the broad middle class would continue to pay lower employment taxes. The result would be increasing demand for goods and services; shrinking dependency payments such as unemployment compensation and welfare; lowered social costs, such as crime and avoidable illness; and a more equitable tax system that encourages rising employment.

Congressman John Delaney (D-MD, 2013-2019)

On Earth Day 2015, Rep. John Delaney introduced a discussion draft of his “Tax Pollution, Not Profits Act” that would establish a tax of $30 per metric ton of carbon dioxide or carbon dioxide equivalent, increasing each subsequent year at 4% above the rate of general inflation. Delaney’s proposal would apply revenues to reduce the corporate tax rate to 28%, provide monthly payments to low-income and middle-class households, and fund job training, early retirement and health care benefits to coal workers.

Congressman Henry Waxman (D-CA, 1975-2015)

Waxman, ranking member of the House Energy and Commerce Committee and co-author of the the American Clean Energy and Security Act, a cap-and-trade measure that passed the House in 2009 but failed in the Senate, began seeking public input on a proposal for a much simpler carbon tax in early 2013. With Republicans (many of whom are climate science denialists) wielding the gavel in the House, Waxman’s initiative made little headway. Nevertheless, Waxman’s shift appeared to bode well for efforts to enact simple, transparent carbon taxes without the gimmicks of complex cap, trade and offset schemes.

Congressman Bob Inglis (R-SC, 1993-1999, 2005-2011)

Inglis represented South Carolina’s 4th Congressional District for six terms before losing the 2010 Republican primary to a Tea-Party backed rival. With economist Arthur Laffer, Inglis published An Emissions Plan Conservatives Could Warm To (NY Times, 12/08), calling on Congress to enact a revenue-neutral U.S. carbon tax (emphasis added):

Conservatives don’t support tax increases that are veiled as “cap and trade” schemes for pollution permits. But offer us a tax swap, and we could become the new administration’s best allies on climate change.

A climate-change bill withered in Congress this summer because families don’t need an enormous, and hidden, tax increase. If the bill’s authors had instead proposed a simple carbon tax coupled with an equal, offsetting reduction in income taxes or payroll taxes, a dynamic new energy security policy could have taken root.

As long as national security risks aren’t factored into the cost of gasoline and as long as carbon dioxide can be emitted without penalty, oil will continue to have an advantage over emerging fuels in the marketplace, and we’ll continue our ruinous addiction to it. We need to impose a tax on the thing we want less of (carbon dioxide) and reduce taxes on the things we want more of (income and jobs). A carbon tax would attach the national security and environmental costs to carbon-based fuels like oil, causing the market to recognize the price of these negative externalities.

Conservatives do not have to agree that humans are causing climate change to recognize a sensible energy solution. All we need to assume is that burning less fossil fuels would be a good thing. Based on the current scientific consensus and the potential environmental benefits, it’s prudent to do what we can to reduce global carbon emissions. When you add the national security concerns, reducing our reliance on fossil fuels becomes a no-brainer.

It is essential … that any taxes on carbon emissions be accompanied by equal, pro-growth tax cuts. A carbon tax that isn’t accompanied by a reduction in other taxes is a nonstarter. Fiscal conservatives would gladly trade a carbon tax for a reduction in payroll or income taxes, but we can’t go along with an overall tax increase.

The good news is that both Democrats and Republicans could support a carbon tax offset by a payroll or income tax cut.

Two carbon tax bills introduced in House Ways & Means (tax-writing committee) embodied much of what Rep. Inglis advocated in his op-ed: Stark-McDermott, filed in April 2007, and Larson, filed in August. (More details on our Bills page.) Rep. Inglis now chairs republicEn, (formerly the Energy & Enterprise Initiative at George Mason University) and is a vocal advocate for a revenue-neutral U.S.carbon tax.

Congressman Pete Stark (D-CA, 1973-2013) and Congressman Jim McDermott (D-WA, 1989-2017)

(Former) Congressmen Stark, who died in 2020, and McDermott were lead sponsors of the “Save Our Climate Act,” (2007) that would have imposed a $10 per ton (of carbon) charge on coal, petroleum and natural gas when the fuel is either extracted or imported. The charge would increase by $10 every year until U.S. carbon dioxide emissions have dropped 80% from 1990 levels. Introducing the bill, Congressman Stark eloquently stated:

The question is not if human activity is responsible for global climate change, but how the United States will respond,” said Stark. “Predictable, transparent and universal, a carbon tax is a simple solution to a difficult problem. It would drastically reduce our carbon dioxide emissions by providing an economic disincentive for the use of carbon-based fossil fuels and an incentive for the development and use of cleaner alternative energies. The Save Our Climate Act would establish the United States as a global leader in environmental protection and encourage other nations – most of whom have already acknowledged the climate change threat – to take similar action to reduce emissions. I strongly encourage Congress to pass a carbon tax.

CTC reported on the Stark-McDermott bill here.

Editorial Positions

The New York Times

See our Editorial Positions page for more recent expressions.

Global Warming and Your Wallet (July 6, 2007): “When the market, on its own, fails to arrive at the proper price for goods and services, it’s the job of government to correct the failure… We are now using the atmosphere as a free dumping ground for carbon emissions. Unless we — industry and consumers — are made to pay a significant price for doing so, we will never get anywhere.”

Warming Up on Capitol Hill (March 25, 2007): “Forcing polluters to, in effect, pay a fee for every ton of carbon dioxide they emit will create powerful incentives for developing and deploying cleaner technologies.”

The Truth About Coal (Feb. 25, 2007): “There is a need to put a price on carbon to force companies to abandon older, dirtier technologies for newer, cleaner ones. Right now, everyone is using the atmosphere like a municipal dump, depositing carbon dioxide free. Start charging for the privilege and people will find smarter ways to do business. A carbon tax is one approach. Another is to impose a steadily decreasing cap on emissions and let individual companies figure out ways to stay below the cap.”

Avoiding Calamity on the Cheap (Nov. 3, 2006): “Since the dawn of the industrial revolution, the atmosphere has served as a free dumping ground for carbon gases. If people and industries are made to pay heavily for the privilege, they will inevitably be driven to develop cleaner fuels, cars and factories.”

The Washington Post

See our Editorial Positions page for more recent expressions.

Some Positive Energy — Now Start Talking About a Carbon Tax, (June 25, 2007).

As important as many of the measures in [the Senate energy] bill are, they amount to only tinkering at the margins of a serious problem. What the Senate bill doesn’t do — and what the House bill won’t do when it is brought to the floor for consideration next month — is spark a necessary debate on the imposition of a cap-and-trade system or a carbon tax. This must be on the agenda after the Fourth of July recess when the Senate is expected to take up global warming. Sooner or later, Congress will have to realize that slapping a price on carbon emissions and then getting out of the way to let the market decide how best to deal with it is the wisest course of action.

Sorry Record – Waiting for breakthrough technologies is not the way to reduce greenhouse gases (July 11, 2006)

[The Administration] has resisted taxing carbon use, preferring instead to provide incentives for oil and gas extraction — just the opposite of what’s needed.

Los Angeles Times

See our Editorial Positions page for more recent expressions.

The L.A. Times ran two stirring editorials in May-June 2007 that powerfully made the case for taxing carbon. Here are excerpts:

Time to Tax Carbon, (May 28, 2007):

There is a growing consensus among economists around the world that a carbon tax is the best way to combat global warming, and there are prominent backers across the political spectrum … Yet the political consensus is going in a very different direction. European leaders are pushing hard for the United States and other countries to join their failed carbon-trading scheme, and there are no fewer than five bills before Congress that would impose a federal cap-and-trade system. On the other side, there is just one lonely bill in the House, from Rep. Pete Stark (D-Fremont), to impose a carbon tax, and it’s not expected to go far.

The obvious reason is that, for voters, taxes are radioactive, while carbon trading sounds like something that just affects utilities and big corporations. The many green politicians stumping for cap-and-trade seldom point out that such a system would result in higher and less predictable power bills. Ironically, even though a carbon tax could cost voters less, cap-and-trade is being sold as the more consumer-friendly approach.

A well-designed, well-monitored carbon-trading scheme could deeply reduce greenhouse gases with less economic damage than pure regulation. But it’s not the best way, and it is so complex that it would probably take many years to iron out all the wrinkles. Voters might well embrace carbon taxes if political leaders were more honest about the comparative costs.

Reinveting Kyoto, (June 11, 2007):

A better treaty [than Kyoto] would scrap the unworkable carbon-trading scheme and instead impose new taxes on carbon-based fuels. As recently explained in the first installment of this series [Time to Tax Carbon, above], carbon taxes avoid many of the pitfalls of carbon trading. They would produce an equal incentive for every nation to clean up without relying on arbitrary dates or caps, or transferring money from one nation to another. They’re also much less subject to corruption because they give governments an incentive to monitor and crack down on polluters (the tax money goes to the government, so the government wins by keeping polluters honest)… Real solutions to global warming, such as carbon taxes, won’t come cheap — they’ll make power bills steeper and gas prices even higher than they are now. But the economic news isn’t all bad. Much of the clean technology of the future will probably be developed in the United States and sold overseas. Think of [a carbon tax] as a novel way of reducing our trade deficit with China while building a cleaner world.“

For the strong critique of cap-and-trade in the Time to Tax Carbon editorial, click here.

Other Newspapers

Detroit Free Press:

A tax on carbon dioxide emissions, phased in gradually but relentlessly, would be the most transparent and efficient step this country could take in the search for energy independence and reductions in many emissions, including carbon dioxide. It would send a hugely important signal to the markets — for cars and for alternative energy sources such as windmills and solar collectors, in particular — that innovation and conservation are essential. Consumers are going to pay for any measures taken to reduce greenhouse gases and shift away from dependence on foreign petroleum. But most politicians choose instead to hide the costs by placing expensive demands on automakers and by dispensing subsidies for alternative fuels, such as ethanol, that become a hidden tax burden. A cap-and-trade system for emissions also would have disguised costs. Keep Carbon Tax in the Mix of Solutions, July 12, 2007.

Chicago Tribune:

[T]he ultimate goal should not be to reduce the price consumers pay at the pump. It should be to reduce the amount going to oil producers. Global warming is more than ample grounds for levying taxes on carbon-based fuels, including gasoline, to reduce emissions. But those taxes would fall partly on foreign oil producers. By cutting consumption, they promise to put downward pressure on world crude oil prices—weakening OPEC and stemming the flow of dollars to anti-American regimes. American consumers have a choice: They can pay high prices to oil producers or to themselves. The tax proceeds can be used to finance programs of value here at home or to pay for cuts in other taxes—even as they curb the release of carbon dioxide. Pump Pain, May 20, 2008.

Christian Science Monitor:

Consumption taxes, after all, are often designed to wean people off bad behavior, such as smoking. A 90 percent drop in these emissions is probably what’s needed to limit any rise in atmospheric warming to 2 degrees Celsius, a goal that many scientists recommend. Most presidential candidates do endorse pinching pocketbooks, but only indirectly, such as by calling for higher fuel efficiency in vehicles and a cap on greenhouse-gas pollution from company smokestacks. Such demands on industry have the advantage of creating more certainty in reducing emissions, but they are complex to enforce. Gore would do both: tax carbon use and cap emissions. Putting a crimp on global warming can’t be done solely by promoting new energy technologies and voluntary conservation. Consumers of oil and coal need a direct tax shock. Christian Science Monitor, July 5, 2007.

The Monitor was even more direct in a pair of editorials on Oct. 25 and 26. In the first, Be Wary of Complex Carbon Caps, the Monitor noted the loopholes, fraud and other problems that have hamstrung carbon cap-and-trade programs. In the second, A Tax on Carbon to Cool the Planet, the Monitor summarized the first editorial:

Indeed, caps may put the US on a knowable track to, say, an 80 percent reduction in carbon emissions by 2050. But as the previous Monitor’s View pointed out, the flaws in cap-and-trade plans as experienced in other nations – their complexity and vulnerability to fraud and special-interest lobbyists – would reduce the intended effect. They also take a long time to set up and get working right. And, in the end, they also raise energy prices for consumers, just not as directly as a tax.

The Monitor then concluded:

With Europe’s cap-and-trade system faltering, the US should be a leader in using a carbon tax, even if big polluters such as China don’t follow. As a last resort, the US could tax goods from countries that fail to cut their carbon emissions.

A carbon tax is not the whole solution. Regulations will still be needed, such as stiffer fuel-economy standards for cars and trucks. And the US should fund research into alternative fuels, too. All it takes is the political will to act.

Eugene (OR) Register-Guard:

The crisis presented by global warming demands a response that is simple, comprehensive and effective. A tax on carbon consumption is the only response in sight that both discourages the production of emissions that cause global warming, and finances the rapid transition to a post-carbon economy… “The best way to tax carbon fuels is at the point of production: at the wellhead, mine or biofuel plant. The added tax should be large – starting at the equivalent of $1 per gallon of gasoline, and increasing to the equivalent of $6 per gallon of gasoline over 10 years… The phase-in of high taxes on carbon fuels over 10 years will provide huge incentives for market-financed, market-driven, market-governed development of unsubsidized, safe, sustainable alternate energy sources, far more efficient uses of energy, and other alternate products and methods. (The Cold Truth, July 22, 2007).

Writers & Pundits

Bob Herbert

Writing about Obama’s tepid response to the BP oil disaster in the Gulf Coast, Herbert wrote on June 1, 2010:

[W]henever the well gets capped, what we really need is leadership that calls on the American public to begin coping in a serious and sustained way with an energy crisis that we’ve been warned about for decades. If the worst environmental disaster in the country’s history is not enough to bring about a reversal of our epic foolishness on the energy front, then nothing will.

The first thing we can do is conserve more. That’s the low-hanging fruit in any clean-energy strategy. It’s fast, cheap and easy. It’s something that all Americans, young and old, can be asked to participate in immediately. In that sense, it’s a way of combating the pervasive feelings of helplessness that have become so demoralizing and so destructive to our long-term interests…

We also need a carbon tax. The current crisis is the perfect opportunity for our political leaders to explain to the public why this is so important and what benefits would come from it. (Our Epic Foolishness, June 1, 2010, emphasis added).

John Tierney

Burn, Baby, Burn (“The fairest and most efficient way to reduce greenhouse gas emissions would be with a carbon tax on all fossil fuels,” Feb. 7, 2006; similarly on April 23, 2006, in Cheer Up, Earth Day Is Over). In late 2006 Tierney relinquished his column to focus on science reporting. He featured CTC in his Jan. 24, 2007 blog.

There was a time … when the Republican Party was a hotbed of environmental worrywarts. The last big clean air act of the Bush I administration passed the House 401 to 21. But no more, no more. You’re not going to get any sympathy for controlling climate change from a group that doesn’t believe the climate is actually changing … It’s sort of ironic. These are the same folks who constantly seed their antideficit speeches with references to our poor, betrayed descendants. (“This is a burden our children and grandchildren will have to bear.”) Don’t you think the children and grandchildren would appreciate being allowed to hang onto the Arctic ice cap?

Times Economic Columnist Daniel Akst (“On The Contrary”):

Let’s face it: nothing but drastically higher prices will deter most of us from consuming more carbon-based energy… Of course, it would be nice not to have to rely on cartels and circumstances to make us moderate our consumption. Hefty taxes on carbon-based energy … would be a much better approach. The Good News About Oil Prices Is The Bad News, Sept. 17, 2006.

Wall Street Journal business columnist Holman W. Jenkins Jr.:

… walking upright, with knuckles no longer in proximity to the ground, are advocates — mostly economists — of a carbon tax. A carbon tax would be the efficient way of encouraging businesses and consumers to make less carbon-intensive energy choices. Government would not have to exercise an improbable clairvoyance about which technologies will pay off in the future. There’d be less scope for Congress to favor some industries over others purely on the basis of lobbying clout. (Decoding Climate Politics, Jan. 24, 2007) Note: While Jenkins’ remarks should be taken with a heap of salt (he’s no climate advocate, to put it mildly), his praise for a carbon tax and vitriol toward the new enviro-corporate climate alliance are both striking.

Wall Street Journal Op-Ed Contributor Nicole Gelinas, (Contributing Editor to City Journal):

At the end of the day, a strict cap-and-trade program would have the same effect as a carbon tax, one that’s high enough, eventually, to encourage switching to cleaner generation, but that’s gradually imposed over a decade so that companies have plenty of time to plan. Such a tax would make emissions more expensive; discourage carbon-intensive power generation; and it would allow the market to decide which environmentally more-friendly technologies would be competitive enough to take its place. A tax per ton of carbon would mean higher power prices, too, but without direct subsidies to developing nations by paying for their power-plant upgrades. Nor would a carbon tax create a new multibillion-dollar global commodity whose value would depend on political manipulation. The feds could use the revenues from such a levy to reduce other taxes—including dividend and capital-gains taxes further to spur the massive private investment needed to build the next generation of power generators—while ensuring that they’re also creating a political and regulatory climate to encourage such mass-scale construction. If it’s true that a global warming consensus really exists — and not just in press releases and speeches — politicians and business leaders wouldn’t be afraid to suggest such a tax. They would insist on it. A Carbon Tax Would Be Cleaner, Aug. 23, 2007

Washington Post columnists

E.J. Dionne (in 2011):

Obama should put forward a plan of his own to close the long-term deficit. He should not be hemmed in by his negotiations with congressional Republicans to get the debt ceiling raised. They don’t hold the nation’s credit hostage anymore. He should lay out exactly what he would do and abandon his practice of making preemptive concessions to his opponents. That means Obama should not be shy about urging eventual tax increases, particularly on the wealthy. And let’s be clear: These would not be immediate tax hikes; they’d kick in a year or two from now. Any plausible plan should include at least $2 trillion to $2.5 trillion in new revenue over a decade [largely from additional taxes on the wealthy and super-wealthy]. A carbon tax, partly offset by tax cuts or rebates for middle-income and poorer taxpayers, could provide additional revenue. (Obama: Go Big, Long and Global, Aug. 21, 2011)

Anne Applebaum (in 2007):

I no longer believe that a complicated carbon trading regime — in which industries trade emissions “credits” — would work within the United States … So much is at stake for so many industries that the legislative process to create it would be easily distorted by their various lobbies. Any lasting solutions will have to be extremely simple, and — because of the cost implicit in reducing the use and emissions of fossil fuels — will also have to benefit those countries that impose them in other ways. Fortunately, there is such a solution, one that is grippingly unoriginal, requires no special knowledge of economics and is easy for any country to implement. It’s called a carbon tax, and it should be applied across the board … (Global Warming’s Simple Remedy, Feb. 6, 2007)

Anne Applebaum again (in 2009):

American politicians who really care about climate change — I’m assuming this includes our president, as well as a majority in Congress — should skip the summits and instead ask themselves why the oil and gas prices that started rising a couple of years ago (creating a boom in alternative-energy research) have once again dropped to an artificial low. Why artificial? Because the price of fossil fuels has never reflected their true cost, either environmental or political. It doesn’t reflect the cost of the U.S. military presence in the Middle East. It doesn’t reflect the cost of treating asthma. And it certainly doesn’t reflect the cost of rescuing bits of the coast of Florida that will be submerged by rising sea levels. Raise the taxes on fossil fuels to reflect those costs, and [T. Boone] Pickens’s [wind farm] project, along with many others, will once again be viable.” (The Summit of Green Futility, July 14, 2009)

Sebastian Mallaby:

These days almost nobody asserts that global warming isn’t happening. Instead, we are confronted with a new lie: that we can respond to climate change without taxing and regulating carbon… We already have technologies to cut carbon… The problem is we don’t use them… What matters is not just the technologies we have but the incentives to deploy them. (A Dated Carbon Approach, July 10, 2006)

Automotive columnist Warren Brown:

Why is it now more politically feasible to send our sons and daughters, brothers and sisters, husband and wives to foreign soil to fight and die for oil than it is for us to place higher taxes on the stuff at home to help reduce our wanton use of it? It’s time to tell Congress that we’re not stupid, not hopelessly blind or irrevocably self-centered. It’s time to demand that Congress give us a real energy policy, one that addresses industry and consumers, one that demands we do what we’ve historically done in times of crises — work together, sacrifice together to solve the problem. Bring Consumers into the Energy Equation, July 1, 2007.

Charles Krauthammer:

Unfortunately, instead of hiking the price [of gasoline] ourselves by means of a gasoline tax that could be instantly refunded to the American people in the form of lower payroll taxes, we let the Saudis, Venezuelans, Russians and Iranians do the taxing for us — and pocket the money that the tax would have recycled back to the American worker. This is insanity. For 25 years and with utter futility (starting with “The Oil-Bust Panic,” the New Republic, February 1983), I have been advocating the cure: a U.S. energy tax as a way to curtail consumption and keep the money at home. On this page in May 2004 (and again in November 2005, I called for “the government — through a tax — to establish a new floor for gasoline,” by fully taxing any drop in price below a certain benchmark. The point was to suppress demand and to keep the savings (from any subsequent world price drop) at home in the U.S. Treasury rather than going abroad. At the time, oil was $41 a barrel. It is now $123. But instead of doing the obvious — tax the damn thing — we go through spasms of destructive alternatives, such as efficiency standards, ethanol mandates and now a crazy carbon cap-and-trade system the Senate is debating this week. These are infinitely complex mandates for inefficiency and invitations to corruption. But they have a singular virtue: They hide the cost to the American consumer. At $4, Everybody Gets Rational, June 6, 2008.

Other Publications

Financial Times Columnist Clive Crook:

If ever there were a case for the maxim, get prices right, this is it. The way to curb carbon emissions is to add the environmental cost of carbon to the price of energy. The current oil price offers a good opportunity: when it falls (as it probably will) a carbon tax could be used to set a floor, making the transition to correctly priced energy much easier. Once the price of energy is right, other decisions become simpler, or can be left mainly to the market. There is no need to legislate fuel economy standards or subsidise conservation and low-carbon forms of energy; no need for an emissions trading regime, with all the waste and complexity and gaming that that entails (witness Europe’s experience); no need to scapegoat oil companies or environmentalists; no need to mislead or pander. For sure, the politics is a challenge – but not, I am willing to bet, as hard as conventional wisdom insists. Carbon is bad: tax it and use the money to cut other taxes. A new kind of politician could do something with that. Financial Times Online June 22, 2008.

Clive Crook (again in FT):

In the US, cap-and-trade was dead even before the midterm elections. The Obama administration plans to rely on regulation instead. [B]ut … this micro-regulatory approach will be costly. The bureaucratic overhead will be huge, as producers vie for waivers and other special treatment. Effort and resources will be misdirected… Where, then, should the government concentrate its efforts? No prizes for guessing the answer: introduce a carbon tax. … In the US, many dismiss this as a political impossibility. They are wrong. Whether the country likes it or not, with or without an effective climate change policy, Americans will eventually have to pay more in taxes. The state of the public finances decrees it. However you do the political calculations, this unpopular outcome is inevitable. Therefore, start measuring a carbon tax against the relevant alternatives. At worst, a moderate carbon tax would be no more indigestible than higher income taxes or other revenue-raising options. And, in every important way, it would be the best climate-change policy as well… Compared to EPA action, a carbon tax is simpler, more transparent, less susceptible to rent-seeking and more economical in bureaucratic overhead. It also provides an indicator around which future international co-operation could be organised and explained. After their break in Cancún, if the US and other governments want to get serious, this is where they should look.” Stop Talking and Start Taxing Carbon, Nov. 28, 2010. (emphasis added)

Clive Crook (now, late 2011, in Businessweek):

Quantity targets enforced by treaty don’t foster effective cooperation, they hinder it… to succeed, measures to curb emissions need to be sustained for decades… Binding emissions targets are too rigid… The best instrument for coordinating climate-change efforts is the price of carbon… For most countries, the simplest and clearest way to hit the price target would be with an outright carbon tax. The economic benefits are well known: By letting markets work, a tax achieves a given amount of emissions abatement at the lowest cost. The world needs to cap its greenhouse gas emissions, but there’s no obligation to do this in the most expensive, painful or disruptive way. Climate-change campaigners made a great mistake early on in opposing this approach — arguing, in effect, that sin should be prohibited not taxed, and that cuts of a certain size had to be assured. The cost of this inflexibility is now apparent: Insist on known and guaranteed cuts in emissions, and the wheels of international cooperation turn too slowly. So far, explicit carbon taxes have not been widely adopted (though where they have been, as in British Columbia, they have worked). It’s not only environmentalists who aren’t enthusiastic. In many countries, especially the U.S., conservatives are bitterly opposed as well. A carbon tax, after all, is a tax. Yet with many countries in a fiscal crisis, a carbon tax is more attractive than before. A carbon tax could lift some of the burden from spending cuts and increases in other taxes. As this sinks in, what was once politically impossible may soon be merely hard. Free Markets, Carbon Tax Best Way to Fight Climate Change: View, Bloomberg Businessweek, Dec. 12, 2011.

San Francisco Chronicle columnist Carolyn Lochhead:

One day, someone’s going to put two and two together and discover that East Bay Rep. Pete Stark’s carbon tax could address global warming and budget troubles at the same time. San Francisco pols are ahead of the curve, proposing a gas tax — a close cousin of the carbon tax — to fight global warming… In policy circles, a carbon tax is a no brainer, embraced by lefties like Stark and conservatives like former Bush economic advisor Gregory Mankiw. It’s a highly efficient way to reduce demand for fossil fuels and induce alternative energy supplies by using market forces. That’s also why it gags politicians: it incorporates the true cost of fossil fuel consumption in prices. Polluting consumers would pay too. Two Vultures, One Stone, Oct. 15, 2007.

Newark Star-Ledger Columnist Paul Mushine:

We need a new generation of clean energy that will enable us to be liberated from dangerous dependence on dictatorships, effective in worldwide competition and provide for a much cleaner and healthier future,” says [Gingrich’s] Web site. These “alternative, renewable energies” that Gingrich is promoting sound the same as the mystery oil Pelosi’s pushing. Like ethanol, these fuels can be manufactured only with huge government subsidies. And those subsidies represent an indirect tax on drivers If we’re going to tax drivers, we might as well do it directly. This is a point upon which most free-market economists agree. Unlike politicians, economists are not up for election, so they can tell the truth about cutting oil imports. And the truth is if you want to cut imports, tax the hell out of gas. The imposition of so-called “Pigovian taxes,” named after the late economist Ar thur Pigou, generates lots of revenue that can be used to reduce other taxes, such as the income tax, that are much worse for economic growth. And such taxes also reduce what Pigou termed “externalities,” the externalities in this case being air pollution, traffic jams and reliance on unstable exporters. On Energy, Dems are Daffy, Newt is Nuts, op-ed, Star-Ledger, August 7, 2007.

Chicago Tribune Editorial Board Member Steve Chapman:

The free market is the best system ever created for providing what we want at the lowest possible cost. The way to get affordable amelioration of climate change is to put the market to work finding solutions. To achieve that, we merely need to make energy prices reflect the potential harm done by greenhouse gases. How? With a carbon tax that assesses fuels according to how much they pollute. Coal, having the highest carbon content, would be taxed the most, followed by oil and natural gas. The higher prices for the most damaging fuels would encourage people and companies to use them less and more of other types of energy, including nuclear, solar, wind and biofuels. This approach also would affect all sources — not just cars, which account for only one-fifth of all U.S. carbon dioxide emissions. Saving the Earth Sensibly, Chicago Tribune, April 12, 2007.

Economists almost unanimously agree that if you want to cut greenhouse gas emissions by curbing gasoline consumption, the sensible way to do it is not by dictating the design of cars but by influencing the behavior of drivers. If you want less of something, such as pollution from cars, the surest way is to charge people more for it. A carbon tax or a higher gasoline tax would encourage every motorist, not just those with new vehicles, to burn less fuel—by taking the bus, carpooling, telecommuting, resorting to that free mode of transit known as walking, or buying a Prius. A Wrong Turn on Saving Fuel – Which Energy Efficiency Plans Hold Up to Scrutiny?, reason.com, July 23, 2007.

[T]he GOP doesn’t have to surrender its principles to confront environmental reality. There is plenty of room for disagreement, for instance, about how to combat global warming. The method most congenial to personal and economic freedom is a carbon tax. Instead of putting the government behind favored forms of energy, as the administration likes to do, it would create strong incentives for people to find their own ways to reduce emissions. It would achieve maximum benefits at minimum cost. It could be revenue-neutral, if the receipts were used to pay for other tax cuts. A carbon tax is hardly a liberal idea. Among its proponents are Gregory Mankiw, who headed the Council of Economic Advisers under President George W. Bush, and Douglas Holtz-Eakin, John McCain’s chief economist during his presidential campaign. But Republican politicians have no interest. During hard economic times, that approach may work. But at some point, voters will conclude that global warming and other environmental problems demand solutions. And Republicans will be left wondering why they didn’t come up with any. Republicans vs. the Environment, June 16, 2011.

Atlanta Journal-Constitution editorial-page editor Cynthia Tucker (writing in the Baltimore Sun):

The president should have told Americans years ago that the days of cheap gas were over. If the president had imposed a stiff tax on gasoline at the pump [after 9/11], American motorists would have grumbled, but we would have gotten over it. (Oiloholic Nation Has No Business Lecturing China, April 24, 2006)

Arizona Republic columnist Robert Robb:

Economists have long preferred a carbon tax to a cap-and-trade regimen. A small tax would likely have a large effect. Once the infrastructure for collecting the tax is in place, an increased rate is just a vote away. Even with a small tax, carbon emissions would become an unpredictable variable cost, creating a large incentive to reconfigure production processes to reduce or eliminate them …Politicians frequently ignore the preferences of economists, since economists usually prefer a reduced role for the preferences of politicians … However, if serious action is to be taken on global warming, someone in the political class needs to start paying attention to them. (Cool It on Global Warming, Feb. 7, 2007)

New York Observer Columnist Nicholas von Hoffman:

When they talk about conservation at all — which is almost never — [politicians] talk in terms of new tax deductions when they ought to be talking about imposing new taxes. How about a heavy energy-consumption tax on McMansions?… Similar kinds of taxes could be imposed on whole classes of machines that pour filth into the atmosphere and consume frightful amounts of fuel. (While Politicians Pander, Conservation Is Ignored, May 15, 2006)

Although CTC seeks to tax all carbon emissions, not just those from uses deemed excessive, we share with von Hoffman the view that taxing carbon is more important than subsidizing carbon alternatives.

Toronto Star columnist David Olive:

Carbon taxes are coming … The carbon tax [is] the single most powerful tool for encouraging conservation of the planet’s finite coal, oil and natural gas resources, and for diminishing the role of CO2 emissions in destroying the earth. Only Carbon Taxes Can Rekindle Conservation, March 9, 2007.

Magazines

The New Republic

In theory, if the United States ever got serious about tackling climate change and put a price on carbon–through either a cap-and-trade system or a simple carbon tax–we could put an end to much of this anguished contrarianism. Shoppers concerned about melting icecaps wouldn’t have to scratch their heads and wonder how many food miles a tomato has traveled, or fret about whether a tightly packed ship full of produce from Chile emits more carbon than having everyone haul groceries in their SUVs from the local farm. The climate impact would be reflected in the price, and markets could work their magic. Simple enough.OK, so it wouldn’t be that simple. Carbon pricing and markets alone won’t, for instance, produce better public transportation. Nor will they put an end to the vast array of government policies that subsidize suburban sprawl–which include, among other things, easy financing for roads, tax deductions for large McMansions, and various zoning regulations that can prevent mixed-use living and disfavor walkable town centers. Nor, for that matter, will they get rid of the federal subsidies that prop up the nation’s agricultural system. (On the other hand, a carbon tax might convince voters that these policies should be altered.) Second-Guessing the Conventional Environmental Wisdom — It’s Not Easy Being Green, Bradford Plumer, assistant editor, The New Republic on-line, Aug. 27, 2007.

Atlantic Monthly

Blogger Megan McArdle (“Asymmetric Information”) used the “local food” quandary to discourse on the capacity of carbon taxes to provide honest information on the true carbon costs of consumer purchases:

How much carbon goes into the food we eat? Recently I’ve been beseiged by buy-local fanatics, claiming that if I eat Guatamalan raspberries, I’m killing the earth with the carbon needed to transport them… [T]his … cause[d] me to try to figure out how much energy the various options consume, and frankly, the answer is, I have no clue. There are so many second, third, and eighth order effects that my brain is spinning… Not only has no one done a good analysis of this subject; I don’t think anyone could… That’s why if we’re serious about cutting carbon dioxide emissions, we need a carbon tax, and not CAFE, or other sorts of piecemeal regulatory solutions. The Perils of Buy Local, Oct. 15.

McArdle’s column, including her invocation of free-enterprise philosopher Friedrich Hayek, is worth reading in full.

The Nation

The Nation published a special issue Surviving the Climate Crisis: What Must Be Done on May 7, 2007. It included a strong editorial, Going Green, stating that in order to reach the “necessarily ambitious goal: 80 percent emission reduction in carbon emissions from their 1990 levels by 2050:

We’ll have to discourage emissions by putting a price on polluting gases like methane and carbon. The best way to do that is through taxation, which would be offset by tax breaks to soften the impact on poor and middle-class households and to encourage green job growth and investment. But such ideas face formidable resistance from a political establishment beholden to entrenched interests–the oil and coal industries–that stand to lose out. Those industries have sunk billions of dollars in investments that would depreciate in value if real carbon reduction targets were achieved. Thus, they fight tooth and nail with lies and canards to keep things as they are.

In the same issue of The Nation, financial journalist Doug Henwood wrote:

Given the risk that a climate catastrophe could hit soon and suddenly … we may not have time for mass movements to develop and force elites to do the right thing. They’ve got to get started now, or all could be doomed. But … there are problems with their favorite strategy: cap-and-trade schemes… Already an entire industry has grown up around the trading system — analysts and brokers and traders who hope to make money from the scheme but contribute not much of anything to saving the planet. Also, cap-and-trade permit prices are tremendously volatile, more so even than the stock market. Volatility makes long-term planning very difficult. A far better approach would be to tax carbon. A carbon tax would be simple — gasoline, coal and other fuels would be taxed based on their carbon content — and nearly impossible to evade. It could be introduced quickly, unlike the multiyear phase-in of the complicated EU cap-and-trade system. The tax rate could start low and then increase, to allow energy users to adjust. Unlike the market volatility of CO2 and SO2 permit prices, a carbon tax would be predictable, making it much easier for businesses and consumers to plan ahead. And as Charles Komanoff of the Carbon Tax Center argues, at least part of the proceeds of the tax could be rebated to poor and middle-income households through the income tax system, neutralizing any inequities.” Cooler Elites, May 7, 2007 issue.

Hendrik Hertzberg, The New Yorker magazine

The veteran commentator Hendrik Hertzberg wrote in the Feb. 13 & 20, 2006 issue:

The best way to encourage conservation — and the true sign of a serious energy policy — would be imposing a hefty gasoline tax and raising mandatory fuel-efficiency standards.

Hertzberg broadened this theme in the March 23, 2009 issue:

If the economic crisis necessitates a second stimulus—and it probably will—then a payroll-tax holiday deserves a look. But it’s only half a good idea. A whole good idea would be to make a payroll-tax holiday the first step in an orderly transition to scrapping the payroll tax altogether and replacing the lost revenue with a package of levies on things that, unlike jobs, we want less rather than more of—things like pollution, carbon emissions, oil imports, inefficient use of energy and natural resources, and excessive consumption. The net tax burden on the economy would be unchanged, but the shift in relative price signals would nudge investment from resource-intensive enterprises toward labor-intensive ones. This wouldn’t be just a tax adjustment. It would be an environmental program, an anti-global-warming program, a youth-employment (and anti-crime) program, and an energy program. (emphasis added)

Others

Newsweek columnist Fareed Zakaria:

Both problems [clean energy’s insufficient funding and insufficient incentives] can be solved by the same simple idea—a tax on spewing carbon into the atmosphere. Once you tax carbon, you make it cheaper to produce clean energy. If burning coal and petrol in current ways becomes more expensive because of the damage they do to the environment, people will find ways to get energy out of alternative fuels or methods. Along the way, industrial societies will earn tax revenues that they can use, in part, to subsidize clean energy for the developing world. It is the only way to solve the problem at a global level, which is the only level at which the solution is meaningful. Congress is currently considering a variety of proposals that address this issue. Most are a smorgasbord of caps, credits and regulations. Instead of imposing a simple carbon tax that would send a clear signal to the markets, Congress wants to create a set of hidden taxes through a “cap and trade” system. The Europeans have adopted a similar system, which is unwieldy and prone to gaming and cheating. The Case for a Global Carbon Tax, April 16, 2007.

Newsweek columnist Robert J. Samuelson:

If we’re going to use price to try to stimulate those new technologies, let’s at least do it honestly. Most economists think that a straightforward tax on carbon would have the same incentive effects for alternative fuels and conservation as cap-and-trade without the rigidities and uncertainties of emission limits. A tax is more visible, understandable and democratic. If environmental groups still prefer an allowance system, let’s call it by its proper name: ‘cap and tax.’ Let’s Just Call It ‘Cap and Tax’, June 9, 2008.

Reason Magazine Science Editor Ronald Bailey:

The problem with air pollution—and global warming is a form of air pollution—is that I don’t see a good, easy way to privatize it. The transaction costs are too large. And if you can’t privatize it, you have to regulate it. So now the question is: What’s the least bad way to regulate? And that is why I’ve come out in favor of a carbon tax….For consumers, for inventors, for innovators, a tax offers price stability in a way that the cap-and-trade markets don’t. For example, in the sulfur dioxide market, sulfur permits have ranged in price from $50 a ton to over $1,000 a ton. And for sulfur dioxide, it’s a smaller market. A carbon market would encompass the world.” Reason.com July 2008

Katherine Ellison (The Mommy Brain):

What our kids need to know most is that adults are acting like grown-ups… If we want to show our kids we mean business about global warming, let’s start by ponying up for a carbon tax. Let our children watch us demand this from Washington with the courage and force of the civil rights movement. (Global Warming-era Parenthood, Los Angeles Times, Dec. 23, 2006)

350.org founder and author-journalist Bill McKibben:

There’s another way of saying what is missing here. Almost every idea that might bring us a better future would be made much easier if the cost of fossil fuel was higher—if there was some kind of a tax on carbon emissions that made the price of coal and oil and gas reflect its true environmental cost.” (How Close to Catastrophe?, New York Review of Books, Nov. 16, 2006.) McKibben, author of the classic The End of Nature and a supremely effective and engaged climate activist, has also advocated for carbon taxes in articles in Orion, Grist, Mother Jones and elsewhere.

Vox.com (earlier, Grist) columnist David Roberts:

A carbon tax is a huge deal, a game-changer, and if it’s taking root, even tenuously, it needs to be nurtured. Is This the Right Time to Attack Dingell?, June 2007.

Note, though, that Roberts (who now writes for vox.com) for years has criticized the effort to enact a U.S. carbon tax as politically naive. Our 2012 exchange with him is particularly illuminating.

Former George W. Bush speechwriter David Frum: Writing in The Wall Street Journal on Nov. 9, 2006, Frum urged Bush to send Congress a carbon-tax bill. In his 2008 book, Comeback: Conservatism That Can Win Again, Frum pressed carbon-tax advocacy at greater length:

There is a simpler and better way to encourage consumers to conserve while denying income to producers: Tax those forms of energy that present political and environmental risks — and exempt those that do not. That tax will create an inbuilt price advantage for all the untaxed energy sources, which could then battle for market share on their competitive merits. What would such a tax look like? … It would look exactly like the carbon tax advocated by global-warming crusaders…You don’t have to believe that global warming is a problem to recognize that a carbon tax is the solution. Under the umbrella of a permanent disadvantage for fossil fuels, markets could figure out freely which substitutes made most sense. (p. 129)

The 2016 Washington state carbon tax referendum: what happened

In 2015, grassroots advocates in Washington crafted a carbon tax ballot measure that, they hoped, would make theirs the first U.S. state with a carbon tax. Their Initiative 732 would have established a comprehensive statewide carbon tax reaching $25 per metric ton of CO2 in 2018 and rising thereafter at 3.5% faster than the general inflation rate. The initiative was decisively defeated, however, by a vote of 59% to 41%. We discuss I-732 and the divisiveness it spawned, directly below.

Five weeks after that vote, Washington Gov. Jay Inslee proposed a carbon tax whose level — starting in May 2018 at $25 per metric ton of CO2 and increasing thereafter at 3.5% a year faster than inflation — would be identical to that in I-732. The Seattle Times first reported the proposal, which is a key part of the governor’s fiscal plan, on Dec. 13. Inslee’s office has issued an informative 3-page policy brief outlining the intended uses of the carbon tax revenues; unlike I-732, which was designed to be nearly 100 percent revenue-neutral, the governor’s proposal, which requires legislative approval, is intended to patch big holes in the state budget. We hope to report on the progress of Gov. Inslee’s proposal shortly.

On Nov. 12 Carbon Washington, the grassroots advocacy group that gathered 360,000 signatures to put Measure I-732 on the November ballot, and then fought for its passage with a high-energy organizing campaign, issued a statement, Carbon tax friends, be proud of what we’ve accomplished. Here’s the opening paragraph:

Together, we accomplished something historic by putting the nation’s first statewide carbon tax before the voters. We showed that there is a strong desire for common-sense climate action in Washington State, and we influenced the national conversation on climate policy. We ran an honest, transparent, and positive campaign focused on addressing the climate and equity problems facing our society. We did all of that thanks to you.

CarbonWA says it is thinking through next steps and want[s] to hear supporters’ “thoughts on the election and where this movement that you helped build should go next.” The group invites feedback via email. Their terrific Web site, Yes on 732, is still up.

As of Nov. 13, Washington’s Secretary of State was reporting 1,571,080 No votes vs. 1,091,626 Yes, a nearly 3-to-2 margin. Only King County, the state’s largest, which includes Seattle, voted majority Yes; all other 38 counties voted No to Measure 732.

In the aftermath of the election, the Alliance for Jobs and Clean Energy — the Washington confederation that became the locus of “green” opposition to I-732 — posted a five-page draft clean energy plan intended to fulfill its commitment to fashion an alternative policy to Carbon WA’s revenue-neutral carbon tax. The plan’s carbon tax, just $15 per ton of CO2 and with no increase beyond inflation unless as-yet-unspecified reduction targets are met, would be around half of the tax level specified in I-732; most emission reductions would come from investments in efficiency and renewables outlined but not specified in the draft. Alliance leaders pledged to push their plan to the legislature and vowed to put it on the ballot in 2017, if necessary, the Seattle Times reported on Nov. 12.

Top reads on the ballot battle (newest listed first):

The I-732 referendum received intense national as well as local coverage in the run-up to the election, in part because the split over the measure within the green movement made for a compelling (and disturbing story).

The best post-mortem we’ve seen is Marianne Lavelle’s Nov 9 story, Washington State Voters Reject Nation’s First Carbon Tax, for Inside Climate News. It’s an excellent overview of the competing perspectives of I-732 proponents and opponents (state purview vs. national, social-justice vs. economic, etc.) and has quotes from Washington social-justice advocates (who opposed the measure) and climate luminary James Hansen and CTC director Charles Komanoff, who supported it. Here, for example, is a quote from KC Golden, senior adviser to the Washington State nonprofit Climate Solutions:”

The people who came up with the idea of ‘revenue-neutral’ did it for a good reason, to defuse the partisan bomb that keeps us from getting everywhere on climate. But we can’t find any political ‘there’ there. To tell labor and communities of color, ‘We’re going to change the incentives and benefits are going to flow’ sounds…a lot like ‘trickle-down’ economics. They justifiably don’t trust that story.”

Draw your own conclusions.

Here are half-a-dozen other (pre-election) articles:

• The left’s opposition to a carbon tax shows there’s something deeply wrong with the left, (Washington Post editorial, Oct 27). Strongly supported I-732 and decried left-greens’ stance that “softening the blow for the poor and middle class is not enough; the government must divert the revenue according to the wishes of specific interest groups.”
• Opposition to Washington’s historic carbon tax initiative is coming from the unlikeliest of sources (Natasha Gelling in Think Progress, Oct 6). Sophisticated and concise examination of the green split over I-732.
  
• Initiative 732: A ‘Carbon Tax Swap’ To Address Climate Change (Seattle NPR affiliate KNKX-FM, Oct 3). Excellent account of both sides’ views on I-732.
  
• The environmental groups killing a carbon tax (“The Hill,” Sept 22). Professor of law and economics Shi-Ling Hsu — a signatory to CTC’s Paris letter last fall — dissected the opposition to I-732 from sectarian green groups.
• Tax carbon polluters, not working families  (“Crosscut,” Sept 20). Three veteran organizers explained why the I-732 carbon tax will be just as well as efficient.
• Washington Carbon Tax Ballot Initiative Picks Up Biggest Corroboration Yet (CTC blog, Aug 5). Our quick guide to Sightline Institute’s in-depth analyses backing Carbon-WA’s claims for Measure 732 demonstrating that the carbon tax will be revenue-neutral, income-progressive and climate-effective.
• There’s a cheap, proven fix to the world’s biggest problem (CNN, April 19). Political writer John Sutter interviewed Carbon-WA founder Yoram Bauman and explained why a victory for Yes on 732 could be key to unlocking carbon taxing in the U.S.
  

Our blog posts on I-732 (newest listed first):

The Carbon Tax Center strongly supported Carbon WA’s initiative and organizing campaign. Our blog posts during the few weeks before the election responded vigorously to attacks on Initiative 732. Earlier-dated posts mostly involved straight reportage about the merits of the initiative and the campaign to pass it.

• Naomi Klein Is Wrong On The Policy That Could Change Everything, Nov. 7, 2016. The policy that could do the most to start changing everything is on the ballot in Washington state, but somehow it’s not quite good enough for the author of “This Changes Everything.”
• To The Left-Green Opponents of I-732: How Does It Feel?, Nov. 4, 2016. The Koch brothers just gave $50K to the “No On 732” forces. If you’re on the left, it’s time to ask yourselves, in Bob Dylan’s words, “Are you having a good time?”
• Fighting in the Trenches Doesn’t Excuse Ignorance on Carbon Taxes, Oct. 28, 2016. We skewer criticisms of I-732 from the advocacy group Food & Water Watch, including their nonsensical claim that “carbon taxes help fossil fuel companies, not the environment.”
  
• Washington State’s I-732: A Climate Measure for the Society We Have, Oct. 18, 2016. Invokes mid-century humanist radical Paul Goodman to critique “old-guard” green-establishment’s stance opposing Carbon Washington’s ballot initiative.
• The Political Meltdown That Could Save The Climate, Oct. 8, 2016. Why the GOP-Trump electoral meltdown opens a path for I-732 to become the template for a U.S. carbon tax.
• Carbon Tax Can Be a Remedy for Toxic Hot Spots (Sept. 13, 2016). Rebuts notion — left over from the 2009 Waxman-Markey bill built around cap-and-trade with offsets — that a carbon tax could perpetuate or exacerbate tosic “hot spots” in communities of color.
• Washington Carbon Tax Ballot Initiative Picks Up Biggest Corroboration Yet, Aug. 5, 2016. Reports on masterly rebuttal to WA state government’s objections to I-732, from Pacific NW think tank extraordinaire Sightline Institute.
• Feeling The Heat: A Carbon Tax Gains Grassroots Momentum in Washington State, July 16, 2015. CTC’s Matt Gordon captures the on-the-ground energy of Carbon WA’s petition-gathering for Initiative 732.

I-732 history and details (This pre-Nov 2016) content has not been updated.)

The Evergreen State is blessed with abundant natural beauty — Mt. Rainier, the North Cascades, Puget Sound, the Olympic Peninsula and the Columbia River basin and gorge — with an outdoor culture to match. It was also wracked by drought and forest fires in 2015. In that year, carbon tax advocates under the banner of Carbon Washington began organizing for a ballot initiative mandating a state carbon tax. Measure I-732 would have taxed carbon emissions at an initial rate of $15 per ton of CO2, rising the following year to $25 per ton, and then increasing annually by 3.5% more than the inflation rate.

The tax, gracefully summarized last year by the Christian Science Monitor, would have used the expected $1.7 billion in annual revenue to overhaul Washington’s unusually regressive tax code. Most of the money was earmarked to lower the state sales tax from 6.5% to 5.5%. (While the state sales tax is 6.5%, the average combined local-state sales tax rate is 8.89%, the fifth highest in the country.) The annual increases in the carbon tax would have offset the rising value of the sales tax reduction, ensuring the measure stayed revenue-neutral. Another $200 million a year would have funded the state Working Families Rebate – an extension of the federal Earned Income Tax Credit. The Working Families Rebate was created in 2008 but never funded, and revenue from the carbon tax could have assisted 400,000 low-income working families. These two pieces made I-732 the state’s most progressive tax initiative since groceries were exempted from sales taxes in 1977. The remaining funds would have enabled the state to eliminate the business and occupation tax on manufacturing — a feature designed to win business support.

CTC researcher Matt Gordon visited Washington in June 2015 and met with ballot organizers there. He wrote a blog for us about Measure I-732 last July and another in August about backbiting against Measure I-732 by some veteran state environmental advocates. (The surprising opposition to I-732 was criticized by leading right-of-center economist Greg Mankiw in a New York Times opinion piece in early September, 2015, backing the measure.) Despite the opposition, Carbon Washington collected 360,000 petition signatures — over 100,000 more than the 246,000 required to put Measure I-732 on the November, 2016 ballot for a statewide up-or-down vote.

Keibun Mori, a former economist with the Washington State Energy Office, developed a carbon-tax spreadsheet model to predict revenue generation and CO2 reductions for the state from a carbon tax. Keibun’s model used an elasticity-based approach (as does CTC’s national carbon-tax model), and was used to estimate greenhouse-gas emission reductions for the Oregon study noted above.

Carbon Washington’s  I-732 website has clear and compelling information, arguments and graphics for Measure I-732, including lead organizer Yoram Bauman’s clarion defense of the measure’s provisions to ensure social and economic justice. Yoram’s New Year’s 2016 update was stirring and informative as well.

No U.S. state has a carbon tax. An attempt to break through with a tax on carbon emissions in the state of Washington was defeated at the ballot in Nov. 2016, as we recount below. Nevertheless, Washington and 7 other states (including Washington DC, which for linguistic simplicity we are calling a state) are considered “promising” arenas for enacting state carbon taxes, in a comprehensive 2017 report by the Carbon Tax Center.

This page is sprawling, reflecting the intensity and breadth of state carbon tax organizing. These links can help you navigate:

• CTC report on state carbon tax potential
• Introduction to state carbon taxing
• The 2016 Washington state carbon tax referendum: what happened
• Carbon tax organizing in Oregon
• Carbon tax organizing in New York State
• Carbon tax organizing in Massachusetts
• Carbon tax organizing in Rhode Island
• Carbon tax organizing in Vermont

Also of interest: Minnesota state auditor Rebecca Otto has promised that her ambitious proposal for a revenue-neutral carbon fee will be a big issue in the 2018 campaign to succeed Mark Dayton as governor in 2018. Read our post, Minnesota state auditor stakes campaign for governor on carbon dividend.

CTC Report Ranks the States on Carbon Tax Potential

The report was written by Yoram Bauman, who spearheaded the Washington state carbon tax effort, and Carbon Tax Center director Charles Komanoff. It classifies the 51 states into five categories of carbon tax readiness ranging from “promising” to “very challenging.” (See map.)

As the map shows, the eight most promising states are Connecticut, Hawaii, Illinois, Maryland, Massachusetts, New York, Washington and the District of Columbia. (Follow these links for historical perspective and other information on Massachusetts, New York, and Washington that isn’t in our new report.) We rate another 17 states as having “potential” for enacting state carbon taxes, with some having relatively clear paths while others appear to face legal or ideological constraints. (Follow these links for additional information on Oregon, Rhode Island, Vermont, and—as a bonus—the city of Boulder, Colorado.)

The rankings are just one aspect of the report. Each state gets an overview, a brief analysis of CO2 emissions, summaries of local climate impacts and current climate policies, a sketch of carbon pricing activism, a brief look at climate ideology and politics, recent polling results, and, where applicable, a summary of ballot measures and proposed legislation.

The report is comprehensive in its coverage but concise in each state’s analysis and ranking. It clocks in at 120 pages, making it huge (a 14 MB pdf), but it’s well worth perusing for info on your state and how it stacks up with others. Click here to download. (A reduced-size pdf under 2 MB is available for those with slower connections, click here.)

Further below is extensive coverage of the Washington state I-732 campaign and its aftermath, along with info on carbon tax organizing in five other states as well as Boulder, CO’s carbon tax on electricity generation. Click on those links and read our introduction for context.

Also see our August 2016 post reporting on the new Brookings Institution report, State-Level Carbon Taxes: Options And Opportunities For Policymakers. It’s essential reading for people seeking to advance carbon taxes at the state level and anyone who wants to understand the nuts and bolts of designing and implementing actual carbon taxes.

State Carbon Taxes: An Introduction

“It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” — Justice Louis D. Brandeis (New State Ice Co. v. Liebmann, dissenting opinion, 1932)

This page covers organizing campaigns for U.S. carbon taxing at the state level, with sections on Washington State, Oregon, New York, Massachusetts, Rhode Island and Vermont.

With a national carbon tax blocked by the denialist Republican majority in Congress and a carbon-besotted White House, a growing number of climate advocates are heeding Justice Brandeis’s advice and are organizing at the state level. “Retail” politics, it is thought, might assuage concerns over outside-the-box ideas like carbon taxing, perhaps as occurred in the successful push for marriage equality (the right to same-sex marriage) which began and spread as state-level campaigns.

Moreover, progressive and popular options for distributing carbon tax revenues can be made more tangible at the state level than the federal. This point was underscored by a Jan. 2015 study by the Institute for Taxation and Economic Policy ranking the 50 states on their tax incidence that established that states are more regressive taxers than the federal government. In particular, sales taxes could be swapped out for carbon taxes, as advocates in Washington State proposed in their I-732 ballot initiative in 2016 (full discussion further below).

Not all states are riven by ideological resistance. While America’s geographical diversity can impede national unity, it has left some states less beholden to fossil fuel interests. Naturally, advocates are focusing on those states. (In March 2016, Resources for the Future posted two superb summaries of proposals in six states to adopt carbon taxes; the first focused on the tax rates (see graphic below), while the second addressed revenue treatment and household “incidence.”)

States have also pushed the envelope on issues like minimum wage and fuel-efficiency standards, moving the national discussion as they did so. In a 2016 op-ed in the New York Times, Georgetown University law professor David Cole ascribed the National Rifle Association’s success at strangling national gun-control regulations to a decades-long campaign that changed state constitutions and laws to protect the right to possess and carry guns. Less far afield is the fact that gasoline taxes first took root in a handful of Western states to fund road construction, before spreading to the rest of the country. State carbon taxes could, it is hoped, create a similar template leading eventually to federal enactment.

The EPA Clean Power Plan may have provided an opening for state carbon taxes through a provision allowing states to submit projected emission reductions from carbon taxes applied to power generation (unfortunately, reductions from carbon-taxing non-electric sectors such as transportation would not receive credit). A June 2015 report from the Niskanen Center concluded that even small state carbon taxes could effectuate the required emissions reductions in most cases, mirroring our own modeling results on the national level.

Still, state carbon taxing raises issues that don’t apply to a federal tax. State policy makers and advocates need to address these concerns:

• Competitiveness: It would be hard for any one state to push its carbon tax too high, due to concerns over competitive advantage and inter-state “leakage” (e.g. driving out-of-state to fill up with untaxed gasoline).

Yet using some carbon tax revenues to reduce business taxes (as was proposed in Washington State) may soften concerns over economic impact. The cross-border issue may be less salient in larger Western states than in smaller East Coast states.

Jeff Renfro, a key member of a team at Northwest Economic Research Center that modeled a possible Oregon carbon tax, said:

We tried [in our modeling] to wreck the economy. We modeled a big tax – $100 a ton – with a relatively short phase-in period, and we assumed the government put the revenues toward non-productive reserves. Even in that scenario, we were surprised by how small the effects on employment were relative to the overall economy. (Interview with CTC researcher Matt Gordon, July 10, 2015)

• Efficiency: Energy policy is largely determined at the federal level. Administrative costs could be disproportionately higher for state taxes, due to greater cross-border movements of electricity and fuels among states than between the U.S. and other nations. In some states, utility sector regulation may complicate efforts to tax fossil fuels sufficiently upstream.

Many states already have taxes on gas and electricity, however, and it shouldn’t be difficult to piggyback a carbon tax on those taxes without significantly increasing administrative burdens. British Columbia’s carbon tax program uses this technique, and reports the administrative burden as negligible.

• Coverage: Only a national carbon tax will enable the U.S. to impose Border Adjustment Taxes to induce China and other countries to adopt their own taxes, which is a key benefit of pursuing carbon taxing. States cannot pursue a similar strategy without violating the commerce clause of the Constitution.

Although states may not tax imported goods, that prohibition shouldn’t be construed to mean they can’t tax imported electricity or fossil fuels that are then used within the state. In fact, some advocates see this as an opportunity for economic development; carbon-taxing out-of-state fossil-based electricity and fuels could stimulate growth in local renewables and energy-efficiency industries.

• Local Policy: Every state has idiosyncracies. In Oregon, the constitution mandates that all revenues from taxing gasoline must be deposited in the Highway Trust Fund. In Washington, state law precluded carbon tax revenues from being used for dividends to the public. Yet this patchwork of state policies may be a motivating factor in driving a national policy. The complications of doing business in jurisdictions with varying policies have even driven some oil companies to demand more unified action on climate change.

That said, the 2016 elections further cemented the Denier (Republican) Party’s hold on state governments, as the New York Times graphic below illustrates.

On the other hand, red states tend to be fossil fuel-dominated states already out of reach of state carbon-tax campaigns. Two states with past or present carbon tax organizing, WA and OR, have Democratic governors and legislatures. Two others, NY and CO, have Democratic governors but divided or uncertain legislatures. Massachusetts and Vermont have Democratic legislatures but Republican governors.

The 2016 Washington state carbon tax referendum: what happened

In 2015, grassroots advocates in Washington crafted a carbon tax ballot measure that, they hoped, would make theirs the first U.S. state with a carbon tax. Their Initiative 732 would have established a comprehensive statewide carbon tax reaching $25 per metric ton of CO2 in 2018 and rising thereafter at 3.5% faster than the general inflation rate. The initiative was decisively defeated, however, by a vote of 59% to 41%. We discuss I-732 and the divisiveness it spawned, directly below.

Five weeks after that vote, Washington Gov. Jay Inslee proposed a carbon tax whose level — starting in May 2018 at $25 per metric ton of CO2 and increasing thereafter at 3.5% a year faster than inflation — would be identical to that in I-732. The Seattle Times first reported the proposal, which is a key part of the governor’s fiscal plan, on Dec. 13. Inslee’s office has issued an informative 3-page policy brief outlining the intended uses of the carbon tax revenues; unlike I-732, which was designed to be nearly 100 percent revenue-neutral, the governor’s proposal, which requires legislative approval, is intended to patch big holes in the state budget. We hope to report on the progress of Gov. Inslee’s proposal shortly.

On Nov. 12 Carbon Washington, the grassroots advocacy group that gathered 360,000 signatures to put Measure I-732 on the November ballot, and then fought for its passage with a high-energy organizing campaign, issued a statement, Carbon tax friends, be proud of what we’ve accomplished. Here’s the opening paragraph:

Together, we accomplished something historic by putting the nation’s first statewide carbon tax before the voters. We showed that there is a strong desire for common-sense climate action in Washington State, and we influenced the national conversation on climate policy. We ran an honest, transparent, and positive campaign focused on addressing the climate and equity problems facing our society. We did all of that thanks to you.

CarbonWA says it is thinking through next steps and want[s] to hear supporters’ “thoughts on the election and where this movement that you helped build should go next.” The group invites feedback via email. Their terrific Web site, Yes on 732, is still up.

As of Nov. 13, Washington’s Secretary of State was reporting 1,571,080 No votes vs. 1,091,626 Yes, a nearly 3-to-2 margin. Only King County, the state’s largest, which includes Seattle, voted majority Yes; all other 38 counties voted No to Measure 732.

In the aftermath of the election, the Alliance for Jobs and Clean Energy — the Washington confederation that became the locus of “green” opposition to I-732 — posted a five-page draft clean energy plan intended to fulfill its commitment to fashion an alternative policy to Carbon WA’s revenue-neutral carbon tax. The plan’s carbon tax, just $15 per ton of CO2 and with no increase beyond inflation unless as-yet-unspecified reduction targets are met, would be around half of the tax level specified in I-732; most emission reductions would come from investments in efficiency and renewables outlined but not specified in the draft. Alliance leaders pledged to push their plan to the legislature and vowed to put it on the ballot in 2017, if necessary, the Seattle Times reported on Nov. 12.

Top reads on the ballot battle (newest listed first):

The I-732 referendum received intense national as well as local coverage in the run-up to the election, in part because the split over the measure within the green movement made for a compelling (and disturbing story).

The best post-mortem we’ve seen is Marianne Lavelle’s Nov 9 story, Washington State Voters Reject Nation’s First Carbon Tax, for Inside Climate News. It’s an excellent overview of the competing perspectives of I-732 proponents and opponents (state purview vs. national, social-justice vs. economic, etc.) and has quotes from Washington social-justice advocates (who opposed the measure) and climate luminary James Hansen and CTC director Charles Komanoff, who supported it. Here, for example, is a quote from KC Golden, senior adviser to the Washington State nonprofit Climate Solutions:”

The people who came up with the idea of ‘revenue-neutral’ did it for a good reason, to defuse the partisan bomb that keeps us from getting everywhere on climate. But we can’t find any political ‘there’ there. To tell labor and communities of color, ‘We’re going to change the incentives and benefits are going to flow’ sounds…a lot like ‘trickle-down’ economics. They justifiably don’t trust that story.”

Draw your own conclusions.

Here are half-a-dozen other (pre-election) articles:

• The left’s opposition to a carbon tax shows there’s something deeply wrong with the left, (Washington Post editorial, Oct 27). Strongly supported I-732 and decried left-greens’ stance that “softening the blow for the poor and middle class is not enough; the government must divert the revenue according to the wishes of specific interest groups.”
• Opposition to Washington’s historic carbon tax initiative is coming from the unlikeliest of sources (Natasha Gelling in Think Progress, Oct 6). Sophisticated and concise examination of the green split over I-732.
  
• Initiative 732: A ‘Carbon Tax Swap’ To Address Climate Change (Seattle NPR affiliate KNKX-FM, Oct 3). Excellent account of both sides’ views on I-732.
  
• The environmental groups killing a carbon tax (“The Hill,” Sept 22). Professor of law and economics Shi-Ling Hsu — a signatory to CTC’s Paris letter last fall — dissected the opposition to I-732 from sectarian green groups.
• Tax carbon polluters, not working families  (“Crosscut,” Sept 20). Three veteran organizers explained why the I-732 carbon tax will be just as well as efficient.
• Washington Carbon Tax Ballot Initiative Picks Up Biggest Corroboration Yet (CTC blog, Aug 5). Our quick guide to Sightline Institute’s in-depth analyses backing Carbon-WA’s claims for Measure 732 demonstrating that the carbon tax will be revenue-neutral, income-progressive and climate-effective.
• There’s a cheap, proven fix to the world’s biggest problem (CNN, April 19). Political writer John Sutter interviewed Carbon-WA founder Yoram Bauman and explained why a victory for Yes on 732 could be key to unlocking carbon taxing in the U.S.
  

Our blog posts on I-732 (newest listed first):

The Carbon Tax Center strongly supported Carbon WA’s initiative and organizing campaign. Our blog posts during the few weeks before the election responded vigorously to attacks on Initiative 732. Earlier-dated posts mostly involved straight reportage about the merits of the initiative and the campaign to pass it.

• Naomi Klein Is Wrong On The Policy That Could Change Everything, Nov. 7, 2016. The policy that could do the most to start changing everything is on the ballot in Washington state, but somehow it’s not quite good enough for the author of “This Changes Everything.”
• To The Left-Green Opponents of I-732: How Does It Feel?, Nov. 4, 2016. The Koch brothers just gave $50K to the “No On 732” forces. If you’re on the left, it’s time to ask yourselves, in Bob Dylan’s words, “Are you having a good time?”
• Fighting in the Trenches Doesn’t Excuse Ignorance on Carbon Taxes, Oct. 28, 2016. We skewer criticisms of I-732 from the advocacy group Food & Water Watch, including their nonsensical claim that “carbon taxes help fossil fuel companies, not the environment.”
  
• Washington State’s I-732: A Climate Measure for the Society We Have, Oct. 18, 2016. Invokes mid-century humanist radical Paul Goodman to critique “old-guard” green-establishment’s stance opposing Carbon Washington’s ballot initiative.
• The Political Meltdown That Could Save The Climate, Oct. 8, 2016. Why the GOP-Trump electoral meltdown opens a path for I-732 to become the template for a U.S. carbon tax.
• Carbon Tax Can Be a Remedy for Toxic Hot Spots (Sept. 13, 2016). Rebuts notion — left over from the 2009 Waxman-Markey bill built around cap-and-trade with offsets — that a carbon tax could perpetuate or exacerbate tosic “hot spots” in communities of color.
• Washington Carbon Tax Ballot Initiative Picks Up Biggest Corroboration Yet, Aug. 5, 2016. Reports on masterly rebuttal to WA state government’s objections to I-732, from Pacific NW think tank extraordinaire Sightline Institute.
• Feeling The Heat: A Carbon Tax Gains Grassroots Momentum in Washington State, July 16, 2015. CTC’s Matt Gordon captures the on-the-ground energy of Carbon WA’s petition-gathering for Initiative 732.

I-732 history and details (This pre-Nov 2016) content has not been updated.)

The Evergreen State is blessed with abundant natural beauty — Mt. Rainier, the North Cascades, Puget Sound, the Olympic Peninsula and the Columbia River basin and gorge — with an outdoor culture to match. It was also wracked by drought and forest fires in 2015. In that year, carbon tax advocates under the banner of Carbon Washington began organizing for a ballot initiative mandating a state carbon tax. Measure I-732 would have taxed carbon emissions at an initial rate of $15 per ton of CO2, rising the following year to $25 per ton, and then increasing annually by 3.5% more than the inflation rate.

The tax, gracefully summarized last year by the Christian Science Monitor, would have used the expected $1.7 billion in annual revenue to overhaul Washington’s unusually regressive tax code. Most of the money was earmarked to lower the state sales tax from 6.5% to 5.5%. (While the state sales tax is 6.5%, the average combined local-state sales tax rate is 8.89%, the fifth highest in the country.) The annual increases in the carbon tax would have offset the rising value of the sales tax reduction, ensuring the measure stayed revenue-neutral. Another $200 million a year would have funded the state Working Families Rebate – an extension of the federal Earned Income Tax Credit. The Working Families Rebate was created in 2008 but never funded, and revenue from the carbon tax could have assisted 400,000 low-income working families. These two pieces made I-732 the state’s most progressive tax initiative since groceries were exempted from sales taxes in 1977. The remaining funds would have enabled the state to eliminate the business and occupation tax on manufacturing — a feature designed to win business support.

CTC researcher Matt Gordon visited Washington in June 2015 and met with ballot organizers there. He wrote a blog for us about Measure I-732 last July and another in August about backbiting against Measure I-732 by some veteran state environmental advocates. (The surprising opposition to I-732 was criticized by leading right-of-center economist Greg Mankiw in a New York Times opinion piece in early September, 2015, backing the measure.) Despite the opposition, Carbon Washington collected 360,000 petition signatures — over 100,000 more than the 246,000 required to put Measure I-732 on the November, 2016 ballot for a statewide up-or-down vote.

Keibun Mori, a former economist with the Washington State Energy Office, developed a carbon-tax spreadsheet model to predict revenue generation and CO2 reductions for the state from a carbon tax. Keibun’s model used an elasticity-based approach (as does CTC’s national carbon-tax model), and was used to estimate greenhouse-gas emission reductions for the Oregon study noted above.

The Carbon Washington website has clear and compelling information, arguments and graphics for Measure I-732, including lead organizer Yoram Bauman’s clarion defense of the measure’s provisions to ensure social and economic justice. Yoram’s New Year’s 2016 update was stirring and informative as well. Sign up with Carbon-WA to stay connected and donate.

Carbon tax organizing in Oregon

The Beaver State is the locus of the most detailed examination of a carbon tax for any U.S. state to date.  Oregon’s legislature allocated $200,000 to study the effects of a state-wide carbon tax. The result was Carbon Tax and Shift: How to Make it Work for Oregon’s Economy, by economists at Portland State University’s Northwest Economic Research Center, and released in March 2013. The clearly written and gorgeously designed 36-page report examined a tax based on British Columbia’s carbon tax.

Like BC’s, the carbon tax examined for Oregon would be (largely) revenue-neutral: one scenario applied 70% of the tax revenues to cut corporate taxes, 20% to cut personal income taxes, and 10% to reinvest in industrial energy efficiency programs. The other scenario apportioned 50% of the revenues to cut corporate taxes, 25% to cut personal income taxes, and 25% for industrial and residential energy efficiency and transportation infrastructure.

The Oregon tax, starting at $10/ton of CO2 and rising by $10 per year to $60/ton, or roughly twice the level of BC’s tax, would, by 2025, reduce the state’s greenhouse gas emissions by 12-13% below baseline projections and generate over $2 billion a year in revenue, according to the report. The carbon tax outlined in the study became the basis of HB 3252, a bill aimed at establishing a state-wide carbon tax. The grassroots movement to advance the tax was led by Oregon Climate, which spread awareness via canvassing, tabling and lobbying. Oregon Climate also sought to bridge art with climate advocacy, culminating in “Salmon at the Redd,” a community project in which residents created tiles for a mosaic illustrating what they loved about their state.

Unfortunately, the carbon tax campaign was effectively pre-empted by Senate Bill 1547, which in 2016 established a Renewable Portfolio Standard mandating that Oregon utilities ramp up wind and solar facilities to supplement the state’s considerable hydro-electric supplies. Oregon Climate has shifted its focus to a national effort to help other localities advocate for carbon pricing.

Carbon tax organizing in New York

New York should be a strong venue for pursuing a state carbon tax. In October 2012, Superstorm Sandy made a climate-change believer of Gov. Andrew Cuomo. who declared, “[C]limate change is a reality, extreme weather is a reality, it is a reality that we are vulnerable,” after the tidal surge from the storm inundated coastal communities and brought unprecedented devastation to hundreds of miles of shoreline. Moreover, not just coastal residents but upstate citizens politicized by fracking have rallied around the Jacobson-Delucchi “100% Wind, Water and Sunlight” global scenario for NY State, as Jacobson and co-authors propounded in their compelling journal article in Energy Policy.

Two Carbon Tax Center officers — director Charles Komanoff and board chair Alex Matthiessen — outlined the rationale for and distributional impacts of a potential $20/ton (of CO2) NY State carbon tax in a 2013 op-ed for the Huffington Post (cross-posted here). Our draft brief envisions applying the lion’s share of carbon tax revenues to reduce the statewide sales tax rate by a full percentage point — paralleling the sales tax cut in Carbon Washington’s Measure I-732, discussed above. “Leftover” revenues could help fortify the state’s infrastructure to withstand future storms and/or expedite and incentivize homeowners’ and business owners’ installation of photovoltaic electricity generating capacity. Comments on this concise (6-page) draft document are welcome

A NY State carbon tax bill with a more aggressive design was introduced in Sept. 2015 by two Democratic legislators, Assemblyman Kevin Cahill of Dutchess County and Sen. Kevin Parker of Brooklyn. Their bill, A8372 Cahil / S6037 Parker, starts taxing CO2 emissions from coal, oil, natural gas and biofuels at $35 per ton and increases the rate annually by $15/ton, to a ceiling of $185 per ton. The bill proposes returning 60% of revenues to low- and moderate-income households, with the remaining funds used to prepare for climate change, invest in renewable energy, and build transportation infrastructure.

Environmental advocates from around New York State including CTC director Charles Komanoff met at the SUNY New Paltz campus in September, 2015 to discuss climate campaigning and carbon tax organizing. One of the participants, New York League of Conservation Voters Member Andrew Ratzkin, previously outlined the case for a NY State carbon tax in this compelling op-ed in Crain’s New York Business, in July, 2015. In mid-2016 Ratzkin published a lengthy article in the Columbia Journal of Environmental Law, You Say You Want a REV Solution, critiquing the state’s “Reforming the Energy Vision” blueprint as inferior policy to a statewide carbon tax.

Carbon tax organizing in Massachusetts

The bay state’s Global Warming Solution Act of 2008 mandated a 25% reduction of CO2 emissions below 1990 levels by 2020 and an 80% reduction by 2050. Befitting its “promising” status in CTC’s report, Opportunities for Carbon Taxing at the State Level, Massachusetts is a hotbed of advocacy for a statewide comprehensive carbon tax to meet and surpass those targets.

The most politically popular bill appears to be S.1821, An Act combating climate change, sponsored by State Senator Mike Barrett (D-Lexington). Barrett’s nearly identical 2016 bill S.1747 had 47 co-sponsors, and this year he has 64, nearly one-third of the legislature,

The Barrett bill specifies an initial carbon fee of $10/ton of CO2, increasing in $5/ton annual increments to $40/ton, after which the legislature will consider increases or decreases. The bill establishes a fee-and-rebate system, with 100 percent of carbon revenues collected from fossil fuel providers returned pro rata to state residents and to employers based on the number of employees.

S.1821 will direct additional rebates to households in car-dependent areas and to energy-intensive businesses. As with the similar Citizen Climate Lobby fee-and-dividend proposals at the federal level, the rebate system is intended to be income-progressive (with low- and moderate-income households being net beneficiaries while wealthier households would be net payees) while preserving all households’ incentives to reduce fossil fuel use in order to pay less in fees.

Supporters of Barrett’s prior bill, S.1747, cited broad support from businesses including financial services, healthcare, hospitality, food services, transportation, design and technology companies touting its potential to incentivize innovation and preserve competitiveness. At an Oct. 2015 legislative hearing, Business Leaders for Climate Action released an endorsement letter backing the Barrett bill, signed by over one hundred state businesses and business leaders.

Reports by the Massachusetts Department of Energy Resources and Regional Economic Model Inc concluded that S.1747 would slash emissions while boosting employment and overall economic activity.

On the House side, State Representative Jennifer Benson (D-37th Middlesex) is sponsoring H.1726, “An Act to promote green infrastructure, reduce greenhouse gas emissions, and create jobs.” The Benson bill adheres to the Barrett bill’s carbon-fee-and-rebate model but dedicates 20 percent of revenues to fund green infrastructure directly, such as public transportation, renewable energy, energy efficiency, and protection against the expected impacts of climate change. With 80 percent of revenues applied to rebates rather than 100 percent, the Benson bill would likely have a somewhat less income-progressive outcome than the Barrett bill, though the difference would be attenuated by the green investments.

Two other energy-related bills also include carbon pricing provisions:

• Senator Marc Pacheco (D-Taunton)’s S.479, An Act relative to 2030 and 2040 emissions benchmarks, would authorize the state to “create, expand, or join market-based compliance mechanisms, including but not limited to greenhouse gas emissions trading and carbon pricing programs,” in order to achieve the greenhouse gas emissions reductions required by the Massachusetts Global Warming Solutions Act.
• Solomon Goldstein-Rose (3^rd Hampshire)’s HD.1948, An Act relative to creating energy jobs, would establish a carbon-fee-and-rebate system similar to those in the Barrett and Benson bills as part of a larger initiative to make Massachusetts “the Silicon Valley of the new energy economy.”

Analysis by the Massachusetts Department of Energy Resources suggests that carbon pricing would deliver the greatest CO2 reductions of any policy while enhancing state and local employment. Advocates are using those findings, along with the potential to cut health care costs through reduced air pollution, to convince Governor Charley Baker to support carbon pricing legislation.

In Jan. 2017, Dave Anderson of the Massachusetts-based Energy & Policy Institute posted a  provocative, well-documented piece, Under Rex Tillerson, ExxonMobil Lobbied Against Carbon Tax Bills. In his article Anderson revealed 2016 lobbying disclosures filed with the Secretary of the Commonwealth of Massachusetts indicating that a lobbyist paid by ExxonMobil opposed the revenue-neutral carbon tax bill S.1747, as well as other climate-related bills.

For more information on carbon pricing in Massachusetts, view this short video on carbon pricing by Business Leaders for Climate Action, or contact info@blcama.org.

Carbon tax organizing in Rhode Island

With its coastline-defined topography, the Ocean State is directly exposed to climate change impacts of rising sea levels, flooding and storms. Rhode Island is also home to U.S. Senator Sheldon Whitehouse, whose 100 weekly “Time to Wake Up” speeches on the Senate floor in 2013-2015 established him as Capitol Hill’s most forceful voice for climate action. The Senator’s American Opportunity Carbon Fee Act of 2014 would establish a national carbon tax.

With federal carbon pricing blocked by the GOP, a coalition of RI environmental, faith and business groups formed Energize Rhode Island in 2015 to advocate for state carbon pricing legislation. In January 2016 State Rep. Aaron Regunberg (D-Providence) introduced House Bill 7325, along with 40 co-sponsors. H7325 specifies an initial carbon fee of $15/ton of CO2, increasing in $5/ton annual increments. Seventy percent of the revenue would be refunded via per capita and per employee rebates to Rhode Island families and businesses, with 25% invested in renewable energy and efficiency programs.

The Energize Rhode Island Coalition touts a REMI study finding that H7325 will create over a thousand new jobs in the first year alone — a major economic boost for a state whose 2014 population was just 1.055 million — while emission reductions quickly reach double digits. Job growth will continue apace in subsequent years, according to the study, as Rhode Islanders save much of the nearly $4 billion a year they now spend on fossil fuel energy, all of it imported from outside the state.

Carbon tax organizing in Vermont

The conversation among policymakers in Vermont has begun to shift from whether the state should price carbon pollution to how, reports Tom Hughes of VPIRG, in Feb 2016.

The carbon-pricing campaign is led by Energy Independent Vermont, a coalition comprising the state’s top environmental organizations, the renewable-energy leaders who have made Vermont a solar powerhouse, iconic Vermont businesses like Ben & Jerry’s and Seventh Generation, the state’s low-income weatherization agencies, interfaith religious leaders, and academics at U-Vermont’s Gund Center for Ecological Economics. Non-member allies of Energy Independent Vermont include the Vermont Council on Rural Development and a CERES-supported group of industry leaders including Sugarbush Resort, Burton and King Arthur Flour.

The campaign engaged Regional Economic Models, Inc. (REMI) to conduct an analysis of a pollution tax set at $100 per metric ton of CO2, with 90% of revenues recycled as cuts to the state income tax, corporate taxes and a reduction in the sales tax, and the remaining 10% reserved for low-income weatherization and other energy-saving investments. As modeled, the tax would exempt electric generation, since that is already covered with a carbon pricing regime through RGGI, the Regional Greenhouse Gas Initiative. The REMI study concluded that over the first decade this measure would cut carbon emissions from heating and transportation by 31% while generating 2,400 new jobs, raising gross state domestic product by $100 million, and adding more than $150 million a year to real disposable personal income.

Two bills with similar tax rates and revenue treatment were introduced in the Vermont General Assembly in early 2015, according to Hughes. Energy Independent Vermont delivered 25,000 petitions in favor of carbon pricing to Vermont legislators in November 2015, he reports. In January 2016 Gov. Peter Shumlin’s administration called for the state to “investigate and pursue options for market-based greenhouse gas emission policies.” A May 26 piece by Energy Independent Vermont activist Luc Reid in the Williston (VT) Observer, The unsuspected upsides of a carbon pollution tax, did a nice job of laying out the “income progressivity” of EIV’s carbon tax proposal.

The November election win of Republican Lieutenant Governor Phil Scott to the governor’s office will set back efforts to enact a Vermont carbon tax, Seven Days political columnist Terri Hallenbeck reported in early December.

Boulder (Colorado)

The municipality implemented the United States’ first tax on carbon emissions from electricity, on April 1, 2007, at a level of approximately $7 per ton of carbon dioxide. According to the City of Boulder, the tax was costing the average household about $1.30 per month, with households that use renewable energy receiving an offsetting discount. The city expected the tax to generate about $1 million annually until its expiration in 2012, with the revenues used to fund Boulder’s climate action plan to further reduce energy use. In June 2009, the City Council voted unanimously to raise the tax level. Although the new rate was not originally specified, the expected increase in revenues, some $810,000 annually,  suggests that the increase is on the order of 80%, or perhaps $5-$6 per ton of CO2 (on top of the original $7/ton). In 2012, residents voted to continue the tax at the 2009 rate for another five years.

Other States?

Please send us (info@carbontax.org) your reports, or even just ideas, on state-level carbon taxes, so we can post them here.

(coming soon: Utah, drawing on this link and that link)

A striking — and troubling — shift of late in the climate-policy landscape is the pronounced turn against carbon pricing by the environmental- and climate-justice movement — the community of individuals and organizations dedicated to overturning deeply entrenched inequities of disproportionate pollution burdens borne by African-Americans, Latinos, Asians and Pacific Islanders and Native Americans in the United States.

Most in that movement now appear to disdain carbon pricing as a climate policy tool, whether as a straight-up carbon tax or a permit-based cap-and-trade system. This shift is a blow to carbon tax prospects, not least because the broader progressive community increasingly is taking its lead from Black, Brown and Indigenous people who traditionally were excluded from leadership in environmental issues. Growing antipathy by EJ/CJ campaigners is one of the reasons that progressives’ interest in carbon pricing has cooled in recent years. (See in-depth discussion on our complementary page, Progressives and Carbon Pricing.)

This page begins by inquiring into the sources of that antipathy. It then recapitulates two 2020 Carbon Tax Center posts reporting new research crediting carbon pricing for reducing disproportionate dumping of pollutants on disadvantaged communities in California. Environmental Justice, Borne Aloft by Carbon Pricing, was posted in Sept. 2020. A follow-on, Dogmatism on Carbon Pricing Mustn’t Derail Climate Progress, was published in Dec. 2020.

We then summarize another 2020 study that found that the Clean Air Act has sharply reduced environmental inequality between racial groups across the United States, even though its provisions and enforcement did not explicitly target communities of color.

This new research, while heartening, does not yet appear to have prompted reconsideration of carbon pricing or other “universal” environmental and climate policies by environmental justice advocates.

Wellsprings of EJ antipathy to carbon pricing

A decade or so ago, at the start of the 2010s, many EJ/CJ campaigners opposed carbon cap-and-trade programs but were agnostic about carbon taxes. By the end of that decade, most in the movement were aligning against carbon taxing as well. Some did so with increasing stridency, branding any carbon pricing as harmful, even “colonialist” (see photo).

The turn against carbon pricing by many environmental and climate advocates of color has multiple causes and antecedents, including:

• Belief that carbon pricing commodifies both nature and humans’ right to a safe environment and climate.
• Conflation of carbon pricing with predatory capitalism that, over centuries, brought prosperity to whites by stealing the land of Indigenous people and the labor of people of African descent.
• Fear that carbon pricing necessarily entails “offsets” that let polluters buy their way out of reducing local pollution.
• Conviction borne from an early and easily gamed pollution-pricing program — California’s RECLAIM cap-and-trade system to cut nitrogen oxides — that carbon pricing perpetuates pollution “hot spots” in disadvantaged communities.
• A preference for addressing the climate crisis by attacking entrenched power imbalances that skew against communities of color rather than through so-called “race-blind” policies that, at least on their face, appear to ratify those imbalances.
• The mistaken belief that California’s carbon cap-and-trade program is exacerbating long-standing pollution-exposure disparities between disadvantaged communities and whiter, affluent populations.

Further below, we unpack the sixth and final bullet  — the deeply held but erroneous conviction that California’s permit-based carbon-pricing system is worsening the disproportionate pollution burden borne by low-income communities of color. It should be said, however, that it is the the cumulative power of the five other conditions that has given this misplaced conviction such great salience in the environmental justice movement — initially in California and now nationwide.

2015-2020: EJ criticism mounts against carbon pricing

We first wrote about environmental justice and carbon pricing in 2016, prompted by a column in Yale 360 by 350.org co-founder and prolific climate activist Bill McKibben. In Why We Need a Carbon Tax, And Why It Won’t Be Enough, McKibben wrote:

Carbon rebates also come with one obvious moral and intellectual flaw: most of the damage from both climate change and air pollution has fallen on poor people, people of color, and Native nations, both in our country and around our world. They need to be treated fairly in any rebate plan. And any such rebates shouldn’t overlook the estimated nearly 12 million undocumented Americans who contribute to the economy — and cause far less than their proportional share of emissions. Environmental justice would mean a truly “fair” system compensated them for that history; it would also require policies to make sure that carbon pricing doesn’t perpetuate toxic “hot spots” in poor communities as companies look for least-cost ways to deal with the new reality. Furthermore, environmental justice demands that carbon prices don’t create a windfall on other of forms of ecological or toxic energy production, such as mass incineration or mega-hydro dams. (emphasis added)

McKibben’s first charge to carbon-pricing proponents, that the necessarily higher prices of fossil fuels not disadvantage poor people and people of color, was one that CTC and other carbon-tax advocates had addressed for years (our Ensuring Equity page, has details). Our response to McKibben, published as Carbon Tax Can Be a Remedy for Toxic Hot Spots, summarized our antidotes to economic regressivity. We then turned to hot spots.

“From time to time,” we noted, “concern is voiced that polluting companies will respond to carbon taxes by curbing carbon pollution elsewhere rather than in frontline communities like blighted urban neighborhoods, Appalachian hollows, or Native peoples’ lands.” To head off those possibilities, we urged “members of frontline communities to assume leadership positions in the carbon tax effort.”

Hopes for that partnership soon dwindled, with publication by the Indigenous Environmental Network and the Climate Justice Alliance of “Carbon Pricing: A Critical Perspective for Community Resistance” in November 2017. The manifesto nature of this 60-page report was telegraphed by its boldface message on page 3: “This publication will help communities and organizations articulate crucial points to resist carbon pricing and carbon change.”

The paradigm of resistance to carbon pricing suffused the report’s five “main takeaways” (shown at left). Carbon pricing was deemed a “false solution” that “does not keep fossil fuels in the ground.” Rather than a climate-damage antidote or preventive, carbon pricing was, at best, merely “remedial.” Better to “fight fossil fuel subsidies” and “build power,” the report stated, than succumb to polluters’ carbon-pricing “greenwash.”

Then and now, CTC has no argument with the call for frontline and disadvantaged communities to build power. But build power toward what? If ending fossil fuel subsidies is part of the solution, it needs to be said that “fossil fuel subsidies” as commonly defined — taxpayer-funded payouts or tax breaks such as the oil-depletion allowance — are dwarfed in the United States and most other industrial countries by the climate and health damages from extracting and burning fossil fuels. Which means that the real fossil fuel subsidy, as we point out on our Subsidies Reform page, is the absence of carbon pricing.

The following September (2018) saw the “Solidarity to Solutions” action in San Francisco depicted in the earlier photograph. We reached out to one of the participants, just as we had, a year earlier, to one of the prime movers of the IEN/CJA manifesto. In both cases, our entreaties for dialogue were rebuffed. Tellingly, one party informed us, “We do not have the capacity for engaging deeply with individuals that are not rooted in an organization with accountability to a base of people — there may be other organizations who have that capacity, but we do not.”

An incomplete analysis of cap-and-trade hardens EJ opposition in California

Concurrently, in California, a research project examining the incidence of pollution from California’s carbon cap-and-trade law, AB 32, was adding to environmental justice campaigners’ antipathy to carbon pricing.

That project, by a team of academics led by Prof. Lara Cushing, published its findings in a 2018 paper in the journal PLOS Medicine Carbon trading, co-pollutants, and environmental equity: Evidence from California’s cap-and-trade program (2011–2015). However, the team’s preliminary findings had begun circulating as early as 2016, helping turn opinion against the cap-and-trade program in the EJ community and its allies.

The Cushing team concluded that, following implementation of the cap-and-trade program, a majority (52 percent) of California “regulated facilities” — the state’s roughly 300 largest “stationary” sources of carbon dioxide emissions — increased rather than curbed their emissions of greenhouse gases. Moreover, the increases in carbon co-pollutants such as particular matter and nitrogen oxides were disproportionately concentrated in communities with “higher proportions of people of color and poor, less educated, and linguistically isolated residents,” according to the PLOS paper.

These conclusions left an indelible imprint on discourse about carbon pricing and environmental justice. Yet they rested on shaky ground. The Cushing analysis had no control group, leading it to mistake the cap-and-trade program as the cause of rising emissions in disadvantaged communities when emissions actually increased across all of California as economic activity rebounded from the 2008-09 recession. It also assumed that smokestack emissions deposited within a few miles, ignoring wind patterns and tall smokestacks that sometimes dispersed pollutants far from frontline communities. Last, the analysis flattened the data into binary, “up or down” results, which inadvertently suppressed the tendency of bigger polluters to cut back the most as the cap-and-trade incentives kicked in.

2020: A pair of UCSB economists improve on, and reverse, that analysis

After reading elements of the work by Cushing et al., two economists at U-C Santa Barbara — PhD candidate Danae Hernandez-Cortes and Associate Prof. Kyle C. Meng — embarked on an ambitious research methodology that would improve on the Cushing work in three respects.

First, Hernandez-Cortes and Meng established a control group of 440 lesser California emitters that were not regulated by the cap-and-trade program; this “difference-in-difference research design” weeded out macroeconomic and other factors to discern the cap-and-trade program’s specific effects on emissions from the 306 larger, “covered” facilities.

Second, Hernandez-Cortes and Meng deployed an atmospheric transport model to track where the carbon co-pollutants actually deposit after they have been emitted.

Third, rather than assigning equal weight to the 300-plus facilities, the UCSB economists based their calculations on each facility’s emission quantity.

Hernandez-Cortes and Meng wrote up their work in a paper for the National Bureau of Economic Research, Do Environmental Market Cause Environmental Injustice? Evidence from California’s Carbon Market, first posted in May 2020 and revised in Feb. 2021. We’ve summarized their key findings in the table below.

The yellow columns display ground-level concentrations of particulate and gaseous carbon co-pollutants from California’s 306 largest carbon emitters in 2008. Perhaps even more striking than the “deltas” (numerical differences) between pollution concentrations in environmental justice vs. other communities are the ratios: pollution levels in the EJ communities in 2008 were three to four times as high as in other areas.

It’s apparent from the green column that by 2012 each pollutant’s “EJ gap” — the excess pollution deposited on disadvantaged communities relative to other California locales — had worsened even from its shocking 2008 base. Thereafter, however, coinciding with the onset of the cap-and-trade program, the gap narrowed significantly, as shown in the final two columns.

Consider the Hernandez-Cortes – Meng findings in the third row of the table for PM_2.5. That’s the fine particulate matter that lodges deep in the lungs and is implicated in illness and death from heart and lung diseases and strokes and is considered the most deadly air pollutant associated with industrial processes that emit climate-damaging carbon dioxide. Beginning in 2013, the EJ gap for fine particulates contracted, falling to 2.7 µg/m³ in 2017 (the last year for which pollution data was available). That was 30 percent less than the 2012 gap of 3.8, and less than the baseline figure of 3.0 µg/m³ as well.

The state’s cap-and-trade program had a similarly beneficial impact on oxides of nitrogen, or NOx, which is the key constituent (along with volatile organic compounds) of the photochemical smog that since the late 1950s has infamously blanketed skies and seared eyes and lungs across much of California, with disadvantaged communities bearing more of the impact. As shown in the table’s top row, from 2012 to 2017 the EJ gap for NOx shrank to 4.8 µg/m³, a level 21 percent below the 2012 figure. Similarly, the environmental justice gap shrank during the same five years by 24 percent for sulfur oxides and 30 percent for larger particulate matter, known as PM₁₀.

EJ antipathy to carbon pricing strikes down the top candidate to head the EPA

Neither the Hernandez-Cortes – Meng paper, which was posted in May 2020, nor our write-up of it in September drew much commentary. Neither piece broke into the mainstream press or even climate-journalism sites such as Inside Climate News or ClimateWire. The Hernandez-Cortes – Meng paper received two mentions in the green press, in October and November (our Dec. 2020 “Dogmatism” post has details); both were cursory and largely dismissive, owing either to the writers’ inexperience or their reticence to question environmental justice dogma.

That reticence would soon prove consequential. On Dec. 2, less than a month after Joe Biden’s victory over Donald Trump, 70 environmental justice and allied groups sent a strongly worded letter to the Biden-Harris transition team opposing the prospective nomination of Mary Nichols, long-time environmental attorney and regulator and chair of the California Air Resources Board, to head the US Environmental Protection Administration.

A principal charge in the letter, and the one singled out by the New York Times and in other media accounts, was the claim, based on the Cushing analysis, that the carbon cap-and-trade program overseen and administered by Nichols and CARB “perpetrated environmental racism [by] increas[ing] pollution hotspots for communities of color in California.”

Though the claim lacked merit — Hernandez-Cortes and Meng had reached the opposite conclusion in their work, after correcting critical weak spots in the Cushing analysis — it stirred up opposition that the new administration could not attempt to counter without incurring significant political costs, as the New York Times noted in an editorial, excerpted at left, that appeared on Dec. 28 — after selection of North Carolina environmental quality secretary Michael Regan to be EPA Administrator.

(The Wall Street Journal waited an additional three months before noting in a March 24, 2021 column that “A coalition of environmental groups [had] accused [CARB head Mary Nichols] her of ‘pushing market-based approaches to the climate crisis at the expense of the health and well-being of California’s communities of color.’ But empirical evidence suggests otherwise. California’s carbon market actually narrowed disparities in exposure to particulates, nitrogen oxides and sulfur oxides, according to a study by economists Danae Hernandez-Cortes and Kyle Meng of the University of California, Santa Barbara.” Our Dec. 2020 post, Dogmatism on Carbon Pricing Mustn’t Derail Climate Progress, has a detailed discussion of how opposition to Nichols was stoked by misinterpretation of the California cap-and-trade program.)

A separate analysis finds that the Clean Air Act’s “universal” policy approach has benefited EJ communities nationwide

In Jan. 2020, Princeton Prof. Janet Currie and two other academics published a paper, What Caused Racial Disparities in Particulate Exposure to Fall? New Evidence from the Clean Air Act and Satellite-Based Measures of Air Quality.

The paper takes as its premise the statistically demonstrated (and heartening) finding, stated in the abstract, that “Racial differences in exposure to ambient air pollution have declined significantly in the United States over the past 20 years.”

Applying what it calls “newly available, spatially continuous high resolution measures of ambient particulate pollution,” the Currie paper makes three revelatory findings about declining levels of fine particulates (PM2.5) in the United States from 2000 to 2015:

1. 1. Areas with larger black populations experienced greater declines in PM2.5 exposure.
   2. The black-white gap in mean pollution exposure to PM2.5 has decreased from 1.5µg/m³ (micrograms per cubic meter) in 2000 to only 0.5µg/m³ in 2015 — a two-thirds reduction.
   3. Over 60 percent of this “convergence” (reduction) in the black-white pollution gap is attributable to regulatory measures related to and required by the Clean Air Act.

The Currie paper concludes:

These findings suggest that the Clean Air Act has likely played a significant role in reducing the black-white gaps in exposure to air pollution, because the legislation systematically targeted the dirtiest areas for cleanup, and African Americans were disproportionately likely to live in areas with dirty air.  Hence, although the Clean Air Act was not explicitly designed to address disparities in pollution exposure, the Clean Air Act has nonetheless contributed to reductions in environmental inequality between racial groups in the United States. (emphasis added)

The bolded passage signifies the enduring value of the “universalist” approach to pollution reduction embodied in the Clean Air Act and other foundational environmental legislation, circa 1970. Rather than prioritize one set of communities over another, the Clean Air Act was designed to mitigate environmental pollution and its effects on everyone, everywhere. And if communities of color were the furthest from those standards (which of course they were, overwhelmingly, on average), then the mandated improvements in those communities would have to be disproportionately large.

That is, although “early” environmental legislation, which was driven and to a great extent written by the environmental movement of that era (the late 1960s and early 1970s), was not framed in terms of differential pollution impacts between rich and poor or Black and white, it nonetheless has had the effect of reducing those differentials.

The Currie paper won’t be the last word on pollution differentials. It doesn’t address the pollution gap between white or Black populations and Hispanic/Asian/Native populations. Rapidly rising Hispanic and Asian-American populations, both nationwide and in California, e.g., in the heavily polluted and largely Hispanic San Joaquin Valley, make this an urgent research priority.

Nevertheless, the Currie paper is valuable in its own right and for the light it casts on another universal policy: carbon pricing. Provided that carbon pricing programs aren’t saddled with “offsets” or other invitations to game the system, they almost certainly bend toward reducing both absolute pollution levels and race-based pollution gaps  — a point argued at length in our late-2020 posts (Sept. 2020 and Dec. 2020) already discussed here.

Further confirmation of the shrinking clean-air gap between Black and white Americans 

A Sept 2021 Atlantic article, Why Americans Die So Much, reports newer research reinforcing Currie’s finding of disproportionately positive benefits to Black and other non-white Americans from U.S. “universal” environmental policies. Author Clive Thompson summarizes a new National Bureau of Economic Research working paper, Inequality In Mortality Between Black And White Americans By Age, Place, And Cause, And In Comparison To Europe, 1990-2018, written by a team led by Northwestern University professor Hannes Schwandt. Amid the bad news of falling U.S. life expectancy, the NBER paper includes what Thompson calls “a surprising success story in U.S. longevity”: a near-halving of the Black-white life-expectancy gap from 1990 to 2018, prior to the onset of the COVID-19 pandemic.

Thompson writes:

In the three decades before COVID-19, average life spans for Black Americans surged, in rich and poor areas and across all ages. As a result, the Black-white life-expectancy gap decreased by almost half, from seven years to 3.6 years. [One reason was] reductions in air pollution. “Black Americans have been more likely than white Americans to live in more-polluted areas,” Schwandt said. But air pollution has declined more than 70 percent since the 1970s, according to the EPA, and most of that decline happened during the 30-year period of this mortality research.