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Last modified: April 29, 2007

Last modified: April 26, 2007

Rep. Stark Introduces Carbon Tax Bill

California Democrat Fortney “Pete” Stark, the second-most senior member of the House Ways & Means Committee, today introduced legislation to take aim at global warming by taxing the carbon content of fossil fuels.

Rep. Stark, who has represented Fremont, Hayward and other East Bay communities since 1971, said the “Save Our Climate Act” would establish the United States as a global leader in environmental protection and encourage other nations to take similar action to reduce emissions.

The bill would impose 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 percent from 1990 levels.

Click here for Rep. Stark’s statement. Click here for today’s story in E&E News, Rep. Stark tosses carbon tax proposal into global warming debate. Or read the full text of the story below.

Rep. Stark tosses carbon tax proposal into warming debate

Darren Samuelsohn, E&ENews PM senior reporter

Rep. Pete Stark (D-Calif.) introduced legislation today that aims to curb global warming by taxing the carbon content of fossil fuels.

Stark acknowledged in an interview he faces a tough slog, but he insisted it should be seen as an alternative to the more widely discussed cap-and-trade approach to reducing greenhouse gases.

“Its viability depends on industry’s concern that cap-and-trade becomes a bureaucratic gaming nightmare,” Stark said. “We’ve had some indication from people who are concerned that the cap-and-trade is just too complex and subject to some kind of politically staffed bureaucracy getting involved in it.”

Instead of cap-and-trade, Stark said an energy tax would be easier for government to administer and consumers to understand. It also would not set competition among different sectors of the U.S. economy that is expected if lawmakers move toward a cap-and-trade bill.

“It might very well become the the lesser of some evils,” Stark said.

Stark’s bill would tax coal, petroleum and natural gas at $10 per ton of carbon content when the fuel is either extracted or imported. The tax would increase $10 every year until the Energy Department and Internal Revenue Service determine U.S. carbon dioxide emissions have dropped 80 percent from 1990 levels — a threshold many scientists say could help to avert catastrophic changes to the Earth’s climate.

Endorsements for a carbon tax come from many notables in the energy policy debate, including former Vice President Al Gore, New York Times columnist Thomas Friedman and Democratic presidential candidate Sen. Christopher Dodd (Conn.). To industry groups and several leading energy companies, including Exxon Mobil Corp., a carbon tax also belongs in the debate over solutions to global warming.

“If your goal is to put a price on carbon for the goal of changing behavior, it’s a lot more transparent,” said Lou Hayden, a senior policy analyst at the American Petroleum Institute. In written comments to the House Energy and Commerce Committee, API said taxes should be considered along with voluntary efforts and cap-and-trade.

‘Right issue, wrong solution’

Stark and Rep. Jim McDermott (D-Wash.), the bill’s other lead cosponsor, nonetheless face an uphill climb in winning support on Capitol Hill for their proposal.

“I don’t think there’s an interest in a tax, per se,” Senate Environment and Public Works Committee (D-Calif.) Barbara Boxer told reporters last week. “There’s more interest in letting the free market set a price on carbon through cap and trade.”

When asked about a carbon tax during a February interview, House Ways and Means Committee Chairman Charlie Rangel (D-N.Y.) said “everything was on the table.” But asked today about the Stark legislation, a Rangel spokesman declined comment.

Also declining comment: a spokesman for House Energy and Commerce Committee Chairman John Dingell (D-Mich.).

One top environmental group said it would not back the tax approach.

“Right issue, wrong solution,” said Steve Cochran, national climate campaign director at Environmental Defense. “Virtually no proposed tax has ever been simple, transparent nor predictable by the time it become law. ”

Stark said he has spoken with Rangel about the legislation but has won no pledge it will be taken up anytime soon. “There’s not a politician in Washington who likes to say tax out loud in mixed company,” Stark said.

See below for Rep. Stark’s bill.

Click here for API’s comments to the House Energy and Commerce Committee.

Last modified: April 26, 2007

Sen. Dodd: "Tax Corporate Carbon"


Dodd brings pollution tax proposal to NH

By JOHN DISTASO

Senior Political Reporter, (New Hampshire) Union Leader

Friday, Apr. 20, 2007

NASHUA – Connecticut Sen. Chris Dodd brought his call for a $50 billion tax on polluters from a Washington think tank to a New Hampshire kitchen table today.

Over coffee, juice, fruit and cake, he told 10 local political and clean energy activists his plan contains “tough but important steps” toward reducing greenhouse gas emissions.

The Democratic presidential candidate continued his “kitchen table” discussion series at the home of Paul and Wendy Johnson a day after unveiling an ambitious plan to cut 80 percent of all greenhouse gas emissions in the country by 2050.

His centerpiece is a “Corporate Carbon Tax,” which would produce revenues to fund research, development and production of renewable energy technologies and make them more affordable.

Several greenhouse gas-related bills and plans propose some form of a cap-and-trade system, aimed at reducing carbon dioxide emissions by allowing more efficient polluters to sell emission credits to less efficient polluters. Dodd supports that system, but said it only works if it is combined with a tax.

“I don’t know how we can possibly talk about honestly getting to the number we need to get to if you’re going to just dance around that issue,” Dodd said. “Price is the last real barrier.”

He said believes many heavy polluters want to transfer to cleaner technologies, “and this will be the incentive to do it.” Dodd said the carbon tax would provide the “additional resources to” help industries make the transition.

Speaking with reporters after the hour-long discussion, Dodd acknowledged his plan is controversial.

“But it’s an honest answer,” he said. “As long as the oil industries, the polluting industries, can make a lot of money at a lot less cost a barrel, they’re going to drive these other technologies out of the market. If I can make these alternative
energy sources financially competitive with sources that leaves us more dependent on the Middle East, endangers our environment, endangers our health, endangers our economy, then I think people, if they understand that, will accept it as a smart move.”

Dodd said, “It’s not going to happen miraculously. It’s going to happen because political leadership makes intelligent decisions about how to move us in that direction.”

Dodd, accompanied by his wife, Jackie, said he hosts kitchen table talks because, “while people want to hear what I have to say, it’s also very important that as a candidate, I see what the people I seek to represent have to say.” Dodd, a 26-year
senator, said the format has worked well for him during his Connecticut campaigns.

CTC addendum: Follow link for Sen. Dodd’s April 27 op-ed, A Corporate Carbon Tax, in the Boston Globe.

Last modified: April 26, 2007

Last modified: April 26, 2007

Industry Caught in Carbon Trading Smokescreen

Here’s the full text of this fascinating and timely story from the Financial Times. — C.K.

Industry Caught in Carbon ‘Smokescreen’ (Financial Times)

By Fiona Harvey and Stephen Fidler in London

Published: April 25 2007 22:07

Companies and individuals rushing to go green have been spending millions on ‘carbon credit’ projects that yield few if any environmental benefits.

A Financial Times investigation has uncovered widespread failings in the new markets for greenhouse gases, suggesting some organisations are paying for emissions reductions that do not take place.

Others are meanwhile making big profits from carbon trading for very small expenditure and in some cases for clean-ups that they would have made anyway.

The growing political salience of environmental politics has sparked a ‘green gold rush’, which has seen a dramatic expansion in the number of businesses offering both companies and individuals the chance to go ‘carbon neutral’, offsetting their own energy use by buying carbon credits that cancel out their contribution to global warming.

The burgeoning regulated market for carbon credits is expected to more than double in size to about $68.2bn by 2010, with the unregulated voluntary sector rising to $4bn in the same period.

The FT investigation found:

? Widespread instances of people and organisations buying worthless credits that do not yield any reductions in carbon emissions.

? Industrial companies profiting from doing very little – or from gaining carbon credits on the basis of efficiency gains from which they have already benefited substantially.

? Brokers providing services of questionable or no value.

? A shortage of verification, making it difficult for buyers to assess the true value of carbon credits.

? Companies and individuals being charged over the odds for the private purchase of European Union carbon permits that have plummeted in value because they do not result in emissions cuts.

Francis Sullivan, environment adviser at HSBC, the UK’s biggest bank that went carbon-neutral in 2005, said he found ‘serious credibility concerns’ in the offsetting market after evaluating it for several months.

‘The police, the fraud squad and trading standards need to be looking into this. Otherwise people will lose faith in it,’ he said.

These concerns led the bank to ignore the market and fund its own carbon reduction projects directly.

Some companies are benefiting by asking ‘green’ consumers to pay them for cleaning up their own pollution. For instance, DuPont, the chemicals company, invites consumers to pay $4 to eliminate a tonne of carbon dioxide from its plant in Kentucky that produces a potent greenhouse gas called HFC-23. But the equipment required to reduce such gases is relatively cheap. DuPont refused to comment and declined to specify its earnings from the project, saying it was at too early a stage to discuss.

The FT has also found examples of companies setting up as carbon offsetters without appearing to have a clear idea of how the markets operate. In response to FT inquiries about its sourcing of carbon credits, one company, carbonvoucher.com, said it had not taken payments for offsets.

Blue Source, a US offsetting company, invites consumers to offset carbon emissions by investing in enhanced oil recovery, which pumps carbon dioxide into depleted oil wells to bring up the remaining oil. However, Blue Source said that because of the high price of oil, this process was often profitable in itself, meaning operators were making extra revenues from selling ‘carbon credits’ for burying the carbon.

There is nothing illegal in these practices. However, some companies that are offsetting their emissions have avoided such projects because customers may find them controversial.

BP said it would not buy credits resulting from
improvements in industrial efficiency or from most renewable energy projects in developed countries.

Additional reporting by Rebecca Bream

Last modified: April 26, 2007

Canadian eco-guru: "We're ready for carbon tax."

David Suzuki is known (and widely revered) throughout Canada for his lifelong writing and advocacy for nature, communities and social justice. — CTC 

From CTV.ca

Updated: Sun. Apr. 22 2007 2:51 PM ET

Environment crusader David Suzuki says ordinary Canadians are far ahead of politicians when it comes to fighting climate change — and that they’re ready and willing to pay for it.

Fresh from a cross-Canada tour in which he heard from thousands of people in more than 40 cities, Suzuki told CTV’s Question Period on Sunday that Canadians are ready for a carbon tax that would punish those who waste energy and reward those who conserve.

"We met over 30,000 Canadians. They recorded over 500 personal statements about what they would do if they were minister for the environment," Suzuki told Question Period co-host Craig Oliver.

"And I’m telling you, they want carbon taxes."

In a Friday Globe and Mail column that he co-wrote with automotive consultant Dennis DesRosiers, Suzuki said politicians are hanging on to a quarter-century old, outmoded view of the carbon tax — that is, Joe Clark’s 18-cents-a-gallon gas tax that helped bring his minority government down in 1979.

But that was then, argued Suzuki, and today, the public’s anxiety over pollution and climate change means a majority of people are much more receptive to taxing polluters and to paying a levy on fossil fuels.

Asked about Conservative claims that meeting Kyoto targets would cause a deep recession, Suzuki said global warming would cost the economy more than two world wars combined and bring about a severe global depression.

A Tory government study released Thursday said the Kyoto emissions-cutting targets for Canada could be met only by introducing a massive $195-per-tonne carbon tax that would eliminate thousands of jobs and undercut our quality of life.

‘Knee-jerk’ response

Suzuki on Sunday called this an extreme, "knee-jerk" response from the government and some members of the business community.

"Of course if we start paying $195 a tonne, it’ll be economically disastrous. Nobody’s saying that," Suzuki told Question Period.

He added that the Conservative report takes the most "extreme suggestion about what it will cost to pay for what carbon dioxide will be worth, $195 a tonne, which no environmental group says is what the cost is going to be."

Liberal Leader Stephan Dion also rejected the $195 figure as excessive, saying that his party proposes a $20-per-tonne "deposit" instead of a tax.

"It’s a deposit that the companies will have to give to the environmental bank — and they will have this money back if they decrease their emissions," Dion told Question Period co-host Jane Taber.

"It’s like when you have your bottle of Coca-Cola and you bring it back to the grocery store. You get your money back. It’s not a tax."

Dion called his plan a "great incentive" for Canadians to reduce emissions while not harming the economy.

Suzuki, other environmentalists and opposition members also say the Tory study is flawed because it doesn’t take into account the benefits of cutting emissions — such as reduced energy costs and a more stable climate. 

"Do (the Tories and business leaders) ask the question, how many jobs will be created by taking this seriously?" said Suzuki. "How many jobs in the whole alternative energy area? No, they do not do that."

Baird defends plan

Appearing on the show ahead of Suzuki, Environment Minister John Baird defended the grim economic picture his report painted if Canada were to comply with Kyoto. He again criticized the Liberal’s Bill C-288, that would force the government to comply with the Kyoto targets.

Members of all three opposition parties demanded to know on Thursday when the Tories would bring their Clean Air Act to the House for debate and a vote — and whether it would include mandatory emissions reductions targets for industry.

Refusing to say exactly when, Baird said on Sunday that the government will "very shortly" bring forward a reasonable environmental plan that won’t destroy the economy.

"We also have brought forward a partnership with the provinces. We’ve got all the provinces rolling together towards cleaner air and reducing greenhouse gases," said Baird.

He noted that the final part of his government’s plan will be an industrial emissions strategy.

"We’re going to be for the first time in Canada regulating industry," Baird said. "We’re going to regulate the entire industrial sector for both greenhouse gases and pollution. We want to make sure it’s tough."

The Kyoto Protocol calls for Canada to cut its greenhouse gas emissions to 6 per cent below 1990 levels by 2012. As of 2003, those emissions had increased by 27 per cent above 1990 levels.

If Canada doesn’t meet its treaty obligations, it faces a 30 per cent penalty under the next phase of the Kyoto accord.

In addition, the opposition parties have forced the government to rewrite its Clean Air Act, which didn’t mention the word Kyoto.

Baird has said the government will adopt intensity targets, which require cuts in emissions per unit of production, but allow
overall emissions to go up if production rises.

Environmentalists have blasted that approach, saying GHG emissions from sectors like Alberta’s oil sands could rise
dramatically.

Asked if he’s ready to go into an election campaign on the issue, seeing as how neither the Liberals nor Conservatives appear ready to compromise, Baird said he hopes the government’s industrial regulatory strategy is unveiled and working for Canadians "long before an election is held."

"I think it would be wrong to simply put it off to the next parliament. We’re going to act. You know, industry has been fighting tough regulation for years, and being very successful with the Liberals," said Baird.

"Environmentalists want perfection. Do you know what? The debate is about to end and the Canadian government’s going to act."

Suzuki, meanwhile, said politicians have been aware of the debate and the urgency behind it for almost two decades.

"In 1988, George Bush ran for president of the United States and said, ‘you vote for me, I’ll be an environmental president,” said Suzuki. "What a joke. And you know why he said that? Because the American public was there."

In Canada, Suzuki pointed to prime minister Brian Mulroney’s appointment of Lucien Bouchard as environment minister to show that the environment was a high priority for his Conservative government.

"I interviewed Lucien Bouchard two months after he was appointed, and I said, Mr. Minister, what is the most important issue we face? Right away, he said global warming. In 1988! I said, how serious is it? And he said it threatens the survival of our species."

Suzuki said he will be campaigning ceaselessly for his cause whenever the next election campaign starts, although he won’t be doing so for a particular party.

"I can’t. … because I have a charitable foundation. We’re always running on that narrow ledge there about whether you’re being too political. And unfortunately, I can’t say anything as an individual.

"But it must be the political issue of our time."

With files from the Canadian Press

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Last modified: April 25, 2007