Comments on: Sprint vs. Marathon — A New Frame for Cap vs. Tax

By: Carbon Tax Center Sprint vs Marathon A New Frame for Cap vs Tax | Portable Greenhouse

Mon, 01 Jun 2009 11:29:10 +0000

[...] Carbon Tax Center Sprint vs Marathon A New Frame for Cap vs Tax Posted by root 17 minutes ago (http://www.carbontax.org) Because reducing greenhouse gas emissions is more like a marathon than a sprint the cost of cutting emissions tends to go up comment by james handley april 14 2008 5 00 pm powered by wordpress designed by nick grossman Discuss | Bury | News | Carbon Tax Center Sprint vs Marathon A New Frame for Cap vs Tax [...]

By: Carbon Tax Center Sprint vs Marathon A New Frame for Cap vs Tax | Portable Greenhouse

Mon, 01 Jun 2009 10:18:55 +0000

[...] Carbon Tax Center Sprint vs Marathon A New Frame for Cap vs Tax Posted by root 14 minutes ago (http://www.carbontax.org) Because reducing greenhouse gas emissions is more like a marathon than a sprint the cost of cutting emissions tends to go up comment by james handley april 14 2008 5 00 pm powered by wordpress designed by nick grossman Discuss | Bury | News | Carbon Tax Center Sprint vs Marathon A New Frame for Cap vs Tax [...]

By: Daniel Rosenblum

Daniel Rosenblum — Mon, 05 May 2008 18:57:49 +0000

Lorna – Cap-and-trade does not require that a specific plant reduce it’s own emissions. A plant owner can either reduce plant emissions or buy allowances in the marketplace. As long as there are relatively inexpensive allowances available on the market, for example through offsets or a poorly designed program, there will be little pressure to shut down individual plants. One example of a poorly designed program would be cap-and-trade with a relatively low safety-valve, such that the market price of an allowance would not exceed a certain level. On the other hand, a cap-and-trade program with a low enough cap, without a safety-valve and with 100% allocation of allowances would eventually provide a powerful incentive to shut down inefficient coal-fired plants. I’m not betting on such a cap-and-trade program coming out of Congress. At the regional level, RGGI doesn’t have a tight enough cap and it has a safety-valve, so it won’t be enough to force coal plant closings.

By: Charles Komanoff

Charles Komanoff — Mon, 05 May 2008 18:22:09 +0000

Lorna (Comment #10) — Good questions. Re RGGI, you might try their Web site, http://www.rggi.org. Ditto, EDF’s and NRDC’s Web sites re their cap-and-trade proposals. For what it’s worth, it would take 40 years of 4% annual reductions to reach an 80% reduction from 2010 levels by 2050 (which is what EDF/NRDC say is their goal). If you find out anything, please report back in this space! Thanks. — CK, co-director, CTC.

By: Lorna Salzman

Lorna Salzman — Sun, 04 May 2008 23:05:17 +0000

Do any of the cap and trade proposals, including RGGI, have a steady annual reduction in the allowable emissions of each plant? I have not gotten a clear answer on this. If in fact there are proposals that would reduce the allowable emissions by a fixed percentage each year, say 5%, then we have, in effect, a program for phasing out fossil fuel power plants. But everything else we read and hear suggests otherwise: that no utility, especially the coal utilities, have any intention of phasing out operating plants before their full lifetime. So I would appreciate some clarity on this issue. Also, does anyone have any ballpark estimates on the middleman profits being made and to be made on carbon trading? And who is getting them?

By: Joe Libertelli

Joe Libertelli — Wed, 30 Apr 2008 00:51:46 +0000

Strikes me that a carbon tax is to a cap and trade system as single-payer universal health care is to the wacky, convoluted health care systems being proposed by Clinton and Obama and others that attempt to cover more people, while still cutting in the insurance industry. Cap and trade and the typical health care expansion proposals are both bureaucratic and inefficient – apparently intentionally cutting in vested interests in order to gain their political support.

By: James Handley

James Handley — Tue, 15 Apr 2008 01:19:21 +0000

You’re right David, even with progressivity and revenue-neutrality to offset the income effects, some individuals and industries will be hurt by a carbon tax. Oil-drilling, highway-building, trucking for example. But at the same time, new, green industries, like building wind farms, transit systems, retrofitting houses and buildings for energy efficiency will be spurred. The net effect will be more jobs and more income. Assistance (training in the new green jobs, for example) to those displaced by the decline of high-carbon industry must be a part of any climate legislation.

You’re also right about the politics of selling the idea — we have work to do. But a per capita carbon "dividend" or reduction in payroll or income taxes should be popular.

By: David

David — Mon, 14 Apr 2008 23:39:36 +0000

Excellent article! While I think it ultimately would be the best solution, I’m wondering how you would be able to address the problem of heavy petroleum users, like farmers, truckers, etc., getting hit the hardest. My understanding from a NY Times op-ed a few days ago, was that this is exactly what killed the BTU tax that Clinton tried to implement 15 years ago. You start making exemptions and pretty soon the legislation looks like swiss cheese, or worse…

By: Sarah

Sarah — Mon, 14 Apr 2008 21:29:36 +0000

Thanks for the excellent article! I just can’t understand why environmental groups aren’t flocking to this simpler, more effective solution. Why would anyone prefer cap-and-trade, with the dead weight of traders, the inefficiency of price spikes, and the regulatory morass needed for enforcement? Let’s go for a single, consistent, simple system where every consumer of energy will have the correct price incentives built in for reducing carbon emissions.

By: James Handley

James Handley — Mon, 14 Apr 2008 21:00:56 +0000

To Mr. Weed’s thoughtful questions, I’d say it’s clear that replacing taxes on wages or income with fees on carbon emissions would create advantages for states or even cities. They’d be attracting jobs, promoting alternative energy and energy conservation.
"Tax Carbon Burning, Not Wage Earning" to paraphrase Gore’s suggestion (in his latest slide show).
Another "revenue-neutral" approach: distribute the funds from a carbon fee equally, per capita. It’s a stimulus: like the $600 checks IRS is issuing (once) to dampen economic recession. But we’d get carbon "dividends" month after month. And it’s progressive: for those whose fuel use is below average, the "dividend" would more than offset the tax on fuel and on "embedded" fossil fuel energy in other products.
A win-win, with no "traders" to game the system, no price spikes to thow off budgets. Much easier (and faster) to set up and enforce than complex cap and trade schemes.