This Q&A is from an interview with Grist magazine, published July 30. While Obama’s positive words about a carbon tax are encouraging, shouldn’t his next step be to ditch the substitute and go for the real thing?
Q. Do you believe that we need a carbon tax in addition to a cap-and-trade program?
A. I believe that, depending on how it is designed, a carbon tax accomplishes much of the same thing that a cap-and-trade program accomplishes. The danger in a cap-and-trade system is that the permits to emit greenhouse gases are given away for free as opposed to priced at auction. One of the mistakes the Europeans made in setting up a cap-and-trade system was to give too many of those permits away. So as I roll out my proposals for a cap-and-trade system, I will price permits so that it has much of the same effect as a carbon tax. [Emphasis added]
David Collins says
I like that Obama looks positively upon the carbon tax idea. That he does not come out in favor of it is quite okay at this moment. Given that in this math-challenged day and age "tax" is a four-letter word, I would not expect him to propose a tax now. He has already had some trouble because of overly truth-based comments.
Remember the CARTER KISS MY GAS bumper stickers? What could be a deadlier "Third Rail" than a combination of TAX and raising gasoline prices at the pump? This is why we need the Carbon Tax Center, and say a Hail Mary for the Pigou Club, too.
I agree with David. In order for leaders to promote a carbon tax we have to develop mass support to give them a mandate against entrenched interests. Don’t knock on your candidate’s door, knock on your neighbor’s.
James Handley says
Obama, Clinton and McCain are all co-sponsors of the Lieberman-Warner cap ‘n trade bill which gives away most of the permits to the historic polluters. Clinton introduced an amendment to auction the permits– it got one vote. Hers.
One of the tricks for selling cap ‘n trade is to give away permits and to over-allocate them so the effect is not really a cap until later when they start to "retire" some of the permits, which drives prices up. California, tried a cap n’ trade system for smog emissions (RECLAIM) in the LA basin. The price went too high during their electricity crunch, so they just un-capped it and ultimately, price volatility has essentially killed the program. The EU’s carbon trading program is also plagued with price spikes (and has acheived no net reductions yet). And the northeastern states are still struggling to implement their Regional Greenhouse Gas Initiative. The initial allocation of permits is nothing short of a food fight and once the traders and permit holders have vested interests we’ll have to buy them out to switch to a carbon tax.
My nightmare is that Lieberman or some variation will pass– we’ll wait a decade or so to find that it didn’t reduce emissions, and we’ll seriously harm the economy in the process. A transparent revenue neutral tax could actually be an economic boon if it replaced other distortionary taxes like payroll taxes.
The politicians rarely do the right thing because it’s the right thing. They do it because of organized public pressure. Where’s the movement for a carbon tax? Why won’t ANY of the big environmental groups even talk about carbon taxes?
Friends of the Earth at least says "Fix or Ditch" Lieberman warner – they’d "fix" it by auctioning the permits. But that would be a big, sudden (and probably very unpopular) shift, even if permit prices were very low– because it would drive up fossil fuel prices very suddenly. A gradually-increasing carbon tax would be easier to phase in, would not result in price spikes and would avoid this backlash. It would also minimize the problem of enforcement– permits only are valuable if exceeding them has penalties. Lieberman-Warner can’t be fixed. Ditch it!
We need a movement for carbon taxes– and we’re being shut out by the environmental groups who view carbon taxes as a distraction from their pre-determined agenda of cap ‘n trade (or worse yet, regulations like CAFE standards). Without a citizens’ movement, expect Clinton, Obama and McCain to continue taking the path of least resistance, and another decade of accelerating GHG emissions from the US.
Nader is an ass for not working within the Democratic party and for running another counter-productive campaign. But he deserves credit for having the guts to utter the "T" word (as in Carbon Tax). The others won’t do it until we force the issue into the campaign.
John Burton says
We shold have a poll of voters to see if a "revenue neutral carbon tax" is acceptable.
We shouldnever use the word "carbon Tax" without coupling it with " revenue neutral" and preferably naming the taxes that would be re duced or eliminated with the revenues froma carbon tax.
Yes, have a carbon tax and cap and trade and carbon sesquestion projects. Then the companies can get certified by DOE and get an IRS tax credit for thier carbon project.
WACC Colorado says
So who exactly are we paying this tax to? And why are they deserving of this money?Why should we be paying a tax on what we naturally exhale? I’m all for keeping the planet clean,. but perhaps we should focus more on not dumping millions of tons of toxic waste into the environment rather than taxing everyone for the benfit of global government?Golabl warming is just a scam designed to force everyone to make do with less while all the people promoting the tax fly around in Lear jets (which pollute far more than anything we could ever produce). It’s the biggest ripoff in history under the guise of saving the earrh. Wake up.
It’s sad that people truly buy into this notion of a regulated cap & trade system, or carbon tax. If they feed you the propaganda enough through the media outlets people soon believe what all these "what is published is correct profiteers". You have to look at the bigger picture, yes we do need to take care of mother earth we do have immense emissions of smog and pollutants around the world, but how does taxing us for over an estimated $5.6 trillion dollars help the issue? You can say well it limits and caps carbon on certain nations, but this in turn while exploits others developing countries. Some countries will be shut out as a result to this, ones who are less desirable or have no natural resource. Carbon tax, where does this money go, who benefits, who is accountable and who regulates? You have a pre-determined committee who regulates the worlds energy and production, one step closer to globalisation. The facts is the world goes through cycles and carbon level have been as much as 10x higher than today. The earth has had ice ages more than once, droughts and still regulates itself it is a natural occurance. You have to look at who stands to profit and gain from this, and most of all read something other than mainstream media. Other planets are having warming effects as we speak also, this is due to the sun and the sun also plays a major role on our ice melting here, why don’t they educate you about that? If the body of the U.N controls and regulates our energy,food,media,and constitutional rights what else do we have left? We have ways of regulating CO2 through forestation, regulating emmisions through fines, and machine that can trap and convert CO2 from the air, we also can minipulate the weather to reflect/ or take in the suns rays thus cooling or warming our planet. Here is a study put out that explains this http://www.holmestead.ca/chemtrails/globalwarmingteller.pdfs this study suggest we can create or stop global warming through scattering allumnium particles into the earths stratosphere in lower altitudes. One of the proposals is to scatter perfluorohydrocarbon to help with global warming to prevent warming, but yet they don’t mention perfluorohydrocarbon causes cancer and birth defects according to Dow Cornings MSDS sheet. Don’t be persueded into this prapganda, global warming is a business just like any other which accounts for hundreds of billions of dollars pooring in. To sum it up once globalisation fully occurs your energy, food and way of life will be controled in every aspect brick by brick and slowly implemented to not cause panic. So next time you are driving or looking up at the sky ask yourself why do some contrails not disapate no more look to the sky and wonder why they sit there, and research what chemtrails are and how they play a rold into our global warming and our health issues.
Tim Quinn says
A total transition from income tax to a carbon (& methane & all greenhouse gases) should be studied. It would possibly be a way to rapidly cut greenhouse gases & be politically palatable to a wide range of people. It would require serious study by environmental economists, tax accountants & environmental scientists to devise a way to be equitable & aalso accomplish the twin goals of to low income groups, truckers, farmers & people who live in rural areas, but might appeal not just to environmentalists, but also flat tax Forbes readers & other conservatives, increasing momentum.
Glenn Page says
Obama is intelligent and is appointing intelligent people that apparently appear to be willing to work for the people instead of special interests. The best thing for the country would be a revenue neutral tax. I would have called in a fee charge for dumping pollutants into the environment. Wealthy people dump he most carbon into the air and can afford to pay for damage done. It is obvious it is not just the environment, but also our balance of payment that now needs to be fixed.
The average human exhales almost a ton of carbon dioxide per year. Will we all now have to pay a breathing tax?