In its just released Policy Options for Reducing CO2 Emissions, the non-partisan Congressional Budget Office confirms the superiority of carbon taxes over various types of cap-and-trade schemes. The CBO concludes that:
A tax on emissions would be the most efficient incentive-based option for reducing emissions and could be relatively easy to implement. If it was coordinated among major emitting countries, it would help minimize the cost of achieving a global target for emissions by providing consistent incentives for reducing emissions around the world. If other major nations used cap-and-trade programs rather than taxes on emissions, a U.S. tax could still provide roughly comparable incentives for emission reductions if the tax rate each year was set to equal the expected price of allowances under those programs.
Responding to interest in cap-and-trade programs, the CBO study "explores ways in which policymakers could preserve the structure of a cap-and-trade program but achieve some of the efficiency advantages of a tax." In other words, the CBO recognizes that a carbon tax is the "gold standard" and then tries to figure out how to reduce the disadvantages of cap-and-trade.
If Congress in its wisdom decides to approve a cap-and-trade program, it should make that program as similar as possible to the carbon tax "gold standard." But why settle for second best?
David Ocampo G. says
Obstacles facing the Carbon Tax are overwhelmingly image-based: "No New Taxes" has enthralled more than the Gullible Right. So far, it seems to me, the Carbon Tax Center has wisely stuck to a nonpartisan position, as there is no gain in alienating potential allies across the Red-Blue divide (our country has already suffered more than enough from this alienation). However, our fair nation’s tax "system" (so complex, maybe I should write "systems") is so far out of kilter and counterproductive that, apart from nonpartisanship, massive reform is quite imprescindible, and this will unavoidably involve partisanship. For example, it is almost a half-century since Treasury Secretary George Humphrey warned that ever-increasing deficits could give us "a depression that will curl your hair." (Never mind that he favored taxing the many for the benefit of those who deserve the benefits.) AND THUS, I suggest we champion comprehensive tax reform as a partisan issue AND IN THE MEANWHILE champion the Carbon Tax.
David Ocampo G. says
Separately from the above post, I would like to know what folks think of referring to the CTC’s position on the Carbon Tax as the "Redistributed Carbon Tax". It might soften the knee-jerk anti-tax reaction without playing semantic games with the "Tax" work.
Dean Weichmann says
I just visited the Obama website. It has a form for submiting your ideas to him. I suggest taking a look and send a suggestion for a carbon tax shift.
It is amazing that something as sensible as a carbon tax is so feared in Washington because it is called a tax. To provide political cover for the cowardly politicians who might otherwise consider implementing it, the word “tax” needs to be removed from the concept of “Carbon Tax”. Perhaps “Carbon Revenue Shift” or “Carbon Emissions Fee” or maybe something such as “Atmosphere Pollution Charge”. As the Repubs know well, he who defines the terms of the debate controls the debate.
Free Travel says
in life it is generally termed that nothing is free and there is no such thing as a free lunchyet this carbon tax boondoggle has turned into little more than yet another tax grab under the table It is true that if consumers of various good pay the real price and costs involved their decisions may be more rational and less wasteful as say example in suvsYet for all of these costs and concerns the increased price of petrol in Europe , asia and North America has influenced buying patterns more than any of the bureaucratic measures
Budgeting Tips says
Carbon taxes are the wave of the future. It would be very helpful in the reduction of emissions around the world and will have a significant impact in the fight to reduce global warming.