Carbon Tax Center

Pricing carbon efficiently and equitably

Carbon Tax Center
Pricing carbon efficiently and equitably
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Search Results for: cap and trade

Sen. Dodd: "Tax Corporate Carbon"

April 26, 2007 By Charles Komanoff


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.

Filed Under: Carbon Tax

Time for a Carbon Tax

April 14, 2007 By Charles Komanoff

Michael Riordan invited us to publish the following Opinion Piece, which was originally published in the San Francisco Chronicle on March 23, 2007. Michael is the co-author of The Solar Home Book. He teaches the history of science and technology at Stanford University and University of California, Santa Cruz. Thanks, Michael!

Time for a Carbon Tax?

By Michael Riordan

It balms my bleeding liberal heart to witness a conservative president from Texas and a Republican governor of California promoting renewable energy. Also known as alternative energy, it was widely advocated by environmentalists after the 1970s energy crisis and heartily embraced by President Jimmy Carter and Gov. Jerry Brown. But President Bush’s oil-patch friends ridiculed renewable energy as impractical, and it faded from the national agenda during the Reagan years — to be resurrected only recently. Perhaps the time has finally come to revive yet another radical idea: a carbon tax, which charges anyone who burns fossil fuels for the problems that ensue.

Of course, the word "tax" sends shudders across the political spectrum, but it shouldn’t, especially when the only good alternative is another hot-button word, "subsidy."

During the late 1970s, tax credits and other subsidies encouraged ill-considered technologies, such as solar-heating panels on roofs, that didn’t make much economic sense. Some renewable-energy advocates argued that governments should not subsidize any sources of energy — whether fossil fuel, solar, wind, biofuels or nuclear. Just get out of the economic way and let market forces determine the outcome — and penalize detrimental energy sources by taxing them accordingly.

Today, a different dynamic is operating. Global warming, then regarded as a distant possibility, is widely accepted in scientific — and, increasingly, business — circles as a looming threat that we must confront. In the wake of Hurricane Katrina, a majority of the U.S. population regards global warming as fact, caused by human introduction of carbon dioxide into the atmosphere. All of us are contributing by burning fossil fuels, and we are just beginning to witness the terrible consequences.

Thus, a rational course of action is to penalize those who burn fossil fuels — all of us — and use the revenues to implement solutions. This tactic would discourage actions detrimental to the environment and encourage energy alternatives, which could range from energy-efficiency measures to carbon-removal methods to renewable-energy sources.

A carbon tax on our gasoline purchases, for example, would automatically penalize owners of gas-guzzlers while promoting hybrid and flex-fuel automobiles. The average miles-per-gallon of U.S. cars would steadily rise in response to such a measure, as individuals take this added cost into account when making purchases.

The real key to widespread acceptance of a carbon tax, is to put the money directly to use on solving our energy problems — not just pour it into the general fund, where it can be diverted. Carbon taxes could pay for loans or even grants for insulation and double-glazing of windows in older homes, especially in cases where owners cannot afford to make such improvements. They can fund much-needed research and development on ways to capture and remove carbon dioxide or subsidize power companies that begin to take such measures with their emissions. They can support tax credits to homeowners who install solar cells, as California is doing through its Million Solar Roofs program. They can fund much-needed research on converting agricultural waste, wood chips and switchgrass to biofuels, or to solve the knotty problems of fuel-cell automobile engines and compact hydrogen-storage systems.

As Americans consume about 9 million barrels of oil daily for transportation, a dime-per-gallon gas tax thus would yield nearly $14 billion annually for such purposes. This amount does not include taxing coal, oil and natural gas burned in electrical power plants or for heating our homes and office buildings, which would probably add twice that amount.

A small carbon tax applied across the board, wherever fossil fuels are burned, thus would yield more than $50 billion a year to help address global warming. We already do something like this with the gasoline taxes that go directly into highway construction and repair. It is not all that new of an idea.

Spending these funds wisely, of course, will require some kind of responsible governmental decision-making body. Given the politics and corruption that often swirl around large pools of money, this will not be easy. But with openness, vigilance and leadership, it can succeed.

Meanwhile, renewable energy sources would begin to flourish. It would finally become economical to tap the vast supplies of renewable energy that course through our communities daily. Just imagine solar-cell panels on millions of homes converting the sunlight shining on them into thousands of megawatts of electricity fed back into the power grid. And the local construction jobs thus created will be awfully difficult to export to China or India.

Achieving this worthwhile goal cannot happen without courageous political leadership, for few can stomach a new tax. That is why so many politicians, including Sen. Dianne Feinstein, D-Calif., favor a "cap-and-trade" emissions-trading scheme, whereby companies are allowed to emit limited amounts of carbon dioxide, but can trade these allowances like stocks and bonds.

Fortunately, we are beginning to get the needed leadership in California, thanks to an inspired governor working across the aisle with Democrats on energy issues. What better legacy could President Bush leave when he departs from office in two years?

Filed Under: Carbon Tax

A Convenient Tax – Issue #1

April 4, 2007 By Charles Komanoff

(Note: We’ve changed the newsletter’s name. While the “truth” about global climate change may have been inconvenient, the carbon tax for combating it is straightforward, transparent and simple to administer — in a word, convenient! — CK & DR)

Welcome to the first issue of A Convenient Tax, the Carbon Tax Center’s newsletter. It’s been a very successful initial two months. Here are highlights.

Our Successful Launch

In just two short months the Carbon Tax Center (“CTC”) has established a strong presence in Washington DC, New York City, within the environmental community and throughout the Blogosphere. Here’s a quick snapshot of what CTC has accomplished since our Jan. 22 start.

  • Created the first Web site (www.carbontax.org ) devoted to taxing carbon emissions.
  • Formed a working partnership with veteran Washington (DC) environmental advocates who are committed to advancing a carbon tax in the current (110th) Congress and enacting one as soon as possible.
  • Provided technical assistance to legislative staff of a senior House Ways & Means Committee member (and gained a higher tax level in his anticipated carbon tax bill).
  • Raised probing questions about the “cap-and-trade” approach advocated by some large environmental groups and corporations, while maintaining a united front on the necessity of putting a price on carbon emissions,
  • Presented the case for “Carbon Taxes First” to an overflow Capitol Hill briefing organized by the Environmental and Energy Study Institute (EESI), and at other meetings in New York, Washington and Westchester County (NY).
  • Developed a preliminary analysis suggesting that CTC’s proposed 10-year phased-in $370/ton carbon tax (ramped up by $37/ton, the equivalent of a 10c/gallon addition to petroleum prices, each year) could reduce U.S. emissions of carbon dioxide by at least one-third.
  • Shared information and strategy with carbon tax advocates in several dozen states, including developers of carbon tax proposals for Colorado, New York and Washington, DC.

CTC Media Highlights

  • CTC’s comprehensive, accessible web site attracts 100-150 visits a day from across the USA as well as Canada, Europe, Asia and Australia, making www.carbontax.org the #2-ranked site on Google for those searching “carbon tax,” surpassed only by Wikipedia. Note: On April 12 we leapfrogged Wikipedia, making us #1 on Google.
  • Prominent and complimentary coverage of CTC’s launch in the online version of the New York Times in late January, in Times columnist John Tierney’s Science Blog.
  • Time Magazine‘s use of CTC’s estimate of the carbon-reduction impact of a carbon tax in its Global Warming Survival Guide (under solution #5: Pay The Carbon Tax ).
  • Strong presence in online discussions of carbon taxes and cap-and-trade, including repeated mentions of CTC in Gristmill and Slate.
  • Attack on carbon taxing and CTC by climate deniers at Accuracy In Media.

Going Forward

The climate debate “has shifted incredibly quickly,” wrote New York Times economics columnist David Leonhardt this week, and “the political debate now revolves around what … action should be [taken].” The next two years are the crucial period during which competing policies to reduce carbon emissions will be examined for their effectiveness, cost and political viability. CTC’s strategic goals focus on shaping that debate and properly framing the issues by:

  • Working with environmental organizations and other allies to solidify support for the concept of “putting a price on carbon.”
  • Gradually educating opinion leaders, grassroots organizations and decision-makers that while cap-and-trade is also a vehicle to put a price on carbon, carbon taxes are far superior because they provide a more predictable and less volatile price and are transparent, immediate, universal and equitable.

While CTC’s action plan will necessarily remain flexible, we anticipate engaging in the following activities during the next one to two years:

  • Continuing to develop intellectual ammunition on key issues including revenue recycling, tax equity, “co-benefits” of a carbon tax (e.g., for national security), and the potential “bang” for each carbon tax “buck.”
  • Providing technical assistance to opinion leaders, grassroots organizations and decision-makers, including responding to requests for technical information from political campaigns.
  • Assisting local and state-level carbon tax initiatives seeking to build on Boulder’s partial carbon tax adopted last November.
  • Spearheading a sign-on statement by economists and other experts calling a tax on carbon emissions more effective, transparent and equitable than a carbon cap-and-trade regime.
  • Working with a broad coalition of interest groups (labor, environmental, economic justice, national security, etc.) to support carbon taxes through a national sign-on statement and other actions.

That’s how things look at this juncture (April 1, 2007). It’s clear to us that CTC is proving its effectiveness every day. But we can’t continue to play our essential role without your financial help. We heartily thank all of you who have already donated to CTC. We ask carbon tax supporters who are not yet CTC contributors to become so today.

You can contribute to CTC in three ways, of which two are tax-deductible:

  • Tax-deductible: Write a check or money order to ELPC (Environmental Law & Policy Center), writing Carbon Tax Center in the memo line; mail it to ELPC at 35 East Wacker Drive, Suite 1300, Chicago, IL 60601. ELPC is CTC’s fiscal sponsor.
  • Tax-deductible : Make an on-line contribution via Groundspring by clicking on the DONATE NOW box on our website, www.carbontax.org.
  • Not deductible: Write a check or money order to Carbon Tax Center and send it to our New York City mailing address: CTC, 636 Broadway, Room 602, New York, NY 10012.

Just as a carbon tax now will send climate-appropriate price signals to businesses and individuals and help lock in low-carbon investment for the long haul, your financial support today will enable CTC to build on our current successes and chart a growth trajectory. Please be as generous as you can, and please donate today. Thank you.

Sincerely,

Charles Komanoff
Daniel W. Rosenblum

Filed Under: Newsletter

Carbon Tax, not “Peak Oil,” Can Save Climate

March 5, 2007 By Charles Komanoff

"It’s the fifth time to my count that we’ve gone through a period when it seemed the end of oil was near and people were talking about the exhaustion of resources," said Daniel Yergin, author of a Pulitzer Prize- winning history of oil, who cited similar concerns in the 1880s, after both world wars and in the 1970s. "Back then we
were going to fly off the oil mountain. Instead we had a boom and oil went to $10 instead of $100."

That’s from a front-page article, Oil Innovations Pump New Life Into Old Wells, in today’s New York Times. The article uses Chevron’s Kern River oil field near Bakersfield, CA, whose life has been extended by injections of high-pressured steam, as a template for how advancing technology and profit opportunities from today’s higher oil prices are combining to increase recovery rates at oil fields around the world.

Oil_Well.jpgThe bottom line: peak oil will come some day, but not soon enough to avert climate catastrophe. I’ve long maintained that "peak oil" wouldn’t be a climate lifesaver. In my first talk centered on carbon taxing, at the "Philly Beyond Oil" meeting in 2005, I noted that $70 crude would "stimulate conservation, extraction and substitution," and that only the first of this trio (conservation) would be a climate-helper. Quoting the trenchant economics writer Doug Henwood, I cautioned that there’s "no shortcut around political
agitation," which is why Dan Rosenblum and I founded the Carbon Tax Center earlier this year.

The Times article closes by quoting a Chevron engineer: "… peak oil is a moving target [and the supply of] oil is always a function of price and technology." True enough. Our task is to make the use of oil, coal and gas a function of a climate-aware price and technology.

At present, the fuel prices that determine the demand side of the equation include nothing for the climate damage resulting from
burning those fuels, resulting in vast overuse. Moreover, those feedback mechanisms I mentioned in my 2005 talk invariably overshoot the mark, resulting in the kind of wild price swings that Yergin described. These fluctuations drown out underlying movements toward higher prices, frustrating investment in low-carbon alternatives on both the demand and supply sides.

What to do? A tax on carbon fuels will internalize the costs of carbon damage and make manifest today the long-term trajectory of rising carbon-fuel prices. No other policy option — not cap-and-trade, not fuel efficiency standards, not subsidies for renewables — can do that.

Photo: RavenHawk / Flickr 

Filed Under: Carbon Tax, Prices Matter, Technology

Carbon Tax, not "Peak Oil," Can Save Climate

March 5, 2007 By Charles Komanoff

“It’s the fifth time to my count that we’ve gone through a period when it seemed the end of oil was near and people were talking about the exhaustion of resources,” said Daniel Yergin, author of a Pulitzer Prize- winning history of oil, who cited similar concerns in the 1880s, after both world wars and in the 1970s. “Back then we
were going to fly off the oil mountain. Instead we had a boom and oil went to $10 instead of $100.”

That’s from a front-page article, Oil Innovations Pump New Life Into Old Wells, in today’s New York Times. The article uses Chevron’s Kern River oil field near Bakersfield, CA, whose life has been extended by injections of high-pressured steam, as a template for how advancing technology and profit opportunities from today’s higher oil prices are combining to increase recovery rates at oil fields around the world.

Oil_Well.jpgThe bottom line: peak oil will come some day, but not soon enough to avert climate catastrophe. I’ve long maintained that “peak oil” wouldn’t be a climate lifesaver. In my first talk centered on carbon taxing, at the “Philly Beyond Oil” meeting in 2005, I noted that $70 crude would “stimulate conservation, extraction and substitution,” and that only the first of this trio (conservation) would be a climate-helper. Quoting the trenchant economics writer Doug Henwood, I cautioned that there’s “no shortcut around political agitation,” which is why Dan Rosenblum and I founded the Carbon Tax Center earlier this year.

The Times article closes by quoting a Chevron engineer: “peak oil is a moving target [and the supply of] oil is always a function of price and technology.” True enough. Our task is to make the use of oil, coal and gas a function of a climate-aware price and technology.

At present, the fuel prices that determine the demand side of the equation include nothing for the climate damage resulting from burning those fuels, resulting in vast overuse. Moreover, those feedback mechanisms I mentioned in my 2005 talk invariably overshoot the mark, resulting in the kind of wild price swings that Yergin described. These fluctuations drown out underlying movements toward higher prices, frustrating investment in low-carbon alternatives on both the demand and supply sides.

What to do? A tax on carbon fuels will internalize the costs of carbon damage and make manifest today the long-term trajectory of rising carbon-fuel prices. No other policy option – not cap-and-trade, not fuel efficiency standards, not subsidies for renewables – can do that.

Photo: RavenHawk / Flickr

Filed Under: Carbon Tax, Prices Matter, Technology

Congressional Climate Poll — Hold the Pessimism

February 7, 2007 By Charles Komanoff

Washington climate circles are abuzz over a National Journal poll released last weekend suggesting that concern over climate change is waning among Republican House members just as public alarm is mounting.

The Journal, a highly respected print and e-magazine covering politics from Washington, DC, asked Members of Congress, "Do you think it’s been proven beyond a reasonable doubt that the Earth is warming because of man-made problems?" While the number of Democratic members answering No was a gratifyingly low 2%, the same as last April, the share of Republican naysayers rose to 84%, from 77% in April.

Though the Dem-Rep split is noteworthy, the absolute percentages should be viewed with caution. For one thing, the response rates were low: 1 in 7 Republicans, 1 in 8 Democrats. (Hmm, could it be that the more "extreme" Senators and Representatives from either party were more apt to respond, skewing the divisions between the parties?) Second, the poll predated the Feb. 2 release of the IPCC-4 report. The Journal’s questionnaire was sent out Jan. 29 and the answers were received Jan. 29 – Feb. 1, too early to reflect the sobering findings from the report and the extensive media coverage.

The second (and last) poll question concerned solutions: "Which of these actions to reduce global warming could you possibly support?" Respondents could vote Yes or No to six choices, which included measures such as higher CAFE standards and greater spending on alternative fuels.

A carbon cap-and-trade program far outpolled a carbon tax, by 83% to 50% among Democrats and 42% to 3% among Republicans. We regard this, at least in part, as a reflection of the active promotion recently of cap-and-trade and the relative silence from carbon-tax supporters. In addition to the  poll’s unfortunate timing, we wonder if the wording ("A ‘cap-and-trade’ carbon dioxide emissions-reduction program" and "A carbon tax", respectively) inadvertently tilted responses toward cap-and-trade. Perhaps next time National Journal can ask about "An emission-reducing carbon tax" or "A revenue-neutral carbon tax".

We also expect that Congressional understanding of the merits of carbon taxing will increase as a result of efforts by carbon tax supporters who can now benefit from the information on this site.

Filed Under: Carbon Tax, Media

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Quote of Note

Until there are penalties for emitting carbon, clean alternatives will just meet new energy demand. They are not currently displacing ‘fossil fuel use to any great extent’ and will not in the future.”

Robinson Meyer, commenting on three linked articles by the Global Carbon Project, in 5 Big Trends That Increased Earth’s Carbon Pollution, The Atlantic, Dec. 3. The quote is from the project’s article in Nature Climate Change (links are in the Atlantic article).

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