Forbes editor calls for tax increase to fight global warming

Posted by Adam Browning (Guest Contributor) at 8:53 PM on 14 Jun 2006

In a very Forbsian way, of course:

First, get rid of all other energy taxes. And legislation, while we're at it. Then tax carbon. Slowly. Start at a penny a pound, then increase -- let's not get crazy -- a penny a year.

The devil's always in the details.

The link makes you join, so I've pasted it below.

An inconvenient truth, not adequately addressed by Al Gore in his movie, is that environmentalism makes life complicated. If SUVs are bad and wind power is good, then we must levy a tax on gas-guzzlers and hand out tax credits for windmills. Those in the business of selling windmills are very happy with this arrangement (see story by Naazneen Karmali), but in no time our fears of global warming have caused our economy to become littered with subsidies, credits, deductions, tax surcharges, earmarks and research boondoggles. Here's a way to make life simpler: Chuck out all energy legislation, replacing it with a one-sentence statute that levies a tax on carbon emissions. Let's do it big--30 cents a pound. So that people can adjust, start it at 1 cent and increment the tax by a penny a year from now to 2036.

We're talking a lot of revenue--enough, if the full rate were in place today and no one responded with changes in air-conditioning and driving habits, to replace the personal income tax. It would add $1.65 to the price of a gallon of gasoline. It would triple your electric bill if your utility were entirely coal fired. The purpose, though, would be not just to raise revenue but to change behavior. In 30 years' time, coal utilities would get very imaginative about switching to nuclear or finding some way to stuff carbon dioxide down a well hole. You would have long since retired your Suburban.

Now think of the legislative pollution that could be removed. The guzzler tax (up to $7,700) could be repealed; it is, after all, none of the government's business whether I waste gas by driving a big car or by making unnecessary trips to the pharmacy. Repeal mileage regulations (27.5 miles per gallon for cars, 21.6 for pickups). Get rid of the hybrid tax credit (up to $3,400). Forget George Bush's plan to spend $1.2 billion on hydrogen and $150 million on grass clippings.

We could find other employment for the lobbyists who tell us that ethanol is a winner; now, for the very first time, the chemical would succeed or fail on its own carbon merits. We wouldn't need the $2,000 solar credit or the $150 for qualified water heaters or the $50 for advanced circulating fans. We wouldn't need the tax forms for any of these things.

What about all those bureaucrats at the Department of Energy working on renewable energy and energy conservation? They work so very hard, burning the midnight oil. Think of the oil you could save.

For story: Forbes editor calls for tax increase to fight global warming
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Writting my Congressman on the carbon tax

Open Letter To
The Honorable James P McGovern
Third District Massachusetts

Dear Congressman,

I, your constituents, the American people, various non-human species, and the world all look to you, to lead us forward from the energy & climate crisis we now face. We all require a different energy future than the one made by the petroleum industry and the burning of fossil fuels. Wise federal policy and legislation is required. I've attached a recent article from Forbes which outlines a simple solution. I like simplicity. I like this idea. Please consider this, as you formulate a progressive democratic policy, as if we the people really mattered (along with our concerns for our energy future, the environment and all of life).

by arkmundi at 11:54 PM on 14 Jun 2006

A classist tax

My main problem with this type of tax, is it priveledges people who can afford to pay it. Rich people could drive as much as they want, buy gas-guzzling cars, run their ac and heat, etc.

Not that this doesn't already exist to an extent, as the rich have more to spend on whatever they want, but this CO2 tax would only highten any difference between the experiences of a rich American and a poor one.

How about some sort of carbon tax combined with programs that would counteract its downsides, like providing cheaper efficiency programs for people who could not otherwise afford them (cheaper hybrid cars, efficient home heating/cooling, etc).

It's certainly a difficult problem to address: how do you discourage the burning of fossil fuels without hightening class tensions. But it is one we must address.

Diana

by DianaJardine at 9:24 AM on 15 Jun 2006

Yep

"My main problem with this type of tax, is it priveledges people who can afford to pay it"

But as with all taxes it's passed on to consumers.

I think that taking away subsidies for fossil and nuclear power and shifting a portion of it to incentives for individual home and small business owners to install solar, wind, and buy plugin cars would be more effective.

As well as fund programs that help low income families pay their soaring energy costs. The rest of the savings from cutting corporate welfare ought to go to pay down the deficit.

Energy corporations would still pass on the costs of losing the subsidies to consumers though. Better they take the blame, since subsidies artificially lower the cost of fossil and nuclear power, thus making it harder for renewable energy to compete.

http://amazngdrx.blogharbor.com/blog

by amazingdrx at 10:33 AM on 15 Jun 2006

Government profits from fossil fuels

People to whom a steady government cheque is a financial mainstay often speak as if the fossil fuel industry cost them money by taking from the public purse, leaving less for them. Of course that's the opposite of the truth. The tax man recoups, from fossil fuel consumers, the subsidies he gives fossil fuel producers at least tenfold.

That is why speed limits are so little enforced, why as Clark Williams-Derry recently said there are "subtle disincentives to compact development that are embedded in tax and zoning codes", and, indeed, why the subsidies to producers are paid (and why, even if the Forbes proposal doesn't mention them, it would certainly soon cause their cessation: government would no longer profit by paying them).

I suspect nuclear isn't subsidized, certainly not to the extent renewables are, but neither does it pay the taxes the fossil fuels that might otherwise have been burned would have. With each 2.6 gigatonnes of CO2 it keeps out of the atmosphere it also keeps a large amount of oil and gas money out of the public purse. That feels like a subsidy to tax takers, but like a windfall to tax payers.

--- G. R. L. Cowan, former hydrogen fan
Boron: fire without exhaust gas

by GRLCowan at 2:05 PM on 15 Jun 2006

What's "low income"?

How do you define low income? Realistically, given today's energy costs and the resulting increase in most everything we buy on a daily or weekly basis, anything less than 35,000 for a family of four is low income. People at this, or even a bit higher, are soon going to be forced into making the same choices regarding fuel, medicine, food, rent/mortgage, as the typically "low income" family. Wages simply aren't keeping up with the across the board increase in expenses. Sure computers are going down, but how many of us buy a computer every month?

by SMLowry at 4:58 PM on 15 Jun 2006

Enlighten self interest, our best hope.

End all energy subsidies and tax carbon, YES. This is what I have been promoting for years. Is $0.01/lb C the same as $0.03/lb CO2? I think 2 cents per pound increased by 2 cents per year will be required to challenge mass extinction from global warming. If started three years from now then the starting point should be at least 6 cents per pound.

Education and subsidy will not save us. Avoiding cost is enlighten self interest, our best hope. I will vote for this. Forbes is right on!

by sunflower at 9:10 PM on 15 Jun 2006

C at 30 Cents per Pound

Having slept on this, I think the main platform plank should be to abolish the IRS code and tax CO2 at 10 cents per pound (C at 30 cents per pound), adjusted for inflation. Other GHG should be included (with released fossil methane at 20 times the rate). The proceeds can be used for the poor, education, the military, entitlements, military, research, and so on. I hope we have the collective wisdom to do this.

by sunflower at 7:29 AM on 16 Jun 2006

ADVERTISING POLICY

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