Has 'carbon tax' entered the world of the possible?

Dingell floats it; Boucher knocks it down

Posted by David Roberts at 5:07 PM on 21 Jun 2007

Hmm? What's all this now? John Dingell is floating the possibility of a carbon tax? From CongressNow (sub. rqd.):

Rep. Rick Boucher (D-Va.), who will play a key role in crafting the House version of comprehensive climate change legislation, on Wednesday night downplayed speculation that the House bill could include some form of a tax on carbon dioxide emissions.

Boucher, who chairs the House Energy and Commerce energy and air quality subcommittee, last night said that no decisions have been made about a carbon tax, despite comments by House Energy and Commerce Chairman John Dingell (D-Mich.) yesterday that a carbon emissions "fee" may be necessary to affect climate change in addition to a cap-and-trade scheme.

"We're going to have a discussion about exactly what that means," Boucher told reporters last night when asked about Dingell's remarks. "But cap-and-trade is probably the operating principle here. We have not made a final decision about any of this at this point, but a carbon tax frankly does not work for us."

Dingell yesterday suggested that carbon fees could complement a cap-and-trade scheme, in which companies buy or trade pollution credits to meet a government-mandated cap on emissions.

"My own judgment is that we are going to adopt a cap-and-trade system and some form of carbon emission fee to achieve the reductions we need," Dingell said when discussing climate change legislation he intends to bring up in September.

But Boucher said a carbon tax would not guarantee carbon dioxide reductions because many emitters would simply consider the tax a cost of doing business and continue to emit. "If you're looking for certainty with the level of emission reductions, you have to have some sort of regulatory approach," he said.

Um, well, a) not to contradict Mr. Boucher, but I believe the economic principle that taxing something discourages it is fairly well established, and b) holy shit Dingell is talking about a carbon tax?!

I'm going to dig into this more tomorrow.

For story: Has 'carbon tax' entered the world of the possible?
10 Comments | Post a Comment

tipping

I think I've seen things tipping that way ... not to say we're there yet.

by odograph at 5:37 PM on 21 Jun 2007

carbon taxes and social unequalty

Carbon taxes will hurt the poor, but will not stop the rich from flying corperate jets.

Charles Barton

by Charles Barton at 5:50 PM on 21 Jun 2007

Well basically

Basically it sounds like he's promoting a ceiling price on carbon trading.

The effect is to bring some long range planning towards carbon reductions.

"Worst comes to worst, we'll pay this much."

-David Ahlport

by GreyFlcn at 5:52 PM on 21 Jun 2007
[ Parent ]

Or basically

Or basically the government would offer a fixed rate price which is higher than the going market price.

Kind of like the "Buy Now" feature on EBay :P

Costs a bit more, but it's a lot more reliable.

-David Ahlport

by GreyFlcn at 5:53 PM on 21 Jun 2007
[ Parent ]

better Still

It is a start and will contribute to the thinking which is environment before profit

by carbet at 11:13 PM on 21 Jun 2007
[ Parent ]

abstract taxes

"Carbon taxes will hurt the poor, but will not stop the rich from flying corperate jets."

I don't think an abstract tax idea (like a "carbon tax") can hurt anyone. It is all in how it is implemented.

If it was implemented as a per gallon tax on fuel types, for instance, it would be relatively easy to target jets.

by odograph at 5:50 AM on 22 Jun 2007

C taxes : progressive or regressive?

Raw Carbon taxes are regressive - while the rich use more energy (and pollute more...), the poor would have a harder time reducing the percentage of their costs that go to energy.

That said, what the government actually does with the money matters greatly. What if the government kept no money for "itself" but instead gave every taxpayer back an equal Carbon return. Then the poor would actually make money off the system - but still have the incentive to reduce their emissions.

http://www.FairPriceEnergy.com for more...

by Bikechess at 10:08 AM on 22 Jun 2007

adjustment

Isn't the argument that "the poor have already adjusted" a good one?

The poor are not the cash-strapped SUV drivers. Those are middle-class types making a gambit for higher social position through consumption.

What we want are taxes that encourage the great bulk of the middle class to give that up.

In that sense, the rich-vs-poor thing is a false dichotomy.

by odograph at 10:16 AM on 22 Jun 2007

regressive taxation verses luxury tax and mandates

Carbon taxes are inevitably regressive.

Tax engine power and displacement. Tax large homes. Tax business Jets. Tax heated swimming pools.

Mandate gas milage. Mandate plug in hybreds. Mandate truck milage performance. Mandate plug in hybred trucks.

Charles Barton

by Charles Barton at 12:35 PM on 22 Jun 2007

A Revenue-neutral Carbon Tax is Efficient

Impose taxes on polluting commodities (cars, heavy appliances, products requiring a lot of energy to produce, etc) and at the same time reduce taxes on non-polluting commodities (bed sheets, food items). This not only controls carbon dioxide emission, but also makes sure that consumers do not pay additional tax money as a whole.

(Perhaps the Federal government can collect the pollution tax and redistribute the tax money to different states so that the sales tax rates in each state can be reduced! Or each state changes their sales tax system so that polluting products are charged higher sales tax rates whereas non-polluting products are charged lower sales tax rates.)

This is the idea of the so-called "revenue-neutrality" in economics!

Oftentimes the tax incidence falls on both the consumers and producers. The result is, consumers of polluting commodities will be paying higher taxes, but consumers of non-polluting commodities will be paying lower taxes. Producers of polluting commodities will be paying higher taxes if they do not attempt to invent new technologies to fight pollution. This gives them some incentives to improve to become "non-polluting" producers.

WIN-WIN!

freehk.org | chinasick.blogspot.com | noolympics.blogspot.com

by noolympics at 10:55 PM on 22 Jun 2007

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