Conservative and progressive policy wonks agree: a carbon tax is the most promising of all tools to fight climate change. Such a tax would spur investments in green energy and encourage motorists to buy more electric cars. It would minimize the role of regulatory bureaucrats and maximize that of markets. What is not to love about a carbon tax?
The sticking point is what to do with the billions of dollars of revenues such a tax would generate. Conservatives favor using the money for a revenue-neutral tax swap. Lower taxes on capital would encourage investment, lower payroll taxes would encourage welfare recipients to take jobs, lower sales taxes would promote commerce. Progressives favor using the revenue for a combination of green investment and aid to low-income families. But if your overriding goal is to combat climate change, it seems there ought to be some revenue distribution formula that would build a winning coalition.
But maybe not. Washington State voters have now rejected both approaches by wide margins. A 2016 initiative, I-732 would have used carbon tax revenues to cut sales taxes and give tax relief to low-income families. It lost by a 59 to 41 margin. The 2018 version, I-1631, took the opposite tack, proposing fund investments in clean energy and healthy forests, with a little for low-income families and healthy communities. It was defeated 56 to 44.
Where to go from here? Can further tinkering with revenue distribution push a carbon tax over the top? For example, the Market Choice Act, submitted this year by two Republican House members, proposed using carbon tax revenues to replace the federal gasoline tax and fund infrastructure. Fear of higher gasoline prices by voters in the wide-open spaces of Eastern Washington helped defeat I-1631. Or will we have to wait for more hurricanes and wildfires to wake voters up to the risks of climate change?
One thing is sure: As David Roberts wrote in an analysis of the I-732 debacle, we have seen the future of climate politics played out in Washington State, and it is not pretty.
The best policy… and the one that will likely be implemented at the Federal level is called Fee and Dividend (“F&D”), aka Carbon Dividends Plan (“CDP”). Under F&D/CDP, a rising… Read more »
Almost completely agree with Dan. Except once this concept is implemented, the fee will actually go up faster because the majority will make money on it. That’s a GOOD thing!!
I agree with Dan Miller, MIke Shatzkin, et al who recommend a “Fee and Dividend”, as promoted by the Citizens Climate Lobby, as the most likely to be effective and… Read more »
Miller, Schatzkin, Gremban and others point to the CDL “fee and dividend” plan as their favored option. I agree, the CDL approach has much political support and inherent merit. However,… Read more »
Ed: While F&D is certainly anti-regressive and helps address the problem of income inequality, that is not its major purpose. F&D places a tax on CO2 use and it turns… Read more »
Very simple! Stop trying to control the money. Carbon fee and dividend! Refund the money in equal shares to every taxpayer. How could that alternative be entirely left out of… Read more »
The carbon tax in Washington State was viewed as pork-barrel politics to send money to the favorite government-sponsored programs of the advocates. The public will take carbon taxes seriously when they are not… Read more »
This topic is based on a false premise. The premise is that the conservative and progressive policy wonks are correct in their belief that it is appropriate for the government… Read more »
The problem is that the climate establishment is losing credibility. Historical data gets worse the further back in time you go, the models over predict the impact of increasing CO2… Read more »
Bill: I have no idea what you are referring to. Models don’t over predict impacts of CO2 emissions. Climate impacts are accelerating. The probability of an Extremely Hot Summer (3+… Read more »
Dan, you are a one trick pony. My comment was in support of a gasoline tax and nothing in it said wait and see. You ignore the decline in CO2… Read more »
Global CO2 Emissions:
2007: 31.13 gigatons
2013: 35.84 gigatons
https://ourworldindata.org/co2-and-other-greenhouse-gas-emissions
The discussion is about US actions. When I cite something that conflicts with your preconceived views, you simply go to some other assertion. In this case, global emissions. US emissions… Read more »
Bill (re: your 4:14pm final comment): As shown in the CCL REMI report, we can cut emissions in half while creating millions of jobs and growing GDP by $1.4 trillion.… Read more »
Do tell us where to find that “extensive documentation”. Here is NASA information. https://climate.nasa.gov/ The info has real numbers.. There is a nice global picture that turns color according to… Read more »
Look at these two sources–THE USE AND MISUSE OF MODELS FOR CLIMATE POLICY *Robert S. Pindyck, Massachusetts Institute of Technology and U.S. House Committee on Science, Space & Technology Testimony of John… Read more »
Bill: The only thing that Mother Nature cares about is global emissions. But it’s great that the US has theoretically reduced CO2 emissions, even though it came about by increasing… Read more »
Dan, this is the last comment I plan to make on your comments. You should rely on actual statements and not put so much emphasis on assumptions. If you think… Read more »
I support the concept of carbon taxes as an important policy tool to address global warming by incentivizing the adoption of fossil fuel alternatives and development of clean-energy technologies as… Read more »
While it would be wonderful if someone could wave a magic wand and have all countries agree to mandatory emissions reductions, it hasn’t happened for 30 years and I don’t… Read more »
Dan, You are arguing that the U.S., China, and the European Union will get together and institute common carbon taxes and that they will all institute border adjustment duties on… Read more »
The EU Emissions Trading Scheme (ETS) has been in place for many years. China is setting up a nationwide ETS-like system, which is running regionally now. The US has nothing… Read more »
Dan, Henry: I have enjoyed your back-and-forth about border carbon adjustments (BCAs). I agree that they are conceptually a good idea but that they raise some thorny implementation problem. You,… Read more »
Ed: My understanding is that a border adjustment tariff is allowed under WTO as long as you have such a tax on your own products (which we would). https://www.scribd.com/document/155956625/Changing-Climate-for-Carbon-Taxes-Who-s-Afraid-of-the-WTO “Hillman… Read more »
Ed, Dan: I read Ed’s referenced recent paper by Adele Morris discussing issues related to border carbon adjustments for implementing carbon tax policies (thanks for suggesting that Ed). I am… Read more »
Henry: It’s not one or the other, it’s both. F&D is estimated to bring emissions down by about half in 20 years, but we still need to eliminate the other… Read more »
I took the trouble to read through one and to skim the second resource that Bill O’Keefe recommended. While I am not a statistician of any kind, I saw nothing… Read more »
Jane — Thanks to your input and your support for carbon taxes. You say, however, that you “also think that now that the prices of onshore wind and rural solar… Read more »
Oh Dear … “Encourage” and “Discourage” and words this English major doesn’t find strong enough for where we are today. Rural solar and onshore wind are leading the way as… Read more »
Jane: I am with you on the need to address perverse incentives in current utility regulation. With regard to agriculture, yes, it is a great idea to make agriculture greener,… Read more »
Ed, I have not really paid attention to the agricultural issues but lately people seem to be exploring the possibilities. The new study I red about just the other day… Read more »
Bill O’Keefe: Recent emissions declines are due to market forces: the switch from coal to less expensive natural gas generation. However, this past year emissions reversed course and increased, indicating… Read more »
Need to reduce CO2 emissions from natural gas combustion? http://www.SidelSystems.com Want to reduce CO2 emissions from combusted coal? http://www.SidelGlobal.com There is also heat energy in these exhaust streams that need… Read more »