Carbon tax percolates through U.S. political system – Washington state representative introduces Managed Carbon Price Act

By Kevin G. Hall
20 November 2012 WASHINGTON (McClatchy Newspapers) – The president downplays it. Insiders insist it doesn’t stand a chance. Yet as negotiations between the Obama administration and Congress take form over a deal on taxes and budgets, the idea of a carbon tax is discussed with greater frequency. Oddly enough, there’s no high-profile leader out there championing a carbon tax, yet it’s the subject of reports, conferences and a flurry of maneuvers by groups for and against it. “We would never propose a carbon tax, and have no intention of proposing one,” White House Press Secretary Jay Carney said. A day earlier, President Barack Obama was asked during a White House news conference about the prospects for a carbon tax to address climate change. The president outlined a number of steps his team had taken to lower carbon emissions, but said there was no consensus for a tax on carbon. “That I’m pretty certain of. And, look, we’re still trying to debate whether we can just make sure that middle-class families don’t get a tax hike. Let’s see if we can resolve that. That should be easy. This one is hard, but it’s important because one of the things that we don’t always factor in are the costs involved in these natural disasters,” Obama said. It was music to the ears of oil refiners. “I applaud the president for recognizing that now is not the time for a new, regressive carbon tax that will hamper the nation’s ability to get the economy back on track,” Charles Drevna, the president of the American Fuel & Petrochemical Manufacturers, said in a statement. Even with no one formally proposing a carbon tax and the leader of the free world opposing it right now, the group Americans for Prosperity, which advocates limited government, issued a statement boasting that the entire Republican leadership of the House of Representatives had signed its pledge to “oppose any legislation relating to climate change that includes a net increase in government revenue.” Also undaunted by the lack of any leader pitching a carbon tax, the environmental group Green For All issued a statement from CEO Phaedra Ellis-Lamkins that sounded as if a carbon tax were now inevitable. “Yes, polluters will fight a carbon tax tooth and nail, just like tobacco companies raged against cigarette taxes. But far from costing jobs, a carbon tax will provide a net benefit to our economy,” she said. […]

Carbon tax: The idea no leader proposes but that won’t die

By BRIANNA EHLEY
20 November 2012

(The Fiscal Times) – The devastating aftermath of Hurricane Sandy has breathed new life into the discussion of climate change and has revived interest in an old idea for a carbon tax. Advocates say the tax would discourage the use of fossil fuels and generate revenue to reduce the deficit or help finance infrastructure projects to minimize damage from future storms. Opponents of the tax, including Carol Raulston, senior vice president of communications for the National Mining Association, called the carbon tax “very regressive.” She said it would hurt low-income families “because lower income people spend more of their disposable income on energy, and since the carbon tax would likely be rolled into the price, energy costs would rise.” For example, if the U.S. imposed a carbon tax of $27 per metric ton of carbon, the average household could pay an extra $425 a year, according to the Congressional Budget Office. Not since former President Bill Clinton tried unsuccessfully in 1993 to push a general tax on all energy forms as part of a broader deficit reduction plan have policy makers and experts given serious thought to levying a tax on oil, gasoline and other fossil fuels that emit carbon into the atmosphere. But the revived concern about the connection between carbon emissions by manufacturing plants, refineries and automobiles and global warming has spurred talk again – both on the left and right — about considering a carbon tax as part of an overhaul of the federal tax code next year. “I think the impossible may be moving to the inevitable without ever passing through the probable,” former conservative Republican Rep. Bob Inglis of South Carolina told the Associated Press earlier this month. Environmental advocates including former Vice President Al Gore have also been pushing a carbon tax as a way to bring in new revenue to narrow the deficit, while attempting to reduce carbon dioxide emissions which many scientists have linked to extreme weather, like Hurricane Sandy. “We can back away from the fiscal cliff and the climate cliff at the same time,” Gore told The Guardian. For his part, President Obama does not intend to propose a carbon tax, but indicated at his White House news conference last Thursday he would not stand in the way of one if Congress were to take the lead and approve it. “I am a firm believer that climate change is real, that it is impacted by human behavior and carbon emissions,” he said. “As a consequence, I think we’ve got an obligation to future generations to do something about it.” […] For the time being, there is one piece of revenue-neutral carbon tax legislation floating around Washington. Last August, Rep. Jim McDermott, a Washington state Democrat and senior member of the Ways and Means Committee, introduced the Managed Carbon Price Act (MCP). McDermott’s bill would require coal, oil and natural gas producers to purchase permits from the Secretary of the Treasury to emit carbon dioxide – a major contributor to climate change. The permit prices set by the government would increase every five years. The MCP aims to reduce carbon dioxide emissions by 80 percent within 42 years based on 2005 levels. Of the revenue generated from the permits, 75 percent would be rebated to the public to compensate them for price increases, while 25 percent would go toward deficit reduction. “We can no longer ignore the climate and revenue problems we have in this country, and a well-crafted carbon tax can help address both issues in a way that helps the economy and ensures meaningful emissions reductions,” McDermott told The Fiscal Times. He added that he put the proposal forward right before August recess as a way to “spark discussion and awareness of a carbon tax, so that we have the best policy ready when Congress finally takes up tax reform.” A Congressional Research Service study released on the heels of McDermott’s bill in September found that revenue generated by a fee of $20 per ton of carbon could cut the national deficit in half over ten years. […]

Carbon Tax: Two Problems Solved for the Price of One