Carbon Tax instead of Cap-and-trade?

posted by Becky Ran

In an op-ed in today’s Philadelphia Inquirer, Marshall Saunders of the Citizens Climate Lobby makes a compelling argument for a carbon tax rather than the current convoluted cap and trade proposal currently making its way through Congress. We couldn’t agree more that the current climate change bill is faulty – with 300 (ish) other organizations, RAN just signed on to a letter asking for climate policy that is consistent with climate science (the current bill is not). And why not a carbon tax? Our friend James Hansen has been an outspoken supporter of a carbon tax idea (so have Al Gore and Ralph Nader) – and in many ways, it makes much more sense.

And that’s the beauty of the carbon tax and dividend, which would impose a steadily increasing fee on carbon at the source, whether it be a well, mine, or port of entry. Most of the revenue from the tax would be returned to consumers through payroll or income-tax reductions – a carbon rebate, if you will.

In addition to being more efficient, the carbon tax and dividend are also more effective. An analysis by the Carbon Tax Center predicts that by 2020, the tax would reduce carbon dioxide emissions to 28 percent below 2005 levels. Even if it delivers as promised, the cap-and-trade bill would effect a reduction of only 17 percent by 2020.

One might be tempted to shrug off this difference, given that the cap-and-trade bill requires an 83 percent reduction by 2050. But the problem is that climate change is happening twice as quickly as previously believed, according to an exhaustive study released last spring by the Massachusetts Institute of Technology. Making matters worse are the “amplifying feedbacks” that climate scientist James Hansen has warned of. For example, as rising temperatures melt the tundra in the arctic regions, methane, a powerful greenhouse gas, is released into the air, trapping even more heat.

Instead of having a debate in Congress over what climate policy is most politically possible, perhaps it’s worth shifting the debate to what will really work.