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Call to Action for a Truly Sustainable Renewable Future
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-Include high octane/high ethanol Regular Grade fuel in EPA Tier 3 regulations.
-Use a dedicated, self-reducing non-renewable carbon user fee to fund renewable energy R&D.
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A Carbon Tax by Any Other Name Would Smell “Tax”

Submitted by on November 13, 2017 – 10:41 amNo Comment

by Richard Gilmore (Biofuels Digest/GIC Group)  … The carbon tax alliance is led by prominent Republicans along with some fence sitting Dems and their respective linesmen from public policy think tanks. While seemingly counter-intuitive in light of the Administration’s rejection of any causal links between increases in carbon or greenhouse gas (GHG) emissions and climate change, the enduring interest in a carbon tax coincidentally could very well figure into the drive for tax reform before Congress. In other words, you don’t have to believe in climate change to latch on to the benefits of a carbon tax as a heretofore untapped source of public revenue.   Then, presumably, corporate and individual tax rates could be cut, the unpopular border adjustment tax officially abandoned, and Trump’s budget kept at non-inflationary levels. In 2013, the non-partisan Congressional Budget Office estimated that a modest tax of $20 per ton of CO2 could generate 1.2 trillion dollars over a decade. Since then, analysts have projected higher carbon tax rate scenarios with greater benefits to lower income families.

Arguably companies are doing more today through shadow pricing of carbon– internal pricing of the costs of their carbon inputs–than they would be fiscally incentivized to do under a new carbon tax regime. Based on ample precedent, the tax could have the perverse effect of raising fossil fuel prices without dampening demand. After all, conservative carbon tax boosters maintain that it is the best strategy to preserve the free workings of the market; hence, no prohibition is placed on passing the tax on through the value chain or on regulatory curbs on sources of carbon emissions.

Now the best strategy to reduce GHG is a market solution. Leave it to industry to cost carbon in their own production. They don’t need any other incentive than the fact that the highest growth markets are the “green” markets so if they don’t go green, they will be walking away from business opportunities.

Far from a quick fix, the earlier default solution of trading carbon credits on futures exchanges has not done much when it comes to reducing emissions with, perhaps, the exception of California.

And what about trying some of the newer futures contracts for commodities that measure carbon reductions in crops and in food, feed and biofuel products. The reductions, written into each futures contract, would be certified and traded at a higher value than the standard futures contract.

The next step for CPC is a trial protocol to test the extent of their savings from cutting back on inputs like nitrogen fertilizer and then, selling the crop priced under the new CPC contract at a likely premium.  READ MORE

 

It’s Time for a Non-Renewable Carbon User Fee for Fuels — Press Release (Advanced Biofuels USA)

 

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