The Energy 202: Why Some Climate Activists Are Cooling on a Carbon Tax

by Dino Grandoni (Washington Post) It is one of most popular plans among economists for addressing climate change. Many Democrats have embraced it. Even some Republicans have come around to the idea.

But a carbon tax is increasingly out of favor among left-wing climate activists, who are animating the push for a Green New Deal.

These progressives argue that simply charging a tax on those who emit carbon dioxide and other heat-trapping gases would be too little, too late given the amount of greenhouse gases humans have put into the atmosphere.

“Carbon tax is often treated as a magic bullet,” said Nicole Ghio, the fossil fuels program manager at the environmental group Friends of the Earth. “It’s unrealistic to expect a carbon tax on its own to solve the climate crisis.”

Other environmentalists have begun treating any pricing-carbon plan with outright hostility. More than two dozen far-left green groups, led by the Food & Water Watch, wrote a letter to House Democrats last year deriding a carbon tax as a “license to pollute.”

Their worry is that the burden of paying such a tax would be borne by the poor not only through higher prices for food and fuel, but by proximity to polluters that tend to build refineries and other facilities near low-income and minority neighborhoods.

In response, some carbon-tax proponents in Congress acknowledge that a such tax policy ought to be a piece of a bigger climate package.

“There is no silver bullet,” said Brian Schatz (D-Hawaii), who recently introduced his own carbon-tax proposal, “but there is a silver buckshot.”

Notably, any mention of carbon pricing was missing from the Green New Deal resolution introduced this year by Rep. Alexandria Ocasio-Cortez (D-N.Y.).

But a number of economists argue that a carbon tax, or something similar, is the most economically efficient way of spurring companies to invest in low-carbon technology and, if designed correctly, spurring foreign nations to rein in their own emissions.

Placing a price on carbon can take several forms. Under a carbon tax, sometimes given the friendlier moniker of a carbon “fee,” polluters pay the government a certain price for each pound of carbon dioxide they put into the atmosphere. Depending on the plan, the revenue raised is used either to fund government programs or simply is sent back directly to taxpayers.

Alternatively, under a cap-and-trade plan, such as the one congressional Democrats and President Barack Obama tried and failed to institute in 2009, regulators set up a market where companies can buy and sell credits permitting them to release carbon into the atmosphere.

A price on carbon does not do much to incentivize the owners of rental apartments, for example, to improve the energy efficiency of their buildings if tenants are paying their own utility bills.

If such a landlord made some improvement, like installing more efficient air conditioners, he would be saving money for his renters — not himself.

She (Sunrise Movement Executive Director Varshini Prakash) added that although she could support including a carbon tax as part of a broader climate package, “it is just completely unviable to say that that kind of policy is going to be our silver-bullet solution.”

Implementing such a change to the tax code can be politically explosive, too. Protests erupted in France last year over a plan to raise already high taxes on diesel and gasoline in an effort to wean motorists off petroleum products.

This year, Rep. Francis Rooney (R-Fla.) joined with more than 30 Democrats to introduce carbon-fee legislation that they projected would cut greenhouse gas emissions 90 percent by the middle of the century.

And Schatz and Sheldon Whitehouse (D-R.I.) found two new Democratic co-sponsors for their carbon-fee proposal — Martin Heinrich of New Mexico and Kirsten Gillibrand of New York — when they reintroduced it in April. READ MORE

Excerpt from Politico's Morning Energy: Four former EPA administrators representing both Republican and Democratic administrations will testify today (June 10, 2019) on the agency's management and policy challenges.

Probably the most eye-catching is (George H.W. Bush administration's William) Reilly's suggestion that Congress impose an "impactful carbon tax" that does not revoke EPA's authority to regulate greenhouse gases, since giving up that power would amount to "surrender by having us lay down vital armaments that have played the key role in the 50 year restoration of America's environment." Thomas calls on Congress to provide "clearer direction" to EPA on climate change. And both (George W. Bush administration's Christine Todd) Whitman and (Barack Obama administration's Gina) McCarthy will urge aggressive congressional oversight, particularly on climate change. READ MORE