Download Making the case for a revenue-neutral carbon tax

 OPED MAY 12, 2014 Making the case for a revenue-neutral
carbon tax
By Dan Dietrich
A revenue-neutral carbon tax is the best
thing we could do for the American
economy as well as for our climate.
In general, the problem with taxes is
that they discourage people from doing
whatever is taxed. But we want to
discourage people from burning carbonbased fuels. A tax on the carbon put into the
atmosphere by burning fuels such as coal,
oil, and gas would do that.
Revenue-neutral means that the money
we’d collect would be returned to
households instead of becoming part of the
federal budget. In other words, the proposal
is not about growing the government. The
tax would be collected at the mine, at the
well head, or, if we imported the fuels, at the
border. The fee would start small (say, $15
per ton) and then gradually increase each
year (by, say, $10 per ton). At this rate, after
10 years, the price of gas would have risen
only $1.08 per gallon as a result of the
policy.
Why levy such a tax? For two reasons.
The first is to reduce the amount of
carbon dioxide we’re putting into the
atmosphere, so we eventually can reverse
the climate change it’s causing. According
to a report from the Intergovernmental Panel
on Climate Change, climate change is
causing heat waves and droughts, leading to
massive forest fires. It’s reducing global
crop yields, leading to widespread hunger
and even starvation. It’s enabling the spread
of Lyme disease, West Nile virus, hantavirus
and dengue fever.
It’s also raising sea levels, leading to
flooding of low-lying areas, including some
in the U.S. According to the International
Organization for Migration, by 2050 this
may make as many as one billion people
climate refugees, leading to more terrorism
and wars.
People are already dying because of
climate change.
The second reason to implement a
revenue-neutral carbon tax is because it
would benefit our economy. It would
encourage investors to support the
development of clean energy technology. It
also would encourage people to waste less
energy and use more clean energy. In
addition, it would provide more jobs
because clean energy is more labor intensive
than petroleum refining.
The world’s carbon-based energy era is
ending. We’re entering the era of clean
energy. Countries such as Germany, Sweden
and China are already promoting the
development of clean energy technology,
and we’re buying that technology from them
— technology we in America could develop
and manufacture if our entrepreneurs were
spurred to do that by a carbon tax.
Regional Economic Models Inc.
recently studied the economic impact that a
revenue-neutral carbon tax would have on
the state of California over 20 years. It
found that if the state had such a tax, after
20 years Californians would pay $1.80 per
gallon more for gas because of it, while
decreasing its carbon dioxide emissions by
31 percent.
The study also found the tax would
increase Californians’ personal income by
$16 billion and provide around 300,000 new
jobs.
Conservative and progressive
economists alike support putting a price on
carbon, as do most climate scientists. It’s the
best way to improve our economy while
reducing the damage we’re doing to our
climate.
Urge U.S. Sens. Ron Johnson and
Tammy Baldwin as well as U.S. Reps. Sean
Duffy and Ron Kind to call for hearings as
the first step in getting a revenue-neutral
carbon tax through Congress.
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