Now surrender your firearms.” How high should the tax go? To some green campaigners, this sounds like: “Here’s a silver bullet. Perhaps existing energy-efficiency standards for autos might survive, but not much else. It’s not just the CPP, but the entire authority of the Environmental Protection Agency to limit CO2 under the Clean Air Act, that could be sold down the river. That’s why the first rule to go, under this proposal, would be the Clean Power Plan, anathema to Big Coal.īut fossil fuel industries already believe that the CPP is dead in the water, ripe to be overturned in court or gutted by President Trump, Senate Majority Leader Mitch McConnell, and Scott Pruitt, who sued to block the plan and is now nominated to head the EPA.Īnd environmentalists, even those who would normally welcome a tax on carbon and who recognize that utility emissions had been dropping fast even without the CPP, won’t easily accept this tradeoff. The carbon tax will punish the sickly coal industry especially hard, as it’s the dirtiest fuel. The rollback is done mainly to defang corporate opposition. The idea of trading off a carbon tax against traditional regulations is the main thing that distinguishes this proposal from a half dozen carbon tax bills presented by Democrats-such as Bernie Sanders, who combined a smaller carbon tax with a larger package of regulations and incentives. Why combine a tax with a regulatory rollback? “Congress might even consider allowing individuals to borrow against their future dividend income for certain clearly defined purposes, such as higher education or the purchase of an electric vehicle,” the proposal suggests. What if you live in a rental apartment, or face a sudden increase in your bus fare to work? You can’t install double-paned windows or switch buses, so you might just cut spending on premium cable channels or do something else with no carbon benefit.Īnd if the merits of this plan are its simplicity, as its sponsors boast, even they are tempted to gild the lily. Realistically, adjusting your carbon footprint is not always as simple as it sounds. Theoretically, people will react to these price signals by conserving energy, whether that means carpooling and lowering the thermostat, squeezing into a thrifty hatchback or splurging on an elegant Tesla. This could help people who are already having a hard time making ends meet, but they’d still notice the extra cost of every fill-up. Under this plan, all the tax revenues are intended to go back to consumers in quarterly checks from the Social Security system-an estimated $2,000 yearly for a family of four. How your electric company or the conglomerate that sells you breakfast cereal responds to rising fuel prices is up to them, but the costs will come back to you. It gets much harder to estimate the ripple effects. It’s fairly simple to calculate the impact on gas at the pump-about 36 cents a gallon, at first. That’s deliberate: a carbon tax, like a cattle prod, is meant to deliver a shock that changes behavior. How would this tax affect ordinary people?įor starters, prices would go up, for everything from gasoline and electricity, to stuff made of metal and cement, to food and other staples. If this version of the idea does draw more serious attention than past trial balloons, here are the kinds of vexingly complicated questions that will surely arise. It’s a longshot to become law, but it won guarded praise from some environmentalists. Among others, its sponsors include five prominent cabinet members and economic advisers to past Republican presidents-George Shultz, James Baker, Henry Paulsen, Martin Feldstein and Gregory Mankiw. The proponents say their approach is designed to create deeper emissions cuts than regulations would accomplish, more than enough to meet the United States’ pledges under the Paris Agreement on global warming. In exchange, Congress would strip the Environmental Protection Agency of most powers to issue new regulations to control emissions, including a full repeal of the Clean Power Plan that the Obama administration wrote to govern power plants. The tax, collecting $40 for every ton of carbon dioxide pollution from fossil fuels, and escalating over time, would include a charge on imports and would generate enough revenue to pay substantial, regular dividend checks to individuals and households. A group of eminent establishment Republicans have proposed a grand compromise on climate change policy: a carbon tax, offset by a payout to individuals and families, in exchange for repeal of other regulations on industry.
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