CARBON TAX/CAP-AND-TRADE

CARBON TAX/CAP-AND-TRADE

Burning fossil fuels is by far the greatest source of the greenhouse gases causing climate change. However, the full cost of fossil fuel energy is not included in the price of the fuel. We pay for that later when we deal with the consequences of global warming. Using a car to illustrate this point, “We pay for the gas, we pay for the car, and we pay for the insurance, but we don’t pay for the pollution that comes out of the tail pipe.”

It is time to raise the price of coal, oil, and gas and put the market on the side of fixing that inequity. This will allow all the other energy sources that do not put CO2 into the ecosystem — solar, wind, geothermal, hydro, and nuclear — to be competitively advantaged because the fossil fuel energy will be relatively more expensive. 

Here are the differences between carbon taxes and cap-and-trade: “A carbon tax directly establishes a price on greenhouse gas emissions — so companies are charged a dollar amount for every ton of emissions they produce — whereas a cap-and-trade program issues a set number of emissions “allowances” each year. These allowances can be auctioned to the highest bidder, as well as traded on secondary markets, creating a carbon price.”  

The challenge in both cases often comes down to how the revenue should be distributed.

Apparently there are 4 possibilities:
1. Climate justice. The money collected should be spent in pursuit of promoting climate justice.
2. Investments in renewables.
3. Tax swaps, such as reductions in taxes of some kind and using the revenues to make up for that.
4. Dividend. Give it back to the people in equal shares. Doing that provides people a regular check, reminding them that carbon is being taxed, which might additionally encourage them to lobby for an even larger tax.

CURRENT NEWS

KEY RESOURCES

Key to Biden Climate Agenda: The Social Cost of Carbon Explained

02/08/21
Michael Greenstone, EPIC Director, said reverting to the Obama-era calculations would yield a social cost of carbon of $125 per ton, assuming it took into account lower interest rates in recent years.

Report of the High-Level Commission on Carbon Pricing and Competitiveness

10/01/20
The potentially adverse impact of carbon pricing on the competitiveness of businesses and economies has been a matter of concern to industry and policymakers.

Putting a Price on Carbon: Evaluating A Carbon Price and Complementary Policies for a 1.5° World

10/01/20
Putting a price on carbon is necessary to reduce emissions but sufficient to get to full decarbonization by 2050. Complementary policies with a carbon price are needed to achieve full decarbonization.

Climate Leadership Council

03/04/20
Economists agree that an escalating carbon fee offers the most cost-effective climate policy solution, sending a powerful price signal to steer businesses and consumers towards a low-carbon future. Accordingly, the first pillar of our bipartisan…

U.S. State Carbon Pricing Policies

06/01/19
Compared to command-and-control regulations, carbon pricing is a market-based mechanism that creates financial incentives to reduce greenhouse gas (GHG) emissions. Ten states that are home to over a quarter of the U.S. population and account…

Implementing a U.S. Carbon Tax: Challenges and Debates (2015)

01/14/20
Although the future extent and effects of global climate change remain uncertain, the expected damages are not zero, and risks of serious environmental and macroeconomic consequences rise with increasing atmospheric greenhouse gas concentrations. Despite the…

Citizens Climate Lobby

01/19/19
Citizens’ Climate Lobby is a non-profit, non-partisan, grassroots advocacy organization focused on national policies to address climate change. By building upon shared values rather than partisan divides, and empowering our supporters to work in keeping…

Carbon Tax Center

01/19/19
The Carbon Tax Center stands at the front lines of the struggle for a sustainable climate and a habitable Earth. Our mission: to generate support to enact a transparent and equitable U.S. carbon pollution tax…

Carbon Pricing as a Solution to Climate Change

02/14/20
FCNL believes that carbon pricing is one of many essential tools that Congress should use to address climate change and shift towards a clean energy economy. While we have not endorsed any particular bill at…

Cap Carbon Now

01/02/19
This blog explains what Pure Cap-and-Dividend means, how it differs from more limited cap-and-trade proposals, and why it is superior to other policy options...

MORE NEWS

Coast to coast state carbon pricing efforts

By Lynn Meyer   09/11/18  
Coast to coast state carbon pricing efforts  By Lynn Meyer  With raging wildfires polluting the air throughout the northwest, storms and flooding ravaging the east coast, and red tide closing the gulf state beaches, it’s…

Ottawa to announce rebates in provinces without carbon tax

By Shawn McCarthy   10/23/18  
Canadians in four provinces − including the election battleground of Ontario − will receive carbon-tax rebates that will leave most families financially better off, with cheques arriving ahead of the next federal campaign, Prime Minister…
CBC

Trudeau promises rebates as Ottawa moves to levy carbon tax on provinces outside the climate plan

By John Paul Tasker   10/23/18  
The federal Liberal government will slap a carbon tax on fuels in provinces and territories with no adequate emissions pricing plans of their own — but will send annual rebates to Canadian families to offset…

The Case for a Climate Tax (2011)

Dr. Shi-Ling Hsu   01/14/11  
There's a simple, straightforward way to cut carbon emissions and prevent the most disastrous effects of climate change-and we're rejecting it because of irrational political fears. That's the central argument of The Case for a…

75 Business Leaders Lobbied Congress for Carbon Pricing. Did Republicans Listen?

By Marianne Lavelle  Photo: Marianne Lavelle   05/23/19  
Microsoft, Pepsi, Levi's and others are calling for carbon taxes or fees that could scale up innovation fast enough to combat climate change.