Some say carbon tax simpler way to curb emissions

Some say carbon tax simpler way to curb emissions

By JULIET EILPERIN and STEVEN MUFSON

The Washington Post

WASHINGTON - As lawmakers on Capitol Hill push for a cap-and-trade

system to rein in the nation's greenhouse gas emissions, an unlikely

alternative has emerged from an ideologically diverse group of

economists and industry leaders: a carbon tax.

Most legislators view advocating any tax increase as tantamount to

political suicide. But a coalition of academics and polluters now

argues that a simple tax on each ton of emissions would offer a more

efficient and less bureaucratic way of curbing carbon dioxide buildup,

which many scientists have linked to climate change.

''We want to do the least damage to the growth of GDP,'' said Michael

Canes, a private consultant and former chief economist for the

American Petroleum Institute, who led a Capitol Hill briefing on the

subject in late February sponsored by the conservative George C.

Marshall Institute. Between a cap system and a carbon tax, ''a carbon

tax will be the much more cost-effective way to go,'' he said, though

he added that there are other ways to reduce emissions.

Robert J. Shapiro, a private consultant who was a Commerce Department

official in the Clinton administration, agrees. A cap-and-trade system

-- involving plant-by-plant measurements -- would be difficult to

administer, he said, and would provide ''incentives for cheating and

evasion.'' And the revenue from a carbon tax could be used to reduce

the deficit or finance offsetting cuts in payroll taxes or the

alternative minimum tax.

A carbon tax offers certainty about the price of polluting, which

appeals to many economists and businesses. William A. Pizer, a senior

fellow at the centrist think tank Resources for the Future and a

former senior economist for President Bush's Council of Economic

Advisers, estimates that the benefit-to-cost ratio of a tax-based

system would be five times that of a cap-and-trade system.

''You're going to pay one way or another, whether it's a tax or a

permit program,'' Pizer said, adding that while a cap would provide

more certainty on how much emissions would be cut, ''the consequences

of being uncertain about emissions over any short period of time just

aren't that serious.''

Under a cap-and-trade system, the government would set an overall

limit on emissions and allocate permits to emitters. If one plant

reduces its emissions more quickly than another, it can sell its

credits to the other emitter. A carbon tax would simply increase the

cost of emitting each ton of carbon, which could then be passed on to

consumers.

While Democrats have vowed to push through some sort of carbon dioxide

control in this Congress, Bush has consistently opposed mandatory

limits, so it remains unclear whether the United States will adopt any

system before the next election.

Moreover, the fact that many economists back the tax approach is no

guarantee that it will prevail over the five cap-and-trade plans

already proposed in the Senate.

The complexity of the cap-and-trade system is part of its virtue for

some politicians, since it may mask the system's impact on prices.

Such a system also appeals to conservative lawmakers who like the idea

of letting the market determine the price of carbon, while keeping

revenue out of the hands of government. Some economists say it would

channel capital to the most economically worthwhile projects first.

Environmentalists are split on a carbon tax. Fred Krupp, president of

Environmental Defense, which is handing out baseball caps emblazoned

with the slogan ''Just Cap It'' on Capitol Hill, called such a tax

''an interesting distraction.''

''It doesn't give us the guarantee the emissions will go down,'' he

said.

But Carl Pope, executive director of the Sierra Club, said: ''It will

be more effective if people know that in year 'X' they will pay this

much. Companies are highly motivated by costs.'' Moreover, he worries

that rationing carbon allowances based on historical emissions would

reward companies that spew out the most greenhouse gases now and did

the least to limit them in the past.

Dan Becker, director of the Sierra Club's program on global warming,

said the nation may need to adopt a carbon tax in several years but

''we're not there yet.''

Some industries that have historically opposed carbon limits embrace

the idea of a tax because their sectors would not be singled out for

regulation. ''A poorly constructed cap-and-trade system can be as

punitive as a regressive tax,'' said Scott Segal, an electric

utilities lobbyist.

Red Cavaney, president of the American Petroleum Institute, told a

National Press Club audience in February that his industry prefers

that lawmakers explore a range of policy options before imposing a

cap.

''A cap-and-trade system isn't necessarily the be-all and end-all,''

he said. ''A carbon tax, everything, should be on the table from the

beginning.''

Few lawmakers, Democrat or Republican, have the stomach for a carbon

tax, however. Some are still smarting from a vote in the early 1990s

when President Clinton persuaded the House to adopt a BTU tax -- a tax

on the heat content of fuels -- only to abandon the effort in the

Senate.

Democrats such as House Natural Resources Committee Chairman Nick J.

Rahall II, W.Va., say they have no desire to revisit the issue. ''I'm

not an advocate of a carbon tax,'' Rahall said. ''That's going to be

passed on; the consumer would end up paying for that.''

Some analysts said former Vice President Al Gore's endorsement of both

alternatives in testimony before Congress last week was so politically

unpalatable that it was a sign that he is not seriously thinking of

running for president.

Only one House Democrat, Rep. Pete Stark, of Hayward, has drafted a

carbon tax proposal. Stark, who first proposed such a tax 16 years ago

as a way to ease the nation's energy crunch, plans to introduce a bill

in April that would levy a tax of $25 per ton of carbon released for

five years.

''It's more efficient, more equitable, and it's less subject to

gaming, I might add,'' Stark said, estimating that it would raise the

cost of gasoline by 10 cents a gallon.

As Congress debates how to regulate greenhouse gases, however, several

European officials have said it would be a mistake to choose anything

but a market-based trading system that could be linked to the emerging

carbon market in Europe.

''Political leaders in the United States need to make a decision, and

make it quickly, whether they want to be left behind in a market that

is going to evolve, or whether they want to get involved quickly,''

said Stephen Byers, a member of Britain's Parliament who helped

establish the European Union's trading system.

''Wall Street could become the world center of carbon trading.''

And Stavros Dimas, the E.U. environment commissioner, speaking at a

recent lunch hosted by the D.C.-based European Institute, called it

ironic that the United States would question the cap-and-trade system,

because U.S. negotiators essentially forced Europe to agree to such a

system in the Kyoto Protocol negotiations in 1997.

''There was suspicion about market-based instruments,'' Dimas said.

''In a way you did us a favor, because now we also are familiar with

these market-based activities. It's functioning very well, actually.''

''If we would go together into a world tax regime, that would be

preferable,'' Jos Delbeke, the top E.U. official on climate change,

said after a Senate Energy and Natural Resources Committee hearing

last week. ''But practically speaking, it is not a likely way to go.

Emissions trading is a very solid second best.''

--

There may come a time when the CO2 police will wander the earth telling

the poor and the dispossed how many dung chips they can put on their

cook fires. -- Captain Compassion.

Wherever I go it will be well with me, for it was well with me here, not

on account of the place, but of my judgments which I shall carry away

with me, for no one can deprive me of these; on the contrary, they alone

are my property, and cannot be taken away, and to possess them suffices

me wherever I am or whatever I do. -- EPICTETUS

"Civilization is the interval between Ice Ages." -- Will Durant.

"Progress is the increasing control of the environment by life.

--Will Durant

Joseph R. Darancette

daranc@NOSPAMcharter.net

"Captain Compassion" <daranc@NOSPAMcharter.net> wrote in message

news:4sp5131mrl5rgbi21nffnep9pluqimld6a@4ax.com...

> Some say carbon tax simpler way to curb emissions

> By JULIET EILPERIN and STEVEN MUFSON

> The Washington Post

>

> WASHINGTON - As lawmakers on Capitol Hill push for a cap-and-trade

> system to rein in the nation's greenhouse gas emissions, an unlikely

> alternative has emerged from an ideologically diverse group of

> economists and industry leaders: a carbon tax.

"Unlikely"? We knew that was what Gore and the chicken-little environwackos

and their Democrats in Congress were after all along!!!

"Taylor" <123@456.com> wrote in message

news:4613a5e2$0$4878$4c368faf@roadrunner.com...

>

> "Captain Compassion" <daranc@NOSPAMcharter.net> wrote in message

> news:4sp5131mrl5rgbi21nffnep9pluqimld6a@4ax.com...

> "Unlikely"? We knew that was what Gore and the chicken-little

> environwackos and their Democrats in Congress were after all along!!!

Hey do not leave out those evil speculators that support the Republicans.

Just look at the gasoline and natural gas prices to see the effect of these

greedy people. There are no shortages of either but the flunkies in

Congress allow these parasites to rake in billions for no reason. Can you

imagine the market in these "cotwo" credits and any other way to flimflam

the silly fools that "invest" in the environment. Hell you will probably

see foundations created by these wealthy parasites to handle these credits

and such things as planting trees on their ocean front properties to help

the planet. Ever hear of the Nature Conservancy selling prime property in

order to save prime property?

"Taylor" <123@456.com> wrote in message

news:4613a5e2$0$4878$4c368faf@roadrunner.com...

>

> "Captain Compassion" <daranc@NOSPAMcharter.net> wrote in message

> news:4sp5131mrl5rgbi21nffnep9pluqimld6a@4ax.com...

>> Some say carbon tax simpler way to curb emissions

>> By JULIET EILPERIN and STEVEN MUFSON

>> The Washington Post

>>

>> WASHINGTON - As lawmakers on Capitol Hill push for a cap-and-trade

>> system to rein in the nation's greenhouse gas emissions, an unlikely

>> alternative has emerged from an ideologically diverse group of

>> economists and industry leaders: a carbon tax.

>

> "Unlikely"? We knew that was what Gore and the chicken-little

> environwackos and their Democrats in Congress were after all along!!!

lol Must be a republican.