Sunday, April 6, 2014

Even the Ski Operators might Agree: It's time for a Carbon Tax

Maybe you saw the front-pager today:
[A] growing body of research by Oregon State University suggests snow-challenged years are already becoming more common and are likely to increase in decades to come....

"We're eyewitnesses to climate change - it's real and it's costing us."
Last year, it was interesting that after the piece about changes in subalpine meadows, the SJ ran an op-ed piece in favor of a carbon tax written by a Crater Lake Park Ranger.

The online commenting went nuts, accusing proponents of carbon pricing of being socialists and fans of redistribution.

But fans of carbon pricing are about as far from socialists as you can get!

How about the conservative and libertarian Cato Institute? They're something of a fan of carbon pricing:
One of the most effective ways of reducing carbon emissions is simply to price them using a revenue-neutral carbon tax whose income is offset by reductions in income or other taxes...
That's exactly what the Ranger suggested.

And it makes sense. It's a market-based, free-enterprise solution that preserves personal choice as opposed to a regulatory scheme that eliminates choices.

Or how about conservative economist Gregory Mankiw, advisor to George W. Bush and Mitt Romney, and no friend of socialism? Back in 2007 he wrote an opinion piece for the New York Times:
IN the debate over global climate change, there is a yawning gap that needs to be bridged. The gap is not between environmentalists and industrialists, or between Democrats and Republicans. It is between policy wonks and political consultants.

Among policy wonks like me, there is a broad consensus. The scientists tell us that world temperatures are rising because humans are emitting carbon into the atmosphere. Basic economics tells us that when you tax something, you normally get less of it. So if we want to reduce global emissions of carbon, we need a global carbon tax. Q.E.D.
Even more, it's not theoretical, the lofty idea of wonks.  There's an increasing body of evidence that suggests it works.

In a recent Atlantic piece, "How British Columbia Enacted the Most Effective Carbon Tax in North America," the writer notes
[G]asoline use in British Columbia has plummeted, declining seven times as much as might be expected from an equivalent rise in the market price of gas, according to a recent study by two researchers at the University of Ottawa. That's apparently because the tax hasn't just had an economic effect: It has also helped change the culture of energy use in BC. "I think it really increased the awareness about climate change and the need for carbon reduction, just because it was a daily, weekly thing that you saw," says Merran Smith, the head of Clean Energy Canada. "It made climate action real to people."

It also saved many of them a lot of money. Sure, the tax may cost you if you drive your car a great deal, or if you have high home gas heating costs. But it also gives you the opportunity to save a lot of money if you change your habits, for instance by driving less or buying a more fuel-efficient vehicle. That's because the tax is designed to be "revenue neutral"—the money it raises goes right back to citizens in the form of tax breaks.
Business people and fans of free markets everywhere should agree: A revenue-neutral carbon tax is necessary and best!

Update, April 19th


Salem Breakfast on Bikes said...

A reader sends a comment by email:

"Even better, carbon fee with 100% rebate! as proposed by James Hansen in his speech at Willamette and described in a Salem Weekly article....What the rich guys want in revenue neutral means hammering the poor, because they will see higher prices for essentials throughout the economy but tax cuts to return the revenue will mean that it is predominantly returned to the rich.

A per capita rebate, on the other hand, will give most people [all] that they pay in carbon taxes plus a little more, because the poorer you are, the less carbon is emitted to serve you. The rich will pay the bulk of the carbon taxes, in proportion to their emissions in other words, and the per capita rebate will add some progressivity, which is essential if we're going to get this adopted. Otherwise, like cap and trade schemes, it's just another way for the rich to capture the gains that result from fixing the problem that is primarily caused by the wealthiest.

In the post it didn't seem necessary to get into the weeds on the exact mechanism by which the proceeds of a carbon fee/tax would cycle back to people in order to assure it was revenue-neutral. That has always seemed like a second order detail after we agreed that we needed to add new fees/taxes to carbon!

But it's certainly true that the various ways to refund the fee/tax would fall differently on a scale of "progressivity," as you say, and depending on one's secondary policy goals, you may prefer one way to another.

Laurie Dougherty said...

Glad to see climate change highlighted. Here are some upcoming activities:

Tonight there will be a gathering of Salem Climate Activists, a loosely coordinated(by me) group of people interested in broad range of activities in response to climate change. April 8 at 7 pm Ike Box at Cottage & Chemeketa Streets.

Thursday April 10: Deep Green - a film on climate change solutions. Salem Progressive Film Series Thursday April 10 at 7 pm Grand Theater 191 High Street NE

Thursday April 17: Momenta - a film on coal export proposals for the Pacific Northwest produced by Protect our Winter, a global group of skiers and snowboarders who see the snow pack dwindling and winter season shortening. Thursday April 10 at 7 pm Grand Theater 191 High Street NE

Citizens Climate Lobby Salem chapter, a group dedicated to advocating for a revenue neutral climate tax meets (new time) on the Monday after the first Saturday each month at the Ike Box Cottage & Chemeketa Streets 6-8pm (Next meeting May 5)

May (Date TBD) Fossil Fuel Transport Forum on coal, oil and LNG transport through the Pacific NW - current capacity, plans for massive expansion & fightback

My two cents: I'm all for putting a price on carbon, but there is more than one way to do it. As long as some protection is provided for low income people, I don't care if a tax is revenue neutral. The starve the government mentality is rotting the country from within and I don't like pandering to it. A cap and trade program like in California and the Northeast states, if well designed, also puts a price on carbon and sets a limit that can shrink over time. Revenue from auctioning permits can be used to mitigate hardship and fund energy efficiency and renewable energy programs.

I feel we need to engage on many fronts and here in the Pacific Northwest opposing efforts to turn our beautiful region into a fossil fuel transport corridor is an urgent struggle.

Salem Breakfast on Bikes said...

Thanks for the calendar!

Anonymous said...

Slate has an interesting interview with meteorologist and Retired Navy Rear Adm. David Titley:

"A lot of people who doubt climate change got co-opted by a libertarian agenda that tried to convince the public the science was uncertain—you know, the Merchants of Doubt. Unfortunately, there’s a lot of people in high places who understand the science but don’t like where the policy leads them: too much government control.

Where are the free-market, conservative ideas? The science is settled. Instead, we should have a legitimate policy debate between the center-right and the center-left on what to do about climate change. If you’re a conservative—half of America—why would you take yourself out of the debate? C’mon, don’t be stupid. Conservative people want to conserve things. Preserving the climate should be high on that list."

Salem Breakfast on Bikes said...

updated with clip from total front-pager on crater lake

Salem Breakfast on Bikes said...

Thanks for the Titley clip, also!