Why We Need A Price on Carbon

Last week, ThinkProgress posted a video about the price of carbon. The short film featured images of storms, wildfires, droughts, and “weather on steroids” that are being caused by carbon emissions, and it raised questions about their costs. The bills are adding up: $65 billion for victims of Sandy and another $35 billion for the Midwest plains drought. Pretty soon, as Everett Dirksen once supposedly said, “You’re talking about real money.”

Real money indeed, but the question is, who is picking up the tab? Last week, (when writing about GMOs) I wrote about the precautionary principle which states:

When an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically. In this context, the proponent of an activity, rather than the public, should bear the burden of proof.

Clearly, the same reasoning applies here, as well. And in this case (as in the other), the financial burden, the health, safety and security impacts are being borne by the general public while the energy companies continue to amass stupendous profits.

The video argues for a price on carbon that would force energy companies to share some of the burden, while at the same time encouraging people to use less, or shift to other, cleaner energy sources. It could also help to address the financial problems that threaten our economy.

Robert Frank argues, “If new taxes are unavoidable, why not adopt ones that not only help balance the budget, but also help make the economy more efficient? By reducing harmful emissions, a carbon tax fits that description.”

It’s certainly not a new idea.

Finland introduced the first carbon tax back in 1990. Since then, many others have followed suit. According to Australia’s Climate Commission, thirty-three countries and eighteen sub-national jurisdictions will have a carbon price in place by the end of this year. This will cover some 850 million people, or a little more than 10 percent of the world’s population, representing 30 percent of the global economy, and 20 percent of global emissions.

The EU’s carbon trading scheme has been successful. Emissions are down by 10 percent since the second trading period began in 2008, though some of that is the economy. British Columbia and Ireland have success stories to tell. Other countries with carbon prices include Sweden, New Zealand, Great Britain.

Even China plans to develop emissions trading schemes in seven provinces and cities starting this year.

The U.S. is lagging. The City of Boulder, Colorado, and the state of California both have programs that put a price on carbon. We might have been among the first countries to produce oil, but we seem to be determined to be among the last to take responsibility for it.

Richard Caperton of the Center for American Progress has a proposal for a progressive American carbon tax, showing it will reduce emissions, while stimulating the economy.

Analysis showed that the cap-and-trade bill passed in the U.S. House of Representatives in 2009 would have benefited low-income people, reduced the deficit, protected vulnerable industries, reduced pollution, and stimulated investment. Unfortunately, it never passed the Senate.

“A national carbon tax,” he says, “would help solve our country’s budget crisis and provide revenue for new job-creating investments in clean energy infrastructure.”

A carbon tax would collect funds for investment in clean technology while reducing emissions and creating jobs.

Unfortunately, anything resembling the dreaded three-letter word will never get past House Republicans, no matter how beneficial it will be to everyone, including them. Never mind the fact that they object to taxes because they increase the size of the government. This tax wouldn’t have to do that if it were designed carefully.

Bernie Saunders’ proposed “fee and dividend” plan, for example, would give the money right back to the people. It has not been getting much traction, as the energy industry continues to pump up their doubt machine, stalling for time, hoping to squeeze a few more hundred billion dollar years in before paying the piper. Meanwhile, the planet keeps heating up.

And while these companies keep up a steady stream of doubt and denial, they know that something is happening and they are busily taking action to preserve their investments and their cash flow. They realize that their operations and facilities could suffer from extreme weather events (e.g. oil rigs damaged by hurricanes).

Louisiana Highway 1, for example, which impacts as much as 18 percent of our national oil and gas production, is sinking in marshland and getting increasingly wet. It needs to be raised, but the state says they don’t have the money. Right now, one big storm surge could knock it out for days or longer. Likewise, supports on the Alaska pipeline need to be upgraded due to melting permafrost.

So while all these companies are questioning whether climate change exists out of one side of their mouths, they’re busy patching up the places where it has impacted their business out the other.

In fact, even ExxonMobil has come out in favor of a carbon tax.

Back in 2009, their CEO Rex Tillerson said, “…a carbon tax strikes me as a more direct, a more transparent and a more effective approach.”

Yet, as the planet continues to heat up and the deficit to grow, nothing, nothing, nothing is happening in Washington about the economy or the planet. They apparently have more important things to focus on.

[Image credit: Climate Reality: YouTube]

RP Siegel, PE, is an inventor, consultant and author. He co-wrote the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water in an exciting and entertaining format. Now available on Kindle.

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