Michael Riordan invited us to publish the following Opinion Piece, which was originally published in the San Francisco Chronicle on March 23, 2007. Michael is the co-author of The Solar Home Book. He teaches the history of science and technology at Stanford University and University of California, Santa Cruz. Thanks, Michael!
Time for a Carbon Tax?
By Michael Riordan
It balms my bleeding liberal heart to witness a conservative president from Texas and a Republican governor of California promoting renewable energy. Also known as alternative energy, it was widely advocated by environmentalists after the 1970s energy crisis and heartily embraced by President Jimmy Carter and Gov. Jerry Brown. But President Bush’s oil-patch friends ridiculed renewable energy as impractical, and it faded from the national agenda during the Reagan years — to be resurrected only recently. Perhaps the time has finally come to revive yet another radical idea: a carbon tax, which charges anyone who burns fossil fuels for the problems that ensue.
Of course, the word "tax" sends shudders across the political spectrum, but it shouldn’t, especially when the only good alternative is another hot-button word, "subsidy."
During the late 1970s, tax credits and other subsidies encouraged ill-considered technologies, such as solar-heating panels on roofs, that didn’t make much economic sense. Some renewable-energy advocates argued that governments should not subsidize any sources of energy — whether fossil fuel, solar, wind, biofuels or nuclear. Just get out of the economic way and let market forces determine the outcome — and penalize detrimental energy sources by taxing them accordingly.
Today, a different dynamic is operating. Global warming, then regarded as a distant possibility, is widely accepted in scientific — and, increasingly, business — circles as a looming threat that we must confront. In the wake of Hurricane Katrina, a majority of the U.S. population regards global warming as fact, caused by human introduction of carbon dioxide into the atmosphere. All of us are contributing by burning fossil fuels, and we are just beginning to witness the terrible consequences.
Thus, a rational course of action is to penalize those who burn fossil fuels — all of us — and use the revenues to implement solutions. This tactic would discourage actions detrimental to the environment and encourage energy alternatives, which could range from energy-efficiency measures to carbon-removal methods to renewable-energy sources.
A carbon tax on our gasoline purchases, for example, would automatically penalize owners of gas-guzzlers while promoting hybrid and flex-fuel automobiles. The average miles-per-gallon of U.S. cars would steadily rise in response to such a measure, as individuals take this added cost into account when making purchases.
The real key to widespread acceptance of a carbon tax, is to put the money directly to use on solving our energy problems — not just pour it into the general fund, where it can be diverted. Carbon taxes could pay for loans or even grants for insulation and double-glazing of windows in older homes, especially in cases where owners cannot afford to make such improvements. They can fund much-needed research and development on ways to capture and remove carbon dioxide or subsidize power companies that begin to take such measures with their emissions. They can support tax credits to homeowners who install solar cells, as California is doing through its Million Solar Roofs program. They can fund much-needed research on converting agricultural waste, wood chips and switchgrass to biofuels, or to solve the knotty problems of fuel-cell automobile engines and compact hydrogen-storage systems.
As Americans consume about 9 million barrels of oil daily for transportation, a dime-per-gallon gas tax thus would yield nearly $14 billion annually for such purposes. This amount does not include taxing coal, oil and natural gas burned in electrical power plants or for heating our homes and office buildings, which would probably add twice that amount.
A small carbon tax applied across the board, wherever fossil fuels are burned, thus would yield more than $50 billion a year to help address global warming. We already do something like this with the gasoline taxes that go directly into highway construction and repair. It is not all that new of an idea.
Spending these funds wisely, of course, will require some kind of responsible governmental decision-making body. Given the politics and corruption that often swirl around large pools of money, this will not be easy. But with openness, vigilance and leadership, it can succeed.
Meanwhile, renewable energy sources would begin to flourish. It would finally become economical to tap the vast supplies of renewable energy that course through our communities daily. Just imagine solar-cell panels on millions of homes converting the sunlight shining on them into thousands of megawatts of electricity fed back into the power grid. And the local construction jobs thus created will be awfully difficult to export to China or India.
Achieving this worthwhile goal cannot happen without courageous political leadership, for few can stomach a new tax. That is why so many politicians, including Sen. Dianne Feinstein, D-Calif., favor a "cap-and-trade" emissions-trading scheme, whereby companies are allowed to emit limited amounts of carbon dioxide, but can trade these allowances like stocks and bonds.
Fortunately, we are beginning to get the needed leadership in California, thanks to an inspired governor working across the aisle with Democrats on energy issues. What better legacy could President Bush leave when he departs from office in two years?
ashley marie says
I agree with Riordan on establishing carbon taxes on gasoline consumption, which I hope might pressure local and state governments to get on board with more efficient public transportation. What I don’t understand is how people see a tax as a relatively simple measure. Will it be like a sales/VAT tax of sorts or will it be as complicated as our income tax code with all sorts of loopholes that will be negotiated by the politicians whose campaign warchests are filled by these very corporations pushing for a tax over cap and trade? And what about the non CO2 gases that contribute to global warming, such as methane? Also, I noticed that some of the people that you cite on your website as being in favor of a carbon tax are also in favor of cap-and-trade. But in any case, what do you think of the successes in the SO2 and NOx emissions trading markets? And whether one takes the carbon tax or the cap-and-trade system, how do we avoid the inevitable problem that the rising industrial powerhouses like India or China, who are doing little to effectively curb their carbon emissions, won’t get manufacturing contracts? It has happened already in Europe with French production getting outsourced to Morocco. I am not against outsourcing, but again part of the problem is to get the public to support these plans. Just mentioning the word stirs up the flames for the average blue-collar and telephone servicing industry workers.
Fred says
Before any of your readers go off half cocked they should view "THE GREAT GLOBAL WARMING SWINDLE" …..Let’s see if you are confident enough in your ideas to allow this post and thus the possibility of discussion that does not hew to your ideas. In this program they rapidly debunk the myth that any global warming that is occuring being due to man’s actions. In truth solar activity controls the fluctuations that are observed over history.
Robb says
A tax on carbon emissions??? hmmm…. anyone who thinks this is a good idea should stop breathing and releasing that dangerous c02 into the atmosphere…. Co2 is not a polutant; it is needed for the survival of all earth’s species. Plants take in c02 and release oxygen (elementary science). More c02 means bigger, healthier plants, which means more oxygen and food for us humans (a good thing). Global warming fanatics aren’t real environmentalists. If they were, they would confront real issues like gentically modified crops or dangerous chemicals such as arsenic, fluoride, and hundreds of others in our drinking water. They would realize the importance of honeybees to our survival, and they become alarmed about the epidemic of the honeybee population (60% of that population is dying on the average in the US). There are real issues, but all they want to talk about is global warming, and for whatever reason they want a tax. I feel sorry for these misguided souls.
I-man says
CARBON TAX IS A SCAM! It wont work, its just going to generate money. Taxing something doesn’t stop it. Where will that money go?
Erin M. says
Yes, of course, let’s add another tax to gasoline… great idea. I am a member of what you refer to as the "blue collar industry" and I say no to carbon tax because we simply cannot afford it. After all, it is the blue collars with little disposable income who will be paying the vast majority of the tax. Corporations and businesses will no doubtly have writeoffs to avoid whatever taxes their cronies in the government make, while we suffer for what the whole world is doing. It’s easy to theorize that adding more tax to gasoline will punish people who drive gas guzzlers and reward those who drive hybrids and eco-friendly cars, but your not considering the masses of people who already struggle to fill the gas tanks of the cars they have, much less make a payment on a $40,000 car. Also, isn’t global warming a global problem? Wouldn’t it make sense to begin negotiation on an international level, especially with countries that have little or no environmental waste regulation? How much good will it do to charge Americans extra for gasoline to penalize us for being born into a suburban sprawl with a lack of public transportation when countries in Asia and South America continue pumping out hazards?
Dan says
Why don’t you spend a few minutes more on our web site. We are proposing a revenue neutral carbon tax, with the revenues returned via offsetting reductions in the payroll tax or rebates to all Americans. You will end up with more money in your pocket through the payroll tax or the rebate; it will be your choice whether to spend it on energy or to use less energy and to come out ahead thanks to the carbon tax.
Americans use far more energy per-capita than the rest of the world and have done so for decades. Americans have a responsibility to themselves and to the rest of the world to reduce their carbon dioxide emissions.
Just to be clear, nobody is talking about a penalty here. The carbon tax increases the price of energy to reflect the costs of carbon emissions to society. The goal is to tax pollution instead of productive work.
sab says
carbon dioxide is not a pollutant, the evidence from ice cores actually shows that the rise in carbon dioxide actually comes after rise in temperature. the amazon rain forest actually produces more carbon dioxide than all man made sources put together.as the trees and other plants die, the dead plant matter releases carbon dioxide. the real pollutants that no ones actually talks about is ozone from ethanol-burning cars that could boost levels of toxic gas
in urban areas.or the mercury being dumped into the atmosphere from us switching to dirty US mined coal . there is no way to sequester the mercury totally. Carbon monoxide emissions needs to be curtailed, benzine pollutants need to be eradicated. PTFE, PVC by products, and other pollutants need to be curtailed. a carbon tax is not the answer. Where is the logic in taxing people for the cars they drive when the real polluters like the corporations who make the plastics and paper that we use are left to keep doing their damage to this planet?
Bill says
The persistence of global-warming deniers (as evidenced by some comments) underscores the importance of a broad carbon tax on all fuels at the point of production/first-sale or import. Many people will never respond to public pleas to reduce energy consumption because they do not immediately experience the environmental harm that they are causing. Most of those costs are shifted to other people and species. On the other hand, all people respond to price signals. If the price of CO2-producing fuels exceeds the cost of clean energy or efficiency improvements, more consumers will buy clean energy and more efficient products. In addition, more investments will be made to produce clean energy and more efficient products. Studies show that huge savings can be achieved now with existing technologies if people had sufficient economic incentives. A carbon tax is a good starting point to effectuate such incentives. More efficient energy consumption will also have lasting national security benefits.
Erik Westgard says
Finally some action. We also need to tax imports made with cheap carbon fuels- i.e. China. A ban on Chineze food products would be a start ofter the melamine debacle. We also need to make sure US industries and jobs benefit from this energy changeover. The big complaint from big oil is "we need to meet the growing demand for energy" – the demand is growing because carbon is not taxed and hydrocarbons are cheap enough to use for everything and waste.
The argument that carbon dioxide is good for trees is partly true -they only can grab 10% of the carbon we produce- and every day more trees are cut down. The other other source of oxygen in the world is phytoplankton- which is under stress from saturation.
patrick says
"THE GREAT GLOBAL WARMING SWINDLE" is a great film… a must watch for anybody foolish enough to literally buy into the carbon tax..
Bill says
Erik Westgard’s idea of taxing imports from countries that lack an acceptable carbon tax is a good one. Rather than singling out China, however, we should apply the same tariff to all countries that fail to implement a carbon tax. Better still, the U.S. should work with our European allies to form an importers’ alliance under which all of these major importers impose a tariff on goods from countries that fail to implement an acceptable carbon tax. Such buying power would influence many countries in the world to implement such a tax, which would both level the trade playing field and spread the efforts to control carbon emissions. Other greenhouse gases should be similarly addressed.
Jon The Savage says
Carbon tax is unconstitutional, and I will NEVER pay it. Jail me if you want NWO. But if Ron Paul wins the election, then your North American Union agenda will never see the light of day.
Wendell Laposata says
A carbon tax must be structured so that a rich person feels just as much pinch as a poor or middle class person feels from the tax. And I mean JUST AS MUCH! Now how do you do that? A flat tax on gas or fuel oil would certainly not meet this criterion! A poor person may have to walk to the store, whereas a rich person would drive just as much as before the tax imposition! Totally unfair!
Now let me propose a something that would meet this criterion (although not a tax, it is a concept). That concept is gas or fuel oil rationing. If you allot every person with a driver’s license say 20 gallons of gas per week (and you cannot sell your allotment), you pinch everyone equally! Rationing is not the answer, but it serves as a perfect model to demonstrate how to spread the effect of a carbon tax equally across rich and poor. Let’s call this the "pinch criterion". If you dont conslider the pinch criterion, you end up with a regressive tax!! Totally unfair to poor folks!
A carbon tax that is used to reduce payroll taxes has been proposed by Al Gore. Again, not a good idea! I am retired…I dont pay payroll taxes! A regressive tax; unfair to the poor.
Your politicians MUST meet the above "pinch criterion" when they decide how to impose this carbon tax! As a lower middle class retiree, I believe that this is one of the most important issues affecting my quality of life over the next decade. Yet nobody even recognizes the problem. Yes, I am worried. Sort of the way I felt during the run up to the Iraq war; and look what happened there.
Dan says
Wendell,
I agree with you that offsetting reductions to payroll taxes do not adequately protect those who are retired or are not working for other reasons. We’re working on a solution. Of course, our rebate alternative treats employed an unemployed alike. Our proposal for a revenue neutral tax, with the revenues returned through a rebate or offsetting tax deduction, is designed to respond to your legitimate concern about the regressive nature of a carbon tax. See our issue paper on softening the impact of carbon taxes.
Andrew Chalnick says
Has everyone seen that Senator Chris Dodd has come out in favor of a form of carbon tax?http://www.boston.com/news/globe/editorial_opinion/oped/articles/2007/04/27/a_corporate_carbon_tax/
Dan says
Andrew,
Thanks for the reminder. I’ve added a "headline" about Senator Dodd’s corporate carbon tax to our home page. I’ve also added Senator Dodd and Congressmen Stark and McDermott to our "Supporters" page.
Don says
Why do you want to tax money from my earnings to support a "Global Warming Theory" that still is unproven? What gives you that right?