Carbon Tax Gains Steam To Fight Global Warming
NEW YORK ( MainStreet) Climate change is making headlines in the United States again after the release of the White House's Third U.S. National Climate Assessment in May, which reported its impacts are already rippling through American life and negatively impacting our agriculture, infrastructure, and economy.
This resurgence in the national discourse on climate change has also reinvigorated the debate about how to address it on a policy level, with many now calling for a federal carbon tax . For instance, a New York Times article stated in April that "...putting a price on emissions of carbon dioxide and other greenhouse gases ...is a fundamental approach that could help redirect investment toward climate-friendly technologies."
Just as there is an overwhelming consensus among climate scientists that the globe is warming and that the warming is due to human activities such as the burning of fossil fuels, there is also an impressively large consensus among economists that a carbon tax would be the most efficient and effective method for addressing climate change .
If done correctly, a carbon tax also has the potential to stimulate the national economy, especially for the people of MainStreet.
A recent study from the environmental think tank Resources for the Future found that a carbon tax of $30 per ton would yield $226 billion a year in revenue while cutting carbon emissions by 15% .
This $30-per-ton price tag is the Canadian equivalent of what the government of British Columbia currently imposes.
After the BC carbon tax law passed in 2008, sales of motor fuels and other petro-products declined by 15%, while raising approximately $5 billion in revenue. Of that figure, $3 billion was returned as business tax breaks, $1 billion as personal tax breaks and the remaining $1 billion as low-income tax credits .
"We want [a carbon tax that] imposes a modest fee on carbon that rises steadily over time so that it doesn't send shock waves through the economy or consumers," says Mark Reynolds, Executive Director of the Citizens Climate Lobby, an advocacy group that has been at the forefront of pushing for a federal carbon tax.
Founded in 2007 in San Diego, the CCL currently has approximately 300 chapters across the country.
As Reynolds envisions it, an effective carbon tax would start at around $15 per ton and increase $10 annually. Though the tax would be imposed on fossil fuel companies at the extraction point, those costs would eventually trickle down to consumers at the pump or on their heating bills. However, those costs would be temporary until the consumers are reimbursed.
"The tax needs to be returned to all American households as a dividend check," says Reynolds.