Yet-another vote for carbon taxes over cap-and-trade:
A tax on carbon to cool the planet, Christian Science Monitor, Oct 26: Forcing higher prices for fossil fuels would be simple, fair, and effective. Why do politicians fear to do it?
Conservative and liberal economists like it. James Connaughton, President Bush's top environmental adviser, backs it. Al Gore says he's always preached it. So why isn't a carbon tax on the table in Congress as it weighs measures to curb climate change? A three-letter reason: T-A-X.
From the start of Capitol Hill's debate on global warming, the notion of taxing all uses of oil, coal, and natural gas has made lawmakers look for less direct ways to wean the nation off fossil fuels and onto alternative energies. They'd rather set caps on greenhouse-gas emissions (with allowances to trade emission permits) and tighten up regulations, such as fuel- efficiency standards.
Indeed, caps may put the US on a knowable track to, say, an 80 percent reduction in carbon emissions by 2050. But as the previous Monitor's View pointed out, the flaws in cap-and-trade plans as experienced in other nations – their complexity and vulnerability to fraud and special-interest lobbyists – would reduce the intended effect. They also take a long time to set up and get working right. …
[P]olls indicate strong opposition to higher taxes on gasoline or electricity. But wait: What if the carbon-tax revenues were returned to most taxpayers, canceling out the effect on pocketbooks but retaining the market incentives?
Under one plan, every worker would receive a tax rebate of about $560, cutting the tax bill by 18 percent for those earning $20,000, or by 4 percent for those earning $90,000. The burden on consumers would shrink, but the US would achieve greater conservation and a shift to energy alternatives. And the tax could be fine-tuned to meet rising targets for reducing carbon dioxide.
With Europe's cap-and-trade system faltering, the US should be a leader in using a carbon tax, even if big polluters such as China don't follow. As a last resort, the US could tax goods from countries that fail to cut their carbon emissions.
A carbon tax is not the whole solution. Regulations will still be needed, such as stiffer fuel-economy standards for cars and trucks. And the US should fund research into alternative fuels, too. All it takes is the political will to act.