Pros and cons of a carbon tax – yale climate connections

In mid-June 2016, the U.S. Gasbuddy app House of Representatives voted overwhelmingly to stand against future proposals for a carbon tax, even though no current bill was anywhere near getting its serious attention.

Opponents, in that symbolism-rich congressional moment, saw the importance of laying down a political marker (were, say, a future Hillary Clinton administration look to push the idea). Electricity symbols worksheet Carbon tax supporters saw pure political theater.

Why does the mere notion of a carbon tax matter enough for legislators to pass such a symbolic measure? Isn’t the United States already committed to addressing climate change through the Paris agreement?

The idea of a carbon tax is, as it turns out, a kind of freakish policy unicorn: It weirdly unites some people on political left and right. Kansas gas service bill pay The idea of a carbon tax weirdly unites some people on political left and right. La gasolina daddy yankee mp3 Click To Tweet

For proponents, sending a price “signal” through the economy is the only way to get energy companies and startups to ramp up their low-carbon investments and search for conservation strategies. Electricity around the world Currently, carbon pollution has no consequence; it is what economists consider an “externality.” A carbon tax could force businesses and citizens to cut back carbon-intensive services and goods. Electricity history in india It could start a race for lower emissions technologies, which would give energy companies an edge on competitors.

For opponents – some of whom don’t believe that climate change is a serious problem and others who just think a carbon tax is bad strategy – regulatory alternatives may be seen as politically unpredictable and therefore dangerous enough to justify preemptive action. Gasoline p Hence, the House vote in June, which was designed to get legislators on record as opposing the bill, perhaps making it more difficult for them to change positions in a future House.

They say that contrasts with addressing climate change by setting, monitoring, and enforcing caps on greenhouse gas emissions; and regulating emissions of the energy-generation sector, as the Obama administration is attempting to do through the Clean Power Plan. Electricity merit badge worksheet That’s an attraction for many right-leaning economists.

For progressives, a virtue is the comprehensive nature of a carbon tax, although many liberals would like to see both a carbon tax and emissions regulations.

The existing special taxes in place on the energy sector could mean the administrative groundwork for a carbon tax already exists. U gas hampton Proponents say it would not be hard to collect the money systematically and comprehensively. Electricity receiver definition If the tax were levied at the “upstream” level of the energy system – across oil refineries and importers, natural gas terminals and pipelines, coal mines, and a few other sources – such a policy could cover perhaps 98 percent of the country’s carbon dioxide emissions.

Opponents don’t necessarily contest that a carbon tax could, in principle, be implemented from an administrative point of view, but they say there is no guarantee that a carbon tax bill passed by Congress would be simple. Youtube gas laws The non-partisan Congressional Research Service notes that legislators “could also choose to establish a carbon tax framework that rivals the complexity of a cap-and-trade program” such as that passed by the House in 2009 but never by the Senate. Electricity lab activities The horse-trading necessary to get a carbon tax passed might require all sorts of policy contortions.

Further, opponents point out that all taxes have “distortionary” effects, affecting free-market decisions and perhaps reducing gross domestic product growth. Electricity and magnetism online games Making energy more expensive might do this, they caution. Gas out game commercial And there could be perverse and unintended effects, such as creating “leakage” whereby businesses, and energy production, move overseas. Electricity omd Calculating the price

Were a carbon tax policy to begin to move through a future Congress, one giant headache would be getting enough legislators – and interest groups – to agree on how to accurately value and price carbon dioxide emissions, so that a fair tax rate could be assigned.

The U.S. 935 gas block government has proceeded in this area by developing a policy instrument and mathematical equation called the “ social cost of carbon” – basically, the cost of the negative effects per year of a metric ton of carbon across a variety of environmental, health, and business dimensions.

To get this number, the tricky thing involves valuing a metric ton of carbon currently and far into the future. Current electricity definition physics For those concerned a climatic tipping point soon could throw the world into chaos, each ton of carbon not emitted would have large and sustained future value.

For those anticipating no near-term crisis, the future value of that ton could be . . . Electricity 2015 not much. No electricity jokes This future-value problem “discount rate” is massively consequential for how carbon prices would be set.

Currently, the price for one metric ton of carbon emissions is $37, a figure used in a variety of government decisions and influencing certain policies, such as vehicle and home appliance standards. Gas mask art But the $37 figure is highly contested, with academics and experts arriving at numbers ranging from between $10 to $220 or more. Electricity gif Many observers see little hope in the near future for reconciling the economic models.

Still, some proponents say that the social cost of carbon and its implementation is a strong enough framework for Congress to find common ground, even as other proponents contend that alternative calculations might be even better. Online electricity bill payment British Columbia has experimented with a carbon tax of modest size (about $30 per ton), and researchers have noted its relative success in terms of emissions reductions and no measurable impact on economic growth. Gas zone pricing (There are many other instances of carbon taxes around the world that bear studying.)

Opponents, of course, say no tax should ever be implemented if it doesn’t have a sound basis. M gastrocnemius medialis A unilateral new tax by the United States will just lead to the previously mentioned “leakage” problems. La gasolina It is highly likely, they argue, that putting an economy-wide burden on the United States will do little to change the overall global trajectory of emissions – and larger countries with no such regulation (India and to some extent China) will just grow and pollute more, and industrial polluters will relocate there. 9gag tv Distributing the revenue

For all its potential simplicity in administration and collection, the general concept of a carbon tax contains no natural solution for what to do with the money once government has it. Gas meter in spanish On this issue, supporters begin fighting among themselves – including liberal groups who are all nominally on the same side of climate action. Monroe la gas prices Many progressives want to use the revenues to address other societal problems, from the environment to health to inequality. Electricity powerpoint template Others want to invest the money back into low-carbon technological research and development, or favor some combination of spending priorities. Gas ks A carbon tax contains no natural solution for what to do with the money once government has it. Electricity office near me Click To Tweet

In this nitty-gritty of taxation and revenue allocation, opponents often pull out a strong talking point: Poorer people tend to spend a greater share of their family budget on energy-related services and goods. Types of electricity generation methods So the tax, according to many economists and non-partisan analysts, is considered to be “regressive” – it hits lower-income families harder than upper-income ones. Gas in babies how to get rid of it (It’s an area of evolving research.) The Congressional Budget Office notes that a “policy that set a price of $28 per metric ton on CO2 emissions would increase costs for households by amounts that would equal about 2.5 percent of after-tax income for the average household in the lowest one-fifth (quintile) of the income distribution but less than 1 percent of after-tax income for the average household in the highest quintiles.” The burden might be unevenly distributed regionally, too, and workers in states with energy-intensive industries such as Ohio, Illinois, Michigan and West Virginia could be harder hit.

One reasonable solution to this inequity would be to refund more of the tax to poorer, harder-hit families. Static electricity diagram Yet that kind of wealth redistribution scheme is a non-starter for many of the very conservatives who might be inclined to support a carbon tax in the first place. Gas finder What many conservative supporters want is a carbon tax that would be “ revenue neutral.” Enacting a carbon tax only makes sense to many if it uniformly offsets the tax burden on individuals and corporations and is part of a broader set of reforms that simplify the tax code.

If there is a likely place where a proposed carbon tax bill could fall apart politically in any future Congressional battle, it is in this area. Gas x tablets himalaya The projected revenues are gigantic, even if the price of carbon is set relatively low. Gas works park fireworks Every imaginable interest group and constituency will be asking for consideration. Electricity generation by country That’s not to say a carbon tax bill will never be passed. E gaskell But even for a policy touted for its elegant simplicity, nailing down the details may be anything but simple. Gas utility worker Filed under: carbon tax, GHG emissions, John Wihbey, pros and cons