Carbon tax background

carbon tax

Read a background paper on a NYS carbon tax by Prof. Sara Hsu

A carbon tax is an “upstream” tax on the carbon content of fossil fuels (coal, oil and natural gas) and biofuels. A carbon tax is the most efficient means to instill crucial price signals that spur carbon-reducing investment. The biggest obstacle to clean energy is that the market prices of coal, oil and gas don’t include the true costs of carbon pollution. A robust and briskly rising U.S. carbon tax will transform energy investment, re-shape consumption, and sharply reduce the carbon emissions that are driving global warming. (Carbon Tax Center)

Many advocates feel that it would be better to call it a greenhouse gas tax, to insure that things such as methane are also taxed.

Climate change activists are divided over whether to supports a “fee and dividend” approach, where the entire revenue is rebated to taxpayers, or whether a portion should be invested in other needs such as renewable energy. Everyone agree that at least a significant portion should be rebated to low and moderate individuals to offset the regressive nature of any energy tax. Polls however show that a plurality (60%) of all Americans, including Republicans, support a carbon tax if the revenues are used for renewable energy. The fee and dividend approach still receives majority support (56%) from all voters but not from Republicans (43%).

The State of Oregon commissioned a study on the carbon tax. They concluded that a tax of $10 per ton would not help Oregon reduce greenhouse gas emissions below 1990 levels. At $60 per ton, a carbon tax would begin reducing emissions below 1990 levels almost immediately by cut emissions by 26 percent and would raise $2.35 billion in new taxes. The study’s authors dismiss the drag factor at even the highest level — $150 per ton — as “small.” A $60 per ton carbon tax would raise the price of gas by about 6 cents. Natural gas prices would rise 18 percent and electric prices would rise 9 percent to 30 percent, depending on regional variability. More info re Oregon.

An overview of state carbon taxes.

Information on a carbon tax from the World

Info on one of the carbon tax proposals in the State of Washington.

State Carbon Pricing Network

The difference between a carbon tax and cap-and-trade. Many progressive groups and the Pope oppose cap and trade as being subject to manipulation by the financial community.

New York and four other states are exploring ways to put a price on the air pollution spewing from cars, trucks, trains and other vehicles — the source of more than a third of greenhouse-gas emissions in the northeastern U.S. The result may eventually be new taxes, tolls or a pollution-trading system that could raise $3 billion a year or more for mass transit, electric-vehicle rebates and other projects, supporters say.  See story