Wednesday, November 16, 2011

Can the US Pass a Carbon Tax?

See also my March 2012 post for Climate Progress: "Growing Grassroots Political Support for a Price on Carbon"

It's rather embarrassing to admit this, but up until a week ago, I knew precious little about climate/emissions legislation, either in the US or abroad. I could mumble something about the US's failure to pass a climate bill last year but couldn't tell you the name of it or what it was about or who co-sponsored it. "Cap and Trade"? Yeah, I'd heard of it, but ask me to explain what it does? (admittedly, Cap and Trade schemes are rather confusing). I knew Europe had passed something, but that's because they're Europe, right? And what's with Australia? What did their "carbon price" decision mean?

You can't live in the DC Metro area for long before some wonkiness starts to rub off, however. I still have a lot to learn, but this week has been my crash course in climate law. I want to learn this stuff because I'm convinced that passing federal legislation will give us the best ROI, as they say - forcing all carbon polluters to fall in line. I'm happy to get arrested in front of the White House again protesting a pipeline, but fighting individual projects can only take you so far.

There's one group that's devoted itself to getting climate legislation (specifically "Fee and Dividend" - a carbon tax scheme) back on the table: Citizens Climate Lobby. Last night I met with Nils Petermann who's in the midst of setting up a DC chapter of the organization. What is Fee and Dividend?

RFF infographic on carbon tax and deficit
Simply, the plan would raise taxes on carbon polluters based on the emissions they produce ("fee") and send that revenue to taxpayers as a check/rebate ("dividend"). There are other legislative frameworks out there, from a Fee and Deficit Reduction plan (see left) to Cap and Trade and Cap and Dividend, but F&D's the plan that Citizens Climate Lobby is putting its weight behind, largely because the public is the primary beneficiary of the revenue and emitters are rewarded for reducing, rather than offsetting, CO2.

In theory, Republicans should be supportive of a carbon tax - and in fact, some notable conservative economists do support it, albeit one that replaces the dividend portion of the plan with lower income taxes (a "Tax Shift" plan, if you will): Kevin Hassett at the conservative American Enterprise Institute and Gregory Mankiw, economic advisor to Mitt Romney. Hell, even American Petroleum Institute members have voiced support for a carbon tax. Unfortunately, according to Petermann, such sensible conservative think tank-iness doesn't translate well to a world of conservative politics still beholden to "drill baby, drill" sentiment.

It's necessary to talk about Republican perspectives on taxing carbon because legislation simply won't get passed without some support from their side. At least not in today's political climate. "It's important for Republicans to take ownership of this issue," said Petermann.

Just last week, Australia passed its own carbon tax legislation despite some fierce and dramatic political opposition. The bill isn't perfect from an environmental standpoint and some conservative leaders are threatening to repeal the plan, but it's a big step in the right direction for one of the world's highest per capita carbon emitters.

Australia's political landscape is different than the US, of course (their Green Party has representatives at the federal and state levels), but I think Australia's passage of a carbon price holds some lessons for the US. I'm especially interested in the strategies that grassroots organizations like GetUp and Say Yes used to garner support for the legislation. How did these groups push through heavy opposition not unlike what we face in the US?


In terms of a legislative model for the US, Petermann is more apt to look to British Columbia than Australia. The "California of Canada" started enforcing its own "revenue-neutral" carbon tax in 2008 and appears to be changing industry behavior and gaining public support three years later. In the meantime, our own California is taking the Cap and Trade route through the AB32 law, passed back in 2006.

As the euphoria of Obama's announcement on delaying the Keystone XL started wearing off, Bill McKibben's 350.org sent out a survey asking their engaged followers to suggest new movements to get behind. About 75 suggestions were made (as of this writing) and right behind #1 (fracking) was removing oil subsidies and passing Fee and Dividend.

If you'd like to join the movement to pass a carbon tax, check out the Citizens Climate Lobby website. They hold regular conference calls to let people know what they're about, and an annual conference that reaches a large portion of Congress. They also have chapters around the country. Join CCL and you'll likely be joining a movement that has the best chance of making an impact on the US's outsized carbon monster.

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