Wednesday, April 14, 2010

Senate considers a fifteen cent gas tax to fight global warming

© 2010 Joshua Stark

Do I have an automatic, knee-jerk reaction to big oil companies supporting climate change legislation?  Yes, I do.  I understand that I need to rein that in some, but in this case, I'm concluding with my knee-jerk reaction.
The L.A. Times reports that Sens. Lieberman, Kerry & Graham are hashing out a tri-partisan (the Independents in the Senate are their own beast) climate change bill that would possibly include a gas tax of around fifteen cents.  The Times reports that some oil companies are in favor of this because, "it figures to cost them far less than other proposals to reduce greenhouse gas emissions, including provisions in the climate bill the House passed last year."

I guess so.

Here's another interesting tidbit from the Times:

The fifteen cent gas tax, "is shaping up as a critical but controversial piece in the efforts by Graham, Sen. Joe Lieberman (I-Conn.) and Sen. John Kerry (D-Mass.) to write a climate bill that moderate Republicans could support. Along those lines, the bill will also include an expansion of offshore oil drilling and major new incentives for nuclear power plant construction."

Is this a "climate bill" like Clear Skies was an "air quality" bill?  I still need to get the specifics for myself, but if what we end up with is a bill where consumers have to pay a regressive tax so that major companies can have an easier time pumping more oil and not paying for failed nuclear projects, then this is looking a lot more like the environmental double-speak of administrations in the past.  

We need a price on carbon, not just gas.  And, we need a rebate of a good chunk of that money directly to Americans, to help mitigate the regressive nature of that price.  Also, the price has to be big enough to hit the 300 ppm of atmospheric carbon that is generally agreed to in the scientific community.  If it's easier to hit that number with a cap, then cap it.  If it's easier to hit that number with a cap-&-trade, then do that.  If it's easier to hit that number with a tax, then I'm all for it.  Just remember to mitigate the regressive impacts, and don't let individuals or individual companies off the hook.

For a refresher, here are some quick links to pieces I've written about climate change and/or regressive taxes:
Carbon Pricing:  Who, What, Why (the basics)
Cap & Trade, Front & Center  (on alliances and positions about its impacts)
Where are all the Big Greenhouse Gas Emitters? (on California's list of its biggest emitters, and greenwashing)
My Problem with Pigou (on Pigovian taxes used to help alleviate negative externalities, and the need for rebates)
Cap & Squander Strikes Back! (on a highly respected panel of economists agreeing with me about rebates)


Anonymous said...

Before we add a carbon tax to gas (along with other fossil fuels), we could just add sales tax in the states where it's exempt, and triple the excise tax to match its inflation adjusted prior levels while barely covering the actual direct road costs of the U.S. rather than leaning on state and city general funds to cover those costs. THEN add the carbon tax.

Josh said...

Anonymous, thanks for commenting! You have an interesting point, but I must respectfully disagree a bit.

To me, anyway, the beauty of a carbon price is that it directly relates the price to the externality. That sort of clarity is important both on a social level and in regards to dealing with revenues from said tax.

I'm opposed, also, to relying more and more upon regressive structures without relief, both on ethical grounds and on economic grounds (the MU of poor people's money is higher than of richer people's money). That's why I only support a carbon price if it comes with a rebate (not a 100% rebate, mind you, but an equally-doled-out rebate of, say, 80%).

Any road costs from increasing these prices must only go to mass-transit and repairs, and not new roads (or lanes), too.