A tax for this, a tax for that, why not carbon?

With the recent attention and coverage of the Republican efforts in Congress to overhaul the tax code and implement a tax-cutting bill, perhaps the addition of a revenue-neutral carbon tax will help bring on Democratic support and allow Republicans to show their willingness to address climate change while maintaining their conservative, market-based principles.

What is a Carbon Tax

Essentially, exactly what it sounds like. It is a way to account for the negative externalities of burning fossil fuel using a market-based approach. Think of it as similar to taxes on cigarettes. It is an attempt to change behavior (make people buy less) by making the thing being taxed more expensive to the end user.

How it works

The government implements a steadily rising fee on all carbon-emitting fuels. The fee can be considered a revenue neutral tax, meaning that the money will be collected by the government, but not kept, nor fund any government programs. The money will be returned to all US households as a dividend.

Why the carbon tax

This is seen by many as a very practical effective first step in addressing climate change. The reasons for this are that it can reduce carbon emissions and act as a catalyst for economic growth using market-based solution.

A carbon tax is seen as an effective way to address climate change because it enjoys bipartisan support. Addressing climate change and environmental protection is mostly seen as a left issue, as Republicans are reluctant to impose restrictions on how natural resources are used in relation to how it will affect the economy. Prominent, elder statesmen have even come forward in support of a carbon tax presenting what they call “a conservative climate solution,” which former Secretary of State, James A. Baker says, “follows classic conservative principles of free-market solutions and small government.”

Something to be cautious of is those that think this is a one fix solution. If we implement this tax on carbon, then we no longer need to worry about climate change and environmental protection. This is a seriously dangerous mindset. Capitalism and consumer frenzy have led to a culture of use without regard to the future, which is environmentally destructive and unsustainable on a fundamental level. A carbon tax is not going to be the fix to that issue. While, having said that, implementing a Carbon Fee and Dividend program will lead us in the right direction and is absolutely necessary while we figure out longer, more comprehensive fixes and structures to put in place.

 

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