PD Editorial: Time to consider a tax on carbon

For all the disarray of the GOP leadership in Washington, one recent partisan breakthrough should not be overlooked. Last month, 10 House Republicans broke ranks and came together on a resolution acknowledging that climate change is real and calling on Congress to work toward solutions.

The timing couldn’t have been better. It came just weeks before the arrival of Pope Francis who, in raising his own concerns about climate change, had already made a plea for “a new dialogue about how we are shaping the future of our planet.”

Here’s something to contribute to that dialogue. If we’re to get serious about lowering carbon emissions and encouraging the purchase of cleaner sources of energy, there’s one step to consider, one that even many conservatives are supporting. The adoption of a carbon tax.

The system is far less complex than cap and trade with the likelihood of having a far greater impact. The simple idea is to require fossil fuel companies to pay a fee on the C02 content of the fuels they extract.

Why support that? Isn’t this just an opportunity to give taxpayer money away for pet projects by lawmakers? No. The key is that the money would go directly to taxpayers through monthly dividend checks. Economists for the group Citizens Climate Lobby, which is pushing for adoption of such a system, have projected that checks for a family of four would be $220 a month by 2021, rising to $397 per month by 2035. Yes, the fee on fossil fuels would drive up the cost of energy, but the checks would make up the difference - and then some.

Under the carbon tax, roughly two-thirds of U.S. households would come out ahead. Most of those who would not are wealthy individuals who have large carbon footprints due to air travel and other factors, projections show. They aren’t going to make much of a dent in their bills and carbon footprints by buying hybrids either.

But here’s the most important dividend. This approach, known officially as the carbon fee and dividend system, would reduce the nation’s emissions ?52 percent below 1990 levels within 21 years. That’s far greater than reductions envisioned by other plans, including legislation signed by Gov. Jerry Brown last week that sets a goal for California of generating half of its electricity from renewable sources by 2030. That’s good, but it did not go far enough. A provision of SB 350 called for cutting gasoline use in half. But that was removed from the bill amid opposition from oil companies.

A sure way to get oil companies to understand the importance of reducing carbon emissions is to charge them at the source. To ensure this system does not put American companies at a competitive disadvantage, the carbon fee and dividend system would include border tariffs on products imported to the U.S. The tariffs would be based on the product’s C02 emissions. But they would only apply if the imports ?come from a country that does not have a similar system in place.

As former Secretary of State George Shultz wrote earlier this year in endorsing a carbon tax, “Let’s level the playing field for competing sources of energy so that costs imposed on the community are borne by the sources of energy that create them, most particularly carbon dioxide.”

As the nation grapples with more complex ways of confronting climate change, this is a simple idea that should be part of the conversation.