Carbon Tax Gaining Popularity, But Not With Lawmakers
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Last month when President Obama proposed new climate regulations, he also urged Congress to act on what he called a market-based solution. In fact, one such idea has been gaining steam over the past year. It would tax carbon emissions, and its group of supporters is diverse and bipartisan - except in Congress, as NPR's Jennifer Ludden reports.
JENNIFER LUDDEN, BYLINE: It's hard to see how lawmakers can agree on a solution when they don't even agree on the problem. At a Senate panel today, nearly every Republican member disputed whether climate change is even happening. Still, Bernie Sanders plugged his legislation to stop it with a carbon tax.
SENATOR BERNIE SANDERS: Coal and oil are not quote, unquote, "cheap energy," if they are causing catastrophic damage to this planet. It is the most expensive form of energy.
LUDDEN: A carbon tax would, in fact, make coal and oil more expensive, levying a fee at, say, coal mines, refineries, power plants who would pass that cost on down the line. Things like wind and solar would then be cheaper by comparison, and economists say the entire economy would shift in response.
Adele Morris of the Brookings Institution estimated the impact of one proposed tax. It would start at $16 per ton of carbon dioxide and rise over time.
ADELE MORRIS: And what we found was that would raise an average of 100 billion per year over 10 years. And it would reduce emissions by about a third through the middle of this century.
LUDDEN: Great for the climate and here's the key: the budget. Instead of keeping that hundred or so billion a year, you could use it to offset a drop in income tax rates. Big boosters of this idea include political advisers to Mitt Romney and John McCain.
Morris, herself a onetime Democratic appointee, says a carbon tax could bring down greenhouse gas emissions much faster than the president's recently proposed regulations on coal-fired power plants. And depending on which taxes you cut, it could even juice the economy.
MORRIS: A centrist, pragmatic approach where we're doing something serious about climate change, but we're doing it cost effectively. And if it's embedded in tax reform, well, that's just fine.
LUDDEN: Too good to be true? Well, there are catches. Conservatives say they'd want a carbon tax to replace government regulation, including that whole plan Mr. Obama just laid out. Democrats and environmental groups balk at that. And there's major opposition on the conservative side as well.
CHRISTINE HARBIN-HANSON: Our worry here is can we really trust the government with a giant new source of revenue not to increase in the future?
LUDDEN: Christine Harbin-Hanson is with Americans for Prosperity, an advocacy group funded by David and Charles Koch, who made their money from fossil fuels. The group has been pushing lawmakers to sign a No Climate Tax Pledge. Last month, it aired online ads targeting more than a dozen Republicans and Democrats, asking, can you afford a carbon tax?
HARBIN-HANSON: What this does is making energy more expensive. And this is going to have a huge impact on American families who are continuing to struggle right now.
LUDDEN: Carbon tax supporters say you could rebate some of the money to help the poorest families cope. Many expect details like this to be hashed out this fall when lawmakers may again take up a tax overhaul. But first, the Republicans actually in Congress will need to end their uniform opposition.
BOB INGLIS: We hope that changes, and we're thinking that it is going to change.
LUDDEN: Bob Inglis is a former Republican congressman who's been trying to sell his party on a carbon tax for more than a year. Last week saw a big breakthrough. In a writing contest Inglis sponsored, a young GOP staffer in the House of Representatives published an essay that's getting some buzz. He criticizes his party for burying its head in the sand on climate and touts a carbon tax.
INGLIS: It's very exciting, you know, if there are, on Capitol Hill, Republican staffers who believe that action on energy and climate is essential.
LUDDEN: But maybe not likely anytime soon. That staffer wrote his essay anonymously to, quote, "protect his boss and himself."
Jennifer Ludden, NPR News, Washington.