Thursday, February 01, 2007

A Great Green Idea

Every new idea comes with built-in opposition. But the most brilliant new ideas anticipate and address the inevitable criticisms. An Op-Ed in the Los Angeles Times is one such brilliant idea. Actually, it's two ideas, the first of which isn't so new -- a carbon tax. But the second half of the idea is the brilliant part -- use all this new tax money to create market-based "energy savings accounts" for individual tax payers which could energize reinvestment in green technologies and non-polluting energy sources.

You can and should read the entire op-ed at this link. Otherwise, you can check out the highlights and more of my reaction below... makes sense to adopt a tax on carbon emissions now. The trick is to design a "global cooling tax" that a majority of Americans will want to pay. We propose a tax that will hit energy hogs hardest. But under our scheme, whether you use a little or a lot, you would be able to invest your tax dollars directly in clean technologies that would lower your energy bills.

Americans consume 300 billion gallons of gasoline a year, and staggering quantities of coal and natural gas. What can we do to stop drastic climate change while we wait for viable alternative sources of energy? Plenty — if we are willing to pay and make our investments work for us.

We can reduce carbon emissions by installing scrubbers on power plants, switching to hybrid and then plug-in hybrid cars, planting trees and building wind farms and the most energy-efficient buildings on the planet. By many estimates, a tax of about 27 cents for each gallon of fuel consumed and $30 per ton of carbon dioxide from electricity generated would be enough to an economy in which pollution is essentially rewarded to one that rewards clean technologies. This amounts to about $180 billion a year, less than 1% of the $17-trillion U.S. economy.

Our carbon tax proposal is based on the principle that every consumer of fossil-fuel energy should have to pay the price of getting rid of the carbon generated by burning it...

The average American would pay roughly $555 a year for all of the carbon used in his gasoline, electricity and home heating.

But instead of going to the Treasury, the tax money would be credited into individual "energy savings accounts." Each taxpayer could decide how best to spend it to reduce carbon emissions, to benefit himself and the planet. You could use your $555 toward installing solar panels on your roof, cutting your electricity bill to zero. Or you could direct your tax money to a charity that plants fast-growing trees at the equator, or to a private company that would suck up the carbon in the atmosphere and sequester it under the ocean floor. You could pool your "cooling tax" money with your neighbors and build a windmill to supply your town with electricity or a plant to supply you with a non-carbon alternative to gasoline.

Any plan that produces energy without emitting carbon, or gets rid of carbon already in the atmosphere, would qualify. Companies would compete for your business, and more would surely develop to serve the burgeoning clean-energy market...
I think this is a remarkable idea because it not only seeks to create a negative incentive for continued carbon use, but it uses the proceeds to create positive market-based incentives to encourage necessary small-scale changes that would make a huge difference. It offers something for both sides of the political spectrum. However, I doubt the Republicans could ever sign on because they have painted themselves into an ideological corner such that they could NEVER EVER UNDER ANY CIRCUMSTANCES accept new taxes or acknowledge global climate change.



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