US Floats Carbon Tax

“I sincerely doubt that the American people will be willing to pay what this is really going to cost them,” said Mr. Dingell, whose committee will be drafting a broad bill on climate change this fall.

“I will be introducing in the next little bit a carbon tax bill, just to sort of see how people think about this,” he continued. “When you see the criticism I get, I think you’ll see the answer to your question.”

The idea behind a carbon tax is to provide an incentive to reduce the use of fossil fuels like oil and coal, which are loaded with carbon, and increase the use of cleaner, renewable fuels like solar power, wind and fuels made from plants and plant waste.

Many economists like the idea of a carbon tax, saying that it would be simple to administer and could profoundly affect energy choices.

But most Democrats are staunchly opposed, saying that a tax would raise the costs of travel, commuting and heating and cooling homes, and that it would be wildly unpopular at a time when voters are already angry about high energy costs. Republicans, they said, would seize on any such proposal as proof that Democrats were bent on raising taxes and increasing the size of government.

Indeed, many Democrats still cringe at the memory of President Bill Clinton’s trying to pass a broad “B.T.U. tax” in 1993 on most forms of energy. The measure passed the House but not the Senate, and more than a few Democrats believe the effort was one reason they lost their majority in the House in 1994.

Now, House and Senate Democrats are writing bills that would require factories and power plants to reduce emissions of heat-trapping gases through a so-called cap-and-trade system of mandatory requirements and tradeable pollution credits.

Most of the proposals would impose mandatory limits on the amount of carbon dioxide that companies would be allowed to produce each year, and those limits would become steadily more rigorous over time. A factory or a power plant that is already below the limit could sell its unused allocations to companies that were over the limit.

The United States already uses a cap-and-trade system to limit emissions of sulfur dioxide and other pollutants that cause acid rain.

The European Union has adopted a system to reduce greenhouse gas emissions, though the system has come under considerable criticism for letting companies game the rules and for failing to reduce emissions in line with European goals.

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