Exxon Now Advocates for Carbon Tax? Hmmm

What’s behind the “Americans for Carbon Dividends” scheme?

By Leonard Hyman and Bill Tilles for WOLF STREET:

It’s not every day that a former Republican US Senator and one of the most conservative Democratic senators, currently full-time oil lobbyists, advocate for a carbon tax. When one of their main clients, Exxon Corp. [XOM], also decides to publicly and financially support this effort for $1 million, it deserves attention.

Former Senators Trent Lott (R-MS) and John Breaux (D-LA), both with substantial ties to the US energy industry, recently formed a political action committee, Americans for Carbon Dividends (AfCD). This group now advocates for a carbon tax. The actual proposal was released by a related organization, the Climate Leadership Council (CLC), which is headed by former Secretary of State and longtime Republican grandee, James A. Baker, lll.

Interestingly in terms of carbon emitters, this group is an amalgam of oil, natural gas, and nuclear power interests – no one from the coal industry. Reminds us of the camping story about outrunning a bear. Only need to outrun your fellow campers. In this instance, the coal industry seems to be the slow camper.

This proposal has four key parts:

  1. A $40 per ton tax on carbon rising annually at a gradual rate;
  2. Tax revenues generated would be refunded to all citizens (hence the name, “Carbon Dividends”);
  3. This plan would terminate the EPA’s regulatory authority over carbon emissions and specifically terminate the recently enacted Clean Power Plan;
  4. Require “border carbon adjustments to level the playing field and permit American competitiveness.” (Other relatively high CO2 emitting countries apart from the US are China and Russia).

The CLC, in its advertisement touting the four-part plan’s inclusiveness, cited it as being “Pro-Environment, Pro-Growth, Pro-Jobs, Pro-Competitiveness, Pro-Business and Pro-National Security.” With the staggering, wholesale abandonment of federal environmental oversight proposed in return for modest levels of taxation, we would agree is definitely pro-business.

These industries are saying two things publicly: Human-induced climate change is real and that it represents genuine economic and social threat. And it is the first time they’ve backed a carbon tax. At present about forty other nations either have or are contemplating a carbon tax.

It’s also interesting that the energy industry is making this announcement the same week as the Nobel Laureates in Economics were announced. One of the winners, William Nordhaus, developed the so-called DICE model where the social costs of carbon is equal to the “economic impact of a unit of emissions in terms of t-period of consumption.” In 2015 this method generated a carbon price of $31.20 per ton.

The theory is that CO2 can be treated or taxed like other economic activity. But the difference here is that the tax should be equal to the marginal environmental damage costs. These frameworks also assume rather modest “externalities.” In classical economics, externalities are presumed to be small enough so as not to distort the economy. The obvious problem here is that climate change may clearly result in catastrophic, i.e. non-marginal changes which are profoundly distorting in effects.

Following this logic, taxing energy companies fully for the devastating impacts of hurricanes or wildfires for example would simply result in more bankruptcies. This may or may not discourage long term energy production, but would certainly create new sets of financial winners and losers.

Why are we hearing about this now, a few weeks before elections in the US?

Opponents of this measure like the Union of Concerned Scientists and Greenpeace have denounced this as “a nicely worded PR exercise (that) is no cure for decades of deception.” The Greenpeace spokesperson added that this proposed measure is intended to “protect executives from legal accountability for climate pollution and fraud.”

Before concluding, to preempt the howls of pain or declarations of self-sacrifice over this scheme, let’s put the numbers in perspective. The U.S. emitted 6.9 billion metric tons of carbon dioxide equivalents last year. The proposed tax, at $40 per ton, would bring in $276 billion or slightly more than Exxon’s revenues last year, about $800 per person here in the US. We also as a nation spent $1.05 trillion dollars on energy last year. The US had a GDP of $19.5 trillion in 2017.

To probably no one’s surprise, a tax (absent other offsets) would raise energy costs. Coal costs would rise the most. But the overall impact on our economy would be relatively modest. We are not sure how a remedial carbon tax compares with the damage that could or will be blamed on climate change. For example, just two recent hurricanes, Irma and Florence, may have cost the US economy $100 billion.

Our point is that the energy industry’s plan raises relatively small sums to address a huge problem. And none of the proposed taxes are paid by energy companies. They would receive a savings offset that would go into their pockets.

Furthermore, most analyses show that energy consumption has a low elasticity of demand. That means we need it when we need it regardless of the price. Adding 25% to the nation’s electricity prices, for example, might only reduce demand by 5%. We get that the price increase of a carbon tax will reduce energy demand and emissions. But how much will emissions rise as an offset by absence of federal regulatory control – as also proposed here? Does the term “Trojan horse” have any application?

Our view is that this is more of an opening gambit. There is a chance the Democratic Party will soon take over at least one branch of Congress, with much of the party’s energy coming from its left. And as a result, environmental legislation is possible.

We think this proposal is an attempt to make some superficial climate concessions (and also seemingly make a grab for the reasonable centrist middle of policy), while radically restricting governmental authority in the area of environmental regulation. On the other hand, if the Republicans retain control of both Houses of Congress next month, then perhaps we would regard this as a possible blueprint. By Leonard Hyman and Bill Tilles for WOLF STREET

“Oil and gas companies are becoming energy companies,” said BP’s Bob Dudley. BP even changed the logo. Read…  The Return of “Beyond Petroleum”: All Talk and No Strategy?  
 

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  95 comments for “Exxon Now Advocates for Carbon Tax? Hmmm

  1. Petunia
    Oct 12, 2018 at 11:48 am

    This is nothing more than another wealth extraction scheme on the working class. We saw it coming in the last election. The deplorables are a lot smarter than they used to be and know nobody spawned in DC is on their side.

    Tesla’s electric generation systems are now poised to be the next really big thing.

    • Petunia
      Oct 12, 2018 at 11:59 am

      P.S.

      Wolf doesn’t like my predictions, but there’s no blue wave coming. Bet the farm on it.

      • Tom Jones
        Oct 12, 2018 at 12:40 pm

        Petunia,

        I’m inclined to agree with you…somehow I doubt that that “Blue Wave” is ever going to reach shore…(Dems just don’t understand/use “power” the way Repubs. do…always snatching defeat from the jaws of victory)

        • BTilles
          Oct 12, 2018 at 3:11 pm

          Hi Tom,
          I have no view about wave elections. But as as far the exercise of raw power, watching McConnell vs Schumer is like watching a cage match between Hulk Hogan and Joan Rivers. The outcome is never in doubt but it does offer the occasional surprising opportunity for amusement.

        • alex in san jose AKA digital Detroit
          Oct 12, 2018 at 4:55 pm

          The working class wants another FDR not Republicanism “lite”. What was done to Bernie hurt them, a lot. I say, if we were gonna lose, we might as well have lost with Bernie.

        • Setarcos
          Oct 13, 2018 at 5:31 am

          @alexinsanjose “The lessons of history, confirmed by the evidence immediately before me, show conclusively that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber.”

          Doesn’t sound like Bernie.

        • Setarcos
          Oct 13, 2018 at 5:32 am

          Quote by FDR

        • alex in san jose AKA digital Detroit
          Oct 13, 2018 at 7:22 pm

          Setarcos – FDR gave out JOBS not just money. The WPA, I believe the Civilian Conservation Corps started then, too. Yes the jobs were make-work but they were work.

          Anyone who’s read The Grapes Of Wrath remembers “the government camp” the residents had to pay some rent, and do their part in keeping the place maintained.

        • Dave Chapman
          Oct 15, 2018 at 4:28 pm

          All of the (White Middle-Class) Democrats I know are still pissed off about how “the Establishment stole the nomination from Bernie”. They don’t like Trump very much, but I would not bet any money on this coming election.

          A small carbon tax is a small step in the right direction. Remember, $25 per ton of carbon equals $0.10/gallon. The proposal in front of us would equal a 5% increase in the price of gasoline. Not remotely enough to change the situation.

      • Kent
        Oct 12, 2018 at 12:58 pm

        I’m with her (Petunia). The Dems just don’t offer anything of value. If I want more war (Libya, Syria), more neo-liberalism (Obamacare), and more immigration, I’ll just vote Republican.

    • Ed
      Oct 12, 2018 at 12:01 pm

      Exxon can see the trend. That’s why they’ve been running those commercials emphasizing their people and their research into clean energy. I suppose too they’ve stopped covertly funding all those anodyne-sounding groups that cast doubt on climate change and also on the integrity of the data and even individual scientists.

      They need to be in position to shape whatever legislation finally does come along.

    • A/C in SD
      Oct 12, 2018 at 12:15 pm

      Petunia, I feel we are all going to pay in the not to distant future. Especially here in CA where the Climate Change crowd has easily convinced the sheep that, as a result of Climate Change the end is near. We will surely get Gavin Newsome as Governor in November and, from what I have heard, he is much farther left than Gov Moonbeam. As you may know Moonbeam has stated that the wants CA in the forefront of the fight to control Climate Change. So I can see the legislature here ramming through a few more taxes ( or rather fee charges) for the masses. BTW, don’t think electric vehicles are going to be exempt. The power to charge those batteries has to come from somewhere. Maybe wind and solar will help but there is no way those technologies can meet the ravenous demand of the good folks here in CA.

      • Petunia
        Oct 12, 2018 at 1:15 pm

        Victor Hansen has described CA as a medieval keep, (as far as I can remember) a coastal aristocracy supported by an inland peasantry. With the number of people voting with their feet, let’s see how long it lasts. I don’t envy anybody living there.

        • Oct 12, 2018 at 4:33 pm

          Petunia, I wish more people here would follow your suggestion. But instead, this place is getting ever more crowded and congested with people who refuse to take your advise and leave :-]

        • alex in san jose AKA digital Detroit
          Oct 12, 2018 at 4:58 pm

          Pet, dear, you’re so right. Any Red-Blooded True Believing American(tm) should just get the hell out of “Commiefornia”. Preferably to whatever state you live in, Florida, right? Or is it Georgia?

          And all your continual noise about how awful California, er, Commiefornia, that you don’t live in, is totally not because you’re jealous, no sir. It’s being done as a Public Service(tm)!

        • Setarcos
          Oct 12, 2018 at 5:59 pm

          They are indeed voting with their feet. Leaving that climate? Wow, but must be interesting conversations at the kitchen table to prompt throwing in the towel.

          Would like to see stats on the average income of in-migration population versus out-migration. Of course, you can get $35k as a taker and $45k as a worker bee.

        • Four Zhu
          Oct 12, 2018 at 6:49 pm

          People in Canada (Alberta and British Columbia) have paid carbon tax since Jan 2018. Even though most people don’t like it, I have to say everybody will pay it. Hopefully, the US government could use the money in the better way, something like deduction in home insurance because I have been told many times by environments that extreme weather events are all results from the clime change…

        • polecat
          Oct 12, 2018 at 8:06 pm

          We escaped in ’04 .. never looked back .. and no, we were of modest means, with only the procedes of selling the domicile (< $200,000) to start afresh, and at the top of the LAST real estate bubble no less !!, so we didn't really gain much after it was all said and done — no pensions, other savings, or assets to speak of.
          There is no way we could ever afford to live there, even IF we wanted to, which we don't.

      • MCH
        Oct 12, 2018 at 2:31 pm

        We are going to so miss Jerry Brown, because whether you liked the man or not, he is what we in CA would call a centrist, because he had some fairly common sense standards for budgeting. Now, he did have that mess called the high speed rail, but at least its nowhere as bad on a per capita basis as what they have in Honolulu.

        EVs are becoming more common in CA, but as you say, it will become a massive drain on the grid as time go on. But as long as we can draw on the power grid, it won’t be too bad. The funny thing is for all the talk of wind energy, the few times I’ve gone through the Altamont pass I’ve noticed quite a few wind turbines off. I wonder if it’s for maintenance of something else. Because you could easily see its neighbors (same exact types) turning along right beside it.

        • BTillrs
          Oct 12, 2018 at 3:02 pm

          Hi MCH,
          Re Honolulu vs Calif., the formers electricity prices are 2-3 timrs higher than the latter’s due to Hawaii’s reliance on expensive, oil-fired electric power generation. Not really a reflection on either state’s politicians.

        • MCH
          Oct 12, 2018 at 10:38 pm

          @BTillrs,

          Actually, if there was one state in the Union where it would be possible for renewables to cover all of the energy needs, it would be Hawaii. The reason that it isn’t able to is because of all of the corrupt politician and the entrenched interests of HECO. Remember how those guys have massively delayed any kind of solar subsidies to folks who put panels up? Why the place isn’t covered in solar panels and wind turbines is beyond me. Now, technically, Hawaii would probably also need whatever battery technology there is to balance power load, but technologically, there isn’t very much preventing Hawaii from going carbon free at least on power generation.

          In my estimation, the reason it hasn’t done it is because Hawaii politicians are a uniquely corrupt and incompetent bunch. Far worse if you ask me than any politician in CA. It wasn’t quite like that when I lived there 30 years ago, but it’s gotten to the point of utter insanity. I see it every year I go there, out of control homeless problem, traffic worse than 101. A prime example of what happens when there is one party rule for nearly five decades, and the Lingle governorship doesn’t count, that was a combination of weird fluke and people finally getting sick of Cayetano, and his would be successor, Hirono.

          But the Donkeys didn’t have anything to fear, after Lingle, they got their power back, and even that loser Hirono managed to step up, into the US senate.

    • BTilles
      Oct 12, 2018 at 1:19 pm

      Hi Petunia,
      I guess we agree. All taxes of this sort are regressive in that they disproportionately affect the less wealthy.

    • RepubAnon
      Oct 13, 2018 at 11:10 pm

      One other issue: in exchange for taxing carbon, the EPA would be abolished. Refineries spit out many more toxic chemicals than just carbon, and these would no longer be regulated.

      Reminds me of a situation a while back: a corporation generously donated a big piece of property to a charity. Turned out to be a Superfund site- having accepted the property, the charity was then responsible for the gazillion dollar clean up costs…

      Let’s keep the EPA, and tax carbon anyway.

  2. Jdog
    Oct 12, 2018 at 12:20 pm

    A carbon tax is worth picking up a firearm and going to war over. If enacted it will make serfs and peasants of all working people.

    • Oct 12, 2018 at 12:34 pm

      Like the gasoline tax or alcohol tax? Carbon tax is just a tax on a specific item. You could also tax the energy content (a BTU tax was floated a while ago). A carbon tax has a similar effect as an increase in the gasoline tax, only it’s a lot broader and doesn’t exempt certain users, such as power plants and industrial users.

      • Don
        Oct 12, 2018 at 1:27 pm

        Actually, there was an armed rebellion over taxing alcohol, the Whiskey Tax of 1791, the first federal tax on a product for paying off war debt at full price–debt bought up by speculators at cents on the dollar—,debt incurred during the war of secession from Britain, and was also the first use of federal militia or troops to quell a rebellion over taxation of the newly liberated indentured servants and peasants and farmers qua distillers to pay off the war speculators. I gather the proposed carbon tax will function to pay off the 4 trillion dollar war on terror debt held by pension funds, Senator Corzine, Gore, Goldman, etc., only under the guise of saving the planet from global warming. Yes?

        • Setarcos
          Oct 12, 2018 at 6:24 pm

          Thank you for the reminder! The more things change the more things remain the same….as the centuries pass one by one.

          Let’s pass a $1 a pint tax on craft beer! But of course that would never happen because those who consume those pints are actually much easier to extract freedom from. In Russia, vodka was the tonic for those in control.

        • BTilles
          Oct 13, 2018 at 6:31 am

          Hi Don,
          If we updated Shay’s Rebellion we would have a US army green beret stationed abroad in a war zone,
          wounded, decorated, promoted and then at risk of losing his home for unpaid debts. Soldiers in Shay’s time were not paid. There was a class element here in that Shay and his followers were said to be opposing the Eastern banking elite.

      • Stompe, Reinhard
        Oct 13, 2018 at 2:45 am

        Its NOT a tax on a specific item. I can decide whether I drink alcohol, smoke or drive a car more or less. No one can escape this tax, which is nothing but a preemptive PR stunt to get rid of EPA regulations. The term change alone, from “Global Warming” (undeniable facts dont play along) to Climate Change (which has been always changing), should make it clear to every self thinking person that there is no GW. The “warming” measured in the Lower Atmosphere since 1979 is 0.14 degrees C. The Ice shelf of Antarctica is on a record size. The Southern Hemisphere is clearly getting colder. GW profiteer Al Gores claim of a temperature increase of 0.8 decrees in 160 years, measured on the surface of the earth, sounds ridiculous in the ears of an engineer. The 0.8 degrees are probably smaller than the error one has to assume for this “measurement”.

    • Alistair McLaughlin
      Oct 12, 2018 at 12:37 pm

      I lose faith in humanity when I read extreme silliness like that. If carbon taxes replaced a slice of income tax, so what? I used to hear similar arguments here in Canada during the GST debate in 1991. It was absurd then, and is still absurd. The GST did not impoverish anyone, and if it weren’t enacted, our tax system would be even more distortionary and inefficient – not to mention income tax-heavy – than it already is. The US too would benefit greatly from a shift in taxation from income to consumption, particularly energy consumption. Not exactly a carbon tax, but close to it.

      Personally, I’m not in favour of a carbon tax specifically. I prefer a broader-based energy consumption tax to replace much of the income tax we pay (that’s here in Canada, though it would be even more beneficial in the US where governments are even more reliant on income taxes, and fuel and sales taxes are lower).

      The argument that usually comes up at this point is “Yahbut, politicians will just increase carbon taxes without cutting our income taxes!” OK, assuming that is true, what you are saying is that no tax reform is ever possible, and that the current system, heavily reliant on income taxes (the most damaging and distortionary taxes in existence except possibly for tariffs), will remain in place forever. Are you sure that’s what you want?

      • BTilles
        Oct 12, 2018 at 1:57 pm

        Hi Alistair,
        Am in sympathy with a no. of your points. But the carbon tax proposal under review here is interesting precisely for its simplicity and its bargain: modest tax in return for sweeping regulatory rollback.

        • Prairies
          Oct 12, 2018 at 5:55 pm

          “modest tax in return for sweeping regulatory rollback” I am not a fan of this idea. They want to pay a fee for you to look the other way when they pollute.

  3. Setarcos
    Oct 12, 2018 at 12:31 pm

    Just guessing …the really big people have been busy monetizing the move away from fossil fuels for quite a while.

    The climate and everything else was changing long before extraction of fossil fuels. Once saw fish fossils that were dug out of a mountain several thousand feet tall…that mountain was once at the bottom of a lake. Or animals flash frozen with grass still in their mouths. Hmmm.

    Now Denmark taxes cattle because of flatulence. You cannot make this stuff up.

    • BTilles
      Oct 12, 2018 at 2:02 pm

      Hi Setarcos,
      Agriculture as a sector has a huge carbon footprint, flatulence (methane) included. Dennark is not the only country to recognize the issue. As the article states about 40 countries have CO2 regs/controls.

      • Prairies
        Oct 12, 2018 at 6:06 pm

        Agriculture is nowhere near the carbon footprint of the manufacturing of steel products or the generation of power. But blame cow farts, all the grass and trees they nibble on hate the smell so much.

        • BTilles
          Oct 13, 2018 at 8:35 am

          Hi Prairies,
          According to various sources agriculture globally is the second kargest emitter of greenhouse gases after energy. In the US the USDA estimated that ag contributed about 10% to total GHG emissions in one year. This also includes forestry.

        • Ed
          Oct 13, 2018 at 10:32 pm

          I’d refine your point by emphasizing that whatever percentage agriculture plays — and it’s not dominant — it’s the percentage that we don’t really control.

          Smart humans concentrate on what we control when we confront a problem. And do our best to ignore what we don’t control, if indeed we are sure we don’t. I think there is even a prayer along these lines . . .

  4. JimTan
    Oct 12, 2018 at 12:35 pm

    Hmmmm…….I think were this gets tricky is which consumer of the fossil fuel product is responsible for paying the carbon tax.

    In the case of electricity generation, it seems obvious that either the resource extractors or the power generation companies will pay carbon taxes for the coal and natural gas that is burned. Since natural gas emits half as much carbon dioxide as coal, this tax will give natural gas producers like Exxon an advantage over coal companies.

    In the case of auto and truck transportation, it’s not so obvious which consumer of the fossil fuel will pay the carbon tax. Is this tax applied to the crude oil extractors, to the refiners, to the pipeline transporters, to the auto & truck manufacturers, or to consumers at the gas pump. Oil companies may claim they merely process oil, while drivers are the ones who actually release carbon dioxide, and auto manufacturers are the ones who build carbon release mechanisms. My guess is that ultimately the oil carbon tax will mostly be paid by auto manufacturers, truck manufacturers, and consumers at the gas pump.

    • BTilles
      Oct 12, 2018 at 2:09 pm

      Hi JimTan,
      Too many good points to respond to in brief but these are mostly policy questions. Apart from who pays, this proposal almostly flatly states coal is dead and we’ll work on the methane in natural gas. Not a terrible first step.

  5. Chris
    Oct 12, 2018 at 12:44 pm

    Who has benefited the most under Trump? The 1% have gained a lot more under Trump than under any of the previous Governments. Tax Reform is meant to help the 1% and not the 99%. Middle class and the poor will not gain much from this but are going to lose a lot from the cut in social services. If there is no blue wave, the poor and the middle class will be wiped out.

    • alex in san jose AKA digital Detroit
      Oct 12, 2018 at 5:05 pm

      Absolutely. At least where I am there’s a lot of noise about getting registered and voting. I hope this is nationwide.

      As always, my standing advice to any 20-something is to get the hell out of the US. That’s regardless of skills; just get out. If you’re older it gets trickier. But while you live in this 2nd world mediocre country, you don’t “get” to miss an election.

      • Unamused
        Oct 12, 2018 at 5:34 pm

        ->As always, my standing advice to any 20-something is to get the hell out of the US.

        Before they close the borders.

        Now for the tricky part: where do you go?

        • alex in san jose AKA digital Detroit
          Oct 12, 2018 at 11:09 pm

          Asking the important questions, my friend.

          Some off-the-cuff recommendations:

          Ireland wants people, as long as they’re at least partially Irish; pick up your local Irish newspaper and there will be several immigration agencies.

          According to one Charles Cather on YouTube, Serbia’s lovely any time of the year. His videos are quite entertaining, and his takes on some Serbian foods are priceless. You’ll have to learn Serbian, really ought to look at least somewhat Serbian, and keep in mind it’s a deeply Christian country where it’s all about “your” saint’s day etc., but the average person lives just fine on about $400 a month there.

          Eastern Europe in general: Most of those countries seem to be depopulating, and you can always get a job teaching English. Everyone will have relatives/friends who “went to America” so you’ll have some point of commonality.

          There are the Commonwealth countries, which are a go if you have a good trade, or a good college degree. In other words, if you’ve got it halfway made here in the States, you could have it all the way made there. Not in terms of getting rich, but in terms of having far less chance of losing everything because you get sick, dying in the street when you’re old, or your children being forced into a permanent underclass because you couldn’t afford to live in the right area with the right schools.

          If you’re Jewish or don’t mind converting there’s Israel. Sure it’s a little sliver of mostly desert, but it’s like an SF novel; put tons of super intelligent people on some so-so land and watch ’em take off. There’s healthcare, education, etc all regardless of class or color, in fact they really don’t do “class” there and as for color, Jews come in all of ’em.

          There’s Russia, on the if-you-can’t-beat-’em-join-’em principle. Russia’s huge, and writer Dmitry Orlov bets on Russia doing better than the US in the future. Yeah, it’s run by an oligarch flanked by slightly lesser oligarchs, but how things are at the ground level are what we’re talking about here. There are many great YouTube posters on how it was (The Ushanka Show) and how it is (titles like “Real Russia” and so on).

        • alex in san jose AKA digital Detroit
          Oct 13, 2018 at 4:42 pm

          A correction on the “if they’re at least partially Irish” – they want anyone who meets their criteria, but in the US at least in my area there’s an emphasis on Irish heritage because there are a lot of people with some Irish heritage in the US and especially in certain areas, mine being one of them.

          An advantage to leaving for Ireland would be that they’re staying part of the EU.

        • bemused
          Oct 17, 2018 at 11:58 am

          This is a correction to Alex’s suggestion of Ireland. I guess you can’t reply more than a few nests deep or I’d have done so there. I’m an American living in Ireland about half the year. I am not permitted to work. I pay 300 euro/year for the privilege (my wife will pay the same when she retires. I must buy health care insurance (fortunately only about 100 euro/mo) and must show a bank account with a large amount in it or be able to prove I have a large income from abroad (it was raised to 50k euro/year and a bunch of ex-pats who had been living there for many years were kicked out over that; there was a big stink but I don’t know if it changed). If at least one parent was born in Ireland or a grandparent (who must be alive at the time of application) you can claim Irish citizenship and obviously the above do not apply.

  6. Kent
    Oct 12, 2018 at 1:05 pm

    I’m all for a carbon tax. But instead of using it to offset income taxes, use it to shore up the social security trust fund. Lower income working class folks are hurt the most by a carbon tax, and helped the most by social security.

    Nothing worse than some jack-a$$ using his private jet to fly across the country and getting a $2500 check to offset his income taxes for the effort.

    • Petunia
      Oct 12, 2018 at 1:22 pm

      Social security is already taxed for a person earning as little as $32K a year, for a couple it is a whopping $44K before they tax up to 85% of it. This taxation of social security is another gift from the Clinton administration.

      The income limits paying into SS need to be eliminated and we would have plenty to fund the system and medicare.

      The carbon tax was a taxation scheme created on Wall St. to suck more money out of the real productive economy. I was there when they first thought it up and I still can’t believe they got away with selling it.

      • alex in san jose AKA digital Detroit
        Oct 12, 2018 at 5:07 pm

        Taxing Social Security is weird because it’s money you put into that “trust fund” and taxes have already been paid on it.

        Yet another reason the Democrats are just Republicans under another label.

        • polecat
          Oct 12, 2018 at 8:14 pm

          Instead of a truncheon, Democrats use the kinder, gentler .. Sock … that’s laden with pennies !
          Hurts so soft …

      • SquarePeg
        Oct 13, 2018 at 5:57 am

        The oil industry in Canada endorsed the Alberta government’s carbon tax too, to my surprise at the time
        and maybe because they see it as a windfall with the benefit of great PR for the sheep to graze on.
        That’s when I got off the fence and realized that this carbon tax idea is probably a SCAM on the sheep and an assault in the wolves. Either way they are looking to get us all.

    • BTilles
      Oct 12, 2018 at 2:14 pm

      Hi Kent,
      We agree. First permit Congress to pass tbe carbon tax at whatever level and then allocate revenues where needed. This proposal in interesting because it would refund 100% of carbon tax collections back to individuals, denying the gov’t use of the funds.

      • Steve
        Oct 12, 2018 at 3:07 pm

        If you believe the Gov will simple refund this, you are either very naive or vary foolish. The Gov never gives up revenue without a fight. That’s simple the nature of Governments.

        • Unamused
          Oct 12, 2018 at 5:39 pm

          ->The Gov never gives up revenue without a fight.

          Happens all the time. Trillions in tax cuts for the rich can’t be wrong, and neither can trillions in tax evasion that’s never pursued because funding is stripped to the bone.

      • Unamused
        Oct 12, 2018 at 5:36 pm

        ->it would refund 100% of carbon tax collections back to individuals

        Essentially bribing people with their own money. That’s about as brazen as it gets. Sure you want to buy into this?

  7. Anon1970
    Oct 12, 2018 at 1:25 pm

    The fight against global warming is doomed to failure if the world cannot get the poor to have fewer children. The world’s population has grown from about 2.5 billion in 1950 to about 7.5 billion currently. Africa’s population has grown at a much faster rate since 1950, with the introduction of various UN programs designed to reduce infant mortality among others. Some of you may remember the UNICEF newsreels from the mid-1950’s which featured actor Danny Kaye.

    • safe as milk
      Oct 12, 2018 at 2:04 pm

      the un is working on it. that’s the real agenda of many ngo’s. for example, take the rockefellor foundation. they give millions to improving women’s education and distributing birth control in africa. study after study show that educated women have fewer babies.

    • BTilles
      Oct 12, 2018 at 2:17 pm

      Hi Anon1970,
      The fight against global warming may be lost if we don’t convince China, Russia and India to join.

    • alex in san jose AKA digital Detroit
      Oct 12, 2018 at 5:10 pm

      Anon1970 – And yet, the US has fought a hell of a battle over the decades to de-fund any programs that involve birth control.

      So yeah, send them wheat etc because that’s money paid to US agribusiness, but don’t let them have The Pill because we as a “Christian” country can’t abide that.

    • Unamused
      Oct 12, 2018 at 5:52 pm

      ->The fight against global warming is doomed to failure if the world cannot get the poor to have fewer children.

      The fight against global warming is doomed to failure. Fixed it for ya.

      Eventually this will be obvious even to people who haven’t noticed that all the worst-case scenarios have regularly been exceeded for years, and there is insufficient political will even to slow the rate of acceleration. The ‘carbon tax’ plan is little more than yet another ploy to profit from it, and the profiteers hold all the cards.

      • bemused
        Oct 17, 2018 at 12:08 pm

        All the worst case scenarios for CO2 generation have been exceeded and the climate has stubbornly refused to warm anywhere near what the models said it would. People are starting to notice that after almost 30 years of gloom-and-doom catastrophic projections not a whole lot has changed. It’s been hotter before, its been colder before. Same as its ever been.

  8. Joe Stalin's Ghost
    Oct 12, 2018 at 1:55 pm

    I’m all for carbon taxes <—- proof leftist brainwashing works

    Let's tax oxygen then…. it's 2/3s of a carbon dioxide molecule

  9. safe as milk
    Oct 12, 2018 at 1:58 pm

    the carbon tax is just the beginning. the goal is carbon permits. the idea is to trade carbon permits in an exchange. they are desperate to fiancialize climate change.

    • BTilles
      Oct 12, 2018 at 2:22 pm

      Hi safe,
      The idea of financializing climate change is interesting. But like sword it could cut both ways. Start to put large numbers on that climate damage and the blame and financial/legal responsibility could return to the energy companies.

      • safe as milk
        Oct 12, 2018 at 4:05 pm

        hi btilles – the neo-liberal economists have been pushing for this for decades. look up “cap and trade,” if you want to read more about it.

        • BTilles
          Oct 12, 2018 at 4:49 pm

          Hi Safe as,
          Agreed. Now, imagine cap n trade under Pres. Bernie Sanders, Dems controlling both houses of Cong., and neo-libs, at least temporaily, in retreat. The weaponizing I’m think of is more akin to tobacco liability lawsuits where the tobacco co.’s were clearly complicit in what — this is a family blog — we’ll call abuse of the scientific record–just like the oil co.s etc. The Greenpeace comments also suggest as much.

  10. Hurtin Albertan
    Oct 12, 2018 at 2:53 pm

    Our major oil companies here in Alberta also advocated a carbon tax, because they knew they’d be the only ones who’d be able to afford to comply with it and it would consolidate their market share. With a radical left wing government currently in power here they got ahead of the curve and got to influence the legislation, but the tax has proved immensely unpopular and will be dead in the water once the lefties get ousted next year (conservative party is polling at almost 70%). It seems the unwashed masses were smart enough to realize that a tax on carbon really means a tax on everything.

    A number of other provinces have come out against carbon taxes and despite Justin Trudeau’s best efforts, the national carbon tax he wants to impose looks dead. Voters just don’t like it, no matter how much politicial spin is put on the message (“revenue neutral”, “most people will come out ahead” etc).

    Australia also dabbled with a carbon tax before the voters roundly rejected it and they reversed course.

    Both Canada and Australia lean further left than the US on average, so it just doesn’t seem plausible that a national carbon tax would ever pass in the US. I imagine there would be some very strong opponents in congress who would have the power to kill any such proposal. Likely the best the environmental types could hope for are state carbon taxes in solidly blue states, but even that might be a stretch.

    • Lindsay Berge
      Oct 12, 2018 at 8:33 pm

      Translation: We are wrecking the world and cannot manage even the simplest and economically effective way to even begin to address the problem because we are too selfish.

      • Unamused
        Oct 12, 2018 at 10:29 pm

        ->because we are too selfish.

        Along with every other failing we have a name for, and thus assuring the unhappiest destiny well-deserved. Van Gogh was wrong, the tears will end. They will end.

    • BTilles
      Oct 13, 2018 at 8:23 am

      Hi Hurtin,
      This proposal for a carbon tax, which is why we were interested, comes from the conservative, moneyed wing of the Republican party with a smattering of right wing Dems for cover like Bloomberg. No it prob. would not pass today’s Congress. But that’s not the intended audience. This is for a future, more moderate legialative body and they are trying to carve out the “reasonable middle” along staunchly conservative lines.

    • Oct 14, 2018 at 3:08 pm

      Hurtin – I think the carbon tax issue is different in Canada and Australia than the US.
      Here we have varying state systems like California’s cap-and-trade, and the Obama administration empowered the EPA to regulate carbon emissions. These regulations can be quite arbitrary and change profoundly with each new presidential administration.
      The carbon tax in the article would actually be easier on energy companies which is why they support it.

    • Dave Chapman
      Oct 15, 2018 at 4:47 pm

      Well, yeah, but the real problem with Alberta and Australia’s Carbon Tax was that it was a Carbon Tax IN ADDITION TO ALL OF THE OTHER TAXES.

      This caused various economic problems, with which you are probably familiar. It also caused a deadly political problem:

      Since no other taxes had been cut, it was very easy to just repeal the Carbon Tax after the next election.

      BC, on the other hand, got rid of the small business tax, lowered the sales tax, abolished a fair number of “junk taxes”, etc. This meant that anyone who wants to abolish the Carbon Tax has to explain which of the other taxes will get raised. So far, the locals prefer a Carbon Tax. . .

  11. Scott
    Oct 12, 2018 at 3:09 pm

    One aspect that I like about carbon taxes rather than the more common renewable energy/electric vehicle policies is that they (should) hit everything that produces CO2, including industrial processes such as cement manufacturing, and other sources, like air travel. Although these are much smaller sources of carbon emissions, they are still significant and can be reduced. I’d like the proposal much more if it also included policies towards methane emissions and fugitive coolant emissions (which are up to 7000 times as much as an equivalent amount of carbon dioxide.

  12. Maximus Minimus
    Oct 12, 2018 at 3:22 pm

    As the author mentioned, the biggest problem with carbon tax is the elasticity of demand. It might become just a feel-good exercise for the awful energy waste. But it might bring closer to that ultimate horror: a balanced budget (only if put into a special account).
    In my view, the best way to save the planet is by old fashioned monetary policy: raising rates to 5-6% will put an end to global globe-trotting habits, and runaway housing construction boom.

    • BTilles
      Oct 12, 2018 at 3:52 pm

      Hi Max,
      No chance of a balanced budget with this plan insofar as it contemplates retutrning all carbon tax proceeds to the public.

      And as for 6% yields on the US long bond as a solution, apart from the likely unfortunate impact on asset prices, I guess a US budget deficit approaching 2 trillion dollars would result in a considerable amount of unexpected energy conservation.

  13. Wisdom Seeker
    Oct 12, 2018 at 5:16 pm

    A big problem with any carbon taxation plan is the accounting and preventing fraudulent abuse. What scenarios trigger the tax and which get neglected?

    Will people need to pay a tax just to burn wood harvested from their backyard in their own fireplace?

    Will people need to pay a carbon tax to buy a biodegradable polymer water bottle (which decomposes into CO2 when composted)?

    Will people need to pay a carbon tax to use a public toilet (again, guess what decomposes into CO2)?

    Will foods face a federal carbon tax, even though they are currently exempt from sales taxes?

    This sort of change will trigger enormous unforeseen consequences…

  14. Flying Monkey
    Oct 12, 2018 at 5:45 pm

    1.) I have a hard time believing that the taxes in full will not just filter down to the consumer. I do no see demand being elastic enough that some other group in the gravy train will chip in and pay part out of profits.

    2.) 40$/ton carbon tax —-> .77 Kg/L 84% carbon one liter gasoline –> .77 x .84 x 44/12 = 2.36 kg co2/L gas @ $40/ton co2 means at tax of 2.36/1000 x 40 x 3.785 = $.357/gallon

    Baker endorsement of plan –> Schulz endorsement of Thernanos ???

    Airline flight LA-NY –>2451 miles, Airliner gets 73mpg(2.3L/100km)
    carbon tax = 2451/73 x 44/12 x .8 x .83 x 3.785 /1000 x 40 = $3.27

    • Unamused
      Oct 12, 2018 at 10:30 pm

      ->$3.27

      Is that a lot?

      • Flying Monkey
        Oct 13, 2018 at 12:07 pm

        $3.27 is not a lot so I do not think it will significantly change behaviors I don’t see how the carbon tax at that level will prevent a possible climate change catastrophe. Isn’t the tax supposed to get people to reduce their CO2 emissions after all?

        People will still fly and pay the tax.

        It will be interesting to see the game playing when the tax becomes a significant percentage of the cost.

        Supposedly GDP and energy consumption are linked. Watch for the crying when GDP is affected.

    • Flying Monkey
      Oct 13, 2018 at 12:18 pm

      Correction: Math error: The airline ticket is maybe $12.37 more expensive.

      Still it is probably not enough to change habits, but is enough to be a nuisance.

  15. Ian
    Oct 13, 2018 at 7:04 am

    Funny how every remedy for climate change results in a direct or indirect tax on households. Combine that with claims of dubious numbers in the models and no wonder people are sceptical.

  16. Oct 13, 2018 at 8:12 am

    was t senator Breaux a Democrat? that s what his description online says

    -maybe that should be corrected so people can know that both flavors of cool-aid are contaminated

    • Oct 13, 2018 at 9:20 am

      Yes. Fixed. Thanks.

    • Unamused
      Oct 13, 2018 at 9:23 am

      Laugh about it, shout about it, when you’ve got to choose, every way you look at it, you lose.

      Most of all you’ve got to hide it from the kids.

    • BTilles
      Oct 13, 2018 at 11:59 am

      nice catch, thanks, his successor, Vitter, was/is obv. a R.

  17. 2GeekRnot2Geek
    Oct 13, 2018 at 9:55 am

    I wanted to respond to so many comments today, that I knew I’d break the rules.

    It is with anger, frustration, amazement and sadness that I have watched business/religion/U.S. government/U.S. people ignore and degrade science for the last 2-3 decades. The best way I can frame this thought is: Knowledge of an impending catastrophic event is immaterial when self-interest gets in the way.

    Anyone who has been a long time gardener has seen the environmental changes ramping up for the last 30 years. (I’ve been a gardener for 50 years in the same area.) I have no idea when the positive feedback loop starts, or if we are already in it.

    When the science describing climate change (global warming, call it what you will,) is ignored or refuted by corporations and people whose interest are aligned with said corporations, a carbon tax makes perfect sense.

    It allows business as usual to continue, while defraying the costs of the tax to the entire population. As with every other item for sale, the tax will just be passed on to the consumer.

    It’s a win-win for the corporations. Fuel/energy companies will still retain government subsidies, nullify the responsibility for ecological damage, and the financial/ecological cost of the tax is passed on to the consumer, and the corporate “knights in shining armor” get to publicly declare “corporate responsibility”.

    For U.S. West coast, Southwest, SE coast, and gulf coast states, the cost of this willful ignorance and self interest is already apparent. These costs will come for everyone, everywhere. The only questions are when and how much.

    The next item will be water. My best guess is this will start to get really interesting in the U.S.A. in the late 2020‘s.

    • Kchiggs
      Oct 13, 2018 at 1:00 pm

      1 to 3 degrees rise in global tempsas runaway feedback loop we are at 1.5

      If we could Kill all emissions right this second for ever,it might be too little too late.

  18. Oct 14, 2018 at 10:51 am

    No, the oil companies are not saying that the “climate” “science” fraud is real. They’re saying that the “climate” “science” fraud, WHICH WAS PARTLY FUNDED BY OIL COMPANIES, gives them a new way to make more profit while looking cool. That’s all.

  19. cojo
    Oct 14, 2018 at 11:58 am

    It seems that many complaints about the carbon tax is that it is a free giveaway to O&G companies. I would have to imagine that a carbon tax would somehow benefit renewables and allow them to compete more effectively in the markets.

    The other complaint is that a carbon tax will be too little too late, and will be a political tool that will never appropriately value the costs of greenhouse gas emissions. I say, let’s have a carbon tax, but a carbon tax with teeth. It will need to be gauged based on a significant national carbon reduction target. If the target fails, the tax goes up the following year. This positive feedback loop will allow for a market based solution with real effect.

    • cojo
      Oct 14, 2018 at 12:03 pm

      I would also add that Republicans will also want the carbon tax to be revenue neutral. If that is so, then all the proceeds from the tax should go to the EPA, or to climate change mitigation funding that can be run by the agency of choice. This will allow for adequate funding of the EPA and should help dissuade any concerns about abolishing this agency.

  20. saylor
    Oct 14, 2018 at 2:34 pm

    NOVA has done an excellent piece titled “Decoding the Weather”.
    It lays down the science (yes…, science…, no PACs unless you think PACs have been in collusion since the 1800s. So anybody that wants to rail in that direction, please spare me the book burning). It shows the first modern realization that the atmosphere plays the large part of global temperature (early 1800s) then latter in that century that carbon was the predominant gas to trap heat. Since then, science has also been able to determine what carbon is fossil fuel based as opposed to other carbon existence by neutron count. This exchange of a tax to roll back EPA regulations is still a stupid approach to dealing with what will be a mass extinction event. The earth will live on, ‘we’ will probably not. When the variation of weather was mostly regional, global food supplies were flexible. When variation of weather reflects a global climate change, we become a lot closer to a food crisis that will tip all things over. Good luck, so long and thanks for all the fish.

  21. Oct 14, 2018 at 2:49 pm

    This carbon tax proposal is actually a good idea.
    Like it or not, we’re going to see more regulation in that area in the future. Current schemes like arbitrary regulatory rule changes or CA-style cap and trade give politicians too much control over the process so that they can game the financial system to enrich themselves.

    This carbon tax idea gives a long term predictable incentive to reduce emissions in a fair and unbiased way.

    • Dave Chapman
      Oct 15, 2018 at 4:53 pm

      Agree: This carbon tax proposal is actually a good idea.

      It’s just way too low.

      Meanwhile, countries like India subsidize Diesel fuel and Kerosene, which almost certainly causes use of solar-powered pumps and solar-powered lighting systems to be reduced. Stupid. Yet, never once has one of those International Climate Conferences proposed a treaty to ban such subsidies. Instead, it’s all feel-good nonsense and vague “commitments”. Stupid.

  22. Mean Chicken
    Oct 15, 2018 at 8:32 pm

    I’m the old Native American standing on the side of the road with a tear in his eye.

    I hear more lies than truth, based on what I witness with my own eye.

  23. Leonard Hyman
    Oct 16, 2018 at 8:10 am

    I agree with John Taylor and Dave Chapman that a carbon tax is good policy, especially when it is accompanied by smart regulations that nudge consumers in the right direction. It should lead to more economical means to reduce emissions than having politicians decide on which projects to support. The British government, led by Conservatives, no less, have demonstrated how to saddle consumers with the most expensive (but visible) alternatives. Our problem with the carbon tax proposal under discussion is that it seems more of a diversion than a serious effort to reduce emissions and slow climate change.

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