Obama Team Not Open to Carbon Tax? So How Best to Move Forward on Climate Change?

Today, White House spokesman Jay Carney at a press briefing told reporters that the Obama Administration would not consider a carbon tax to help reduce US carbon emissions. Carney stated:

“We would never propose a carbon tax and have no intention of proposing one. The point the president was making is that our focus right now is the same as the American people’s focus, which is on the need to extend economic growth, expand job creation.”

Carney then went on to talk about how the Administration was primarily focused on US jobs creation efforts and that any climate change measures would have to fit into the larger jobs growth and economy puzzle.

Unfortunately, Carney seems to think that the notion of a carbon tax and economic growth are incompatible. A notion the 75 billion dollar and growing disaster that was Superstorm Sandy, an idea the 75+ billion dollar drought in the heartland, both well belie. A notion that the, ever-increasing, cost of fossil fuel extraction also drastically undermines. But Carney is, likely, just denying republicans and others who support low tax rates for the wealthy a way to transfer more of the tax burden onto middle and lower income Americans.

In recent weeks, it appears republicans were tinkering with the carbon tax as a means to increase the tax burden for working Americans while lowering it for the wealthy. And this is an effort to certainly be avoided. The problem lies in just how a carbon tax would be implemented. Would it be, primarily, a punitive tax on energy consumption? In such a case, it would almost certainly harm the prospects of working Americans, unless, of course, the taxes were re-invested in the economy in a way that benefited workers and middle class families.

With world climate agencies noting that civilization-wrecking climate impacts emerge if we burn just 20-30 percent of the world’s current fossil fuel reserves, it does, indeed, appear that a major disincentive for burning fossil fuels should be in the offing. And that such a disincentive would preserve the possibility of growth and prosperity, rather than undermine it.

If the Administration were to re-consider the notion of a carbon tax, they could very well employ such a tax in a growth neutral or even pro-growth fashion. In a way that didn’t harm working families, but helped. In such a case, the tax would not just be punitive, it would be an incentive. James Hansen’s tax and transfer plan would result in a carbon tax at the well-head or point of sale being directly transferred to individuals as a subsidy. The result would be, on the one hand, increasing carbon costs, and, on the other hand, money in the pockets of Americans incentivized to purchase low or no carbon fuels and technologies. The result would be a gradual phasing out of carbon based energy without an overall punitive impact to US growth. If transfer is an unsavory notion for politicians, then the money generated from taxes could be directly invested in renewable, zero-carbon, energy systems and in re-training programs for persons who may lose their jobs in high-carbon industries. Such programs would both create new jobs and reduce or eliminate losses from old industries.

The fact that such basic notions aren’t obvious is somewhat disconcerting. Loss of coal mining jobs, for instance, may be a forgone conclusion. But if these workers can be re-trained to work on wind and solar facilities, then the result is a net gain. Especially when you consider the fact that each renewable energy dollar spent results in three times the amount of jobs stimulus as each fossil fuel dollar spent. Such increases in labor may not result in the kind of concentrations of profits as the old oil and coal industries. But the effects of such wealth hoarding have already proven very damaging to the US economy as a whole.

That said, and to the Obama Administration’s credit, they may well be attempting to avoid maintaining lower tax rates on the wealthiest Americans through the vehicle of a carbon tax. And, in such a case, it is obvious why that kind of trade-off should be avoided.

However, if a carbon tax is off the table, there are a number of other measures that can still be pursued. Below are just a few examples:

Renew the Production Tax Credit

The first would be the immediate renewal of the production tax credit for wind and solar energy. Preferably, this renewal would be for a full decade. Such a long-term renewal would provide stability for the growing US wind and solar industries and spur investment in these key technologies, keeping the rate of adoption high. Growth in these critical industries would result in a powerful engine for generating new jobs.

Cut Tax Incentives for the Fossil Fuel Industry

Over 40 billion dollars in tax incentives have gone to the oil and gas industry. Yet the industry continues to produce record profits. Given this clear math, such incentives are entirely unnecessary and wasteful.

Provide Subsidy and Incentive For Smart Grid and Energy Storage

Thousands of jobs could be created through wise investments in both a smart grid and in powerful new energy storage technologies. Both will be necessary if we are to smoothly handle a growing portion of our energy coming from renewables. This powerful new infrastructure will serve as a mechanism to enhance economic growth for decades to come.

Establish a Climate Mitigation and Adaptation Fund

Set aside a portion of savings from winding down the war in Afghanistan, from levelized military spending, and from removing tax incentives for the fossil fuel industry for two purposes. The first would be for direct investment in critical new clean energy technologies (wind, solar, evs, low-carbon farming, new energy systems, economic and non-damaging carbon capture). The second would be for hardening the nation’s infrastructure to the potential new harms caused by climate change. Research into new farming techniques more adapted to a drier climate and deployment of more resilient coastal infrastructure are examples. Care must be noted that mitigation should receive equal or greater funding as it is impossible to adapt to the worst instances of human caused climate change.

Retraining Initiatives for New Industries

Provide funding for individuals who have lost their jobs to train in critical new industries related to mitigating climate change, responding to climate emergencies, and to adapting to a changing climate. Funds should be targeted to jobless college graduates and to workers who lose their jobs in fossil fuel based industries. A portion of this funding would go to establishing relationships with new industry players and facilitating employment.

Establishing Wind and Solar Energy Corridors in Farm and Fossil Fuel Country

Provide incentive for the development of alternative energy in areas where economies were previously dominated by fossil fuels. This diversification would result in economic resilience in these regions, providing a source of new jobs and added stability. Particularly critical is developing these new energy sources for the Appalachian region where workers have been victimized by exploitative coal barons such as Massey. Also useful would be the development of clean energy technologies in farming regions. The result would be the preservation of lands used for food production as well as providing a safety net for these regions in the event of extended harm to farming due to drought.

Use the EPA to Regulate and Reduce Carbon

Provide base-lines for carbon reductions from key industries via the EPA. Increase these base-lines over time. Use the EPA to provide efficiency standards for appliances, vehicles and other equipment. Push efficiency standards higher over time.

Provide a Fund For Renewable Energy Laboratories at the Nation’s Public Schools

Invest public money in incentivizing purchases of solar panels for public schools. Establish science curriculum at these schools that involve students directly in the management of the school’s solar energy resources. Teach the science of clean energy and environmental stewardship at these schools.

Provide and Maintain Tax Incentives for Home Owners and Businesses to Install Solar Panels, Purchase Electric Vehicles

Set aside monies that incentivize the installation of solar panels for US homes and businesses. Set aside and maintain similar incentives for electric vehicles.

Shut Down Dirty Coal Plants, Sell Public Land Coal, Fossil Fuels at Higher Prices

About 6% of US electricity production comes from old, dirty plants. Use the EPA to rapidly phase these plants out. Furthermore, many fossil fuel companies purchase mining rights for US coal, oil, and natural gas on public lands at a pittance. Increase the royalty payments required to access those resources.

Remove Regulatory Hurdles for the Installation of Wind and Solar on US Homes and Businesses

In many regions, the regulatory hurdles for installing wind and solar for US homes and businesses is punitive and prohibitive. Remove these hurdles to increase the rate of home owner and business new technology adoption.

Require that all New Homes and Buildings include Solar

Requiring that every new home and building in the US include solar energy systems would greatly enhance solar energy adoption in the US.

Require EV Recharge Station Installation for all New Streets and Parking Lots

Requiring that all new parking facilities and refurbished streets require EV charging stations would rapidly increase the adoption potential for US electric vehicles.

Set a Carbon Tariff on Goods Produced by High-Carbon Economies Coming Into the US

Set a tariff on goods produced by countries with high-carbon economies. Provide exceptions if those goods come from facilities that switch to low-carbon or zero carbon energy sources. Such a carbon tariff would help to leverage the US’s strength as importer to reduce global carbon emissions.

These are just a few initiatives that could be pursued that will incentivize US jobs growth while also resulting in the rapid deployment of high-efficiency and zero-carbon technologies.

UPDATE:

It appears that the climate blogosphere is somewhat abuzz with outrage over Obama’s not supporting a carbon tax. There’s some good discussion on the issue here:

http://thinkprogress.org/climate/2012/11/16/1206321/new-york-times-slams-obama-for-lame-flip-flop-on-economic-benefit-of-climate-action/

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