Climate mitigation schemes like "cap-and-trade" (C&T) and "clean coal" got reams of free promotion during the presidential campaign. But once the election was over, people had a chance to actually look up what both meant and saw both were filled with more than a fair share of hot air. So the prospect of a carbon tax -- or maybe something with an easier-to-swallow name -- is gaining traction. Yesterday, the Environmental and Energy Study Institute, the Carbon Tax Center, the Climate Crisis Coalition, the Friends Committee on National Legislation, and Friends of the Earth held a Congressional briefing, moderated by Friends of the Earth President Brent Blackwelder,on phasing in a revenue-neutral national carbon tax as a better alternative to C&T. Among the featured speakers were scientist-activist James Hansen, the original global warming whistle-blower, and former U.S. Under Secretary of Commerce for Economic Affairs Robert Shapiro, who reminded us multiple times that “we only get one shot at this” -- a dire warning that we’d better get it right, or else there may literally be hell to pay.
A scenario where the world’s atmosphere contains upwards of 500 parts-per-million (ppm) of C02 would, scientists say, eventually bring a flurry of abnormal wind patterns, rising sea levels, massive droughts, melting ice caps, and intense grassfires. So the policy question confronting the Obama administration is what is the best way to manage carbon emissions? Shapiro ran down a list of pros and cons that come with both C&T and carbon tax policies. The major con of C&T from an economist’s perspective, said Shapiro, is the "inevitable outcome" of energy price volatility when demand shifts. If a desired outcome of any of these policies is producing revenue necessary for investment in clean energy technology, then C&T price volatility would be bad for businesses since they need a clear and steady picture of future energy costs. With a carbon tax there is a known price signal and the process for implementing such a tax would be “absolutely” transparent and harder to manipulate than the C&T regime.