Carbon Tax Combats Climate Change

Climate change has drastically worsened over the past few decades, with most of the warming occurring over the last thirty-five years. Sea levels are rising, arctic ice is declining, and oceans are quickly becoming more acidic. Scientists say that “we need to be off fossil fuels entirely this century.” Recently, politicians have been trying to come up with a way to slow down, or even prevent, the devastating effects of climate change. One possible way is through a well-placed carbon tax.

According to the Carbon Tax Center, a carbon tax is “a fee for making users of fossil fuels pay for climate damage their fuel use imposes by releasing carbon dioxide into the atmosphere.” Charging businesses and individuals for carbon dioxide pollution would be a quick and easy way “to prevent atmospheric concentrations of CO2 from reaching an irreversible tipping point.” Carbon taxes are also often put in place to motivate switches to clean energy. If using fossil fuels becomes more expensive, more people would start using renewable energy and sustainable fuels instead, which would in turn greatly reduce our impact on the environment. The U.S. alone accounts for around 20 percent of the world’s carbon dioxide emissions from fuel-burning, which means that we bear a heavy responsibility to cut a lot of our emissions as fast as possible.

Washington’s Initiative 732, America’s first proposal of a carbon tax, could have been a possible solution. It would have made pollution more expensive by putting a tax on each ton of carbon dioxide created – showing up in gas pumps and electric bills. The tax was supposed to start from $15 per metric ton of pollution in the first year, then it would have jumped to $25 per ton, then steadily increased 3.5 percent per year until it reached a maximum of $100 per ton. To avoid the tax and keep production costs down, many businesses and people would have gradually shifted to other, more clean energy sources.

Opponents of the carbon tax claim that the tax would not be beneficial at all. To implement this tax, the government would need a huge amount of money for administration costs. In addition, many people do not like the idea of being charged for fossil fuels. Businesses may also resort to “covert strategies or dirty tricks to fool the system,” because they do not want to pay the tax. Secret operations may produce carbon dioxide in an unethical way that can be even more damaging to the environment.

Another benefit would have been that many families would save money due to accompanying tax breaks. The proposal would have lowered the state sales tax by 1 percent, saving the average family about $200 per year. In addition, the tax would have funded a “working families tax rebate” for around 400,000 low-income families.

Carbon Washington, a group that was created to support Initiative 732, “expected the tax to reduce carbon pollution about 2 percent per year.”

According to CNN News, the concept had broad support from “intellectuals on the right and left,” including “economists, environmentalists, climate scientists – even oil execs at Exxon Mobil.” However, Initiative 732 was not very popular with voters, the 59 percent majority rejected the carbon tax.

A new carbon tax is being proposed in Congress, this time by a group of Republican elder statesmen. The group is led by former Secretaries of State James A. Baker III and George P. Shultz, along with former secretary of the Treasury Henry M. Paulson Jr. They claim that “taxing carbon pollution produced by burning fossil fuels is ‘a conservative climate solution’ based on free-market principles.”

While Republicans usually tend to be against extra taxes, many Republicans and Democrats alike are supportive of this proposal. A survey led by the Yale Program that was taken just after the 2016 election found that “66 percent of registered voters supported a carbon tax on fossil fuel companies, with the money used to reduce personal taxes.”

Support for a carbon tax came from 81 percent of Democrats, 60 percent of independents, and 49 percent of Republicans. Even among people that voted for Trump, 48 percent support taxing fossil fuel companies.

The Baker proposal would substitute the Obama administration’s Clean Power Plan with a carbon tax. According to the New York Times, “The tax would be collected where the fossil fuels enter the economy, such as the mine, well or port.” The tax is expected to raise around $200 billion to $300 billion dollars a year, at the initial price of $40 per ton of carbon dioxide. Money from the tax would be returned immediately to consumers in a “carbon dividend.” An average family of four can expect to receive about $2,000 a year.

In order to prevent other nations from gaining a price advantage over carbon-taxed American goods, the plan would incorporate “border adjustments” to “increase the costs for products from other countries that do not have a similar system in place.” However, it remains to be seen whether the bill will be enacted.