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THE DAILY ASTORIAN • FRIDAY, NOVEMBER 30, 2018
editor@dailyastorian.com
KARI BORGEN
Publisher
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PRO-CON
Is carbon tax the right way
to fight climate change?
AP Photo/Branden Camp
The coal-fired Plant Scherer, one of the nation’s top carbon dioxide emitters, in Juliette, Ga.
PRO: It’s time for energy
producers to get on board
C
arbon taxes are a mechanism that
These two observations create the possi-
bility for a win-win tax reform.
puts a price on emissions of carbon
Because it costs the economy less to raise
dioxide, generally focused on fossil
fuel sources.
revenue with carbon taxes than with labor
When the price of carbon dioxide emis-
and capital taxes, a shift toward the more
sions go up, so does the cost of fossil fuels,
environmentally friendly tax could also
so consumers and producers use less energy
reduce the overall cost of our tax system, and
and consequently emit less.
stimulate employment and investment, even
In February 2017 James Baker III, George as it induces emissions reductions.
Schultz and a group of conservative politi-
Analysis by two leading public finance
cians and economists published a clear and
economists, Ian Parry and Roberton Wil-
liams, demonstrates that a tax of $33 per ton
convincing call to adopt a carbon tax in the
of carbon dioxide — about 25 cents on a gal-
United States.
lon of gas and less than a couple of cents per
Seventy governments around the world
have already adopted carbon pric-
kilowatt-hour of electricity — could
ing schemes. It is time for the United
simultaneously reduce U.S. car-
bon emissions by 8.5 percent and
States to join them. It is not only a
save the economy $4.5 billion per
good idea, it is now feasible.
In the past month, there has been
year, even ignoring environmental
a convergence of events that all point
benefits.
toward the potential for a U.S. car-
The key to realizing those sav-
ings, however, is that Congress must
bon tax.
KENNETH simultaneously cut the more distor-
In October, the Intergovernmental
RICHARDS tionary income taxes.
Panel on Climate Change published
To offset the potentially regres-
a report indicating that the expected
sive nature of a carbon tax — the
damages associated with 2.0 degrees
fact that it is likely to take a disproportion-
Celsius warming are much higher than at 1.5
degrees — marine fisheries losses would dou- ate amount of low-income household bud-
ble, sea levels would rise an extra two inches gets — the tax cuts could be supplemented
by tax credits, or even payments, to those
and human exposure to extreme heat would
households.
double. This adds to the sense of urgency to
To succeed, however, our representatives
mitigate greenhouse gas emissions.
Leading up to the 2018 midterm elections, in Washington will need to first design a sys-
tem that delivers both economic and environ-
Republicans called for a second round of tax
mental benefits.
cuts. With criticism over the massive deficits
That will take discipline, resisting efforts
associated with the 2017 tax cuts, however,
to carve out tax exemptions and earmark the
they should be cautious about any move that
revenue. And, because the positive effects
further exacerbates that imbalance.
And of course, now that the Democrats
of a carbon tax are less direct than subsidies
have regained control of the U.S. House of
or dividends, Congress and the White House
Representatives, they should be looking for
will need to carefully explain to the voters
initiatives that all our leaders in Washington
why the carbon tax makes sense.
can support.
If they succeed, a move to carbon taxes
Enter carbon taxes. To see why car-
leaves room for both parties to claim victory.
bon taxes make sense for a broad range of
The Democrats can point to the environ-
mental protection and support for renew-
informed politicians let’s start with two
able energy that are inherent in a carbon tax.
important observations.
Republicans can claim credit for improving
First, price signals are key to enabling
markets to allocate resources efficiently.
the efficiency of the federal tax system. Both
Taxes on capital and income distort price sig- sides can show that they are able to work
nals in markets, leading to inefficient use of
together to find win-win opportunities.
resources.
Kenneth Richards is a professor of environ-
mental economics, law and policy at Indiana
This means that the cost to society of put-
University. He is also a consultant at Gnarly
ting a dollar of money in the government
treasury can be much more than a dollar.
Tree Sustainability Institute, where he works
Second, in the United States, a tax on car- with national governments, international
bon would be less distortionary than a tax on
agencies and businesses on sustainability and
environmental policy issues.
labor or capital.
CON: US already leads the
world in reducing emissions
T
he U.S. natural gas and oil industry
One result: EPA data show that natural
is meeting the climate challenge
gas system methane emissions decreased
head-on, investing in high-tech
16.3 percent while natural gas production
jumped more than 51 percent between 1990
innovation, efficiency improvements and
and 2015.
cleaner fuels.
The energy industry formed The Envi-
The U.S. leads the world in reducing
ronmental Partnership last year to build on
greenhouse gas emissions. Carbon dioxide
emissions in the United States have plunged that progress through collaboration and tar-
geted actions including repairing leaks and
to their lowest level in a generation, while
replacing or retrofitting equipment. More
CO2 emissions around the globe have risen
than 50 of the nation’s oil and gas producers
50 percent since 1990.
have joined so far.
As the American Enterprise Institute
The oil and natural gas industry has
reported, 2017 marked the ninth time this
century we’re reduced emissions more than worked with regulators in support of smart
regulations. The most effective reg-
any other nation.
ulations share two characteristics.
How did we do it? Increased
One, they recognize existing
use of natural gas in power gen-
eration is the single biggest fac-
success and harness, not hinder,
tor. With technological advances
the innovations responsible. Two,
unlocking previously inaccessible
they’re based on sound science.
In the case of energy, that means
natural gas reserves, the affordable,
acknowledging that natural gas and
reliable fuel has become the lead-
KYLE
ing source for electricity generation
oil will supply an estimated 64 per-
ISAKOWER cent of the energy the U.S. uses in
— reducing carbon emissions to
2050, even under optimistic scenar-
levels not seen since 1992.
ios for renewables, according to the
It’s not just carbon. The com-
bined emissions of six key air pollutants
Energy Information Administration.
dropped 73 percent between 1970 and
Any regulatory policy not based on that
2017 even while GDP soared 262 percent
reality risks raising consumer costs and
jeopardizing U.S. energy security. Given the
and energy consumption rose 44 percent
signals from House Democrats that envi-
increased.
ronmental regulations will be a focus when
Tailpipe emissions have plunged thanks
they take control in the new Congress next
to advances in clean fuels and vehicle tech-
nology. New cars, trucks, SUVs and heavy- year, those are important facts to keep in
duty trucks and buses run about 99 per-
mind.
cent cleaner than models produced in 1970,
As a recent American president noted:
according to the EPA helping reduce pollu-
“The all-of-the-above energy strategy I
tion even as vehicle miles traveled nearly
announced a few years ago is working, and
tripled.
today, America is closer to energy indepen-
dence than we’ve been in decades.”
It’s important to recognize this success
That was President Barack Obama,
— not as a victory lap, but as a roadmap. If
we draw the right conclusions, we can build speaking in 2014, and he added that natu-
ral gas “can power our economy with less
on our progress.
of the carbon pollution that causes climate
For starters, the trend lines convincingly
show that energy development and environ- change.”
mental progress are not mutually exclusive.
The same formula that worked then —
Key emissions have dropped as oil and nat- an “all-of-the-above” approach bolstered by
ural gas production has skyrocketed, gener-
natural gas and innovation — is still work-
ating a slew of economic benefits.
ing to reduce emissions without sacrificing
If there’s a common thread in the
jobs and affordable energy. We have a road
promising emissions reduction data, it’s
map to success.
innovation.
By following it, the United States can
The oil and natural gas industry has
continue its remarkable streak: breaking
invested an estimated $339 billion from
records in both energy production and emis-
sions reduction.
1990 — 2016 toward improving the envi-
ronmental performance of its products,
Kyle Isakower serves as vice president
facilities and operations — $1,045 for every for regulatory and economic policy at the
man, woman and child in the United States. American Petroleum Institute.