little mesa

Keep it simple.

President Obama and Congress are faced with 21st Century climate realities. Last week in a 600-page draft bill on energy and climate change, House Democrats detailed a complicated carbon cap-and-trade system. We can no longer delay enacting solutions to our changing carbon-constrained world, but will cap and trade work?   A better alternative is a carbon tax.

While a cap and trade program issues credits to carbon emitters to allow some pollution for free, a carbon tax applies a percentage tax on the carbon content of fossil fuels used right from the start.

Under a cap and trade program, any company may emit more carbon than allowed by simply purchasing more credits. This would create an inequity between carbon-clean and carbon-dirty towns and even nations.

On the other hand, a carbon tax would be an economic and environmental equalizer by providing a profit incentive for minimizing carbon use. Because the tax is percentage-based it would actually encourage reduction in carbon emissions rather than shifting them to cheaper pollution zones in other states or developing nations.

The cap and trade carbon market would be open to speculative profiteering of the same type that collapsed the mortgage and credit markets. Conversely, a carbon tax is not only economically efficient, but also conveys crucial price signals and spurs carbon-reducing investment and low-carbon behavior.  Let’s not create a carbon market that profits the polluter and requires a government bail out in eight years.

A carbon tax would be revenue-neutral, meaning the government keeps none of the revenue and instead invests it in renewable energy and local conservation initiatives. The City of Keene’s Local Action Plan for Climate Protection identifies the economic, social and taxpayer benefits of such a tax. As the Plan explains, a carbon tax would actually save taxpayers money by reducing property and social security tax burdens while investing in improved public transportation.

A carbon tax offers a simple, administratively inexpensive, and sustainable solution to our global carbon limits while still protecting individual communities. A permanent and increasing U.S. carbon tax is essential to reduce the emissions that are driving global climate change.

I call on Congressman Paul Hodes and Congress to take cap and trade out of the budget and give us a simple carbon tax.

Photo: davipt’s flickr photostream (Creative Commons)