Hansen's Message to the Planet: We must tax carbon
By Charles Komanoff, Jun 25,2008
Maybe it was the temporizing of the Democrats and the obstructionism of the GOP. Or it might have been the images of cities, houses and farmland of his native Iowa drowned by the latest "500-year" floods.
Perhaps it was all three. Whatever the reasons, the climate crisis' Paul Revere turned it up a few more notches in a speech yesterday at a Congressional staff briefing in Washington D.C.
Yet James Hansen's headline-grabbing broadside against Big Oil and Big Coal CEOs may prove less significant than his full-throated advocacy of carbon tax-and-dividend as the highest priority for reducing carbon emissions and abating global warming:
"A price on emissions that cause harm is essential. Yes, a carbon tax."
Hansen is no less blunt about what to do with the carbon tax revenues:
"Carbon tax with 100 percent dividend is needed to wean us off fossil fuel addiction. Tax and dividend allows the marketplace, not politicians, to make investment decisions ... The entire tax must be returned to the public, an equal amount to each adult, a half-share for children. This dividend can be deposited monthly in an individual's bank account."
What about the impact on struggling families? That's the point of the carbon dividend. Because the vast majority of the non-rich use less energy than the wealthy, they stand to benefit.
"Carbon tax with 100 percent dividend is non-regressive. On the contrary, you can bet that low and middle income people will find ways to limit their carbon tax and come out ahead. Profligate energy users will have to pay for their excesses."
Why not have the government invest carbon tax revenues in promising energy technologies? For one thing, says Hansen:
"Demand for low-carbon high-efficiency products will spur innovation, making our products more competitive on international markets. Carbon emissions will plummet as energy efficiency and renewable energies grow rapidly. Black soot, mercury and other fossil fuel emissions will decline. A brighter, cleaner future, with energy independence, is possible."
And, speaking like a true Midwestern populist:
"Washington likes to spend our tax money line-by-line. Swarms of high-priced lobbyists in alligator shoes help Congress decide where to spend, and in turn the lobbyists' clients provide "campaign" money."
Ironically, as Hansen was addressing the briefing (organized by Rep. Edward Markey (D-Mass.), detailed quantitative support for his carbon tax prescription was coming from a well-placed Washington economist. A new report by former U.S. Under Secretary of Commerce for Economic Affairs Robert Shapiro calls for a federal carbon tax starting at $14 per metric ton of CO2 in 2010 and rising steadily to $50 in 2030 (equivalent to $82 with inflation).
Ninety percent of the carbon tax revenues under Shapiro's plan would be recycled via rebates on payroll taxes to employees and employers, or their equivalent in direct payments to households. The remaining 10 percent would go to energy and climate-related R&D and new technology deployment. Using the U.S. Energy Department's NEMS consulting model, Shapiro concludes that his carbon tax would reduce CO2 emissions by 30 percent below non-taxed levels while shaving only eight-tenths of one percent off future (2030) GDP.
The report, Addressing Climate Change Without Impairing the U.S. Economy: The Economics and Environmental Science of Combining a Carbon-Based Tax and Tax Relief, was published by the U.S. Climate Task Force, a project of Shapiro's Sonecon economic advisory company.
While Shapiro's recommended carbon tax falls short of the level that my Carbon Tax Center (and likely Hansen) recommends, his unambiguous rejection of carbon cap-and-trade in favor of a nearly revenue-neutral tax is another sign that the Washington establishment may be ready to move boldly and quickly for the "gold standard" of carbon pricing.
"We must love one another or die," Auden wrote in his oft-quoted September 1, 1939, composed as Hitler's blitzkrieg against Poland was ushering in World War II. Some 70 years later, with a new kind of holocaust looming, Hansen is telling Americans: We must tax carbon, or die.
Auden concluded his poem:
Defenceless under the night
For twenty years, Hansen has shown an affirming flame. Can we now, finally, do likewise?
© 2008 Climate Security Project