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It can seem counter-intuitive, but passage and enactment of a carbon tax would have far-reaching positive effects on the US economy and society, stimulating investment, innovation and economic growth, and making US business and industry more competitive. So asserts 35-year energy and aerospace industry veteran Jim Hartung, now the president of energy information services provider GlobalEnergySolutions.org.
Several organizations have proposed variants of a US carbon tax, all of which incorporate mechanisms that both shield lower income individuals from its regressive nature while also building in incentives to reward those who lower their fossil fuel consumption and hence emissions while penalizing those who increase theirs.
Opponents have pounced on the counter-intuitiveness of carbon tax proposals, asserting they would further stifle economic recovery and growth by raising energy costs, disproportionately affecting lower income Americans. Exactly the opposite would be true, Hartung argues in his Sept. 13 op-ed on Energy Pulse.
Carbon Tax: Keystone for Building a Better America, and World
Hartung explains the three principles upon which his carbon tax proposal is based:
To illustrate how the carbon tax would work and the benefits it would yield, Hartung puts forward the example of a carbon tax and tax credits of $20 per ton of carbon dioxide (CO2) and equivalent greenhouse gases, increasing to $100 per ton in 2025 and thereafter, with annual adjustments for inflation that if enacted in fiscal 2013 would come into effect in 2015.
How a Carbon Tax Would Work
An initial carbon tax of $20 per ton would add 20 cents to the cost of a gallon in 2015, which is actually much less than the volatility in prices at the pumps Americans have been experiencing, he notes. Amounting to an additional $1 per gallon of gasoline, the $100 per ton in 2025 carbon tax would incorporate the true external costs of fossil fuel production and consumption into carbon fuel prices, costs that have never been incorporated in energy prices before, he explains.
Analyzing the benefits his proposed carbon tax would produce, Hartung writes, “There are many obvious and a few not-so-obvious benefits of this carbon tax. Because it localizes responsibility to those entities that produce and use fossil fuels, it elicits more responsible actions from both energy producers and energy consumers.”
Each substantial in their own right, the benefits of such a carbon tax encompass:
Concluding his advocacy, Hartung writes:
“The U.S. is in a unique position to benefit from a carbon tax because of the size and competitiveness of its energy markets, the quantity and diversity of its domestic energy resources, and the breath and depth of its technological, business, and entrepreneurial capabilities.
“Most other countries will also benefit from implementing their own carbon tax. The U.S. can encourage them by bilaterally eliminating carbon import taxes from countries that have a similar carbon tax in place. Enlightened self-interest will trigger a domino effect, as most countries will want to secure the advantages of a carbon tax and avoid carbon import taxes on their exports to the U.S. market.”
* Graphic image credit: FossilTrax