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Path To Carbon-Saving Economy Need Not Be Paved With Earmarks

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The Tampa Tribune

Published: June 9, 2008

Putting a market price on emissions of greenhouse gases will have to wait for a new year, a new president and a new plan.

The bill the U.S. Senate debated last week without coming to a vote was too complex for the public to understand and support. Its economic impacts were too unpredictable for many conservatives to support. President Bush threatened to veto it.

A better way to approach the problem is to put a direct tax on carbon, then return the extra revenue to the public through lower income taxes and more federal support of proven technologies, such as public transit. Instead of trying to pick winners and losers in the private sector, Congress should increase grants for university research in clean energy.

Such a straight tax-a-lot-and-spend-a-little proposal would have excited robust debate. The Climate Security Act never captured the public's attention, which is disappointing for so ambitious a reform addressing a problem of international concern.

The Wall Street Journal called it the biggest income redistribution scheme since the income tax, and a General Motors spokesman called it the most significant reordering of the economy since the New Deal.

The goal was commendable: reduce heat-trapping emissions of carbon to reduce the threat of a warmer climate. The process was a cap-and-trade system that proponents promised would punish polluters and reward innovators without damaging the economy.

The king of congressional pork, Democratic Sen. Robert Byrd of West Virginia, got it right: "This legislation would put hundreds of billions of dollars on automatic pilot, allocated by unelected, unaccountable boards, with little congressional oversight."

It would do that through a new Carbon Marketing Efficiency Board and a Climate Change Credit Corporation. Through the new bureaucracy would flow some $7 trillion by 2050. The paperwork alone would be staggering, and the fortunes at stake would invite a surge of campaign contributions. New possibilities for corruption and kickbacks would materialize, along with an army of carbon lawyers, accountants, lobbyists, auditors and regulators.

Proponents stress that the European Union has started such a plan, which is widely credited with working fairly well on the bureaucratic level. Carbon credits are trading there from $30 to $40 a ton, but the price has varied wildly. And despite putting a price on pollution, Europe has seen its earth-warming emissions go up.

The environmental group Greenpeace notes that "it does not sound credible to call the emissions-trading scheme a success when we have seen a proposal for a new coal-fired power station in Kent. It is not sending a strong enough signal to the power companies."

The political challenge is to send that signal without slowing down the economy. That's why a carbon tax makes more sense. It is easily adjustable, and its signal is clear.

Consider how effectively the higher price of gasoline this year has begun to change behavior. Ridership on Hillsborough's transit system, HART, is up 7.2 percent this year. Sales are strong for smaller cars. Motor scooters are selling like hotcakes.

But consumers are right to be angry. They're getting no help making the transition to a lower-carbon life. The profits from expensive oil are going to big oil companies, foreign producers and speculators, while most of us see our standard of living fall.

A backlash against $4-a-gallon gas is translating into calls for more drilling, more gasoline production and lower taxes. A poll by the National Center for Policy Analysis found that 65 percent of Americans don't want to spend even one extra cent just to reduce greenhouse emissions.

That's why Congress has been afraid of proposing a straightforward tax, but also why the tax would win support if it didn't raise the total tax bill of an individual or business.

British Columbia is trying that approach. Starting in July, gas prices there will go up 9 cents a gallon and continue going up until they're up 27.25 cents by 2012. The extra revenue will be returned to the public through cuts in other taxes. The only change will be an incentive to use less gas. Those who do will come out ahead.

In contrast, the cap-and-trade system considered by the Senate would create industries dependant on government permits and gifts. Each session lawmakers would think up new earmarks and new ways to manage the energy economy to better benefit key special interests in their states.

The less-contaminated approach of a carbon tax is a better route to cleaner energy.

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