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Carbon Pricing revenue neutral carbon tax

Published on June 16th, 2014 | by Guest Contributor

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Revenue Neutral Carbon Tax Creates Jobs, Cuts Emissions, Grows Economy

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June 16th, 2014 by  

Editor’s Note: A carbon tax or some other adequate carbon pricing system is urgently needed in order to deal with global warming and climate change. However, the idea of a “tax” isn’t particularly popular with some segments of society (particularly, those who don’t understand that pollution is an externality that must be internalized in some way in order to achieve a “perfect” free market). But a little bit of attention to how such a tax can be revenue neutral and help the economy should (theoretically) help to break down those barriers. Thanks to the folks at Skeptical Science for this piece:

In charts: how a revenue neutral carbon tax cuts emissions, creates jobs, grows the economy (via Skeptical Science)

Posted on 13 June 2014 by dana1981 A revenue-neutral carbon tax or fee is a proposed policy to address global warming that’s become increasingly popular, particularly in the US. It’s a simple concept – put a much needed price on carbon pollution,…

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  • Common Sense

    Carbon Tax is based on the flawed premise that if we pay more taxes to the government, then the government will re-distribute wealth, pass laws, and do stuff to make our climate better? Ha!

    Paying more money to the government to solve any problem, will only guarantee that problem will never be solved.

    No matter how well intended, any manipulation of the free market by the government can only lead to higher costs of consumer goods… paid by you and I.
    The fancy charts show an increase in personal income over 10 years, but fail to also show the cost of a cheeseburger will be around $30.

    lib·er·ty noun. The state of being free within society from oppressive restrictions imposed by authority on one’s way of life, behavior, or political views.

    • A Real Libertarian

      No matter how well intended, any manipulation of the free market by the government can only lead to higher costs of consumer goods… paid by you and I.

      Free markets require the government to force entities to internalize their costs rather then dump them on the rest of us.

      http://www.investopedia.com/terms/e/externality.asp

      The fancy charts show an increase in personal income over 10 years, but fail to also show the cost of a cheeseburger will be around $30.

      Real Income.

      http://www.investopedia.com/terms/r/realincome.asp

      lib·er·ty noun. The state of being free within society from
      oppressive restrictions imposed by authority on one’s way of life,
      behavior, or political views.

      Example: Men with guns violated Ted Bundy’s liberty by restricting his behavior.

    • Bob_Wallace

      How about taking your idiotic ranting down to the donut shop where the rest of the fogies hang out?

    • Hans

      Which part of “revenue neutral” did you not understand? There will not be more taxes, they will just be distributed differently.

      Does your definition of liberty also include, the freedom of not getting ill from power plant pollution, of not having to evacuate from coastal areas and islands?

      • Common Sense

        The idea that taxing Americans, will result in a measurable change to the globe is also a farce not backed by any science. There are many government paid, liberal, and socialist groups who have funded their “independent” studies, but they are all disputed by real data. A single volcanic eruption creates more carbon emission than all of the cars and trucks in the USA over 10 years.

  • Howeman

    The carbon tax is a “job killer?” Exactly which jobs? Plain and simple, the jobs it will put at risk are the ones that generate the most carbon pollution — the same ones we’ll have to eliminate to have any hope of a livable climate that supports everyone else’s job in the long term. Meanwhile, the revenue-neutral carbon tax will generate major new employment opportunities in other areas of the economy. It’s time to put the “job killer” argument to rest once and for all. It is a phony, disingenuous argument for maintaining an unhealthy, unsustainable status quo.

    • Bob_Wallace

      A carbon tax would be a job-shifter. Workers would move from coal mines to wind and solar farms.

      A carbon tax would hurt some locales. Communities which rely on coal and oil jobs would suffer. At the same time we’re seeing dying rural towns revived by wind farms.

      It would be smart to get some job replacement programs in place now in coal country. If people could see an alternative then they would be less upset.

  • http://www.michaeljberndtson.com/ Michael Berndtson

    I skimmed this post. Will read in full later. It got me thinking about liquid products (gasoline and diesel) pricing. The cry from Oil and Gas and its mouthpieces like C of C, API and ALEC is always that a tax on carbon will kill jobs and turn your sons into lesbians or something. However, gasoline in Chicagoland keeps going up without an increase in state and federal taxes. Supposedly because of the free (Ha) market.

    Chicagoland is awash in crude oil to refine. Coming by pipeline and train from Alberta tar sands, Bakken shale in North Dakota, and from the Gulf. I really don’t know how the economics of refined products pricing works, but I’ll guess it has to do with choke points in the supply line and some sort of legal (or not so legal) price manipulation.

    There has been nothing but drill baby drill since Obama took office. Refineries, at least the strategic ones, have been modified to take ultra heavy crude from Venezuela or Canada. World oil supplies are coming up via Iraq and other areas. Iran still dribbles its oil to China.

    So I’m going to assume this: if gasoline and diesel goes up through price manipulation (the legal kind, I guess) than nothing bad will happen to the economy, you’ll have a job, and your kid will grow up to become breeders.

    If there is one penny or maybe 25 cents added to gasoline at the pump or a buck or two at the barrel, for environmental protection, then all goes to hell – and life in the US is subject to liberals flying around in black helicopters, landing on our public schools playgrounds, to teach Marxist economic theory.

  • JamesWimberley

    The advantage claimed for a carbon tax is that it replaces heavy-handed regulation with the magic of the free market. Individuals and businesses will choose the more efficient technologies, steered only by the rising carbon price. Bur REMI’s scenario includes a huge amount of new nuclear: eyeballing the chart, about five times as much as solar. How come? Left to its own choices, the market will build 0 megawatts of nuclear. To get any built at all, you need the heavy-handed technocratic regulation: public insurance and waste disposal, and price guarantees.

    China’s solar programme (14 gw/year) is already running at around the equivalent of 2 new reactors a year. The Chinese nuclear building programme – far and way the largest in the world – is just about on this pace, but the next iteration of higher solar targets will leave it in the dust. Elsewhere nuclear is dead or on life support.

    • Matt

      The report was prepared by people thinking old thoughts. Only big centralized NRG can power the economy. Look at how little solar they predict 2040. It will be higher than that even without a carbon fee.

      • A Real Libertarian

        What is “NRG” an acronym for?

  • juxx0r

    That’s a reasonable idea, but it’s still a weight on the economy. I taxes the industry but returns to the populace. A much better idea would be to tax the industry and say hey, you can keep the tax as long as you spend it on hardware and installation of carbon free generation. Not on studies and whatnot, on actual CapEx. If they decided not to spend that money internally for whatever reason, then they would have to cough it up to a fund which did the same.

    This would generate a self solving equation where carbon pays for carbon free. The more carbon, the more carbon free generation gets built.

    Start off slow, increase it every year, and Bob’s your uncle, problem solved.

    • anderlan

      How do you define the “hardware and installation of carbon free generation”? I mean, that gets more complicated than just taking a slice from fossil fuel production and importation. But MOST GLARINGLY, your option removes efficiency–the absence of energy production in favor of OTHER VALUABLE economic activity–from what we are encouraging. A simple penalty on pollution is the most direct way to do this. Pollution should not be free. It’s an easy to understand moral imperative with a direct and simple implementation. What to do with that money? Give it back to everyone equally, in effect replacing the tax drag on work and income with a drag on pollution. Take from pollution. Give to everything.

      • Bob_Wallace

        Avoid allcaps shouting.

        Dazzle your audience with logic and facts.

        http://cleantechnica.com/cleantechnica-comment-policy/

        (Clever use of paragraphing wouldn’t be a bad idea….)

      • juxx0r

        Yeah, you could give it away or you could do something useful with it.

        I wonder which would be better. I guess we’ll never know.

  • Jan Veselý

    I wonder what will cause 20% growth in electricity consumption. Even now is Germany’s or Japan’s per capita consumption about half of the US and they are working hard to lower it.

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