[FoRK] Why is a carbon tax off the table?

Dave Kammeyer kammeyer at kammeyer.org
Thu Jun 10 11:41:45 PDT 2010


Carbon tax is off the table because it has a concentrated group of
losers from it (electric utilities, airlines, oil companies, SUV
manufacturers, chemical companies, domestic industries that use a lot
of energy), and a very diffuse group of winners from it -- everyone
else.  Everyone else does not have lobbyists, and lobbyists make the
laws now.  Cap and trade has some winners, namely big polluting
industries.  Those industries will basically be able to do what they
have been doing, with incremental reductions in their credit, but they
have the additional option of making their plants more efficient and
selling the credits for lots of money.  Big industries also like it
because it gives them this huge subsidy of carbon credits, while any
new entrant competitor would have to pay for them.  Also, with
deregulated electricity markets, it should make the marginal cost of
electricity go up as demand increases, but the carbon credits don't
increase to meet it.

A greenhouse gas plan that has lobbyists on both sides is potentially
viable.  A plan with no lobbyists for it has no chance.

-Dave

On Wed, Jun 9, 2010 at 9:58 PM, Russell Turpin <russell.turpin at gmail.com> wrote:
> After the past two months, it should be pretty clear to everyone that
> oil has large externalities, and not just in mideast foreign policy.
> Coal's environmental impact may not be as obvious, but is also
> serious. So why is a carbon tax still off the political table? The
> idea, of course, is to eliminate all other alternative energy
> subsidies and rebates for energy savings, relying entirely on the
> increment in long-term projected cost of fossil fuels to encourage
> both of those. My back of the envelope calculations are that a carbon
> tax equivalent to $50/bbl of oil would bring the US government over a
> trillion dollars annually, so there are significant government revenue
> implications as well.
>
> Yes, the cost of natural gas, gasoline, heating oil, and petroleum
> products would all go up, to about what they were when oil prices
> peaked. As well as all services and products that depend on these. The
> idea is that that would be a "long-term promise," to encourage
> alternatives. The price of electricity would go up, initially, moreso
> than when oil prices peaked, because the tax applies to coal as well.
> But the proposed tax isn't on watts, just on fossil fuels. If you
> believe in technology, that is a solvable problem. Better sooner than
> later.
>
> Yes, the Saudis would yelp like scalded dogs. Yes, some good guys
> would be hurt also. The airlines. But they already survived those
> prices once. The Canadians.
>
> OB DISCLAIMER: Moving to the gulf coast. Get monthly oil royalty. As
> they say in football: offsetting penalties.
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