A Solution To Climate Change: A Carbon Tax

By Tyler Gillette

What if I told you that the solution to climate change would be one that almost everyone could agree on, benefit from and create revenue? You may think that it would be impossible. Well, this solution is a carbon tax, and it is already being successfully implemented across the world. This solution is also backed by environmentalists, economists, NGOs, conservatives liberals and even big energy companies such as Shell and BP.

A carbon tax is a tax set on fossil fuels such as coal, oil and gas that allows for a reduction in usage and makes users pay for the issue. It’s used to promote a switch to clean energy because it is more economically efficient. It will also promote technology and the economy to support renewable energy. But, a tax would also need to have other solutions as well. The most favored type of carbon tax is a revenue-neutral tax that has the incentive still based on pricing, but it will not drag down the economy with negative effects on income. This is because the government will get little to none of the money raised, and it will go to the public. One popular approach is a dividends approach, which is a regular payment that every household gets. This revenue would also make it so other taxes can be phased out or reduced. This could possibly increase jobs and give people more money. Those who are facing poverty are not hindered by this approach because families that are more affluent would be generating most of the revenue from this tax since they would use more energy. The less wealthy will also get more money back then they will pay for. The prices globally range from $2 to $168 per ton.

A good example of a carbon tax that is successful is in British Columbia, which was started in 2008. The revenue generated reduced income taxes. The use of fossil fuels decreased, and their economy grew more than the rest of Canada. This tax is at 24 cents per gallon of gasoline. Denmark has had a carbon tax since 1992, and they have reduced their emissions. Washington state recently became the first to implement a statewide carbon tax in the U.S. The carbon tax is $20 per ton. Maryland, Washington, New York, Hawaii, Rhode Island, Vermont and Maine have also introduced potential bills to be voted on to create carbon taxes in their states.

Ohio currently does not have a carbon tax or has one introduced yet. Ohio, according to the Carbon Tax Center April 2017’s assessment, is a challenging state for a carbon tax because the electrical emissions are high, it is a Republican-run state, most voters are moderates but skeptical about climate issues and revenues on gasoline and diesel go to highway purposes. In 2015, Ohio’s electrical emissions were 1.4 times higher than the country’s average. Governor John Kasich(R) vetoed a bill that would extend electric utilities to not have to invest in renewables for 2017 and 2018. According to the Yale Climate Opinion Maps, Ohio was about average for agreeing with the climate statements. But, Ohio is a strong focal point for carbon pricing. It also has two climate policies: an Alternative Energy Portfolio Standard and an Energy Efficiency Portfolio Standard.

So, if a carbon tax is such a good solution why doesn’t the U.S have a federal carbon tax yet? Auto and oil companies publicly support a carbon tax, but when it is introduced to Congress they do not support it, and Republican lawmakers shoot it down. However, a carbon tax that Republicans can get behind is one that was introduced by the Climate Leadership Council, which was created and supported by big names and companies such as General Motors, ExxonMobil, Shell, Total, BP, Republican Party statesmen, Stephen Hawking, Steven Chu and The Nature Conservancy. This carbon tax is also supported by conservative organizations that care about climate change such as republicEn and bipartisan groups such as The Citizens Climate Lobby. I also believe that this is what we need since it is Pro-Environment, Pro-Growth, Pro-Jobs, Pro-Competitiveness, Pro-Business and Pro-National Security. The Climate Leadership Council’s carbon tax is a carbon dividends plan that is revenue neutral. It would only be taxing refineries, starting at $40 per ton and increasing slowly over time. Then, the money would go to American citizens at an equal and monthly rate. A family of four could get $2,000 in the first year. This would also be used on imports and exports, so border adjustments would be used to keep America competitive and keep countries on the same playing field. Lastly, elimination of old regulations would be phased out with the carbon tax being set to exceed all other regulations in reducing emissions. This carbon tax can reduce twice the emissions of all Obama-era climate regulations combined. In a poll, 64% of Americans favor this plan, including 54% of conservative Republicans. According to the U.S. Treasury, this plan would benefit most Americans economically, especially the bottom 70 percent.

Photo by Wikimedia Commons.

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