Washington (Platts)--10Jul2007

US House of Representatives Energy and Commerce Committee Chairman John
Dingell says he will propose a "carbon tax" on electric utilities, oil
companies and other industries to illustrate that it would be extremely
expensive to curb greenhouse gas emissions that are linked to global warming.
     Dingell (Democrat-Michigan), who made the comments in an interview
broadcast on C-Span on Sunday, made it clear that he does not actually support
the approach he outlined, and that he was only offering the plan as a way of
illustrating the high costs of combating global warming.
     "I sincerely doubt that the American people will be willing to pay what
this is really going to cost them," he said.
     Dingell did not claim that legislating a carbon market or other GHG
policies would raise energy prices to prohibitively high levels. He said his
legislation would employ the carbon tax approach, which would charge
industries a set price for each ton of heat-trapping gas that they pump into
the air.
     Dingell said nothing about the "cap-and-trade" approach, which would
allow companies to buy and sell emissions-reduction allowances with each other
as long as total emissions are kept under a certain level.
     Dingell himself has said before he could support such a bill as long as
it would treat all sectors of the economy fairly and would not cause energy
prices to skyrocket, among other things.
     Dingell said his legislation would seek to reduce GHG emissions from
motor vehicles by raising the federal gasoline tax to $0.50 (Eur0.36) per
gallon.
     It would also impose a "very substantial tax" on GHG emissions from
coal-fired power plants and other stationary sources, Dingell said. He
reiterated Sunday that his committee is working to craft such a bill, and that
he will hold a vote on the measure in September.
     Dingell spokeswoman Brin Frazier denied that Dingell's comments Sunday
indicated that he has changed his mind about combating global warming. Dingell
was simply saying that a carbon tax was not the right approach, Frazier said.
     "He hasn't changed his mind about cap and trade," Frazier said.