Hansen to Obama: Support a Carbon Tax
Eminent climatologist James Hansen will urge U.S. President-elect Barack
Obama to support a carbon tax, in a letter to be sent this week, Hansen
said.
Hansen, director of the NASA Goddard Institute of Space Studies, is one of
the leading voices for a carbon tax to address climate change, rather than
backing the more widely used cap-and-trade approach. In his plan, Hansen
recommends levying a rising tax on fossil fuels and redistributing 100
percent of the proceeds to taxpayers - a "tax and dividend" approach [PDF].
Obama has preferred a cap-and-trade policy - an economy-wide limit on
greenhouse gas emissions that will be lowered over time and that allows
polluters to trade emission permits on a carbon market. His most recent
climate change speech, delivered last month at a summit hosted by California
Governor Arnold Schwarzenegger, further emphasized his support for
cap-and-trade.
"We will establish strong annual targets that set us on a course to reduce
emissions to their 1990 levels by 2020 and reduce them an additional 80
percent by 2050," Obama said.
Yet Hansen and other carbon tax supporters insist that the debate between
the two policies is far from complete.
"Politically, [cap-and-trade] will be convenient, but it will not solve the
problem," Hansen said at a Capitol Hill briefing last Tuesday. "We do need a
communicator. Obama has the ability and opportunity to do it."
Hansen was the first climate scientist to state publicly that greenhouse gas
emissions were causing climate change, at a hearing before the U.S. Senate
20 years ago. He has since become a leading voice on the severity of climate
change, urging world leaders to discontinue support for coal and to
accelerate the transition to carbon-neutral energy sources.
Carbon Tax vs. Cap-and-Trade
Carbon taxes raise the price of carbon-intensive fuels and thereby encourage
low-carbon lifestyles. Tax advocates say the approach could be implemented
instantly and that it would avoid the interference of interest groups.
Emissions among the industrialized countries that ratified the Kyoto
Protocol - a treaty that embraces the cap-and-trade approach - have risen
since 2000 [PDF]. Analysts cite several reasons for the rise, including the
fact that Western European energy utilities effectively lobbied for free
pollution permits as part of the European Emission Trading Scheme (ETS).
Also, one of the tools developed under Kyoto to manage the pollution
offsetting process - the Clean Development Mechanism (CDM) - has lacked
effective oversight. The United Nations acknowledged last month that the
firm that validated nearly half the world's CDM projects lacked proper
qualifications.
Another concern is that cap-and-trade mechanisms have led to volatile
prices. Whereas carbon taxes contribute some certainty to energy prices - a
$100 tax on a ton of carbon emissions would raise coal prices an estimated
14.6 percent, for instance - the ETS carbon price fluctuates on average 17
percent each month, according to Robert Shapiro, a former U.S. under
secretary of commerce for economic affairs.
"We're looking at very, very volatile energy prices," said Shapiro, who is
currently the chairman of Sonecon, an economic advisory firm. "Business
leaders need to know energy prices when they decide whether to invest in
more energy efficient products."
World leaders have promised to address the cap-and-trade flaws during the
current climate negotiations. The policy is still preferred by some
environmental groups such as the Environmental Defense Fund and the Pew
Center on Global Climate Change.
Cap-and-trade advantages include that its emissions cap provides a more
certain level of greenhouse gas reductions, if the policy is written without
major flaws and the program runs smoothly. Environmentalists are lobbying
for an emissions cap lower than what was allowed as part of the ETS.
In addition, a carbon tax is not free of potential scandal. Depending on the
policy, billions of dollars would be dispensed to energy efficiency and
renewable energy firms, or taxpayers pockets, creating potential
opportunities for fraud. Also, Friends of the Earth, an environmental group
that advocates carbon taxes, notes that polluters have become skilled at
finding tax loopholes over the years.
"Gaining Momentum Every Single Day"
Carbon taxes are currently in place, with frequent exemptions, in
Scandinavia, the United Kingdom, British Columbia, and select U.S. cities.
The taxes are generally politically unpopular - national plans in New
Zealand and Canada failed to win residents' support. According to a global
BBC poll in 2007, about half of the 22,000 people surveyed were in favor of
increased fossil fuel taxes, and 44 percent opposed the proposal.
James Hoggan, chair of the David Suzuki Foundation, said carbon tax
proponents have to overcome the disinformation campaigns that regularly
attack new tax proposals. "Any legislator considering a carbon tax has to
prepare the ground more effectively than we have in Canada," he said at
Tuesday's Capitol Hill panel. "Stop calling it a carbon tax. Call it a
carbon dumping fee or something that makes it seem more like a climate
change solution."
Connecticut Representative John Larson has sponsored U.S. legislation that
would impose an excise tax on any taxable carbon substance sold by a
manufacturer, producer, or importer. The bill currently has support of 12
fellow Democrats. "It's gaining momentum every single day," Larson said on
Tuesday. "Twelve members may not seem like a lot, but [three of] these are
influential members of the Ways and Means Committee."
Political Success May Need Additional Research
At a time of economic recession, further research may be necessary to
galvanize support for the higher energy costs that may accompany a climate
change solution, the panel's economists said.
Hansen's letter to Obama will request that the president-elect order a
National Academies of Science study of the latest climate science. Such a
study should determine the present and future impacts of global greenhouse
gas emissions, Hansen said.
"We have the strongest scientific body in the world. He should ask them
because the situation is more severe than people realize," Hansen said.
"It's even worse than what is inferred from the latest [Intergovernmental
Panel on Climate Change (IPCC)] report. A lot of information has become
available in the past two years."
A report would also help silence climate change disbelievers, Hansen said.
"It would give [Obama] cover. Otherwise critics say it's just a few
scientists saying this, or the IPCC is politicized," he said.
The Academies are already developing several climate change-related research
projects, however. In October, the Division on Earth and Life Studies began
its America's Climate Choices project, which seeks to address how the United
States can limit the magnitude of future climate change.
"Overall, I believe the study will meet [Hansen's] concerns," said Thomas
Dietz, director of the environmental science and policy program at Michigan
State University and vice chair of the project's science panel. "We will
address the current state of the science around issues that matter in making
decisions about climate change."
Hansen has made available a more detailed
draft [PDF] of the letter he plans to send to Obama. His policy
recommendations are comments of personal opinion and are not related to his
government position, he said.
Ben Block is a staff writer with the
Worldwatch Institute. He can be
reached at bblock@worldwatch.org.
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