The New York Times had an editorial yesterday about carbon pricing by the head of Connecticut’s Environmental department. The authors argue:
The best way to drive energy innovation would be an emissions charge of $5 per ton of greenhouse gases beginning in 2012, rising to $100 per ton by 2032. The low initial charge, starting next year, would make the short-term burden on consumers and businesses almost negligible.
An emissions charge is not a radical idea; making people pay for the harm they cause lies at the heart of property rights. European countries participate in a cap-and-trade system that effectively imposes a carbon charge. Even China is pushing to shut down inefficient coal-burning plants by imposing emissions charges. Thus, instituting a carbon charge would have only a minimal impact on American competitiveness — and might even improve it as the incentive for efficiency and innovation kicked in.
Our proposal would apply to all greenhouse gas emissions, so that everybody, and every fossil-fuel-dependent form of energy, would be included. Coal-burning power plants would pay based on the emissions measured at their smokestacks. Oil companies would pay for every gallon of gas or oil delivered. Yes, these costs would be passed on to consumers, but this is what motivates changes in behavior and technological investments.
Some will say that even the modest emissions charge we propose is politically impossible, given the death of the cap-and-trade bill that the House passed in 2009. But the ballooning federal deficit has created a new political imperative. A modest emissions charge will look attractive compared with raising individual income taxes or burdening the economy with new corporate or payroll taxes.
Well, I think this sounds like a decent attempt at regulating the use of carbon. I do agree with the author that we need a market based approach because, as he mentioned, the government attempting to decide what will be best has failed thus far! I hope this can be passed by the government, though I won’t hold out hope.
This reminds me of our discussion in class: comparing taxes to a cap-and-trade system. I believe consumers would agree to the latter because simply the word “taxes” conjures up negative images in the minds of most people. The editorial brings up a lot of good points, including the increase in gas prices, dependability on foreign oil, and the subsequent effects on the climate and pollution. I thought it was very inspiring and I even decided to share it with my friends on Facebook to spread the message.
The authors argue that the cost would “be passed on to consumers, but this is what motivates changes in behavior and technological investments”. I think this is fundamentally correct, but I think as of right now, what alternatives do/what changes in behavior do consumers have to choose from? Not many, and the ones that are on the market are very expensive and take forever to arrive (i.e., Nissan Leaf), so consumers would probably just end up paying the emissions charge instead of changing their behavior.
Technological advancement should have started awhile ago so that consumers could now make the change after the instigation of such a charge. As it stands, I think this charge will not be as successful as it needs to be in curbing emissions.
You all have brought up great points. Something that caught my eye was the statement:
“To compete globally, we need to encourage clean energy innovation while letting the market decide which particular technologies prevail. Experience in fields like information technology and telecommunications suggests that creating demand for innovation is far more effective than subsidizing company-specific research projects or providing incentives for particular technologies”
…all of this is true, but I’m seeing some challenges. Right now all of the technologies are often too expensive and I don’t think folks will be quick to change technologies if it’s out of their reach. They may just want to pay the emission charges.
There needs to be a better way, but this could be a start. I can see some huge backlash though–we need to try more than just including a emission charges!