Carbon Tax Bill Introduced: Great Idea; Needs Some Amending

A steadily rising tax on the carbon content of fossil fuels would be a powerful, market-based approach to addressing one of the greatest crises of our time – global climate change. It could also help address the nation’s other crises (fiscal, economic, and energy) at the same time. However, policymakers need to be sure that they are taxing fossil carbon emissions - not sustainably-produced, renewable carbon from bioenergy.

On October 24, Representative Pete Stark (D-CA) introduced : H.R. 3242, the “Save Our Climate Act,” which would put a price on carbon dioxide (CO2) emissions. The bill, co-sponsored by eight other Representatives, would amend the Internal Revenue Code to levy a tax on the carbon content of fossil fuels as measured at their entrance into the market – either on the manufacturer, producer or importer. However, the bill also includes biomass and municipal solid waste as taxable energy sources. For more background information about the bill, click here .

In addition to helping put the United States on track to reducing its greenhouse gas emissions, a carbon tax could help shrink the fiscal deficit; it could provide a mechanism to shift taxes away from things that are good (like income and wealth creation) toward taxing (discouraging) things that are bad (like pollution); and it could provide economic certainty that energy conservation and renewable energy investments will pay dividends in the future. That would be much welcome guidance to energy producers, investors, industry, business, and consumers alike. A carbon tax would let businesses and consumers (not the government) make their own choices about how much and in what kinds of technologies to invest as the nation moves toward a more sustainable, low-carbon, renewable energy future. Consumers and businesses could decide for themselves how much tax they want to pay by choosing how much and what kinds of fossil fuel they consume. Finally, the federal government would no longer need to drive the renewable energy industry with so many subsidies, tax incentives, and loan guarantees. Markets, guided by government policy, would take the ball and run with it.

However, carbon emissions from burning fossil fuels are by far the leading culprit causing global climate change. Mass quantities of carbon stored underground over millions of years are being released into the atmosphere, overwhelming the natural carbon balance between terrestrial ecosystems, the oceans and the air. It is a one-way trip for fossil carbon dioxide – out of the ground and into the air and oceans. Not so with carbon emissions from sustainably-produced, renewable biomass and biogenic materials. In the future, as economies shift away from dependence on fossil fuels, they will need sustainably-produced, renewable biomass for heating, liquid fuels and bio-based products to replace some portions of the fossil fuel they consume today. Taxing carbon emissions from biomass energy and the bioegenic portion of waste streams would foreclose these important renewable energy options for the future (e.g., biomass combined heat and power which is used extensively today in the pulp and paper industry; low-carbon biofuels; heat and power from landfill gas; heat and power from anaerobic digestors using livestock and municipal waste and sewage; locally-produced, community-scale biomass heat and power and district energy systems; etc.).

Unsustainable deforestation and other types of carbon-releasing land use change over the past two hundred years has also been a significant cause of global climate change. This process reversed in the United States several decades ago, and since then, forests and natural landscapes across the United States have been storing more carbon in soils and plants than has been released. Moving ahead, the nation needs to assure that, as biomass energy use expands, so does the nation’s sequestration of carbon in plants and soils.