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A Carbon Tax Has Been Proposed in the US


(A big THANK YOU to the Fairfax Climate Watch blog for having shared this information first.)

British Columbia (Canada) has a carbon tax.  Sweden has a carbon tax.  China – yes, THAT China – is planning a carbon tax for the year 2014.  And now, US senators Barbra Boxer and Bernie Sanders (probably my favourite politicians in North America) have proposed a bill for a “fee-and-dividend” system to price carbon emissions in the United States of America.

The “fee” refers to a tax of $20 per tonne of carbon, charged at the point of extraction or at the point of import if the fossil fuel is from outside the US.  Of course, fossil fuel companies will “pass the cost on to the customers”.  Hence the “dividend”: the majority of the revenue from this carbon fee will be passed back, equally, to the citizens of the US, allowing them to afford the increases in cost.  The rest of the revenue will go to weatherization of homes (1 million per year) and R&D.

Here is an interview with senator Sanders where he explains the importance of this bill and how it works.

Pricing carbon is probably the most important policy in the fight against climate change.  Doing so through a “fee-and-dividend” is, to me, the most efficient way to do it.  The price is at the source.  The poorest among us are supported through the dividend.  And it creates a financial incentive to move away from fossil fuels.

Let’s hope the bill passes.

2 Comments leave one →
  1. Mik Aidt permalink
    2013/03/07 11:56 am

    Hi Joce,

    Australia has implemented a carbon tax as well. The government appears to be quite proud of it, even, though the business world is making its complaints.

    Denmark implemented a carbon tax in 1993.

    Even the EU has one – though things aren’t going too well with that one.

    I wrote this on my blog page recently:

    *Tax, when used wisely, is not evil. * Since what we dont like is the burning of oil, coal, gas and petrol, because of what it does to our atmosphere, our common, trans-national air space, then here is what we need to do: we need all governments to instantly put a substantial tax on that burning, if they havent already done it.

    Some countries do it with cigarettes and alcohol: Put a high tax on it, in order to make people use less of it.

    In the light of the carbon crisis, I really dont understand how it can be like this, but apparently in most countries, that money which we all pay as taxes from our salaries to the state is not only used to pay for public health services, road maintenance, libraries, public broadcasting, police work, and so on. Believe it or not, your money is also being spent on supporting *the oil industry*.

    In the middle of that carbon crisis which we now have come to understand that our planet is in, that is just so upright *wrong*. The governments, all governments, world-wide, will have to stop subsidising the oil industry *now*. Not tomorrow or next year. Now. And instead of subsidising, they will have to put a tax on all carbon emissions and anything else that makes our atmosphere hotter.

    What will that mean? That everything will get more expensive? Yes, most likely. Petrol for your car will get more costly. Electricity too. But it doesnt have to be more than for a little while.

    The government of Australia has been doing it: They implemented a carbon price which sees large companies pay for their carbon pollution, and they invest the money raised from the carbon price in renewable energy projects.

    The EU has been trying to do it as well, but so far not with much success, unfortunately. The fossil-fuel driven industry is apparently too powerful and is doing all sorts of tricks to obstruct that initiative.

    Business people generally dont like taxes. But sorry, folks, taxation is a tool which when used in an intelligent way by intelligent people can enhance societies and create better quality of life for its citizens, including the business people. The Scandinavian Model is an example of that.


    • 2013/03/07 12:26 pm

      Thanks Mik,

      I particularly like your last point: that taxes are a tool. I understand why people dislike taxes, especially in countries where government funds are misused. However, the solution is not to “starve the beast” by reducing taxes. It is to push for better taxation laws.

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