The following is a guest essay from Tony Kreindler of Environmental Defense, in response to Charles Komanoff's post from earlier today, "Strange bedfellows in climate politics."
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Charles Komanoff's post is entertaining, but a lot of what he says is wrong. His main proposition is that unlike "devilishly complex" cap-and-trade, a carbon tax is straightforward approach that will resist gaming by special interests. That raises a few questions: is there anything straightforward about the U.S. tax code? Has anyone ever gamed that system? Are there "no legal and financial functionaries" swarming around taxpayers?
Those questions aside, the fact is that a cap is the only way to guarantee the emissions cuts scientists say we need to avert the worst impacts of climate change. No one knows what level of carbon tax will produce what level of emissions cuts -- and the science is pretty clear that we need to cut emissions by 80% from current levels by mid-century or we're in trouble. Guess wrong on a tax and we're all co-starring in a big-budget disaster movie.
Finally, a carbon cap can pass Congress and a tax can't, so if we agree climate change is extremely urgent, we don't have time to waste. Which brings us to the big corporations in USCAP. I'm sure they've all got a mix of reasons for pushing strong action on climate, but their motivations aren't important -- getting something passed into law is. There's little doubt that the USCAP companies can help us get something passed.
Komanoff is worried about the process; we're worried about cutting carbon emissions enough to avert a real environmental, economic, and human disaster. Top-down, side-to-side, stand-on-our-heads-till-we're-blue -- however it happens, the important thing is getting it done.
Obama administration may (finally) offer greenhouse-gas targets
George Voinovich (R-Ohio) [UPDATED]
Comments
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JMG Posted 8:00 am
22 May 2007
It is difficult to assign any credibility to anyone who would compare the complexity of a carbon tax ---- which is applied like a sales tax (only better, because it's applied upstream, so that it is invisible to the consumer and requires collection from only a relative handful of entities) ---- to the complexity of an income tax to attempt to discredit the carbon tax. Short of saying "I will write anything to please my corporate funders," it's hard to imagine a more telling statement.
Further, to say that cap-n-profit is "only way to guarantee the emissions cuts" is simply posturing. Remember, the only reason people trade carbon allowances -- that is, the only reason to incur the costs of setting up the market and the transactional costs of trading--is because people would rather NOT make the cuts. In the end, with any sort of realistic cap, there will be very little trading.
At its idealized BEST, cap-n-profit works almost as well as a carbon tax, less the huge transactional overhead -- the big green trading machine, which can be gamed and turned into a profit center. Further, cap-n-profit invites --- nay, begs for --- all kinds of shenanigans around which activities get credits. Not to mention the environmental justice ramifications of giving out the allowances to precisely the entities who have done the most to defer, delay, and destroy any consensus on the need for action on climate change.
Finally, "cap and trade can pass but a tax can't" is just bullshit. Maybe if we didn't have corpora-greenish organizations selling out to the highest bidder and singing the cap-n-profit song, we'd have a lot better chance of getting the simpler, more efficient, carbon tax through, and we could spend our time talking about how to best use the money to mitigate the effects on the poor.
If the important thing is getting it done then "process" is just as important as anything else, because the process of environmental response IS the product when you're talking either system. Both carbon tax and cap-n-profit are simply ways to tax--to force some internalization of the costs--carbon emissions.
A cap-n-profit system that is just a less-efficient/more expensive/more easily gamed form of the tax, so let's not pretend that Komanoff errs by preferring the better form of the tax.
"An optimist is someone who thinks this is the best of all possible worlds. A pessimist is someone who is afraid that the optimist is right."
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Billhook Posted 8:55 am
22 May 2007
and repeatedly distorting the title of his proposal,
demonstrates rather neatly your lack of confidence in the cogency of your own proposal and in its ability to stand on its own merits.
As Ive pointed out in other posts, the efficient alternative to the various disbenefits of a Carbon Tax
should logically be titled "Cap, Allocate & Trade,"since the form of Allocation is critical to the outcome.
Tom A wrote confusedly of three types, being Grandfathering, Auction and Allocation (including per capita).
Clearly all these are types of Allocation, ranging from the least equitable -
Grandfathering (allocating to incumbent polluters)
through auctioning, (allocation by wealth)
to an allocation converging to per capita parity.
Of these options, you assume arbitrarily that Grandfathering would be legislated,
despite the absurd inequity and market distortion it generates.
Yet you somehow feel that there is sufficient support in Congress & Senate
to get a water-tight carbon tax onto the books ?
On at least one aspest of this issue you seem confused.
A cap on emission entitlements means just that, a cap, ceiling or limit.
A carbon tax is the Bush-like alternative to this,
that is, it disdains any binding limit -
it merely hopes that a sufficient influence will be generated,
and will then maintained over successive elections for 43 years.
With regard to the gaming of systems, be it clearly understood that I've campaigned for the utmost stringency first on carbon sequestration
and then on offsets in general, since the mid '90s.
I've not been similarly involved against the massive and routine net-tax avoidance by corporations,
as I see no prospect of a Carbon Tax being anything more than a distraction and an tragic delay
in establishing the durable effective alternative.
Regards,
Billhook
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Jon Rynn Posted 9:16 am
22 May 2007
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David Roberts Posted 9:34 am
22 May 2007
grist.org
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Jon Rynn Posted 10:45 am
22 May 2007
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b e r n a r d o Posted 11:13 am
22 May 2007
Feel scared of entrusting the future to an agenda of a group that gave us NAFTA and defended utility deregulation in California while playing footsie with Enron and in the past tried to offset a "self-chilling beverage can" which released a potent greenhouse gas (one can was deemed comparable to driving 100 miles).
The below is excerpted from "Crony Environmentalism: Do conflicts of interest taint EDF's Advocacy on climate change?"
http://www.nonprofitwatch.org/edf/
( ED hadn't dropped Fund from its name at the time, thus is referred to as EDF) In the actual report are footnotes for the below.
Noting that this trustee Benkard has defended polluters and Wall Street interests, wouldn't you expect that a group he's affiliated with would pursue a controversial corporate-oriented global warming policy? But should we trust our planet to such people with their "Enronic" policies?
James W.B. Benkard
Partner, Davis, Polk & Wardwell
. . . . defends polluters, despoilers, and fiascoes
Benkard has been a trustee of EDF since 1982.
As a longtime partner at the law firm Davis, Polk & Wardwell, Mr. Benkard has represented numerous corporations, including General Electric(GE), Freeport McMoRan, International Paper, NCNB(Nations Bank's predecessor), Melville(CVS Drugstore Chain), Prudential Insurance Co., Morgan Stanley, Morgan Guaranty Trust, and other financial services companies. For ten years
he defended International Paper from charges that the company had polluted Lake Champlain. One of his clients, GE, constructs nuclear reactors, power turbines, and incinerators. Another client, Freeport McMoRan, has long been accused of reckless mining in ecologically important rainforests and of human rights violations for its treatment of indigenous peoples. Benkard's presence on EDF's board is therefore troubling, at best.
Benkard's law firm Davis, Polk & Wardwell as a whole has an equally questionable record of environmental consciousness, boasting that it "successfully represented Merrell-Dow, Babcock & Wilcox, Manville, and Exxon in major cases concerning prescription drugs, nuclear power, asbestos, and oil spills . . . [and represents] Suzuki Motors in litigation concerning the Samurai sport-utility vehicle." The firm has also represented Philip Morris and RJR Nabisco on company business and in tobacco liability matters.
Davis Polk even represented Exxon's board
of directors in the matter of Exxon Valdez oil spill. Not coincidentally, years earlier the law firm had counseled Morgan Stanley when the finance company was raising money for Exxon to build the Alaska pipeline later serviced by the Valdez. Exxon has also benefited from Davis Polk's legal representation in New York and New Jersey investigations of an oil spill that occurred . . .
Benkard has developed expertise in cases of financial catastrophe. Benkard has been
defending Morgan Stanley in a lawsuit by Orange County which alleged that Morgan Stanley "allowed county officials to engage in a 'speculative investment scheme' thereby violating the California constitution and government
code requirement," according to American Lawyer. Previously he had defended Morgan Stanley in a similar case involving the state of West Virginia which sued the investment firm for liability in the state's loss of $ 300 million
on the stock market.
. . .
( there's more about him in the report )
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josullivan58 Posted 3:42 pm
22 May 2007
Any new tax will have trouble being passed. The very word "tax" is likely to be poison to any legislation. Especially to republicans who control ~45% of congress.
Beyond academic discussions of what may be the best policy there are considerations of what is doable in todays political climate.
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ffletcher Posted 5:04 pm
22 May 2007
The most common approach to trading emission credits is t to move the production to another place and import the stuff. A cap and trade policy is a policy that leads to cap and off-shore.
We will need import restrictions that heavily tax or restrict imports from countries that fail manage CO2 emissions if we are to prevent the cheaters.
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Pangolin Posted 5:40 pm
22 May 2007
Gasoline at the refinery in Richmond California is more expensive than gasoline in Ashland Oregon. Even accounting for differences in taxes. There are no gasoline refineries in Oregon!! Not one. The producers game the system.
A carbon "tax" would pass in a second as long as one provision was attatched. Every citizen gets 90% of the per-capita carbon taxes collected returned to them as a tax credit. Corporations and resident aliens need not apply.
Corporations that cut their carbon output fastest would be able to collect market share from consumers that had extra cash to spend. Consumers that spent some of that extra cash on solar or wind systems could get matching funds from the remaing 10% collected by the government.
Anyone doing the math on such a carbon tax and rebate program would quickly realize that the majority of voters would get a net cash surplus from such a system. I think voters are willing to vote themselves free cash.
The continued debate is a stalling tactic until we lose a few more towns like New Orleans and Greenburg KA. No effective action is planned by either party.
Put the Carbon Back
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spaceshaper Posted 9:33 pm
22 May 2007
I'm not wanting to divert the thread, but nonetheless curious about the thinking behind the lumping together of resident aliens with corporations here. Corporations I can understand, though the exclusion would certainly seem debatable - corporations come in many flavors, and not all are evil polluters. But resident aliens? Seems somehow gratuitous. Resident aliens pay all the same taxes as citizens. Are they somehow more culpable for carbon emissions, and hence less deserving?
The last I heard, global warming was a global problem. Please tell me this is not some kind of America-first jingoism.
The true meaning of life is to plant trees, under whose shade you do not expect to sit.
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