The American Enterprise Institute on 22nd April (the 145th birthday of Lenin and 45th Earth Day) held a seminar on “Implementing a Carbon Tax: Practicalities and Prospects.” A video of part of the event can be viewed here. The rest of the event can be viewed on the web site of a group promoting a carbon tax and headed by former Representative Bob (“Mr. 70-29”) Inglis (R-SC).
Some of the presentations were based on a collection of essays that grew out of a conference AEI held in 2012. That book has now been published by Routledge as “Implementing a Carbon Tax: Challenges and Debates.” For those not lucky enough to have been given a copy at the AEI event, it can be purchased on Amazon for the discounted price of $48.09.
AEI Resident Scholar Aparna Mathur, who was the only AEI scholar to contribute an essay to the book, hosted the event. The first speaker was Vitor Gaspar, director of the fiscal affairs department at the International Monetary Fund. He noted several times that getting the price of carbon was crucial and that most existing carbon taxes and cap-and-trade schemes had put the price too low.
Next on the agenda was a discussion with Representative John Delaney (D-Md.) and former Rep. Inglis, head of the Energy and Enterprise Initiative, which is based at George Mason University. Rep. Delaney used the AEI event to announce that he would soon introduce a carbon tax bill. The “Tax Pollution, Not Profits” Act will begin with a $30 per metric ton of carbon dioxide and then escalate by 4% above the inflation rate every year.
Delaney said that his bill would use 50% of the revenue to reduce the corporate income tax from 35% to 28%. Another chunk of revenue would be used to offset the higher energy costs of poorer people. Finally, some of the revenue would be used to compensate coal miners who lose their jobs by paying for retraining, relocation, early retirement, and health care. Delaney did not say whether the 4% annual escalator would be used for further reductions in corporate tax rates or higher government spending.
Delaney, who was a successful corporate founder and CEO before his election to Congress in 2012, emphasized that carbon was a massive net drag on the economy and that his bill was a free market solution that would spur economic growth and innovation. Asked by Evan Lehmann of Greenwire whether his bill also repealed the EPA’s Clean Air Act rules to reduce carbon dioxide emissions, Delaney replied that his bill does not do that. But he went on to say, “I think it would inevitably lead to that.” If it’s inevitable, then he should put it in his bill.