Today, Rep. Jim McDermott (D-Wash.) introduced the “Managed Carbon Price Act of 2012” (MCP), a bill imposing a tax on carbon dioxide-equivalent greenhouse gas (GHG) emissions from producers of coal, oil, and natural gas, refineries, and other covered sources. The MCP has roughly the same long-term goal as the Waxman-Markey cap-and-trade bill, the Copenhagen climate treaty, and California Assembly Bill 32 — an 80% emissions reduction below 2005 levels by 2050.
Under the MCP, covered sources would have to purchase (non-tradeable) permits equal to the quantity of CO2-equivalent GHGs they emit. The Secretary of Treasury, in consulatation with the Secy. of Energy and Administrator of EPA, would “manage” permit prices to ensure that both the long-term and interim reduction targets are met. Permit prices would have to stay within a maximum and minimum “price collar.” Seventy-five percent of the proceeds would be returned to citizens as “dividends,” and 25% would be applied to deficit reduction. A fact sheet, section-by-section analysis, and side-by-side comparison with last year’s version of the bill provide more detail.
A few quick observations. First, the overwhelming majority of Republican members of Congress have signed the Taxpayer Protection Pledge — a promise to the citizens of their State or district not to support any tax increase that is not offset by an equal reduction in other taxes. Because 25% of the proceeds raised by the ‘managed’ carbon tax would be applied to deficit reduction, the MCP is not ‘revenue-neutral.’ Pledge takers cannot vote for the MCP without breaking their promises to their constituents. Even if some GOP lawmakers agree with the bill’s climate policy objectives, few will dare to support it. [click to continue…]
Concerning the “Price Carbon Campaign/Lame Duck Initiative” meeting of center-right and ‘progressive’ pols, wonks, and activists yesterday at the American Enterprise Institute (AEI), herewith a few additional thoughts.
Today’s Greenwire quotes AEI economic policy director Kevin Hassett saying that AEI was just playing host and the meeting was just information sharing. Well, okay, let’s assume he experienced it that way, but what about the ‘progressives’ who set the agenda? They must really be into sharing, because this was their fifth meeting. Whatever the AEI folks thought the event was about, the agenda clearly outlines a strategy meeting to develop the PR/legislative campaign to promote and enact carbon taxes.
During the cap-and-trade debate in the last Congress, there was something of a consensus among economists that EPA regulation of greenhouse gases (GHGs) is the worst option, a ‘comprehensive legislative solution’ (i.e. cap-and-trade) has less economic risk, and a carbon tax is the most efficient option. But the ‘progressives’ in the “Price Carbon Campaign” are pushing for carbon taxes on top of EPA regulation.
Because the meeting was non-public and hush-hush, we may never know who said what. Here are some points the ‘conservative’ economists should have made: [click to continue…]
Everybody and his brother are reporting yesterday’s cloture vote on Sen. Tom Coburn’s amendment to repeal the ethanol tax credit as a widespread rejection by GOP lawmakers of the Taxpayer Protection Pledge, conceived and administered by Americans for Tax Reform (ATR). This is spin.
Many in Washington would like nothing better than for Republicans to disown their chief product differentiator, their promise in writing not to raise taxes. That may happen. Raising taxes is what politicians do, especially those who claim we have a deficit problem rather than an overspending problem. But repudiating the Pledge is not what went down in the Senate on Tuesday. [click to continue…]
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