Friday, August 3, 2012

Rep. McDermott (D-WA) introduces Managed Carbon Price Bill

On Thursday, August 2, 2012, Rep. Jim McDermott (D-WA) introduced, for considering by the House Committee on Energy and Commerce and the House Committee on Ways and Means, legislation to price carbon that is informally being called the Managed Carbon Price Act. H.R. 6338 would “amend the Internal Revenue Code of 1986 to reduce greenhouse gas emissions … by requiring a Federal emission permit for the sale or use of covered substances, reduce the deficit, and return funds to the American people.”

According to CNBC:

The bill creates a schedule that would put the U.S. on a path to reduce CO2 emissions by 80 percent below 2005 levels within 42 years of enactment - in line with the target set by President Barack Obama.

The bill also directs the Treasury secretary to publish a five-year permit price schedule and to issue federal emissions permits that represent one-quarter ton of CO2 equivalent to emitters.

The price schedule means the bill would help to solve two major problems facing the US energy marketplace:

  1. The extreme volatility of pricing for fossil fuels that are traded on future markets, which drains investment capital and consumer savings, without added productive value;
  2. The need for clarity about the true cost of burning carbon based fuels, to allow for a speedy transition to less economically and environmentally corrosive clean energy technologies.

The Seattle Times is reporting:

McDermott’s staff say the bill would avoid creating volatility in energy prices that has dogged the cap and trade system in place in the European Union.

The money from carbon emissions would be deposited into a public trust fund, with 25 percent going to pay down the deficit and the rest spent to offset any increases in consumer utility rates.  If the price were set at $15 for each ton of carbon emissions, it could bring in about $80 billion, and more in later years.

The bill was introduced as a growing coalition of liberal and conservative organizations, economists and policy-makers, have been meeting to discuss ways to implement a strategy that would correct for the biggest market failure in world history: the massive externalization of costs through the complicated and heavily subsidized global fossil fuels marketplace. There is recognition among conservative economic thinkers that a carbon tax is most likely the appropriate way to achieve an honest pricing mechanism for carbon-based fuels.

According to the Wall Street Journal:

… some of the most vocal supporters of a carbon tax are conservatives. One of Mitt Romney’s economic advisers, Harvard economist Greg Mankiw, is a huge fan of raising taxes on activities that are seen as undesirable—say, polluting the air—and cutting taxes on desirable activities, like working harder. So is supply-side economics guru Art Laffer. Former South Carolina Rep. Bob Inglis, a Republican, just started a whole think tank to push the approach.

“There is certainly progress in the way of thinking about emissions reductions that we haven’t heard from Republicans over the last three years,” said Mr. McDermott, who acknowledged that his bill is essentially a marker thrown down to influence debate in the next Congress.

While the plan delivers 25% of revenues to deficit reduction, it would return the rest of the revenues to consumers, to preclude fossil fuels producers from transferring the cost of doing business to consumers. This strategy returns the burden of credit, financing and investment, to the businesses in question, and motivates investment institutions to find and fund alternatives.

The consumer dividend part of the plan resembles the Save Our Climate Act (SOCA) introduced in the House Committee on Ways and Means last fall, which also devotes part of the revenues to deficit reduction. With near uniform Republican opposition to increasing government revenues through any new tax policy, a 100% dividend, like that proposed by the non-partisan non-profit volunteer organization Citizens Climate Lobby may go further to win conservative support for an economically cost-neutral way to price carbon.

With Republican committee chairs staunchly opposed to passing any legislation to price carbon before this year’s election, it is unlikely the legislation will move out of the committee this year, but a growing national coalition of citizens, lawmakers, think tanks, non-profits and economists from across the political spectrum is building momentum to implement a revenue-neutral people-centered strategy for implementing a carbon-pricing policy, as early as 2013.

For more information on pricing carbon and the clean energy transition:

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Originally published August 3, 2012, at

Thursday, August 2, 2012

The World Will Not Need Liquid Fuels in 20 Years

In the July 23, 2012, edition of CQ Weekly, on page 1483, Randy Udall, brother of Sen. Mark Udall (D-CO), is quoted as saying, regarding the potential for development of environmentally unsound oil shale development, “underlying it is this question that everyone is asking: ‘Well, where is the world going to get its liquid fuels 20 years from now?’” The truth of the matter is: there is no reason we should be using liquid fuels 20 years from now.

Thanks to the work of Mark Jacobson, of Stanford, and Mark Delucci, of UC Davis, we know it is possible to power the entire global economy without carbon-based fuels, by 2030, using technologies already in existence, and in use, in 2009. We also know it is possible to do this without spending more than we will have to spend to upgrade and maintain the existing energy infrastructure, designed to deliver fossil energy to consumers and industry.

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Friday, October 21, 2011

South Africa Carbon Tax Plan: Paper for Public Comment

Discussion_Paper_Carbon_Taxes_81210.pdf Download this file


A carbon tax appears to be the most appropriate mechanism to reduce GHG emissions in South Africa, creating incentives for emissions reduction at least cost to the economy. While it would not guarantee a fixed quantitative reduction in such emissions over the short term, a carbon tax set at an appropriate level and phased in over time would provide a strong price signal and certainty to both producers and consumers, acting as an incentive for more environmentally friendly behaviour over the long term.

Taxes on carbon afford firms the flexibility to undertake emissions reductions according to their specific processes and provide the long-term price certainty necessary for investment decisions. Ideally, a carbon tax should apply directly to emissions of CO2 but for administrative reasons this is not feasible. The next best option is a proxy carbon tax on fossil fuel inputs.

The main body of this discussion document is structured as a technical paper. The remainder of the paper is structured as follows:

  • Background
  • Climate change and its effects
  • Economics of climate change 
  • Policy instruments to address climate change 
  • Environmentally related Pigouvian taxes 
  • Tax policy design considerations 
  • International practice 
  • Revenue use – revenue recycling, tax shifting and/or earmarking 
  • Potential impacts of carbon taxation for South Africa.

The next phase of government’s investigation into a carbon pricing regime will elaborate on the economics, design and practicality of an emissions trading scheme. This will involve an analysis of implemented and proposed emissions trading schemes internationally. The policy discussion document is expected to be published for comment next year.

Tuesday, July 26, 2011 Wednesday, July 6, 2011 Saturday, April 30, 2011 Friday, February 25, 2011

Citizens Climate Lobby Launches New Groups in PA, NJ

On Thursday, February 24, Citizens Climate Lobby launched a new campus chapter at Villanova University, outside of Philadelphia, then another in central New Jersey, at a working dinner in Fair Haven, Monmouth County. Mark Reynolds, executive director of CCL, led both events, giving volunteers an opportunity to examine both fact and strategy related to shaping a viable, grassroots-based policy to transition the US economy to clean energy. 

The Villanova event was a working lunch, with students and faculty joining Mark Reynolds, to hold their first official group meeting, to study key sources of information relating to the climate destabilization crisis and reviewing projects like the Million Letter March, the report Building a Green Economy, and the CCL National Conference in Washington, DC, as means of increasing citizens’ access to the process of making policy. 

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Saturday, January 29, 2011 Thursday, July 1, 2010

Citizens Climate Lobby Takes Campaign to Capitol Hill

Between June 21 and 25, Citizens Climate Lobby took its message to Capitol Hill, meeting with 52 different members of Congress, or their energy and climate staff, in both the House and the Senate. The first CCL national conference was fortuitously timed, as the ongoing disaster in the Gulf of Mexico has brought into stark relief the nature of the carbon-fuel problem and the urgent need for action to achieve a civilization-wide overhaul of energy infrastructure, and the climate bill pending in the Senate may not have the votes to override a filibuster.

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