What if we could help curb climate change, create incentives for renewables, and reward those who conserve energy? What if we could do this in a low cost, low-regulation way - all from a law only two pages long? We have this ability. We can do it by putting a price on carbon emissions.
Renewable energy technologies are getting better all the time, but their cost is still out of the range of your average consumer. Tax credits to purchase renewables are insufficient to promote widespread adoption, as they are mostly available only to those with the capital to spend in the first place. Direct subsidies to American manufacturing of technologies such as solar likewise don't bring the cost down enough. If we can't lower the price of renewable energy sources, then our only option is to raise the artificially low price of carbon-emitting fuels.
The cost of fossil fuel usage goes beyond the price at the pump or the cost of coal-fired electricity. In cities, air laden with exhaust results in a citizenry more prone to heart and respiratory problems. Local coal plant emissions in Holyoke have resulted in a juvenile population in which one out of every four children has asthma. These are externalities: real monetary costs of carbon-emitting fuels not represented in their retail price. They are borne by the affected individuals and by society as a whole through the resulting increase in health care costs. An even higher price is the one we will be paying for the destruction of natural systems effected by human-caused climate change.
Usually called a "carbon tax," attaching a price to carbon-emitting products forces consumers to recognize the real cost of their use. With a consumer base willing to use clean energy sources - now relatively cheaper compared to carbon-emitting sources - firms will be more willing to invest in the technologies, increasing their rate of growth. But forcing upward the price of carbon-emitting fuels alone does not solve the problem. Indeed, it leaves a dangerous moral gap, as those already struggling with energy costs find them now even further out of their reach.
The solution to that problem comes with the next natural question when a new tax is instituted, "Where is the money going?" Routing the money to clean energy subsidies or cleaning the environment may be useful, but are too far removed from consumers to make the higher cost justified. Additionally, they do not address the now-higher price of energy and those who have trouble affording it.
To make the program the most effective, all revenue from the tax should be returned to the citizenry, with equal shares going to every adult citizen. This would close the gap for those for which money is a scarce object. Those who use large amounts of carbon-emitting fuels would receive less than they paid; those who use smaller amounts would receive more than they paid, rewarding their good behavior. Such a rebate could be done annually at tax time, but monthly rebates would be the ideal. Such regular rebates help sustain those for whom the extra cost is a burden and are a regular reminder to people of what role they are playing, be it frugal or indulgent. With enough foresight and forward investment, the whole process could be automated.
All this can be accomplished from legislation with amazingly little text. Such a simple system needs little in the way of oversight, eliminating the need for bureaucratic regulation and the possibility of such political exploitation that more complicated systems, such as cap and trade, are prone to.
Carbon pricing is an economically sound, market-based measure that is simple and intuitive. It accounts for externalities and rewards good behavior. Carbon pricing gets results. After instituting carbon pricing, Australia saw carbon emissions down 7%, brown coal use down 12%, and renewables up 23%, and that was only in the first year. I think we can do even better in the US. We should start the fight to defend the common wealth of nature right here in Commonwealth of Massachusetts, right now with the Green-Rainbow Party of Massachusetts.
Dru Tarr is a member of the Green-Rainbow Party and serves as its Communication Director, National Representative, and on its State Committee.
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