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A Boulder vision for carbon pricing

Posted by Guest Blog - Mark Feldman at Dec 10, 2012 04:20 PM |

The prospect of carbon pricing is taking on new life in the wake of recent public conversations and action in cities like Boulder, Colorado.

SmokestacksWe’re all too accustomed to the steady uptick of atmospheric carbon and the predicted disruptions to global weather that this will cause. But now we’re also getting to hear some serious and refreshing talk around the nation about doing something to slow climate change. Most promising are calls to tax carbon as a way of: discouraging the consumption of fossil fuels (taxing what you burn not what you earn, to paraphrase Al Gore); providing a steady price signal to encourage investment in cleaner energy; and raising revenue during a time of impending fiscal crisis,

The potentials for carbon tax in Oregon are signficant: it would be a major victory for public health (improving air and water quality) as well as local economies, bolstering Oregon’s already vibrant clean energy sector. 

But how might a carbon tax come to pass in an age when new taxes seem to be political non-starters? One answer might be that with the looming fiscal cliff, there is a pressing need for additional revenue, making a carbon tax more attractive (especially when paired with other tax cuts, such as payroll and income). Another answer is that carbon taxes already exist in a handful of places, including Boulder, Colorado, providing a working model for the rest of the nation. 

82% of Boulder voters recently supported the extension of city carbon tax on electricity that was first passed for an initial five-year period in 2006. This tax funds Boulder’s Climate Action Plan, which includes programs to increase energy efficiency and the use of renewable energy—aimed at meeting Kyoto emissions reduction targets. The bill taxes electricity only, costs the average resident $21/year, and brings in $1.8 million/year. It’s relatively low, working out to about $7/ton of CO2; British Columbia by comparison taxes carbon at $30/ton; and a recent paper in the Journal of Environmental Studies and Sciences concludes that the social costs of carbon are likely far higher, perhaps as high as $266/ton.    

The Boulder example is indicative of a larger trend: According to the March 2012 report, Climate Change in the American Mind, U.S. voters want action to mitigate climate change, and large majorities favor a revenue neutral tax shift—taxing fossil fuels and providing other tax reductions. 61% of Americans stated they would be more likely to vote for a candidate who favored a revenue neutral tax shift. People also want big energy companies to pay for the environmental and social impacts of their activities. And more and more individuals and groups on both ends of the political spectrum are endorsing a carbon tax. In November the American  Enterprise Institute, a conservative thinktank, held a day-long conference on “The Economics of Carbon Taxes.” Suddenly, it seems like an idea that used to be called politically infeasible is now becoming increasingly plausible.  

Mark Feldman is a communications and writing consultant. Prior to moving to Portland he taught at Stanford University.

image by flickr user Nick Humphries

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