An Inconvenient Tax
By Bill Moore
Charles Komanoff practices what he preaches. He rides a bike instead of driving a car. He takes the train instead of the plane. And he believes that mankind needs to get serious about reducing the amount of carbon dioxide it emits every second of every day.
When he took the podium following the climate change presentation by Cameron Wake ("The Handwriting In the Ice Core"), he was emotionally moved, telling the audience of some 250 or so conference goers on the opening night that he was thinking of his young sons the entire time.
"I got a serious jolt of reality," he commented somberly. "It makes me think about the people that we share this planet with who have such an immense amount of power and control over all of us in their dogged refusal to listen to this kind of scientific, humanistic reason." He would return to this theme in his presentation, criticizing our obsession for more power, be it horsepower, economic power or political power.
He pointed out that we Americans effectively emit seven times more carbon per capita than anyone else on the planet.
"We all don't emit equally," he said, explaining that this will be an important distinction when he starts talking about carbon taxation.
Why tax carbon, he asked? It is human nature to not conserve what we think is abundant and cheap, he argued.
"The usual remedy of efficiency standards or subsidies for the good stuff inevitably fall short. They are going to be gamed the way the Corporate Average Fuel Economy (CAFE) standard has been." He added that if the standard's aren't "gamed", they will, like hybrid car technology, be "diluted".
Citing the New York Times, he said, "something like 92 percent of the inherent efficiency advantage of hybrid technology has gone into making the cars more muscular." He observed that subsidies also often tend to be too "circuitous" to be effective, pointing out that New York State's renewable energy portfolio goal of adding 1 percent renewable energy a year doesn't begin to keep up with the growth in energy demand.
"Standards are too scattershot... or they are one dimensional," he stated. "They don't deal with behavioral change, or they are static. They are bypassed by dynamic capitalism."
Komanoff gave the example of a school teacher who is offered two teaching positions, one at a very good school 25 miles away and at another, lesser school six blocks away. At today's gasoline prices, the teacher will likely pick the good school, but that decision, he reminded everyone, is subsidized by climate damage.
He pointed out that automobiles do not consume most of the oil burned in this country; it is used by other modes of transportation, by the refinery and petrochemical industries, for home heating, etc.
"So, even if we got our hands around the car issue, we're still not all the way there. We're not even halfway there."
When Komanoff reached the point in his presentation where he talked about the impact of "dynamic capitalism" and the role it plays in fostering evermore energy consumption, an audience member challenged him, asking, "What difference does it make..." that the super-rich can afford to upgrade their corporate jets to jumbo jets?
Komanoff responded that there are two important reasons: the growth of corporate jet fleets is a rapidly growing sector, as is air travel in general...
"... And second, it creates the desire among just about all of us to aspire to this (energy intensive lifestyle) and we distort ourselves and send ourselves into a frenzy in order to do just this. And if we're not going to stop this, let's at least get it so the polluter pays..."
That comment was met by vigorous applause from the audience.
He turned to yet another globalization absurdity: granite headstones are now being imported from China and India, driving out of business a once-flourishing industry in Vermont. He sees carbon taxation on the fuels that power the ships and planes that make this possible as a way of "putting the genie back in the bottle."
Turning to the topic of carbon taxation and what he is proposing, he disagrees with the Sierra Club's Dan Becker who was reported in the New York Times as saying the rise in gasoline prices over the last several years has done little to slow the growth of demand for gasoline or miles driven. Komanoff contended that they have, in fact, had a significant impact on both; and that while in the short term, a one dollar tax on gasoline will only have a slight impact on the cars people drive or how much they drive, over a five to ten year period the impact will be significant, in the range, he estimated, of 20 percent.
To help begin the process of implementing a tax on carbon, he he is proposing a decade-long ramp-up to a steep carbon tax, coming through ten equal installments of $37 per ton of carbon. (Each installment equates to a 10 cent-a-gallon increase in the price of gasoline.) At the end of the ten years, CO2 emissions would have fallen 25-30% rather than rising by the same amount.
What would be the consequence of this, he asked?
"Perfectly good coal-fired plants across the U.S. would become economically obsolescent and it would become economically cost-effective with no government subsidies, not even a production tax credit, to retire them and replace them with non-polluting wind farms.
SUV's would follow suit, as would incandescent lights, the SUVs of the light bulb world, which would also be phased out.
"We would create the market pull for a viable intercity rail system... Suburbs contract, cities thrive. CO emissions down by about 25-30 percent." This should appeal to the energy/national security "hawks", as well he said.
The revenues from a carbon tax would be "gargantuan", estimating that after a decade the revenues would be close to half a trillion dollars a year.
"We need to find a way to rebate that, or tax shift that equally to all people living in the United States. That's the only progressive or non-regressive way to do it." Komanoff said that he wouldn't spend a cent of this on any 'favorite" energy system because the carbon tax would provide the market "pull" to encourage the most efficient and cost-effective energy technologies to thrive.
"I would devote 100 percent of it to some sort of give-back," suggesting something like the oil revenue sharing Alaska citizens enjoy or as a way to shift out of more regressive taxes, including state sales taxes and employee withholdings.
Disappointingly, few nations have implemented carbon tax schemes, he noted, and even more discouraging, when he talks with potential backers they invariably ask him how the environmental community feels about his proposal and he has to tell them that they aren't, by and large, on board with him yet. Labor unions and social justice groups are the same way.
Fortunately, after arriving by Amtrak train for the conference, Komanoff learned that he and a colleague working with him on carbon taxation had received a grant from a private philanthropist to help fund their efforts. He expects to launch www.carbontax.org in mid-January
"If you have any suggestions on what we should call this, maybe something like 'An Inconvenient Tax' ?
Again the audience responded with enthusiastic applause.
Be sure to listen to the entire 25-minute presentation using the two MP3 players at the top of the page. You can also download the MP3 file here: http://www.evworld.com/evworld_audio/aspo06_ckomanoff.mp3. Click here to download Mr. Komanoff's PowerPoint presentation.
EV World expresses its appreciation to ASPO USA for granting us permission to record the proceedings of their conference.