What is a carbon tax? by sunflaresolar.com

What is a Carbon Tax?

Climate change, or global warming, is the result of the build-up of greenhouse gases in the atmosphere that can have major environmental implications such as the destruction of coastal regions, disruption of ecosystems, economic devastation and more.

The Carbon Tax is a tax on carbon dioxide emissions from fossil fuels – the primary greenhouse gas – to ultimately reduce its effect on global warming.

According to the Department of Energy, carbon dioxide released by burning oil, coal and natural gas makes up 82% of total greenhouse gas emissions in the U.S – and the U.S. accounts for around 20% of the world’s CO2 emissions from fuel-burning.

Groups like The Citizens Climate Lobby promote the idea of a revenue-neutral “fee-and-dividend” carbon tax with 100% of the net revenue returned directly to households on a quarterly basis. The idea is that the tax will ultimately reduce greenhouse gas emissions and improve the planet while also growing the economy.

By taxing carbon dioxide pollution, U.S. consumers are more likely to move away from fossil fuels-based energy and towards renewable energy sources as fossil fuels become more expensive.

The hope is that by taxing pollution-generating activities, consumers will use less energy and therefore emit less CO2 overall.

Additionally, carbon taxes could also generate a significant amount of revenue.

Rep. John Larson of Connecticut has introduced a carbon tax proposal of $15 per ton of CO2. This would generate an estimated $80 billion in revenue. According to Rep Larson’s bill’s predictions, after 10 years, annual revenue will be an estimated $440 billion and U.S. emissions will be reduced by as much as one third.

Another recent proposal from the Climate Leadership Council calls for a comprehensive nationwide carbon tax starting at $40 per ton of CO2 and rising over time. The tax would start at $40 in 2018 and increase $5 per ton each year.

By 2030, annual U.S. CO2 emissions would be reduced by almost 40% from baseline levels in 2005.

A carbon tax would help discourage the use of fossil fuels, resulting in better air quality, a less powerful fossil fuel industry, and help reduce our reliance on foreign oil.

Carbon taxes have been enacted in other countries around the world including Ireland, where the tax covers almost all of the fossil fuels used by homes, offices, vehicles and farms. The carbon tax generates almost €400 million annually. (Ireland also levies a vehicle registration tax that is partly emissions-based. Taxes are based on a vehicle’s make, model and CO2 emissions.)

Sweden has had a tax on carbon emissions since 1991 and Finland introduced its carbon tax in 1990. Other countries like Great Britain and France have considered various carbon tax proposals.

Australia had a brief carbon tax in 2012 that was repealed two years later amidst political pressure. Chile’s climate pollution tax, the first in South America, is expected to take effect in 2018.

Voters in Boulder, Colorado, passed a carbon tax referendum in 2006 of $7/ton. Though the tax only applies to electricity, it is the first climate-protecting tax ever levied in the U.S.

Washington State is currently campaigning to enact a statewide carbon tax.

Historically, fuel taxes in the U.S. haven’t been popular. But concerns about global warming are increasing. In Gallup’s annual environmental poll last year, 64% of Americans said they are worried about global warming – the highest percent since 2008.

Ultimately, combating climate change will require worldwide cooperation of consumers and corporations that produce the pollution. But polices like a carbon tax could provide a powerful incentive for consumers and businesses to use less carbon-emitting energy, which is a step in the right direction.

To learn more or to get involved with the network of activists supporting a comprehensive nationwide carbon tax, visit The Carbon Tax Center.