A study of a proposed carbon tax in Congress estimates that the plan could lead to increased costs for everything from gasoline to power rates if it’s implemented.
Rep. Carlos Curbelo, R-Fla., has introduced legislation that would place a $24-per-ton carbon tax on coal mines, oil refineries, and gas processing plants starting in 2020, increasing by 2 percent per year above inflation. Chemical and manufacturing processes in the aluminum, cement, glass and steel industries that release carbon dioxide would also pay the tax. The bill would eliminate federal gasoline and aviation fuel taxes.
“Elected officials owe it to every American, and especially to younger generations who are understandably concerned about the future, to work on a comprehensive solution to mitigate and adapt to climate change,” he said of his MARKET CHOICE Act.
Columbia Center on Global Energy Policy (CGEP) completed a deep dive into the proposal, determining that the American economy will take a hit if this proposal were to somehow snake its way through Congress.
CGEP compared its numbers to how things would look under current energy plans. Some of those findings include:
But don’t worry about the U.S. Treasury — annual federal government revenues would increase between $63 billion and $106 billion by 2030 with the new tax, with much of the money going to the Highway Trust Fund for infrastructure upgrades.
Lowest-income households aren’t expected to be affected because Curbelo’s bill would use 10 percent of the carbon tax revenue to subsidize those on welfare to offset the higher energy prices.
In a joint op-ed, Myron Ebell of the Competitive Enterprise Institute (CEI) and Ross Marchand of the Taxpayers Protection Alliance (TPA) dismissed the proposal, arguing that “the net impact of such a steep carbon tax would be disastrous for working families.”
“While it’s impossible to sum up decades of climatology research in a few paragraphs, the case for a carbon tax is flimsy even if we assume that carbon impacts climate,” they wrote. “As it turns out, the economy is complex and impossible to steer toward a narrow, preordained outcome dreamed up by bureaucrats.”
They point out that left-leaning economist Hans-Werner Sinn has opined that an impending carbon tax would likely lead to energy producers increasing supplies in the present, which would crash the price and encourage more short-term carbon emissions.
“Economic realities will likely doom a carbon tax to fail,” CEI and TPA wrote. “Economies are complex instruments that always defy central planners, derailing even the best-laid plans. Policymakers must steer clear of this poorly thought out proposal that will achieve little at a gargantuan cost.”
Curbelo seems to be having a hard time finding friends with his bill because even many on the left are rejecting it. The National Resources Defense Council (NRDC) said it “cannot support his bill.” NRDC said Curbelo’s plan doesn’t cut pollution quickly enough to meet scientists’ climate protection goals, and they don’t like that it preempts the Clean Air Act, using Curbelo’s metrics instead to try to reduce America’s carbon footprint.
ExxonMobil, which has had its share of ecological disasters, perhaps the impetus for the company becoming a founding member of the carbon tax-supporting Climate Leadership Council, released a tepid statement following the bill announcement.
“We appreciate Rep. Curbelo’s effort to help generate a constructive discussion on this important issue,” said a company spokesperson.
The Week said Curbelo’s carbon footprint cuts would do little to stop climate change as China’s emissions ramp up — rising faster in 2018 than the past seven years. That outlet also pointed out that Americans are unlikely to get behind the plan because of the hit to their wallets.
And Curbelo’s legislation was introduced only days after a resolution in the House expressing that a carbon tax would harm the U.S. economy passed by a 222-6 vote among Republicans.