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Carbon tax will save you money

Carbon tax will save you money
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Once again efforts to regulate climate change are in the news. What makes this time different, however, is that regulation was proposed by a Republican. Rep. Carlos CurbeloCarlos Luis CurbeloHouse GOP lawmaker unexpectedly shakes up Senate trial The Memo: Historic vote leaves Trump more isolated than ever The Memo: GOP and nation grapple with what comes next MORE (R-Fla.), a has introduced a bill that would repeal the federal gas tax and replace it with a carbon tax of $24 per-ton.

The use of a carbon tax, like cap and trade regulation, to regulate greenhouse gases was originally proposed over a decade ago by conservative think tanks. Today, Curbelo, backed by other Republicans like James Baker, has attempted to resurrect a conservative tool that has been kicked to the curb by powerful anti-tax interests and the fossil-fuel industry.

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A small number of Republicans look likely to support carbon regulation. Of course, the majority of the GOP, with substantial pressure from Grover Norquist and his powerful interest group, Americans Against Taxes, continues to oppose it. They have wheeled out the usual talking points; arguing that the free market will respond without government prodding and that taxes hurt the economy and destroy jobs. It is unfortunate that these “usual suspects” continue to have traction in the public sphere despite being incorrect.

 

But there is an even more compelling reason to think seriously about a carbon tax. The anti-tax foes say that the tax will cost the average American money. According to Norquist, “Carbon doesn’t pay taxes — families pay taxes, people pay taxes, taxpayers pay taxes…this is just the most recent effort by the left to find a way to get into your pockets.”

Ironically, the carbon tax is likely to save people money in the long-run. At the very least a carbon tax will not cost us anything and will protect us from the potential devastation of climate change. But, even more importantly, a carbon tax is fair. It makes those who use the most carbon pay for their use. Also, as suggested by Curbelo, the tax money collected can ultimately be distributed back to society directly.

How does a carbon tax actually save us money? Think about the costs of climate change to the average person. The country has experienced flooding, hurricane and tornado damage, illness from extreme heat and other consequences of climate change. To be clear, we can’t say any one storm results from changes in climate, but we can say the weather is getting more severe as a result. 

According to one report, “in the coming decade, economic losses from extreme weather combined with the health costs of air pollution [will] spiral upward to at least $360 billion annually.” Increased taxes to pay for infrastructure and increased insurance premiums to spread the risk from tornado and storm damage, as well as increased health care costs will be the result. It is not a question of whether one will pay for climate change, it simply a question of how one will pay for climate change.

A carbon tax is also fairer. It makes the people who benefit from the burning of fossil fuels pay for the harm they are causing rather than others. When Exxon Mobil has to pay a carbon tax, its increased cost will be passed onto consumers. Do you want to drive a gas-guzzler or not insulate your home? You will pay for your pollution through the carbon tax. Right now, these companies get away with polluting while everyone else bears the cost. 

Without a carbon tax or other climate change regulation, you and I are paying for a portion of Exxon Mobil’s profits. The producers of fossil fuels are already causing billions of dollars of damage and yet they don’t have to bear the cost of any of that harm. Rather taxes and insurance premiums go up to pay for the damage. This is not saving Americans money, it is taking money from our pockets and putting it into the pockets of fossil-fuel companies.

The tax incentivizes fossil fuel producers to find cheaper ways to remove carbon from the atmosphere as well. This is why conservatives first heralded tools like taxes and cap-and-trade programs to respond to pollution. These tools use the market to fix the problem. They incentivize the industry to find solutions rather than leaving it to potentially cumbersome government bureaucracy.

It is not a coincidence that conservatives first heralded taxes as a means of regulating. Unfortunately, all the benefits of these schemes have been lost in the “no tax” mantra that Republicans now use to avoid regulating the big businesses that line their pockets.

Alex Geisinger is a professor of law at the Drexel University Thomas R. Kline School of Law.