Related: Climate Daily and Climate Files
A carbon price is a fee on each unit of carbon dioxide (CO2) or other greenhouse gas emissions released into the atmosphere.
There are two primary methods of pricing carbon: carbon taxes and cap-and-trade programs.
Carbon taxes would directly establish a price on carbon in dollars per ton of emissions, so industry and consumers would have to pay a tax each time they consume a carbon emitting fuel. There would, for example, be a new tax on burning coal and gas prices at the pump would go up because burning gasoline emits carbon.
A cap-and-trade program allows industries to buy permits to emit a certain amount of carbo, but sets a cap on the total release of carbon across all of the permits. Industries could buy and trade permits amongst themselves, but the total amount of carbon emitted would be subject to an overall cap.
A price on carbon makes those responsible for the damages caused by greenhouse gas emissions pay for those damages. The primary objective of a carbon price is to change behavior. A carbon price makes carbon-intensive goods and services more expensive, which provides a financial incentive to use less of these products or shift to lower-carbon alternatives, such as electric cars (assuming the electricity is produced through renewable sources such as wind and solar). It also functions simply to encourage people to use less energy.
*Climate change poses systemic threat to entire economy
*A Carbon Tax influences behavior to reduce pollution and greenhouse gasses
*A carbon tax will bring in hundreds of billions of dollars by the mid-2020’s
*A carbon tax is the most cost effective way of cutting emissions
*Climate activists and the oil industry agree on carbon tax as a solution
*We can allocate Carbon Tax revenues to climate change and mitigation
*It shifts responsibility to the polluters who are responsible
*A carbon tax will increase US leadership and competitiveness in the world.
Meeting the Challenge – A carbon fee should be the centerpiece of our strategy against climate change. An incredible study – easy to digest
*A carbon Tax will increase energy prices adding to inflation
*Now, with the war in Ukraine, is the wrong time to use a carbon Tax
*It is a regressive tax – that falls on lower income households – who spend a higher percentage on energy
*A carbon tax will discourage investment and growth
*Creates an incentive to hide pollution – making the environment worse
*Companies may move overseas to avoid the carbon tax
*Administration will be difficult and decrease any cost savings