A Problematic Feature in Conservatives' Carbon Tax Proposal
WASHINGTON—In a new blog post, former Resources for the Future (RFF) Senior Fellow Joel Darmstadter applauds, but also questions a key part of, a carbon tax proposal recently offered by a group of notable Republican conservatives heretofore largely missing from meaningful public debate about climate change. Convinced of the urgency of addressing the global warming threat, the group of economists and former cabinet secretaries calls for an initial, but steadily rising, tax corresponding to $40 per ton of carbon dioxide if emitted “downstream” in the economy. Such an approach, along with features to ensure fiscal neutrality and fairness, have been advocated by others. What is unique in the group’s blueprint, released under the auspices of the Climate Leadership Council (CLC), is that the tax be levied “upstream,” according to the carbon content of fossil fuels extracted at an oil or gas well or at a coal mine. The case of coal points up a particular dilemma under such an arrangement: a carbon tax on mined coal would translate to around $90 per ton of coal—a large multiple of the approximately $30 per ton price at which coal is selling in the marketplace. Darmstadter, citing earlier RFF research, found such upstream taxation of carbon as unrealistic. For that reason and the fact—perhaps overlooked by the CLC group—that a disincentive to mine coal would necessarily stifle ongoing efforts to capture and sequester coal-based carbon dioxide emissions at power plants prompts Darmstadter to observe that “an otherwise telling initiative on the global warming challenge needs another look.”
Read the new blog post—Conservatives' Embrace of a Carbon Tax Requires Revisiting the Coal Impact.
Resources for the Future (RFF) is an independent, nonprofit research institution in Washington, DC. Its mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. RFF is committed to being the most widely trusted source of research insights and policy solutions leading to a healthy environment and a thriving economy.
Unless otherwise stated, the views expressed here are those of the individual authors and may differ from those of other RFF experts, its officers, or its directors. RFF does not take positions on specific legislative proposals.
For more information, please see our media resources page or contact Media Relations and Communications Specialist Annie McDarris.
