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THE WASHINGTON POST – 05/07/2010
This article calls for the US to reconsider ‘how little Americans actually pay to drive’ and suggests that a significant factor enabling the low price of gas is the erosion of gas taxes. It highlights that an increase in the federal tax of just 25 cents per gallon would raise $305 billion which could be used for much needed highway reconstruction and deficit reduction over the next decade. It emphasises the need for any such increases to be phased in to allow time for drivers to adapt, but concludes that ‘few measures would generate more public benefits in return for less sacrifice’. Read the article…
SAN FRANCISCO CHRONICLE – 22/06/2010
This article highlights plans by the US Senate to propose climate change legislation that would put a price on carbon and thereby ‘remind drivers that the true cost of gassing up includes millions of gallons of crude drenching the Gulf of Mexico’. UC Berkeley Professor Robert Reich suggested there may be greater receptivity to putting a price on carbon since the oil spill but highlights that ‘anything that’s called a tax doesn’t stand a chance’ with most Americans. Instead Congress is considering cap-and-trade systems for carbon emissions that they believe will do the same thing as a carbon tax. Read the article…
THE NEW YORK TIMES – 02/07/09
This article explores the arguments for and against the price (e.g. carbon taxes) vs quantity (e.g. cap-and-trade) approaches to reducing greenhouse gas emissions. So long as scientists lack the sufficient level of certainty about exactly what level of pollution will trigger climate disaster, the price mechanism may have the advantage; at least price targets can provide certainty about how much money will be spent. Setting a price target, however, carries the risk that the price will be wrong. The article concludes that in reality the ‘ultimate test of any system is its design’, whether based on price, quantity or a combination of the two. Read the article…
THE GUARDIAN – 26/06/09
In this article, Reuters’ columnist Matthew Goldstein queries both the Republican opposition to and Obama’s support of the idea of carbon trading. He suggests that, whilst the Republicans would be expected to back such a ‘classic Wall Street-driven solution’, Obama’s administration would more likely oppose any scheme that will ‘fatten the wallets of Wall Street traders’. He wonders why Obama does not show more support for a carbon tax, which ‘would get the job done without the kind of wealth transfer to the gilded class that Republicans generally support’. Read the article…
THE ECONOMIST – 28/05/09
This article highlights that the best way to curb global warming would be a carbon tax, dividing up the resulting revenue among citizens or using it to repay the national debt. Such a tax would provide the necessary incentive for people to emit less carbon dioxide, and would be simple, direct and transparent. The article states that, for these reasons, it will never be introduced in America. It argues that politicians hate to admit that any of their proposals will cause pain to any voter and therefore prefer to back a cap-and-trade scheme, which does not have the word ‘tax’ in its name. Whilst putting forward the benefits of such a scheme, they do not mention that this will still raise energy prices, that subsidies for renewable energy will have to be paid for, or that such a policy may well destroy jobs as well as creating them. It continues by saying that, although the shift to a low carbon economy may reduce economic growth overall, there are many ideas that pay for themselves e.g. making buildings more energy efficient, reducing packaging etc. Read the article…
FINANCIAL TIMES – 28/05/09
This article highlights an announcement by the US secretary of energy, Steven Chu, arguing that it is not politically feasible for the US to reduce its reliance on oil by raising petrol prices to Europe’s levels through higher taxes or regulation. The announcement comes as global oil prices have reached their highest level this year, at $63.82 a barrel. Mr Chi did, however, stress that Americans will have to learn to live with higher petrol prices even without additional taxation, as the global prices of oil and natural gas are both likely to go up in the coming decades, simply because of fundamental supply and demand issues. Read the article…
THE BOSTON GLOBE – 25/05/09
This article suggests that a gas tax is a key missing component of the Massachusetts Senate’s recent passage of a tax package. It highlights the need to get serious about moving away from a CO2-emitting, petroleum-based economy, and suggests that a gas tax is needed, not just to provide a source of funding to fix crumbling infrastructure, nor just to create jobs, but also to encourage the move toward more efficient cars, hybrids and plug-in electric vehicles. It draws on the responses to last summer’s gas prices to argue that people do adjust their behaviour to sustained price signals. Above all, the article calls for the political will to ‘use the tools available only to our government to give us a nudge in the right direction. And the gas tax is precisely the nudge we need’. Read the article…
THE NEW YORK TIMES – 04/05/09
This article argues that the US will need more than just fuel efficient cars to curb its driving-related carbon emissions, and suggests that important lessons could be learned from Europe and Japan. It suggests that public transport in these countries ‘outshines’ anything seen in American cities, that cars are smaller and lighter, and that more people now buy diesel-powered cars, which get better mileage per gallon at less cost than gasoline. The article also highlights how European governments were able to steer drivers to diesel by taxing it a lower rate than gasoline, but that in general both fuels were taxed at a much higher rate in Europe than in the US which, the article says, points to another lesson; higher fuel taxes reduce consumption. Lee Shipper, a transportation expert at Stanford University, says ‘low prices are a curse…I believe that carbon, oil and energy security are underpriced. It makes public policy sense to do something akin to boosting the price.’ Following the surge in gasoline prices in the last two years, the US has seen increasing numbers of drivers leaving their cars at home, with use of trains and buses rising to a 52-year high (according to research by the American Public Transport Association), and the total mileage driven on the nation’s highways has fallen for 13 consecutive months. Read the article…
THE WALL STREET JOURNAL – 24/03/09
This comment piece in the Wall Street Journal questions Exxon Mobil CEO Rex Tillerson’s preference for a carbon tax over a cap-and-trade system, arguing that it is simply because he must recognise that a cap on fossil fuel pollution is ‘a far superior approach, environmentally and economically’. The article says that a cap is more effective as it represents a legal limit on pollution and that, whilst environmental taxes can work well to raise revenue, without a cap they will ‘inevitably become a license to pollute in unlimited amounts’. It suggests that the same cap could be adopted by other nations in a transparent, verifiable and enforceable way in order to cooperatively lower global pollution, but that a carbon tax does not make such a system of commitments possible. From an economic point of view, the cap is also argued to be more effective in pushing the economy towards clean, domestic energy in the most flexible way possible, with investors driven by the market’s demand for clean energy. Finally, the article says that a cap is self-adjusting based on economic conditions, whereas a carbon tax could only be modified through a ‘cumbersome legislative process’. Read the article…
SCIENCE DAILY – 18/03/09
The findings of a national US survey, conducted with 2164 American adults last autumn by researchers at Yale and George Mason Universities, indicate that, even in the midst of a growing economic crisis, over 90% of Americans believe the United States should act to reduce global warming, with 35% saying that the US should make a large-scale effort, even if it has large economic costs. Only 7% of respondents said that the US should act only if other industrialised and developing countries reduce their emissions as well. Respondents strongly supported a wide range of climate-change and energy-related policies, including funding for research on renewable energy (92%), tax rebates for people buying fuel-efficient vehicles or solar panels (85%), and regulation of carbon dioxide as a pollutant (80%). Only 53% of respondents, however, supported the creation of a national cap-and-trade system, and 23% strongly opposed this system. Peoples’ primary concerns about taking action to reduce global warming were that it would lead to more government regulation (44%), cause energy prices to rise (31%) or cost jobs and harm the economy (17%). However, among those who believed that both positive and negative outcomes will occur, 92% said that despite their concerns, the nation should act to reduce global warming. Read the article…
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