Carbon tax gets renewed attention but faces resistance

Advocates of taxing fossil fuels believe their position is stronger now because of an alarming new report on climate change and a Nobel Prize awarded to two American economists, but neither development is likely to break down political resistance to a carbon tax.

Previous alarms about global warming met with resistance from Congress and the White House. President Donald Trump withdrew the United States from the Paris agreement on climate change last year.

The Intergovernmental Panel on Climate Change, a panel of scientists brought together by the United Nations, warned in a report Monday droughts, wildfires, coral reef destruction and other climate and environmental disasters could grow worse as soon as 2040, even with a smaller increase in temperatures than used to set the Paris targets.

A few hours later, the Nobel Prize in economics went to two Americans, including William Nordhaus of Yale University, who argued carbon taxes would be the best way to address problems created by greenhouse-gas emissions.

A carbon tax is a charge imposed on the burning of fossil fuels such as coal, oil and natural gas, which produce carbon dioxide. The tax is designed to make users of those fuels pay for the environmental damage they cause. The ultimate goal of some tax backers is to price fossil fuels out of the market and replace them with sources of energy producing little or no heat-trapping emissions.

Coal and oil and gas companies could pass the tax cost along to consumers, which would presumably give a price advantage to energy not taxed. That, advocates say, would help renewables such as solar and wind grow more quickly from their current single-digit share of the U.S. electricity market.

There is, of course, stark disagreement over the economic effect of a carbon tax.

Researchers at Columbia University estimate a tax of $50 per ton of carbon dioxide emissions would increase average U.S. consumer electricity bills 22 percent by 2030, with amounts varying by region. A Tufts University authority estimated it would add 45 cents a gallon to the price of gasoline. Both think the impact can be mitigated by distributing the money raised through taxes to households, and many low- and medium-income families would come out ahead.

Opponents argue a carbon tax would kill manufacturing jobs and hurt family income.

A 2014 report by the Heritage Foundation said a tax of $37 a ton would cut economic output more than $2.5 trillion, or $21,000 per family, by 2030. This year, two dozen conservative groups endorsed an estimate a carbon tax would cost more than 500,000 manufacturing jobs by 2030.

Noah Kaufman, an energy-policy researcher at Columbia and a proponent of carbon taxes, said the terrifying prognosis in Monday's report should highlight the central role of a carbon tax in addressing climate change. But, he acknowledged, such warnings are not new, and political opposition to a tax remains strong.

"There are really high political barriers that continue to stand in our way," he said. "By far, the biggest obstacle in the United States right now is the leadership of the Republican Party, which is dead-set against any strong climate-change policy."

In July, the GOP-controlled House voted for a resolution rejecting carbon taxes as detrimental to the U.S. economy. Almost all Republicans, joined by a few Democrats, voted for the symbolic measure.

Prominent opponents of the carbon tax also believe urgency over addressing climate change is exaggerated. They point out U.S. carbon emissions have fallen in recent years as abundant natural gas has risen to rival coal in electric generation. Meanwhile, China's emissions grow rapidly, making it the world's largest emitter of greenhouse gases.

The scientists who prepared the UN-backed report "are trying to convince us all that there is an imminent crisis when in fact there is a potential long-term problem," said Myron Ebell of the Competitive Enterprise Institute, who worked on the Trump transition.

Carbon taxes, he added, "are political poison once people figure out how much their energy bills are going to go up."