Europe’s faltering cap-and-trade system doesn’t deter US carbon tax backers

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Michael Bastasch DCNF Managing Editor
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American politicians and activists continue their push to get the United States to impose a tax on carbon dioxide emissions despite reports that Europe’s carbon pricing scheme is faltering.

“Europe’s experiment with carbon markets and lavish subsidies for green energy producers has been a complete failure,” Thomas Pyle, president of the Institute for Energy Research told The Daily Caller News Foundation. “And yet, many policymakers, led by President Obama, want the United States to follow the exact same ruinous path.”

The European Union’s cap-and-trade system took another plunge, with carbon permit prices falling to eight-year lows after the EU Parliament rejected a plan touted as a quick fix to the ailing emissions trading scheme.

“This is a crisis in European leadership on the climate issue,” said Anthony Hobley, head of the climate change practice at the London law firm Norton Rose. “We have reached the stage where the E.U. E.T.S. has ceased to be an effective environmental tool.”

This is the second time this year that the EU’s cap-and-trade market has faltered, however, politicians and activists are still pushing for the U.S. to implement a carbon tax as a way to raise revenue and address climate change.

President Obama has made addressing climate change a priority in his second term and promised to act on his own if Congress failed to deal with the issue. However, the administration has repeatedly said that it has no plans to propose a carbon tax. In light of this, such as tax would have to come from Congress.

Both houses of Congress have taken up the issue. The carbon tax push this year came from the Senate where Vermont independent Sen. Bernie Sanders and California Democratic Sen. Barbara Boxer introduced legislation to put a fee on carbon dioxide emissions to fund renewable energy projects such as wind, solar, geothermal and biomass.

Democrats in the House and Senate have also joined forces to promote a carbon tax. California Rep. Henry A. Waxman, Rhode Island Sen. Sheldon Whitehouse, Oregon Rep. Earl Blumenauer and Hawaii Sen. Brian Schatz, all Democrats, released draft legislation to put a gradually increasing tax on carbon emissions to wean the U.S. off carbon-heavy energy sources, like coal.

“It rightly sets aggressive goals and builds on the progress already underway to clean up pollution from our cars, trucks and new power plants,” said Franz Matzner, associate director of government affairs at the Natural Resources Defense Council. “Confronting climate change, though, will require the use of current authority to cut emissions, in addition to complementary measures such as those in the draft bill.”

Republicans have been resistant to a carbon tax, arguing that it would cause the price of all goods to rise.

“It’s not just energy prices that would skyrocket from a carbon tax, the cost of nearly everything built in America would go up,” said Louisiana Republican Sen. David Vitter. “Let’s not lose sight of how big of a dud cap and trade was in 2009, or as it came to be known, cap and tax. This is really no different.”

However, there are some on the right who have been pushing more conservatives to accept the idea.

“We’ve got a ways to go [in terms of building support on the right] because elected officials typically follow, they don’t lead, so we have to go build support for the proposition — and sensing that support I believe conservatives will start to lead,” said former South Carolina Republican Rep. Bob Inglis, who is promoting the carbon tax on the right.

The carbon tax has also found support among some conservative intellectuals. Conservative economists George Schultz and Gary Becker wrote an op-ed in the Wall Street Journal pushing a carbon tax on the grounds that it will level the playing field for energy producers and eliminate wasteful energy subsidies.

“Clearly, a revenue-neutral carbon tax would benefit all Americans by eliminating the need for costly energy subsidies while promoting a level playing field for energy producers,” wrote Schultz and Becker.

Schultz was secretary of state under President Ronald Reagan.

Most conservatives, however, remain unconvinced.

“Those who continue to support a carbon tax are either ignorant of market trends or willfully desire to further strain family budgets by raising energy prices,” said Pyle.

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