Could the EPA endorse a carbon tax?

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Michael Bastasch DCNF Managing Editor
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Could the Environmental Protection Agency be convinced to consider a carbon tax in lieu of carbon dioxide emissions limits on power plants? Adele Morris, a senior fellow at the Washington, D.C.- based think tank the Brookings Institution, hopes the answer is yes.

“In my comments I am going to suggest that EPA consider an approach that would allow states to price carbon,” Morris told the Hill newspaper, previewing her comments for an EPA listening session on Thursday.

The EPA is currently holding public sessions to get input from outside groups and individuals about its planned carbon dioxide emissions caps for existing power plants. Critics argue that such limits could make it uneconomical for coal-fired power plants to continue to operate.

Under the Clean Air Act, states are responsible for lowering emissions from existing power plants, but do so with guidance from the EPA. Morris argues that the agency can give states multiple options for complying with pending greenhouse gas regulations. One such option would be to tax carbon instead of capping it.

“EPA can provide more than one example to states [as to how to comply with the power plant rules] and suggest to states that EPA views these approaches as effectively equivalent,” Morris told the Hill, adding that some other options could be performance standards, cap-and-trade systems or a carbon taxes.

“EPA could … say, ‘well, states, if you want to do an excise tax on carbon, here’s the price point that EPA views as equivalent to those other measures,’” Morris added.

The idea of implementing a carbon tax in lieu of EPA regulations is also being pushed on the federal level by the R Street Institute — a group pushing a tax on carbon as a “conservative” solution to federal environmental regulations.

“While a revenue-neutral carbon tax would likely help reduce emissions, that’s not the primary reason the U.S. should consider one,” Andrew Moylan, a senior fellow with R Street, told the Daily Caller News Foundation in an email. “The top justifications are to allow for elimination of Obama’s expensive and heavy-handed EPA regulations and to improve economic efficiency.”

However, virtually no Republicans in Congress support the idea of a carbon tax. In fact, Republicans have voted in the House against regulating carbon dioxide.

“President Obama’s plan to impose a tax on carbon would cause household electricity rates to skyrocket while destroying millions of American jobs,” said Louisiana Republican Rep. Steve Scalise, whose anti-carbon tax amendment passed the House with bipartisan support. “The Obama Administration has used every trick in the book to implement its radical agenda through back door regulations.”

California already has a statewide cap-and-trade system, which it hopes will serve as an example to other states. California, Oregon, Washington and British Columbia recently signed an agreement to align their global warming policies and try to implement things like a carbon tax or cap-and-trade system to bring down greenhouse gas emissions.

As international delegates prepare to meet up in 2015 for the next round of major climate negotiation, Morris argues that a carbon tax would provide clarity to the international community on how to move forward with tackling global warming.

“It would be very useful … diplomatically to have a story you can tell about the economic ambition of your regulatory policy,” Morris said.

However, a carbon tax has already been proven to be political suicide in some countries. Australia’s new conservative government came to power, in part, due to their opposition of the country’s carbon tax, which was blamed for raising energy prices and driving up unemployment.

“The carbon tax is bad for the economy and it doesn’t do any good for the environment,” Aussie Prime Minister Tony Abbott told The Washington Post. “Despite a carbon tax of $37 a ton by 2020, Australia’s domestic emissions were going up, not down. The carbon tax was basically socialism masquerading as environmentalism, and that’s why it’s going to get abolished.”

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