Carbon fee from Obama seen viable with Exxon backing

Tax Receipts

Carbon-dioxide emissions since the Industrial Revolution have led to a warming of the Earth’s temperature, which threatens to cause extreme weather, drought and coastal flooding, according to the U.S. Global Change Research Program. Taxing a ton of carbon dioxide at $20 would raise more than $100 billion in the first year, according to research Mathur presented this week.

Mathur said she does not advocate a carbon tax in the abstract. She said it’s better than EPA regulation and is studying how it could be best implemented.

The National Journal reported that Grover Norquist, president of Americans for Tax Reform, said he would support a carbon tax that does just what Exxon said is necessary, offsetting the revenue gains with other tax cuts. The next day, Norquist issued a statement clarifying his remark, saying that the new tax would “inevitably lead to higher taxes.”

“In the real world, it’s not conceivable” that revenue from a carbon tax would be matched by cuts in other taxes, Norquist said in an interview. It would mean “higher taxes in the short and long run.”

Other opponents of cap-and-trade remain skeptical of a carbon tax.

Plan Opponents

The National Mining Association, which represents coal producers such as Peabody Energy Corp., opposes “it unequivocally as it would damage growth,” Luke Popovich, a spokesman, said in an e-mail. It is a regressive tax that would “fall especially hard on those least able to afford it.”

And environmentalists are also skeptical of the trade-offs necessary to get Congress to approve any legislation. Obama’s regulatory efforts are bearing fruit, and that shouldn’t be discarded, they say.

“You hear a lot of talk about a carbon tax,” Ann Weeks, senior counsel of the Clean Air Task Force in Boston, said in an interview. “But EPA has made so much progress on the regulatory front,” she said. “I hope they don’t drop it for that promise of something else.”

Bloomberg News

 

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