Specter of Carbon Tax Re-emerges in Climate-Change Debate

Posted February 27, 2007 at 10:19am

Is an issue that many thought had died in the early 1990s — taxing carbon dioxide emissions to cut down on greenhouse gases — making a tentative comeback on Capitol Hill?

Observers say the issue could resurface today and tomorrow when the House and Senate tax-writing committees hold hearings on climate change and future energy needs.

The Senate Finance Committee today holds a wide-ranging hearing on the future of energy in the United States that will include testimony on renewable energy and carbon sequestration — both are considered key elements in fighting climate change.

On the House side, the Ways and Means Committee tomorrow examines climate change in the first of a series of hearings on energy and tax policy. A spokesman for committee chair Charles Rangel (D-N.Y.) says “the agenda is pretty open-ended” and the goal is to “lay the framework” for members.

Earlier this month, Rep. Pete Stark (D-Calif.) — the No. 2 Democratic on Ways and Means — said the recent global warming report by the Intergovernmental Panel on Climate Change that found humans cause global warning is a good reason to revisit carbon taxes.

“[T]o promote the development and use of renewable energy technologies, I will soon introduce legislation to tax coal, petroleum, and natural gas based on their carbon content,” Stark said in a Feb 2 statement.

A Stark spokesman declined to offer additional details on the plan, but noted the lawmaker introduced similar legislation in 1991. That bill never made it out of committee.

However, sources in Congress, industry and environmental groups caution that the past political backlash from taxing carbon dioxide emissions makes enactment now unlikely.

An effort early in the Clinton administration to enact a “BTU” tax on energy use by a variety of industries became a rallying cry for anti-tax conservatives. The effort failed and became an albatross for the administration and has not been seriously discussed since.

“I’m sure there will be some talk … but I don’t know that Congress has the appetite” to enact a carbon tax, said one oil industry lobbyist.

An environmentalist who follows climate change isn’t expecting dramatic change now.

“Historically, it’s a lot easier to talk about curbing pollution than it is to talk about taxing pollution,” says the environmentalist, who requested anonymity.

David Doniger, the policy director of the Natural Resource Defense Council’s climate center, says an alternative to a carbon tax — a cap-and-trade system by which polluters can either reduce their own emissions or trade with cleaner companies for the right to pollute at a higher level — is more effective at reducing concentrations of greenhouse gas emissions in the atmosphere, and is more popular among lawmakers.

“We have a strong preference for dealing with this by setting caps,” Doniger said.