An Endorsement for a Carbon Tax
In the US, pretty much everything can be turned political. Real issues and human suffering are used for cheap political points to win positions that more often than not accomplish very little. The unfortunate reality is regardless of party affiliation, the people representing you likely do not care. The looming threat of climate change is a prime example of a life threatening issue thrown around for cheap political theater with little intention of truly accomplishing something. Politicians continue to succumb to fossil fuel lobbyists and ignore our impending doom despite the facts that 20 million people lose their homes to climate change every year, that 132 million people will fall into extreme poverty due to climate change by 2030, and most importantly, 250,000 people will lose their lives to climate change related factors every year (a number believed to be very conservative). We must realize climate change is not a political issue. Rather, it is a referendum on whether we are capable of coming together to save humanity from itself. The results do not look promising so far. A potential first step toward fixing our broken system of energy production and mitigating climate change, the implementation of a carbon tax, has already been thrown aside due to fears of political backlash. Putting politics aside, a carbon tax is a mandatory policy toward reducing our reliance on fossil fuels and avoiding our annihilation. It is not without its problems, however. I want to examine what a carbon tax is, its pros, cons, and everything in between, focusing mainly on why it is absolutely necessary to implement.
WHAT IS A CARBON TAX
A carbon tax is a fine imposed on a company whose energy is produced through fossil fuels, with the ultimate goal of reducing usage and encouraging producers to switch to more sustainable forms of energy. The number can range anywhere from $5 to $150 per metric ton of carbon, but the majority of countries that have it or are considering it are within the $20-$50 range. More common policies are aimed at reducing fossil fuel emissions by researching alternative energy to make it more attractive, whereas a carbon tax is unique in that its purpose is to make fossil fuels as least attractive as possible.
While investment into renewable sources of energy is absolutely necessary, it alone is not nearly enough. Our large investments have shown little success in actually limiting fossil fuel use, with billions of dollars of renewable energy investments only resulting in a mere 4% reduction in fossil fuel use over the past decade. Other policies must be enacted to make fossil fuel less attractive while investments make renewables more attractive; pouring billions into alternatives will not be enough. A carbon tax aims to do just that. By making fossil fuels more expensive, profit motivated companies are given a financial incentive to use clean energy while the original reason behind polluting our environment, lots and lots of money, is eliminated. But the question then raised is will it actually work?
THE PROS
To put it simply, yes. Research from numerous studies has demonstrated that implementing a carbon tax would reduce carbon emissions in the United States by historical amounts. Columbia University’s Center on Energy and Global Policy concluded a $50 per metric ton carbon tax could reduce US emissions by up to 47%, but if you don’t buy that then don’t worry because a meta-analysis of 11 studies by researchers at MIT and the National Renewable Energy Laboratory found a $50 carbon tax would reduce carbon emissions by 63%. We would easily meet our original Paris Climate Agreement pledge of reducing emissions by 25%. If $50 sounds like too much, smaller taxes can still create success, with research from the Brookings Institution finding a $25 tax would reduce emissions by 18%.
What about other countries? Like many other progressive policies, carbon taxes have already been implemented by our allies to much success. In Canada’s British Columbia, emissions fell by 17% with no harm to the economy. In Britain, carbon dioxide emissions from electricity generation was cut in half. Even in Australia, whose carbon tax is widely cited by critics as a failure, electricity produced by coal fell by 14% and renewable energy use soared by 28% and was only repealed for cheap, political reasons. Carbon taxes have succeeded in these countries and raise serious questions about how we haven’t followed suit.
Eliminating emissions isn’t the only benefit. Our economy has much to gain by axing fossil fuels and transitioning to renewable energy, a process expedited with a carbon tax. Many companies are hesitant to switch to renewables given the large subsidies the US gives to fossil fuels (which we should absolutely eliminate), but this does not mean consumers benefit. Coal powered energy is old and outdated, and as a result 74% of current coal production can be switched to solar and wind energy and immediately save consumers money. A carbon tax eliminates the financial incentive for companies and encourages a switch, reducing the cost to consumers in the long term. Additionally, renewables are proven to produce more jobs and benefits to the economy. The green economy currently employs 10 times more people than the fossil fuel industry, despite fossil fuels dominating our energy sector.
THE CONS
Carbon taxes are not without critics. In fact, they have quite a bunch. A major concern surrounding carbon taxes is the phenomenon of carbon leakage, which is essentially companies outsourcing their emissions to other countries to avoid taxes. Leakage seriously undermines progress made through a carbon tax thanks to any domestic reduction in emissions being offset by rises in less developed countries with less regulations. While actually calculating how much leakage occurs is difficult, it is estimated about 25% of the world’s emissions are outsourced. On top of this, economic concerns are raised since companies are producing the same goods but moving overseas to do so, meaning the US loses jobs and potential revenue all while emissions remain the same.
Another major concern is short term harms to lower income Americans. While a shift away from fossil fuels may create jobs and provide some savings, another likely scenario is companies may simply pass on the cost to consumers. Large companies don’t like change when they are benefiting in the status quo, and as a result will charge more for their services to keep things the same. Past research shows essential commodities like gasoline could see their prices rise by up to 9.2%, or an extra 25 cents per gallon under a carbon tax, and energy prices could increase to levels 30% higher than before. While everything must be done to protect the environment, it would be morally reprehensible to let those most hurt by the effects of climate change suffer from a potential solution.
WHY A CARBON TAX WILL WORK
Concerns over rising prices and outsourcing are not valid reasons to oppose a carbon tax. On face level they are legitimate reasons, but looking into the specifics of a carbon tax demonstrate how to avoid their issues.
Beginning with outsourcing, many believe the impacts of carbon leakage are grossly overstated. Many researchers attribute rises in emissions in other countries not to domestic policy but rather to shifts in global trade. It would make sense that as countries with little to no climate regulations begin to develop more, they are naturally going to produce more goods and therefore increase their share of emissions. A carbon tax would therefore not increase emissions, and rather they are two independent events occurring simultaneously. On top of this, solutions such as subsidizing domestic production not only provide success but are actually requested by American companies.
On the topic of hurting lower income Americans, a simple solution would be to implement a rebate system. A rebate system would give back money raised by a carbon tax to those most affected by rises in prices. Plenty of money would be raised, with about $1 trillion being collected within a decade. Giving this money back not only offsets any harms, but would actually increase the income of 68% of potential recipients. Additionally, when taking into consideration that letting climate change continue with no change will disproportionately affect lower income Americans, there is no reason to believe a carbon tax would on net harm them.
Our climate is on the brink of destruction. People are losing their homes and going into poverty across the world and are desperate for positive change. Many steps are needed to solve the crisis that is climate change, and a carbon tax is the first step to do so.
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Christian Rodriguez is a high school senior at American Heritage School in Plantation, FL.