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Carbon Tax Aims to Cut Greenhouse Gases

The NewsHour's series of conversations about approaches to deal with global climate change continues with a discussion of carbon taxes -- levies that would aim to reduce greenhouse gas emissions by taxing activities that burn fossil fuels.

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    One proposal for reducing greenhouse gases is to tax carbon dioxide emissions. It's often referred to as a carbon tax. How would it work?

    For that, we turn to Daniel Rosenblum, an environmental attorney and cofounder of the Carbon Tax Center in New York City, a group advocating taxing all CO-2 emissions.

    And, Daniel Rosenblum, who would pay it, and how would you impose it?

  • DANIEL ROSENBLUM, Carbon Tax Center:

    Everybody would pay it. It would be a tax that's imposed on carbon, on the carbon content of fuel. So if you have more carbon content of fuel, like coal, you pay a higher per-BTU price.

    It will be passed through to the ultimate customers, but it will be imposed at the top of the supply chain. So whenever the refiners or the oil companies sell oil into the pipeline, there will be a tax imposed there.

    When you take coal out of the ground, it will be taxed as it goes into commerce. The cost will then be passed on to the ultimate consumer. So when I buy electricity, when I buy gas for my car, I'll pay the tax then.


    How would that eventually reduce the amount of greenhouse gases released into the atmosphere?


    There are costs society incurs when carbon is emitted. And nobody pays for it right now. Because it's free, nobody cares about it.

    So we put a price on carbon, and people start to use less. How? Electric generation. Electric generators will use less coal, more gas, more wind, more solar…


    In order to pay less tax?


    In order to avoid the tax on the coal, individuals will probably get a more-efficient car. They'll drive less. They'll do whatever they can to avoid paying for the carbon tax on their gasoline.


    So how…


    So we're talking about a fairly low starter tax. We're talking about a $37-a-ton-of-carbon tax, which would equate to roughly 10 cents a gallon of gasoline or, averaged across the country, maybe .72 cents a kilowatt hour, less than a penny of kilowatt hour.

    And then we propose increasing the tax each year by that same amount, so it's gradually phased in. One major advantage of that is it gives people time to adapt and gives people time to plan.

    We're talking about a very clear trajectory, so businesses trying to decide what to do with their future investments will say, "Well, we know prices are going up like this, so it makes good sense to invest in a high-efficiency motor," which…

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