Building A Green Economy

Carbon emission fees could work like PFD

December 31st, 2010 - The U.N. climate conference in Cancun wrapped up in December with no meaningful agreement to reduce emission of greenhouse gases. Such disappointing results are due in large part to a lack of leadership from the United States. With each passing year, the devastating effects of climate change become better understood, yet our leaders seem unable to enact any meaningful legislation to help shift our energy regime toward more carbon-neutral energy sources. Undoubtedly the 2,000-plus paid lobbyists in Washington have something to do with this legislative inertia. For the sake of our national security and our economic future, this must change.

Congress must act to enact revenue- neutral legislation that puts a price on carbon and returns all of the revenue directly to the American people. Returning the revenue to the consumer, either by direct payments or through tax credits, will offset increased energy costs caused by a carbon fee. Unlike a cap-and-trade system, there would be no cap on carbon emissions and no uncertainty in carbon pricing. The carbon fee would be applied at the source: the well, the mine or the port of entry. As the cost of carbon-based energy sources increases, a strong economic incentive is created to develop alternative energy technology. Such a revenue-neutral system would comply with the "No Carbon Tax" pledge being circulated in the House by Americans for Prosperity, which forbids a net increase in government revenue. {continued}