U.S. Proposal Would Tax Carbon Emissions

Would a new fee on carbon emissions be the best way to reduce our output of greenhouse gases and curb global warming? U.S. Congressman John D. Dingell (D, Michigan) is seeking public comments on his proposal to do just that, according to news from the legislator's office.

"In order to reduce greenhouse gases and make the planet safe and healthy for future generations it will take a significant investment from all of us," Dingell said. "A fee on carbon emissions requires a tithe from all citizens and industries, but no one entity will be unfairly leveled with a devastating burden. More importantly, it provides an incentive for change in our economy and our way of life."

Under Dingell's proposal, which has not yet been introduced in bill form, carbon -- including coal, petroleum, petroleum products and natural gas -- would be taxed at $50 per ton. The tax would be phased in over a period of five years, and adjusted for inflation over time. His proposal also calls for a similarly phased-in, 50-cent-per-gallon tax on gasoline, jet fuel and kerosene. While that fee would be on top of the existing gas tax, it would include exemptions for biofuels and diesel fuel, which delivers higher fuel economy and lower emissions.

Dingell also recommends a phase-out of the mortgage interest deduction for large homes.

"Despite new homes in and of themselves being more energy efficient, the sheer size, sprawl and commutes lead to dramatically more energy use -- or to put it more simply, a larger carbon footprint," Dingell said.

The deduction phase out would affect homes larger than 3,000 square feet, with exemptions for farm houses, homes built prior to 1900, LEED-certified (a sustainability standard, Leadership in Energy and Environmental Design, developed by the U.S. Green Building Council) homes and homes whose owners buy carbon offsets to make their residences carbon neutral.

Some of the revenues from the new carbon and gas taxes would go toward expanding the Earned Income Tax Credit for lower-income families, to help such families defray the higher costs for fuel. Other funds from the taxes would go toward Medicare and Social Security, a universal healthcare program, the State Children's Health Insurance Program, conservation efforts, renewable energy research and develop and the Low-Income Home Energy Assistance Program.

In their blog on the Carbon Tax Center's Website, Dan Rosenbaum and Charles Komanoff wrote, "Dingell is asking the public for comments. Here's ours: we think the bill is terrific. In line with what we said when we founded the Carbon Tax Center, and as Dingell himself wrote last month in the Washington Post, '(S)ome form of carbon emissions fee or tax ... would be the most effective way to curb carbon emissions and make alternatives economically viable.' Moreover, ... his supplemental tax on gasoline and jet fuel has the look of genius."

A complete summary of Dingell's proposal, along with a link to a public comment page, can be found on the Congressman's Website.

Congressman John D. Dingell, "Dingell Invites Feedback on Carbon Emissions Fee Proposal." URL: (http://www.house.gov/apps/list/press/mi15_dingell/PR092707carbontax.shtml)