Articles by Alan Durning

A quick survey of carbon taxes outside of Cascadia

British Columbia's bombshell announcement of a carbon tax shift last month made me want some context. Here's a rundown of other carbon taxes elsewhere in the world. As I noted, none of them is as consistent and comprehensive as B.C.'s, though some do have higher tax rates. In most cases, these levies came in tax shifts that reduced payroll taxes, business taxes, or other energy taxes. B.C.'s starts at $10.10 per metric ton of CO2 equivalent and rises in steps to $30.30 in 2012.

At least nine jurisdictions elsewhere in the world claim to have carbon taxes. (Good starting places for learning about them are the Carbon Tax Center and these dated but informative U.S. EPA sites.)

How smart climate policy can cut our energy costs

True confessions: I love weatherstripping. And programmable thermostats. And insulation -- all kinds. Oh, and efficient shower heads with "Navy shower" shut-off valves. And high-efficiency appliances. And waste-water heat recovery systems. You get the idea: I actually enjoy the process of making buildings more energy wise -- enjoy as in, "Yippee, it's Saturday! Where's my caulk gun?" So today's topic is especially near to my heart: the role in climate policy of low-income weatherization programs and related efficiency upgrades for working families.

A quick review: climate change is economically unfair by nature; it punishes those least to blame. Auctioned cap-and-trade can counteract this injustice. I've already written about two ways to seize this opportunity: distribute the money from the auction of carbon allowances as equal dividend checks to every citizen ("cap-and-share"), or make sure dividends get to low-income families who are hardest hit by rising energy prices ("cap-and-buffer").

A third option is to invest auction proceeds in energy efficiency in ways that specially benefit working families, by weatherizing homes, for example, or improving the efficiency of household appliances. (Let's call it "cap-and-caulk.")

Our chance to escape the tightening fossil-fuel vise

With or without climate policies, energy prices seem set to rise. The question is, Who will get the money? Auctioned cap-and-trade gives us the opportunity to take charge of price increases and share the benefits widely -- even while we safeguard the climate and stimulate local jobs. Big chances like this don't come along often!

To see what a golden opportunity this is, we've got to briefly review recent fossil-fuel price increases.

A second opportunity to make climate pricing fair

Climate policy offers an enormous opportunity not only to undo our fossil-fuel addiction and build a stable energy future, but also to reverse the natural unfairness of climate change itself.

I've said it before: energy prices are going up no matter what, with or without climate policy. But smart policy can turn rising costs into broadly shared benefits. It can shield working families, fund a shift to a clean future of new technologies, compact communities, and a trained, green-collar workforce.

Building economic fairness into climate policy is a no-brainer: there are several viable ways to make it happen. In my last post, I described a means to it called "Cap-and-Dividend," in which most public proceeds from auctioning carbon emissions permits finance a program of payments to each citizen. Another approach that shields working families from high energy prices (PDF) comes from Robert Greenstein, founder and chief of the Center on Budget and Policy Priorities. CBPP is the Washington, DC-based think tank that bird-dogs the federal budget on behalf of poor families. Greenstein wrote the plan with colleagues Sharon Parrott and Arloc Sherman.

In short, in this plan climate dividends go only to families with very low incomes, to buffer them from cost increases. It's Cap and Dividend, but only families who need it most get a dividend. Call it "Cap and Buffer." Greenstein suggests compensating the poorest fifth of families for energy price increases and also providing some assistance to those in the second fifth of the income ladder. These families, according to Greenstein, stand to pay between $750 and $950 extra each year for fuel and other goods, once climate policy boosts energy prices enough to reduce emissions by an initial 15 percent. (Without climate policy in place, the only dividends from rising prices are going to energy companies.)