During the inaugural event of SWFL Climate Compass series, Bob Inglis made a compelling case for implementing a nation-wide carbon tax that would be revenue-neutral through a commensurate decrease in the payroll tax. The foundational argument made by Inglis and other proponents of a carbon tax is that the free market can effective reduce carbon emissions, one of the primary drivers of climate change, once the pollution externality is properly priced. Taxing the carbon emissions at the source point would edge prices up downstream, in fuel and electricity costs, but this would be offset by providing Americans’s a decrease in taxes, the payroll tax being the least regressive (helping out the lower-income earners the most). Non-wage earners could be compensated through other rebates. American businesses would be protected from cheaper imports through a carbon adjustment tariff, which in turn, would encourage other nations to incentivize carbon reduction policies; the United States thus taking the leadership role in forcing other actors into compliance.
Bob Inglis’ explanation is clear and thoughtful, as he explains not only why we have to price carbon, but how environmental pollution disproportionately burdens lower-income communities and often communities of color. He refers to our need to be “biblically accountable” for our environmental actions. Inglis’ approach, similar to the Baker-Shultz carbon dividend plan, and approaches put forth by groups ranging from the progressive Citizens Climate Lobby to the Young Conservatives for Carbon Dividends, is a promising bipartisan framework. The difference between the policies lies in whether the revenue collected from the tax is returned to taxpayers via a federal tax cut, a public dividend (like the ones Alaskan’s receive from oil revenue, or whether it is best invested by the government in public infrastructure and research. There are also differences in how each proposal views the need for government regulation of emissions and how aggressively the price of carbon is set and raised. What all parties agree on is that pricing the carbon pollution externality would spur innovation and investment in reducing carbon emissions. It would potentially be a job generator as new technologies are developed and implemented to reduce emissions It would also incentivize energy conservation, as those that use less energy would receive more benefit than they expend in the increased costs resulting from the carbon tax.
If you missed Bob Inglis’ great presentation, you can watch it here.