As lawmakers appear to be at a stand still in budget negotiations to avoid the so called fiscal cliff, some are suggesting the politicians should consider a carbon tax in their wrangling over a deficit-reduction deal. A carbon tax is a specific price the government charges for carbon content per ton in fuels (most proposals range from $15 to $30 per ton). Where the raised revenue would go depends on the various proposals that have been put forward—to fund R&D for green energy technologies, to help lower-income families pay for increases in electricity prices dues to the tax, and, in light of the current situation, to pay down the national debt. But supporters say that the tax would incentivize companies to limit greenhouse gas pollution and is an important step in addressing climate change. Furthermore, they say it would boost the green energy industry, creating jobs.
Opponents insist that spending cuts, not more taxes, are the only solution to the current debt crisis. They also argue the tax would harm the energy industry, one of the most robust sectors of the U.S. economy right now, and cost American jobs. Some doubt the carbon tax's ability to bring down carbon emissions.
Is a carbon tax a good idea? Here is the Debate Club's take
Mark Muro Director of Policy for the Metropolitan Policy Program at Brookings
Chad Stone Chief Economist at the Center on Budget and Policy Priorities
Charles Komanoff Director of the Carbon Tax Center
Paul C. Knappenberger Assistant Director of the Center for the Study of Science at the Cato Institute.
Thomas Pyle President of the Institute for Energy Research
Christopher Prandoni Federal Affairs Manager of Americans for Tax Reform