Rep. John Dingell has talked recently about proposing a startling piece of legislation to address the risk of climate change. He has suggested:
* A 50-cent tax increase on gasoline, jet fuel, and kerosene.
* A $50 per ton tax on carbon from coal and natural gas.
* A phase out of the sacred home mortgage deduction for homes over 3,000 square feet.
The carbon and fuel taxes would directly impact everything from the cost of electricity to the price of food. In Washington, he has been accused of being either crazy or intent on proposing legislation that can never pass. Given the history of the debate, I think he is, instead, doing something constructive and admirable. He is being honest with the public about "no free lunch" when it comes to climate change.
A number of political leaders, including presidential candidates, have proposed "cap-and-trade" systems and new taxes on "big corporations" and "the wealthy." This is done in an attempt to convince the general public that climate change can be addressed in ways that are free. Don't believe it! Huge hidden taxes would be paid by every consumer, every family, and every business. And for what benefit? Among the EU countries that participate in a greenhouse gas emissions trading system, only two--the UK and Sweden--are likely to meet their 2010 targets.
The U.S. Chamber of Commerce is skeptical of new taxes--both hidden and direct. But as we examine policy options, let's follow Chairman Dingell's lead and at least have an intellectually honest debate, with a focus on the real costs and benefits of each choice. If the government is going to impose taxes and costs, they should be fair, efficient, and transparent. And let's make sure that the money captured is used to solve core problems that benefit society, our economy, and the environment--among other things, support for new technologies, and a range of infrastructure improvements.
Successfully addressing climate change requires several elements--a global approach, the development of clean technologies, and a recognition that continued economic growth is essential to improving both the human condition and the physical environment. Solutions begin with an honest discussion--and we should all thank Chairman Dingell for taking the lead. www.uschamber.com