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| Carbon Tax Or Cap And Trade? |
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Should the provisions within the Waxman/Markey-inspired American Clean Energy and Security Act, covering the introduction of a cap and trade program, be replaced with a straight forward carbon tax? This appears to be the opinion of the American taxpaying population in general, if we are to believe the results of the survey recently published. Hart Research, on the instigation of the US Climate Task Force polled over 1000 registered voters, the result being that a straight forward carbon tax appears to be much preferable when addressing climate change issues.
Should the provisions within the Waxman/Markey-inspired American Clean Energy and Security Act, covering the introduction of a cap and trade program, be replaced with a straight forward carbon tax? This appears to be the opinion of the American taxpaying population in general, if we are to believe the results of the survey recently published. Hart Research, on the instigation of the US Climate Task Force polled over 1000 registered voters, the result being that a straight forward carbon tax appears to be much preferable when addressing climate change issues. A cap and trade program calls for a central government to issue limits on the amount of carbon dioxide that can be emitted in any one calendar year. All entities that are responsible or contributory to that volume of carbon emissions must then enter into an auction-based program to purchase their individual rights to emit that carbon. Conventional wisdom says this will help to set a tradable price for carbon, which in the long term will drive down the amount of these greenhouse gases. The EU Emissions Trading scheme came into being in 2005 among the 27 nation European Union, at the behest of environmentalists to make strides forward. This scheme was basically the first time that the cap and trade program had been tested within a major climate protection initiative. Opinions vary as to whether it is a success, with some declaring so, but others pointing to problems associated with insecurity, oversupply and volatility. A week is a long time in politics and the United States political landscape has certainly developed out of all recognition in the past few months. What was seen as a workable climate fix in 2009 is now very likely to be restructured. Will a cap and trade program be championed by the Senate and passed into law, or will a carbon tax attach to the most polluting energy forms instead? The healthcare debate took a lot of steam out of Congress and it is highly unlikely that a similarly contentious and very divisive issue will be tolerated again. As such, cross party support will be required and the Republican Party is definitely against cap and trade, so direct carbon tax could be the answer. Advocates tell us that the idea behind a carbon-based direct tax is that not only will it reduce emissions, but the taxes generated should be passed back to ordinary citizens. Carbon tax would undoubtedly push up the cost of energy, so relief should be seen in other areas. All American businesses can be expected to have to deal with a carbon tax of some kind in the future and they should already have begun to cut back on their carbon emissions in anticipation. Indeed, should their competitors be slow to act or be confused by the issues ahead, they could even come out with a significant territorial advantage. Companies should note that every asset that they are responsible for is in turn responsible for emitting carbon as it uses energy to function. As such, the performance characteristics of each asset must be fully understood and business owners must be sure that their operation is totally efficient, especially if they are not only to meet the demands of legislation, but an increasingly critical public as well. About the Author: Daniel Stouffer has a lot of information about the carbon tax and how a visit to www.verisae.com will aid you. |