Carbon or Carbon Dioixde?: Where to Find Sound Climate Policy

Gristmill explains an importance difference: the precise conversion between carbon and carbon dioxide:

The atomic weight of carbon is 12 atomic mass units, while the weight of carbon dioxide is 44, because it includes two oxygen atoms that each weigh 16. So, to switch from one to the other, use the formula: One ton of carbon equals 44/12 = 11/3 = 3.67 tons of carbon dioxide. Thus 11 tons of carbon dioxide equals 3 tons of carbon, and a price of $30 per ton of carbon dioxide equals a price of $110 per ton of carbon.

Thus, when CTC recommends for 2009 a tax of $37/ton of Carbon - rising gradually to become $370/ton of Carbon by 2019 - this works out to a 2009 tax of $10/ton of CO2 and a 2019 tax of $100/ton of CO2.

The above two sites are careful enough to explain this distinction, which is why there are terrific
sources of information on climate policy. As to official sources, Peter Orszag's CBO Director's Blog is a gem on all matters of public finance, but is particularly strong on climate change. Orszag understands the challenge of climate change and under his leadership CBO has already issued a hugely useful policy study (key finding: for a given amount of economic cost, a carbon tax will achieve roughly five times the carbon emission reductions as a cap-and-trade system.... for the wonks: though the comparison varies depending on how cap-and-trade is structured - whether there is a price "safety valve" for emissions permits, whether permits are bankable - emissions reductions from even the most efficiently designed cap-and-trade system are far more expensive than what is achieved under a carbon tax.

Orszag's leadeship at CBO is estimable, and I take pride that one of his former students - international taxation expert Kim Clausing - taught me at Reed college! We even worked together on a summer research project. Ah, the glory in lineage.

Carbon Tax Center

I just wanted to explain a bit more about the Carbon Tax Center.

CTC's goal is to build public support for a revenue-neutral tax on carbon emissions, meaning a tax on carbon emissions coupled with a reduction in the federal payroll tax or state sales taxes. CTC's preferred tax begins at $37/ton of carbon, and is scaled up over ten years to $370/ton of carbon. Structuring a carbon tax so that it is revenue-neutral offers several advantages:

a) coupled with reductions in the payroll tax, a carbon tax will not make the U.S. tax code more regressive

b) revenue-neutrality will be critical to attracting the political support necessary to get the per unit tax rate high enough where it can make a sufficient dent in emissions

c) existing U.S. subsidies to alternative energy have wrought only harm - namely a boom in corn ethanol that raises food prices, brings no net reduction in carbon emissions, and distorts incentives for producers of genuinely clean energy - thus it makes more sense to return extra revenue to the taxpayers rather than to let lawmakers pursue more wrongheaded subsidies

Read more about these points on the CTC website; maybe even think of someone to fund our conference!