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Opinion

Want to help the environment and get cash back for cutting carbon emissions?

The Alaska dividends model is just one of several ways the 1,200-page Waxman-Markey climate change bill could be simplified and made more effective.

By Peter Z. Grossman / January 13, 2010



Indianapolis

Climate legislation doesn’t have to be so complicated.

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Really.

Despite the inconclusive climate conference in Copenhagen, Denmark, when the healthcare debate ends, Congress seems determined to focus on climate-change legislation.

But if the Obama administration and Congress really want to reduce greenhouse-gas emissions, there’s no reason for something like the monstrous 1,200-page Waxman-Markey “Clean Energy and Security Act” that the House passed last summer.

The House bill aims to reduce emissions in 2020 by 17 percent below the levels of 2005, mainly by creating a system of tradable carbon emissions permits. The bill also is laden with renewable-energy requirements, large outlays for alternative energy technologies, energy efficiency standards, rules about carbon offsets, and regulations for coal-fired power plants.

But the bill is long and chock-full of political deals, confusing directives, and subsidies. And it’s so dense that most members of Congress won’t be able to thoughtfully analyze it before the vote. In reality, Waxman-Markey is not about climate change; rather it is an incoherent attempt at social engineering to make us “transition to a clean energy economy.” That goal is so grand and so vague it is meaningless.

What a waste of paper as well as time! The House bill still has to pass muster in the Senate where it will probably be amended with more compromises and directives.

But here’s a better idea: Take the Waxman-Markey bill and properly recycle it.

In its place, Congress should write a bill of about 25 pages. That would be a critical first step toward reducing waste. And it’s sufficient length to spell out the only two necessary provisions: a tax on carbon fuels with the money rebated to taxpayers, and incentives for the gradual retirement and replacement of most coal-burning power plants.

Did you say ‘tax?’

Of course the word “tax” causes legislators apoplexy. And polls confirm that a straight tax on something like gasoline or heating oil would be extremely unpopular with voters. But a funny thing happens to those polls when the tax is balanced by a cut in payroll taxes. People are no longer so overwhelmingly hostile.

Still, a more popular idea might be the Alaska model. In Alaska, royalties from oil production are rebated to citizens of the state. They get a check in the mail for a share of Alaska’s oil money. Carbon tax revenues could be handled the same way; we’d all get a check in the mail. And with a strict rebate rule, Congress couldn’t simply ratchet up the tax without our checks getting bigger by the same percentage as well.

This tax system would have two beneficial effects. Fossil fuels – gasoline and other fuels that when burned emit carbon dioxide, the most common greenhouse gas – would go up in price. That would be good; people would have incentives to look for ways to cut fuel use.

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