Capital Commentary is the weekly current-affairs publication of CPJ, written to encourage the pursuit of public justice.

Reducing Carbon Emissions through Tax and Rebate

Perry Recker


Congressman Pete Stark (D-CA) has recently proposed a “Tax and Rebate” approach for controlling carbon emissions in the U.S.  The Save Our Climate Act of 2011 (H.R. 3242) would place a steadily-rising tax on carbon-based fuels, returning most of the revenue to consumers on a per-capita basis, with a portion being used for deficit reduction beginning in the second year. Unlike “Cap and Trade” and other similar proposals, H.R. 3242 taxes carbon-emitting materials at their point of acquisition, without respect to their intended use, thereby leveling the playing field for all carbon-based products, from gasoline to plastics.  The tax would start at $10 per ton and increase by $10 per ton each year. Projections by Charles Komanoff  (used by both the Carbon Tax Center, and the Citizens Climate Lobby,) indicate that the poorest 20% of Americans would receive about $172, or nearly double their likely energy bills in the first year.

The gradual increase in the cost of carbon-based, non-renewable energy resources and products should send a clear price signal to clean energy investors and entrepreneurs, allowing them to more easily calculate the points at which renewable and alternative energy enterprises would gain a competitive advantage. To help protect U.S. enterprises from foreign competitors not subject to such a tax, carbon energy and other goods that release CO2 during production would be subject to a tariff at the border. In fact, Reuters reports that countries like China may be moving quickly toward a similar tax policy themselves, perhaps with the intention of capturing a greater share of the international renewable energy markets through increased investment in clean energy.

Such a policy makes just economic sense on several levels.  It uses government taxing powers to guide, but not control or dictate, the behavior of responsible market agents, as proposed in the Center for Public Justice Guideline on the Environment.  Simultaneously it protects the weakest and most vulnerable households from bearing a disproportional burden of the added costs.  It also encourages a more rapid but smooth transition from a fossil-fuel-energy-based economy toward a cleaner and greener one.  A primary objective, of course, is to recoup some of the real, but often externalized costs of burning fossil fuels, since currently most of the social cost of a carbon-based economy (the cost to the environment) is currently unaccounted for.  This proposal encourages market lending bodies and energy enterprises to exercise more responsible, stewardly decisions and actions, and also urges consumers to shift their uses and demands in the same direction.  In addition it attempts to buffer responsible economic agencies from unfair foreign competition of carbon energy enterprises who may be exempt from a similar per tonnage fee in their home or source country.  Although far from fail-safe, the inclusion of a tariff factor is at least a step in the direction of acknowledging the need for governments to “work together to build international institutions and protocols that will strengthen…economic justice among all peoples and states” (Guideline on Economic Justice).

This policy is also premised on something other than a belief in the necessity of unqualified economic growth, and, as such, it may also have some ‘redemptive’ merit—at least to the extent that it seeks to encourage rich and poor households alike to reduce their consumption of carbon-based energy fuels, by shifting their demand to more economical, renewable sources and by investing the difference between rebate and cost in energy efficiency improvements and waste elimination.  Is it therefore possible to see in such a tax policy the seed of a significant ideological paradigm shift from the currently dominant one, which tends to increase consumption, demand, and production of increasingly scare energy sources by artificially reducing energy costs for consumers through tax-breaks and subsidies for fossil fuel energy producers?

Actual, fruitful consequences will of course depend on how such a policy is finally worded, implemented, enforced, and interpreted. But that too ought to be considered worthy of responsible Christian attention, discussion and action.  As the Center for Public Justice Guideline on the Environment articulates, Christians should urgently pursue policies that would effectively reduce the growing threats to environmental stability.

—Perry Recker serves as a librarian at Kennedy-King Community College and Chicago Semester and has been a member and supporter of the Center for Public Justice since the late 1960s. He enjoys reading and thinking about Christian worldview issues, and he participated in the Civitas program of the Center for Public Justice in 2006 and 2008.

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Capital Commentary is a weekly current-affairs publication of the Center for Public Justice. Published since 1996, it is written to encourage the pursuit of justice. Commentaries do not necessarily represent an official position of the Center for Public Justice but are intended to help advance discussion. Articles, with attribution, may be republished according to our publishing guidelines.”