Thursday, January 3, 2008

Saving the Planet By Screwing Working Families

Looks like global warming is going to be on the agenda for the 2008 session of the General Assembly, and why not the Governor’s secretive panel the Maryland Commission on Climate Change, spent a lot of time and money on its recommendations. How much time and money we do not know because MDE is stonewalling anyone who requests information regarding MCCC and its ghostwriter Center for Climate Strategies (CCS). If the situation is so dire and the consequences so severe, then what is there to hide?

Apparently, there is already a “carbon bill” already before the legislature.

Several lawmakers say a proposal to cap carbon emissions -- possibly the nation's toughest plan to reduce greenhouse gases blamed for global warming -- stands to become the most ambitious bill of the General Assembly session…

The carbon bill, endorsed by a task force set up by Gov. Martin O'Malley, would call for carbon reductions of 25 percent by 2020 and 90 percent by 2050. If approved, the goals would be the nation's strongest carbon reduction plans…

"I think the environment's going to loom large in this session," said House Democratic Leader Kumar Barve, who worked on O'Malley's global warming task force and plans to back the carbon caps. A carbon cap bill was considered last year by lawmakers, but they didn't approve it. This year, environmentalists and several lawmakers say the cap should pass, likely with a backing from the governor.
"If you talked to me three or four years ago, anything about climate change solutions, I'd say it's tooth and nail. But now, I'm very, very optimistic this bill is going to pass," said Mike Tidwell, director of the Chesapeake Climate Action Network, a Takoma Park-based group that focuses on global warming.

The specifics of the bill are unknown because bills for the 2008 session are not available on the General Assembly website.

However, going by the MCCC Mitigation Working Group’s Interim Report, the methods for reaching those reductions are: a cap and trade scheme for carbon dioxide, which builds off of last year’s deceptively named Global Warming Solutions Act. Maggie McIntosh chair of the House Environmental Matters Committee was so invested in the bill that she made the whole committee view An Inconvenient Truth. I wonder if she provided the committee members with the film’s documented convenient fictions, but I digress.

Note the last bullet point on the bottom of the slide on page 12 of the pdf. Any cap and trade scheme would require significant resources (an understatement) to create a new level of bureaucracy to manage the Cap and trade scheme. How do they propose to do generate the said significant resources: with a self-sustaining fee system, which is Newspeak for a tax.

Cap and trade schemes are exactly that, a scheme, nothing more. It is means for rent seeking utility companies to rake in windfall profits while burnishing their “green” credentials. Across the Atlantic, many EU members cannot meet their emission reduction goals through Kyoto’s vaunted cap and trade scheme. In fact, European Co2 emissions rose faster than US emissions during 2000-2004. Also, the Financial Times noted, cap and trade schemes create a muddle without any real benefit (it that is your goal) of reducing Co2 emissions. FT prefers a straight carbon tax, but they also admit, what the green’s don not, that both carbon taxes and cap and trade markets unduly burden the poor. However, governments prefer the hidden costs in artificial carbon markets because they are more politically feasible than a straight carbon tax. I’m not sure that is the case in Maryland given the governor and the legislature’s propensity for new taxes.

Other MCCC legislative initiatives include:

Carbon taxes (just in case the lumpen proles catch on to the cap and trade boondoggle).

Raise renewable portfolio standards (RPS) requirements. RPS are government mandates for utility companies to buy a certain percentage of its energy from wind and solar sources, which are extremely expensive. Guess who pays the extra costs!

Demand side management (DSM) fees for energy users. DSM fees are additional user fees for consumers.

Transportation fuel tax. MCCC recommends that emission reductions be taken into consideration in any gas tax discussions. Take a guess where that one is going.

Pay as You Drive (PAYD) Auto Insurance programs. PAYD programs connects insurance policies to mileage driven by converting part of your premium into a per mile fee on your policy.

Governor O’Malley won election, in part, based on the perception that he was looking out Maryland’s working families as evidenced by his flogging the unavoidable BGE rate hike as a campaign issue. Through the MCCC, O’Malley has now positioned himself to be perceived as a leader on climate change and the fight against global warming. However, the MCCC proposals, with their added energy and insurance costs, are quite obviously detrimental to working families.

This begs the question; do O’Malley and the Democrat monopoly care more about supposedly saving the planet from a non-existent threat or acting on behalf of working families?

11 comments:

AnotherWatcher said...

90% reduction from what? It sounds like we will be relegated to living in caves without the luxury of a cook fire due to the co2 it may release.

Dan said...

Actually, a revenue-neutral carbon tax would not burden the poor. That's why the Carbon Tax Center recommends that a revenue-neutral carbon tax and that's why such carbon taxes are supported by economists from across the political spectrum. Please take a look at the Supporters page on the Carbon Tax Center web site. For policies to reduce the impact of a carbon tax on the poor and middle-class, you might be interested in our issue paper on the subject Softening the Impact of Carbon Taxes.

StatWatcher said...

I checked out Dan's "softening the Impact of Carbon taxes"... the entire basis for them saying that the Carbon Tax wouldn't impact the middle class or poor is because they are expecting that $183 per person would be rebated by some other fund (such as the sales tax or the Payroll tax. What they aren't considering is that the increase in the sales tax, or payroll tax to pay for the rebate would nullify any "savings" that is gained through this carbon rebate. It is a shell game, just like the O'Malley promise that people would pay less after his tax increases.

Dan said...

Statwatcher is concerned that there would be an increase in the sales tax or payroll tax to pay for the carbon tax rebate. He has it backwards. The revenues from the carbon tax would be returned to the American people. There's no need to increase other taxes. I can't tell you what Governor O'Malley and the Maryland General Assembly have in mind, but a revenue-neutral carbon tax does not require an increase in any other taxes. What goes in should go back out. The goal is to reduce greenhouse gas emissions without increasing revenues to the government.

Those who buy more energy or products whose manufacture or transportation requires energy (just about every product)will likely end up paying more overall with a carbon tax. Those who use less energy, perhaps because they have smaller car, drive less or have a well-insulated home with an energy efficient furnace/boiler will pay less. Overall the carbon tax would be revenue-neutral. Consumers will make choices that determine whether they win or lose. It's about letting market forces work, which is why there is so much support from conservative economists for a carbon tax.

streiff said...

this is silly. Unless there is a rebate involved, no tax is revenue neutral. You may minimize your tax exposure by buying/using fewer products but your taxes still go up.

I am in favor of Heathen Baby Offsets, my self. Under this program I get to adopt someone, age immaterial, in some Third World craphole and I get to use their lack of carbon usage to offset mine. Since we are all in the same Gaia ecosystem that seems to be reasonable.

Dan said...

Streiff, who is being silly here? Your absurd comment about heathen baby offsets doesn't warrant a serious response.

The point in your first paragraph reflects a fundamental misunderstanding regarding revenue-neutral carbon taxes and does require a response. If you're saying that a rebate is needed in order to ensure revenue-neutrality, you are partially correct. There is a need for a rebate OR an offsetting tax reduction. Either would accomplish the goal. If you would look at what we and other revenue-neutral carbon tax proponents are recommending, we find that we recommend a rebate or offsetting tax reduction. So, what are you saying is silly?

streiff said...

Not partially correct. 100% correct. It is utterly fatuous to say a tax is "revenue neutral." It can't be unless there is a rebate on the other end, or unless other taxes equaling the proceeds are eliminated. None of those solutions are going to happen.

And how is said rebate to be administered so? Are you in favor of giving a saintly Al Gore a rebate so he can afford to purchase his version of Heathen Baby Offsets (my idea makes just as much sense as any other commodity trading concept, btw) and not to a working class stiff who can't afford to participate in this lunacy?

Dan said...

One hundred percent now that you have added "unless other taxes equaling the proceeds are eliminated." You still seem to be missing the point that we are advocating exactly what you recommend. The carbon tax revenues should be returned to all Americans through rebates or offsetting tax reductions.

Your second paragraph is as silly as your earlier comment on heathen baby offsets. Rebates would be equal per capita payments to all Americans. Al Gore would get the same rebate as everybody else, nothing more and nothing less. If the carbon tax revenues are returned through offsetting reductions in payroll taxes, it should be obvious that only that portion of income that is subject to the payroll tax would see a payroll tax reduction. Al Gore and, to be non-partisan, the Bush family, will do just fine without receiving carbon tax revenues based upon their income in excess of that subject to the payroll tax.

If you were to take a look at the Carbon Tax Center web site, you might be surprised to find that we are in agreement on most points. And, you might save the readers of this blog considerable time.

streiff said...

you seem to be missing the point that what you 'recommend' doesn't make any difference.

Name 6 federal taxes that have been totally eliminated in the past three decades and I will concede defeat. I can only name one.

If you assume away reality, which you are doing, then you might as well advocate R&D into cold fusion as a solution, too.

Statwatcher said...

Dan,

I'm trying to understand this. So you are saying that we tax all carbon, but tax the rich more for their carbon output (theoretically they produce more carbon to heat their big homes and SUVs) and then we redistribute that tax to the poor to offset their carbon.

If that is true, then it is simply another gas tax, the money isn't going to anything except for to punish those that produce more carbon.

But, you need to consider that the poor are the ones that can't afford (or aren't smart enough) to put the initial investment in CFLs, in energy star appliances, in sealing up the gaps in their homes to stop air from escaping, and therefore are running at a greater inefficiency and producing more carbon per dollar than the rich.

There are no more rebates for hybrids because the chairman of the U.S. House committee on energy is beholden in his American labor unions. so who can afford the efficient mini coopers and hybrid lexuses? not the poor. Who can afford to keep their cars in tip top shape to increase MPG, not the poor.

rosenblumd said...

Sorry about the delay, but my last two efforts over the last several hours weren't allowed through. Looks like Red Maryland doesn't like my views.

Steiff,

Now you’re talking politics, rather than misinterpreting the concept. So, you’re arguing that none of us should recommend policy changes since nobody is going to pay attention? Let’s look at political reality for a moment. Congress is going to put a price on carbon, either through a cap-and-trade scheme that will provide windfalls for polluting companies and for the financial companies that are going to make the markets work, or through a carbon tax. A carbon tax is far fairer to the average working person and is a far more effective way to reduce greenhouse gas emissions. So far cap-and-trade has the most support, but I’m betting that when people start to realize who is going to win and who is going to lose under cap-and-trade, they’ll tell their elected officials that they want the fairer carbon tax. And, they’ll tell their elected officials that they only want a carbon tax if it is revenue-neutral. I’m not going to try to come up with six federal taxes that have been totally eliminated. We’re not proposing a tax increase with the carbon tax. We’re proposing a tax shift from current taxes on work to a tax on pollution. Perhaps you’d rather tax work through the payroll tax.

Statwatcher,

We’re proposing that we tax rich and poor alike the same amount per unit of carbon output. Yes, you’re right, the wealthy on average will pay more and the middle-class and poor will pay less. They will all receive the same amount back as the carbon tax revenues are returned, so there will be some redistribution. There is room for honest debate regarding whether the wealthy are under or over taxed compared to the average working person. The fact that there will be some redistribution doesn’t make the revenue-neutral carbon tax just another gas tax and the goal isn’t to punish those who produce more carbon. Right now the costs of emitting carbon are not included in the prices we pay for carbon. Nobody pays to treat the atmosphere as a free dumping ground. But there is a cost to that dumping, a cost we are all paying and will pay due to climate change. That cost should be included in the cost of energy – something that is acknowledged by economists across the political spectrum. A carbon tax simply makes sure that when we use carbon we pay the true cost – the result is that the market place works to encourage economically rational decisions.

There are more and more programs to help the poor and middle-class invest in energy efficiency. A carbon tax will provide a powerful incentive to encourage more such investment. Makes sense to me!

Fair points about automobiles, but don’t forget that a carbon tax will change the economics of buying an efficient car or paying for a tune-up. A carbon tax will provide an incentive for people to buy more efficient cars and Detroit, hopefully, will finally have the good sense to respond to consumer demand. Finally, I can’t help but note that I just read that the hybrid Lexus costs much more than a standard Lexus, but actually gets fewer miles per gallon (primarily because its so heavy). Not a real smart consumer investment.

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