Thursday, December 04, 2008

President Obama: Reject Carbon Tax & Accept Allowances

Senator Obama supported cap-and-trade over taxes on carbon dioxide. He also supported auctioning carbon dioxide allowance offsets when in the U.S. Senate. He should maintain support for cap-and-trade and use the Acid Rain Program as the model where initial allowances are allocated to utilities and annual auctions are utilized as an indication of allowance prices. Let the market establish the price of allowances in a cap-and-trade program. AAEA supports the technologically efficient and environmentally friendly production of electricity in America. We support plentiful supplies at reasonable prices. Carbon taxes raise prices and AAEA opposes using price as a tool to force conservation. High prices hurt the economy, the middle class and the poor.

Ralph Nader and some others support carbon taxes on large CO2 generators to raise the trillion dollars per year he estimates is needed in investments to retrofit against global warming. They offer to 'offset' the carbon tax by reducing income taxes. Well we should just reduce taxes anyway and forget about carbon taxes. We will need a public/private combination though that leverages the best of capitalism with some government support [see the AAEA/CECE Energy Defense Reservations Program] in the fight against negative climate change. At the end of the day, it will be purchasing power in the marketplace that makes or breaks America's climate change and global warming mitigation programs.

Acid Rain Program Allowance Auction Fact Sheet

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