We Already Have A Huge Carbon Tax – But Oil And Coal Companies Get The Money

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
We all pay a huge “hidden” tax when we burn oil and coal. Oil companies get the money. This is holding our economy back.
Today when we burn oil or coal we put the toxic waste that results straight into the air. This causes damage to all of us, in many ways. First, of course, the carbon dioxide accumulates and over time causes the planet to get warmer, which causes the climate to change. Then there is the standard air pollution, smog, etc. that we are so familiar with, and the effect this has, especially on our health.
This pollution is a hidden tax on all of us. We don’t make the oil and coal companies pay anything for the consequences of the use of their products. WE pay the price instead of them. They just get the profits. This is called socializing the costs and privatizing the profits. We collectively pay the price of the pollution. They privately get to keep the profits.
This failure to collect the cost of using coal and oil holds our economy back. By collectively paying this pollution price instead of adding it to the price of coal and oil itself, burning coal and oil appears to cost us less than it actually costs us. This makes it appear that other forms of energy are more costly, which discourages investment in these other forms of energy. For example, using solar panels appears to cost more than just getting electricity from the power company. But the power company is burning coal and the public-at-large is directly paying the price for the pollution. This subsidy for coal makes a kilowatt-hour have a lower price on your bill than what solar coasts. This coal and oil subsidy keeps solar power from getting the kind of investment it deserves, which keeps coal and oil on top.
Keeping the price of oil and coal lower than it should be keeps us dependent on oil and coal as our energy source. It keeps us from investing in now, more efficient ways to generate the power we use. It keeps oil and coal companies in charge of the direction of the economy. We should see this for what it is, and see the opposition to a carbon tax for what it is. Enriching an already-wealthy few is not what our public policy is supposed to be about.
So we need to set a “price” for burning carbon – a carbon tax – which makes its use reflect the cost of the damage it does and which we are all therefore paying anyway. Using a tax to add this cost to the price means that investors will find solar, wind, biofuels and other forms of energy production more attractive, and will develop these. And We, the People would get the money for use fighting the effects of burning oil and coal.
Another cost that we are paying is that this oil and coal subsidy is not in effect in the rest of the world. So in other countries investment in energy alternatives is taking off. They are becoming the leaders in the 21st century economy. When the price of oil and coal reflect their true cost the green manufacturing revolution will take off in our own country as well..
In January, Senator Lindsey Graham said,

“Every day that we delay trying to find a price for carbon is a day that China uses to dominate the green economy.”

This is the reason Jimmy Carter tried to wean the country off of oil and coal. We could have gotten started 30 years ago and by now could be well ahead of the rest of the world in green manufacturing. But the big oil and coal companies were able to stop the effort.
This is the reason that Al Gore tried to get a “BTU Tax” in 1991. We could have gotten started 20 years ago and by now could be well ahead of the rest of the world in green manufacturing. But the big oil and coal companies were able to stop the effort.
This is the reason President Obama is trying to get “cap and trade” passed today.
So we haven’t gotten started yet. Senator Graham is right. We need to find a price for carbon — instead of all of us just continuing to subsidize the oil and coal companies. They already have plenty of money.