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U.S. groups suggest putting price on carbon

May 27, 2011, Washington, D.C. – The U.S. government's fiscal outlook could be improved by adopting a federal carbon price, according to plans submitted by four Washington, D.C., think tanks.


May 27, 2011
By Argus Media

May 27, 2011, Washington, D.C. – The U.S.
government's fiscal outlook could be improved by adopting a federal carbon
price, according to plans submitted by four Washington, D.C., think tanks. The
Peterson Foundation, a group concerned with the U.S. debt and deficit problems,
commissioned and released a variety of proposals for addressing fiscal
challenges at a conference in Washington, D.C., in late May 2011. Each proposal
varies in details, but four suggested or considered implementing a nationwide
carbon tax or cap-and-trade program to increase federal revenues.

The American Enterprise Institute called
for ending energy subsidies and greenhouse gas regulations in favour of a
$26/tonne carbon tax to be phased in between 2013 and 2017 and then increased
5.6%/year through 2050.

The Roosevelt Institute Campus Network's
plan, which called for a $23/tonne tax on carbon beginning in 2012 that
increases by 5.6%/year, suggested a tax would be more efficient than a
cap-and-trade system because it confers more certainty about the future price
of carbon.

The Center for American Progress proposal
included a $5/barrel tariff on oil imports while pricing carbon in an unspecified
manner. The Center said both policies would raise the equivalent of 0.6% of
U.S. GDP in 2017, rising to 0.8% by 2027 and remaining stable at that level
through 2035, the final year considered in the plan.

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The Economic Policy Institute called for a
carbon tax or cap-and-trade program, with auction revenues dedicated to deficit
reduction.

Two other groups shied away from setting a
carbon price. The Bipartisan Policy Center did not formally recommend a carbon
tax, but said that “a tax of $23/tonne of CO2 emissions in 2018, increasing at
5.8% annually” would result in a 10% cut in carbon emissions by 2025, while
raising $1.1 trillion for deficit reduction. The Center could not reach
consensus on whether to include a carbon price in its recommendations. The only
plan that included no mention of climate change, let alone setting a price for
carbon, was submitted by the conservative Heritage Foundation.

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