Carbon tax 84107 224456339 2008-07-08T22:36:00Z Geoff Kohne 7444407 /* Social cost of carbon */ Benefits were not noted. {{globalize/USA}} {{public finance}} A '''carbon tax''' is a [[tax]] on emissions of [[carbon dioxide]] and other [[greenhouse gas]]es. It is an example of a [[ecotax|pollution tax]], which some [[economist]]s favor because they tax a "bad" rather than a "good" (such as income). Taxing something that is undesirable is favoured by economists as a method to confront users with the [[negative externality|external cost]] of carbon and hence reduce emissions to efficient levels. This "carbon tax" is a direct tax on carbon dioxide, which is generated as a byproduct of the combustion of fossil fuels, among other processes. If the carbon tax equals the social cost of carbon, it is an example of a [[Pigovian tax]]. Carbon atoms are present in every fossil fuel (coal, oil and gas) and are released as CO<small><sub>2</sub></small> when they are burnt. In contrast, non-combustion energy sources — wind, sunlight, hydropower, and nuclear — do not convert hydrocarbons to carbon dioxide. Accordingly, a carbon tax is effectively a tax on the use of fossil fuels, and only fossil fuels. Some schemes also include other greenhouse gases; the [[global warming potential]] is an internationally accepted scale of equivalence for other greenhouse gases in units of tonnes of carbon dioxide equivalent. Because of the link with [[global warming]], a carbon tax is sometimes assumed to require an internationally administered scheme. However, that is not intrinsic to the principle. The [[European Union]] considered a carbon tax covering its member states prior to starting its [[emissions trading]] scheme in 2005. The UK has unilaterally introduced a range of [[Energy policy of the United Kingdom|carbon taxes]] and [[Climate Change Levy|levies]] to accompany the [[EU ETS]] trading regime. Note that emissions trading systems do not constitute a [[Pigovian tax]] because it entails the creation of a property right. Nonetheless, both taxes and tradable permits put a price on emissions, and that price is equal to all parties involved. Therefore, emission reduction targets are met at minimum cost. The intention of a carbon tax is [[natural environment|environment]]al: to reduce emissions of carbon dioxide and thereby slow [[global warming| climate change]]. It can be implemented by taxing the burning of fossil fuels — coal, petroleum products such as [[gasoline]] and aviation fuel, and natural gas — in proportion to their carbon content. Unlike other approaches such as [[Emissions trading|carbon cap-and-trade systems]], direct taxation has the benefit of being easily understood and can be popular with the public if the revenue from the tax is returned by reducing other taxes. Alternatively, it may be used to fund environmental projects.<ref> [http://www.carbontax.org/blog/ Rosenblum, Daniel (11/13/2007) "BBC Poll shows growing support for carbon taxes"] </ref> ==Background== In economic theory, pollution is considered a [[negative externality]] because it has a negative effect on a party not directly involved in a transaction. To confront parties with the issue, the economist [[Arthur Pigou]] proposed taxing the goods (in this case fossil fuels) which were the source of the negative externality (carbon dioxide) so as to accurately reflect the cost of the goods' production to society, thereby internalizing the costs associated with the goods' production. A tax on a negative externality is termed a [[Pigovian tax]], and should equal the marginal damage costs. A carbon tax is an [[indirect tax]] — a tax on a transaction — as opposed to a [[direct tax]], which taxes income. As a result, some [[American conservatism|American conservative]]s have supported such a carbon tax because it taxes at a fixed rate, independent of income, which complements their support of a [[flat tax]].<ref name="gop triangulates">Noah, Timothy (Nov. 9, 2006). [http://www.slate.com/id/2153390/nav/tap2/ The GOP Triangulates]. ''Slate''.</ref> Prices of carbon (fossil) fuels are expected to continue increasing as more countries industrialize and add to the demand on fuel supplies. In addition to creating incentives for energy conservation, a carbon tax would put renewable energy sources such as wind, solar and geothermal on a more competitive footing, stimulating their growth. Former Federal Reserve chairman Paul Volcker suggested ([[February 6]], [[2007]]) that "it would be wiser to impose a tax on oil, for example, than to wait for the market to drive up oil prices."<ref>{{cite web | url= http://www.iht.com/articles/ap/2007/02/06/news/FIN-GEN-Egypt-Volcker-Global-Warming.php | title= "Economist Paul Volcker says steps to curb global warming would not devastate an economy" | date= 2007-02-06 | publisher= [[Associated Press]] | accessdate= 2008-04-15 }} </ref> ===Social cost of carbon=== {{main|Economics of global warming}} Many estimates of aggregate net economic costs of damages and benefits from climate change across the globe, the social cost of carbon (SCC), expressed in terms of future net benefits and costs that are discounted to the present, are now available. Peer-reviewed estimates of the SCC for 2005 have an average value of US$43 per tonne of carbon (tC) (i.e., US$12 per tonne of carbon dioxide) but the range around this mean is large. For example, in a survey of 100 estimates, the values ran from US$–10 per tonne of carbon (US$–3 per tonne of carbon dioxide) up to US$350/tC (US$95 per tonne of carbon dioxide.)<ref> [http://www.ipcc.ch/SPM13apr07.pdf 2007 IPCC Summary for Policymakers], based on [http://ideas.repec.org/p/sgc/wpaper/19.html Tol (2005), Energy Policy 33(16):2064–2074]</ref> One must be very careful when comparing weights of carbon versus carbon dioxide, since carbon comprises only 27.29% (12.0107&nbsp;/&nbsp;[12.0107&nbsp;+&nbsp;2&nbsp;×&nbsp;15.9994]) of the mass of carbon dioxide. In simple terms, there are only 27&nbsp;tonnes of carbon in 100&nbsp;tonnes of carbon dioxide. In an October, 2006, report entitled the ''[[Stern Review]]'' by then HM Treasury official and former [[World Bank Chief Economist|Chief Economist]] and Senior Vice-President of the [[World Bank]], [[Nicholas Stern]], he states that climate change could affect [[Economic growth|growth]] which could be cut by one-fifth unless drastic action is taken.<ref>{{cite web|url =http://news.bbc.co.uk/1/hi/business/6096594.stm | title = Report's stark warning on climate | author =Robert Peston| publisher = [[BBC]] | date = 2006-10-29|accessdate=2007-04-17}}</ref> Stern has warned that one percent of global [[GDP]] is required to be invested in order to mitigate the effects of climate change, and that failure to do so could risk a [[recession]] worth up to twenty percent of global [[GDP]].<ref>BBC News ([[30 October]] [[2006]]) [http://news.bbc.co.uk/2/hi/business/6098362.stm "At-a-glance: The Stern Review"]</ref> Stern’s report<ref>{{cite web | url=http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/30_10_06_exec_sum.pdf |title="Stern Review executive summary" | author=Nicholas Stern | date=[[30 October]] [[2006]] |format= [[PDF]] | publisher=[[New Economics Foundation]]}}</ref> suggests that climate change threatens to be the greatest and widest-ranging market failure ever seen. The report has had significant political effects: [[Australia]] reported two days after the report was released that they would allot AU$60 million to projects to help cut greenhouse gas emissions.<ref>News.com.au ([[November 1]] [[2006]]) [http://www.news.com.au/story/0,23599,20682039-421,00.html "$60m to help cut emissions"]</ref> The ''Stern Review'' has been criticized by some economists, saying that Stern did not consider costs past 2200, that he used an incorrect [[discount rate]] in his calculations, and that stopping or significantly slowing climate change will require deep emission cuts everywhere.<ref> {{Citation | first1=Richard S. J. | last1=Tol | author1-link=Richard Tol | first2=Gary W. | last2=Yohe | author2-link=Gary Yohe | title=A Review of the Stern Review | journal=World Economics | volume=7 | number=3 | year=2006 | pages=223-250 | accessdate=2007-04-14 | url=http://www.fnu.zmaw.de/fileadmin/fnu-files/publication/tol/RM551.pdf }}</ref><ref> {{Citation | first1=Ian | last1=Byatt | first2=Ian | last2=Castles | first3=Indur M. | last3=Goklany | first4=David | last4=Henderson | first5=Nigel | last5=Lawson | first6=Ross | last6=McKitrick | first7=Julian | last7=Morris | first8=Alan | last8=Peacock | first9=Colin | last9=Robinson | first10=Robert | last10=Skidelsky | journal=World Economics | volume=7 | number=3 | year=2006 | pages=199-229 | url=http://www.katewerk.com/temp/sda_WE.pdf | title=The Stern Review: A Dual Critique: Part II: Economic Aspects | accessdate=2007-04-14 }}</ref> According to a 2005 report from the Association of British Insurers, limiting carbon emissions could avoid 80% of the projected additional annual cost of tropical cyclones by the 2080s.<ref> Association of British Insurers (June 2005) [http://www.abi.org.uk/Display/File/Child/552/Financial_Risks_of_Climate_Change.pdf "Financial Risks of Climate Change" (PDF)] summary report. </ref> A June&nbsp;2004 report by the Association of British Insurers declared "Climate change is not a remote issue for future generations to deal with. It is, in various forms, here already, impacting on insurers' businesses now."<ref> Association of British Insurers (June&nbsp;2005) [http://www.abi.org.uk/Display/File/364/SP_Climate_Change5.pdf "A Changing Climate for Insurance:] A Summary Report for Chief Executives and Policymakers" (PDF).</ref> It noted that weather risks for UK households and property were already increasing by 2–4% per year due to changing weather, and that claims for storm and flood damages in the UK had doubled to over £6&nbsp;billion over the period 1998–2003, compared to the previous five years. As a result insurance premiums are rising. In the UK the insurance industry normally offers insurance against natural disasters, however there is a risk that in some areas [[flood insurance]] will become unaffordable for some, and it has been mooted that cover may be withdrawn in some areas entirely unless there is government backing.<ref> [http://www.guardian.co.uk/money/2004/jun/23/homeinsurance.business Insurers threaten to drop flood cover] Rupert Jones, ''[[The Guardian]]'', [[23 June]] [[2004]].</ref> In the U.S., according to Choi and Fisher (2003) each 1% increase in annual precipitation could enlarge catastrophe loss by as much as 2.8%.<ref>Choi, O. and Fisher, A. (2003) [http://www.ingentaconnect.com/content/klu/clim/2003/00000058/F0020001/05109227 "The Impacts of Socioeconomic Development and Climate Change on Severe Weather Catastrophe Losses: Mid-Atlantic Region (MAR) and the U.S."] ''Climatic Change'' '''58'''(1–2): 149–170.</ref> Financial institutions, including the world's two largest insurance companies, [[Munich Re]] and [[Swiss Re]], warned in a 2002 study that "the increasing frequency of severe climatic events, coupled with social trends" could cost almost [[U.S. dollar|US$]]150 billion each year in the next decade.<ref>UNEP (2002) [http://www.unepfi.org/fileadmin/documents/CEO_briefing_climate_change_2002_en.pdf "Key findings of UNEP’s Finance Initiatives study" (PDF)] ''CEObriefing''.</ref> These costs would, through increased costs related to insurance and disaster relief, burden customers, taxpayers, and industry alike. ===Border Issues=== Concerns have been raised about [[carbon leakage]] which is the tendency for energy-intensive industries to migrate from nations with a carbon tax to those nations without a carbon tax where some of the receiving nations might be less energy-efficient. A possible antidote is for carbon-taxing countries to levy carbon-equivalent fees on imports from non-taxing nations. There is also the hope that American leadership through carbon-taxing would be reciprocated by other countries with an equal stake in climate protection. ===Petroleum (motor gasoline, diesel, jet fuel)=== Many [[OECD]] countries have taxed fuel directly for many years for some applications; for example, the UK imposes duty directly on vehicle [[Hydrocarbon oil duty|hydrocarbon oils]], including [[petrol]] and [[diesel]] fuel. The duty is adjusted to ensure that the carbon content of different fuels is handled with equivalence.<ref name=berr>{{cite web | url = http://www.berr.gov.uk/files/file20317.pdf| title = Energy – Its Impact on the Environment and Society | section = Table 2A.1 Current rates of hydrocarbon duty | publisher = UK [[Department for Business, Enterprise and Regulatory Reform]]}} </ref> While a direct tax should send a clear signal to the consumer, its use as an efficient mechanism to influence consumers' fuel use has been challenged in some areas:<ref name=oecditf08> {{cite web | publisher = OECD ITF Joint Transport Research Centre | url = http://www.internationaltransportforum.org/jtrc/DiscussionPapers/DP200809.pdf | title = The cost and effectiveness of policies to reduce vehicle emissions | date [[1 February]] 2008 }}</ref> * There may be delays of a decade or more as inefficient vehicles are replaced by newer models and the older models filter through the 'fleet'. * There may be practical political reasons that deter policy makers from imposing a new range of charges on their electorate. * There is some evidence that consumers' decisions on fuel economy are not entirely aligned to the price of fuel. In turn, this can deter manufacturers from producing vehicles that they judge have lower sales potential. Other efforts, such as imposing efficiency standards on manufacturers, or changing the income tax rules on taxable benefits, may be at least as significant. * In many countries fuel is already taxed to influence transport behavior and to raise other public revenues. Historically, they have used these fuel taxes as a source of general revenue, as their experience has been that the [[price elasticity]] of fuel is low, thus increasing fuel taxation has only slightly impacted on their economies. However, in these circumstances the policy behind a carbon tax may be unclear. Some also note that a suitably priced tax on vehicle fuel may also counterbalance the "[[rebound effect]]" that has been observed when vehicle fuel consumption has improved through the imposition of efficiency standards. Rather than reduce their overall consumption of fuel, consumers have been seen to make additional journeys or purchase heavier and more powerful vehicles.<ref name=oecditf07> {{cite web | publisher = OECD ITF Joint Transport Research Centre | url = http://www.internationaltransportforum.org/jtrc/DiscussionPapers/DP200805.pdf | title = Oil dependence : Is transport running out of affordable fuel? | date [[16 November]] 2007 }}</ref> ====Calculation==== {{Original research|date=May 2008}} Some states in the USA are considering the imposition of fuel taxes. One calculation method is as follows: According to the [http://www.eia.doe.gov/oiaf/1605/coefficients.html EIA], emissions total about 20 pounds of CO<small><sub>2</sub></small> per gallon of petroleum (2.4&nbsp;kilograms per litre, 2.4&nbsp;kg/L), so a tax of $100 per ton of CO<small><sub>2</sub></small> ($110 per tonne of CO<small><sub>2</sub></small>) would translate to a tax of about $1.00 per gallon ($0.26 per litre). To be precise: Emissions are 19.564&nbsp;pounds of CO<small><sub>2</sub></small> per gallon of motor gasoline, 22.384&nbsp;pounds of CO<small><sub>2</sub></small> per gallon of diesel fuel, and 21.095 pounds of CO<small><sub>2</sub></small> per gallon of jet fuel (2344.3&nbsp;g&nbsp;CO<small><sub>2</sub></small> per L of motor gasoline, 2682.2&nbsp;g&nbsp;CO<small><sub>2</sub></small> per L of diesel fuel, and 2527.7&nbsp;g&nbsp;CO<small><sub>2</sub></small> per L of jet fuel).<ref name="eia-coefficients">{{cite web | url= http://www.eia.doe.gov/oiaf/1605/coefficients.html | title= Fuel and Energy Source Codes and Emission Coefficients | work= Voluntary Reporting of Greenhouse Gases Program | publisher= [[United States Department of Energy|U.S. Department of Energy]] (DOE), [[Energy Information Administration]] (EIA) | accessdate= 2008-04-15 }} </ref> So a tax of $100 per ton of CO<small><sub>2</sub></small> translates to a tax of $0.978 per gallon of motor gasoline, $1.119 per gallon of diesel fuel, and $1.055 per gallon of jet fuel ($0.258 per litre of motor gasoline, $0.296 per litre of diesel fuel, and $0.279 per litre of jet fuel). At a price between $2.50 and $5.00 per gallon, a tax of $100 per ton of CO<small><sub>2</sub></small> would raise fuel prices by 40–20%. For the purpose of looking at electricity generation, emissions total about 155&nbsp;pounds of CO<small><sub>2</sub></small> per million BTUs (66.6&nbsp;g/MJ), so a tax of $100 per ton of CO<small><sub>2</sub></small> ($110 per tonne of CO<small><sub>2</sub></small>) translates to a tax of about $7.75 per million BTUs ($7.35 per [[gigajoule|GJ]]). To be precise: The emissions are 156.425&nbsp;pounds of CO<small><sub>2</sub></small> per million BTUs from motor gasoline, 161.386&nbsp;pounds of CO<small><sub>2</sub></small> per million BTUs from diesel fuel, and 156.258&nbsp;pounds of CO<small><sub>2</sub></small> per million BTUs from jet fuel (67.2506&nbsp;g of CO<small><sub>2</sub></small> per MJ from motor gasoline, 69.3835&nbsp;g of CO<small><sub>2</sub></small> per MJ from diesel fuel, 67.1788 g of CO<small><sub>2</sub></small> per MJ from jet fuel).<ref name="eia-coefficients"/> So a tax of $100 per ton of CO<small><sub>2</sub></small> translates to a tax of $7.82 per million BTUs of motor gasoline, $8.07 per million BTUs of diesel fuel, and $7.81 per million BTUs of jet fuel ($7.41 per [[gigajoule]] (GJ) from motor gasoline, $7.65 per GJ from diesel fuel, $7.41 per GJ from jet fuel). ===Natural gas=== According to the [http://www.eia.doe.gov/oiaf/1605/coefficients.html EIA], emissions total 120.6 pounds of CO<small><sub>2</sub></small> per thousand cubic feet, i.e., 60.3&nbsp;tons per million cubic feet, so a tax of $100 per ton of CO<small><sub>2</sub></small> translates to a tax of $6.03 per thousand cubic feet of natural gas.<ref name="eia-coefficients"/> At a price of between $4 and $10 per thousand cubic feet, a tax of $100 per ton of CO<small><sub>2</sub></small> would raise natural gas prices by 60–150%. For the purpose of looking at electricity generation: emissions total 117.08&nbsp;pounds of CO<small><sub>2</sub></small> per million BTUs,<ref name="eia-coefficients"/> so a tax of $100 per ton of CO<small><sub>2</sub></small> translates to a tax of $5.854 per million BTUs. ===Coal=== According to the [http://www.eia.doe.gov/oiaf/1605/coefficients.html EIA], emissions per ton of coal range from 1.40&nbsp;tons of CO<small><sub>2</sub></small> to 2.84&nbsp;tons of CO<small><sub>2</sub></small>, depending on the type of coal (1.40 for lignite, 1.86 for subbituminous, 2.47 for bituminous, and 2.84 for anthracite, to be precise),<ref name="eia-coefficients" /> so a tax of $100 per ton of CO<small><sub>2</sub></small> translates to a tax of between $140 and $284 per ton of coal, depending on the type ($140 for lignite, $186 for subbituminous, $247 for bituminous, and $284 for anthracite). The price of coal delivered to electric utilities nationwide averaged $27.34 per ton in 2004;<ref>{{cite web | url= http://tonto.eia.doe.gov/state/state_energy_profiles.cfm?sid=WA | title= Washington Quick Facts | date= 2008-04-10 | work= State Energy Profiles | publisher= [[United States Department of Energy|U.S. Department of Energy]] (DOE), [[Energy Information Administration]] (EIA) | accessdate= 2008-04-15 }} </ref> for that price, a tax of $100 per ton of CO<small><sub>2</sub></small> means a price increase of 500–1,000% depending on the type (512% for lignite, 680% for subbituminous, 903% for bituminous, and 1039% for anthracite). Because of the differences in the carbon content of different types of coal, it is easier to do the calculations in terms of BTUs rather than tons of coal. So: Emissions per million BTUs range from 205 to 227&nbsp;pounds of CO<small><sub>2</sub></small> per million BTUs (215.4 for lignite, 212.7 for subbituminous, 205.3 for bituminous, and 227.4 for anthracite, to be precise),<ref name="eia-coefficients"/> so a tax of $100 per ton of CO<small><sub>2</sub></small> translates to a tax of about $10 per million BTUs, depending on the type of coal ($10.77 for lignite, $10.635 for subbituminous, $10.265 for bituminous, and $11.37 for anthracite). ===Electricity=== The impact of a carbon tax on electricity prices depends on the amount of CO<small><sub>2</sub></small> generated along with the electricity, and that depends on the type of fuel used and the efficiency ("heat rate") of the generator. 3413&nbsp;BTU&nbsp;=&nbsp;1&nbsp;kW·h. In terms of fuel use, note from above that CO<small><sub>2</sub></small> emissions per million BTUs (293&nbsp;kW·h) range from 117.08&nbsp;pounds of CO<small><sub>2</sub></small> for natural gas and about 155 pounds of CO<small><sub>2</sub></small> for petroleum to between 205 and 227&nbsp;pounds of CO<small><sub>2</sub></small> for coal, and that a tax of $100 per ton of CO<small><sub>2</sub></small> therefore translates into a tax per million BTUs that ranges from $5.854 per million BTUs for natural gas and about $7.75 per million BTUs for petroleum to between $10.27 and $11.37 per million BTUs for coal. For comparison purposes: in 2005, fuel prices to electricity generators per million BTU were $7.70 for oil, $8.18 for natural gas, $1.53 for coal, and $0.48 for nuclear.<ref>{{cite web | url= http://www.eia.doe.gov/oiaf/aeo/figure_65.html | title= Annual Energy Outlook 2008 with Projections to 2030 (links) |date= |year= |month= |format= |work= |publisher= EIA | accessdate= 2008-04-15 }} </ref><ref name="eia-electricity">{{cite web | url= http://www.eia.doe.gov/oiaf/aeo/electricity.html | title= Electricity Generation | date= March 2008 | work= Annual Energy Outlook 2008'' (Early Release) | publisher= ''EIA | accessdate= 2008-04-15 }} </ref> Current electricity prices are in the neighborhood of $0.08 per kW·h. Old-style generators have a heat rate in the ballpark of 10,000 BTUs per kW·h.<ref>{{cite web | url= http://www.nwcouncil.org/energy/powerplan/plan/Appendix%20I%20(Generating%20Resources).pdf | title= "Bulk Electricity Generating Technologies" |date= May 2005 |format= [[PDF]] |work= | publisher= Northwest Conservation and Power Council | accessdate= 2008-04-15 }} </ref><ref>{{cite web | url= http://www.econsci.com/euar9801.html | title= "Efficient Heat Rate Benchmarks for Coal-Fired Generating Units" (Draft) | first= B.F. | last= Roberts |coauthors= Lessly Goudarzi | year= 1998 |work= |publisher= Economic Sciences Corporation | accessdate= 2008-04-15 }} </ref> At that heat rate, a tax of $100 per ton of CO<small><sub>2</sub></small> translates into a tax of $0.05854 per kW·h for natural gas, about $0.0775 per kW·h for petroleum, and between $0.1027 and $0.1137 per kW·h for coal. As noted above, current electricity prices are in the neighborhood of $0.08 per kW·h. New-style combined-cycle gas turbines currently (2005) use 6,572 BTUs per kW·h (51.93% efficient), a number that is expected to decline to 6,333 by 2015.<ref name="eia-electricity"/> At these heat rates, a tax of $100 per ton of CO<small><sub>2</sub></small> translates into a tax of $0.0385 per kW·h for natural gas using 2005 technology and a tax of $0.0371 per kW·h for natural gas using 2015 technology and considering only emissions at the generator. New-style combined-cycle coal gasification units currently (2005) use 8,309&nbsp;BTUs per kW·h (41.08% efficient), a number that is expected to decline to 7,200 by 2015.<ref name="eia-electricity"/> At these heat rates, a tax of $100 per ton of CO<small><sub>2</sub></small> translates into a tax of between $0.0853 and $0.0945 per kW·h for coal using 2005 technology and a tax of between $0.0739 and $0.0819 per kW·h for coal using 2015 technology and considering only emissions at the generator. Life cycle emissions from coal power tend to be concentrated at the generator, whereas with gas plants, upstream emissions can be more significant, depending on the source of the gas. ==Implementation== On [[January 1]] [[1991]], [[Sweden]] enacted a carbon tax, placing a tax of 0.25&nbsp;SEK/kg ($100 per ton) on the use of oil, coal, natural gas, liquefied petroleum gas, petrol, and aviation fuel used in domestic travel. Industrial users paid half the rate (between 1993 and 1997, 25% of the rate), and certain high-energy industries such as commercial horticulture, mining, manufacturing and the pulp and paper industry were fully exempted from these new taxes. In 1997 the rate was raised to 0.365&nbsp;SEK/kg ($150 per ton) of CO<small><sub>2</sub></small> released. In 2007, Sweden will raise taxes on carbon emissions.<ref> http://www.colby.edu/personal/t/thtieten/eco-taxation.htm , http://www.thelocal.se/8522/20070917/ </ref> [[Finland]], [[the Netherlands]],<ref name=defranl>{{cite web | title = Greening the tax system in the Netherlands | publisher = UK [[DEFRA]] | url = http://www.defra.gov.uk/ENVIRONMENT/WASTE/thematicstrat/greeningtaxnetherlands.pdf}}</ref> and [[Norway]] also introduced carbon taxes in the 1990s. In [[Italy]], carbon tax was introduced or modified with the article&nbsp;8 of the law [[23 December]] [[1998]], n.&nbsp;448,<ref> Italian carbon tax law 23 december 1998 - http://www.camera.it/parlam/leggi/98448l.htm</ref> according to the conclusions of the Kyoto Conference of 1–11&nbsp;December 1997. The [[United Kingdom]] Treasury imposed the [[Fuel Price Escalator]], an incrementally-increasing [[pollution tax]], on retail petroleum products from 1993. The increases stopped after politically-damaging [[UK fuel protests|fuel protests]] in 1999, at which time tax and duty represented more than 75% of the total pump price. Tax now represents about ⅔ of the pump price.<ref> [http://news.bbc.co.uk/1/hi/business/4672980.stm BBC 2 February 2006, Why UK petrol prices remain high]. </ref> In 2005 [[New Zealand]] proposed a carbon tax, setting an emissions price of NZ$15 per tonne of CO<small><sub>2</sub></small>-equivalent. The planned tax was scheduled to take effect from April 2007, and applied across most economic sectors though with an exemption for [[methane]] emissions from farming and provisions for special exemptions from carbon intensive businesses if they adopted world's-best-practice standards of emissions. After the [[New Zealand general election, 2005|2005 election]], the minor parties supporting the Government opposed the proposed tax, and it was abandoned in December 2005. In 1993, [[President of the United States]] [[Bill Clinton]] proposed a [[BTU tax]] that was never adopted. His [[Vice President of the United States|Vice President]], [[Al Gore]], had strongly backed a carbon tax in his book, ''[[Earth in the Balance]]'', but this became a political liability after the [[US Republican|Republicans]] attacked him as a "dangerous fanatic". In 2000, when Gore ran for President, one commentator labeled Gore's carbon tax proposal a "central planning solution" harking back to "the New Deal politics of [[Al Gore, Sr.|his father]]."<ref name="gop triangulates"/> In April 2005, Paul Anderson, [[CEO]] and Chairman of [[Duke Energy]], called for the introduction of a carbon tax.<ref>{{cite web | url= http://makower.typepad.com/joel_makower/2005/04/climate_change_.html | title= Climate Change: Keeping Up with the Andersons | first= Joel | last= Makower | date= 2005-04-08 | work= Two Steps forward |publisher= | accessdate= 2008-04-15 }} </ref> In January 2007, economist [[Charles Komanoff]] and attorney Dan Rosenblum launched a Carbon Tax Center<ref>{{cite web | url= http://www.carbontax.org | title= Why revenue-neutral carbon taxes are essential, what's happening now, and how you can help | publisher= Carbon Tax Center | accessdate= 2008-04-15 }} </ref> to give voice to Americans who believe that taxing carbon emissions is imperative to reduce global warming. On [[19 February]] [[2008]], the [[Canada|Canadian]] province of [[British Columbia]] announced its intention to implement a $10/tonne carbon tax beginning [[1 July]] [[2008]], making BC the first North American jurisdiction to implement such a tax. The tax will rise by $5 a year until it reaches $30 in 2012. Unlike previous proposals, legislation will keep the pending carbon tax revenue neutral by reducing corporate and income taxes at an equivalent rate.<ref> [http://www.bcbudget.gov.bc.ca/2008/backgrounders/backgrounder_carbon_tax.htm Government of British Columbia, B.C.'s Revenue-neutral Carbon Tax]</ref> In November 2006 voters in [[Boulder, Colorado]] have passed U.S. first-ever municipal "carbon tax", is a tax on electricity consumption (utility bills) that goes to fund programs by the City of Boulder, Colorado to reduce [[greenhouse gas emissions]]. However, because it is a tax on electricity usage instead of on carbon, the tax also applies to carbon free sources of electricity.<ref> [http://www.nytimes.com/2006/11/18/us/18carbon.html City Approves 'Carbon Tax' in Effort to Reduce Gas Emissions]</ref> In May 2008, the [[Bay Area Air Quality Management District]], which covers nine counties in the [[San Francisco Bay Area]], passed a carbon tax of 4.4 cents per ton. <ref>[http://www.latimes.com/news/local/la-me-carbontax22-2008may22,0,7383756.story Bay area passes carbon tax] Los Angeles Times, May 21, 2008</ref> ==See also== * [[Emissions trading]] — An alternative approach to curbing carbon use. * [[Ecotax]] * [[Gasoline tax]] * [[Landfill Tax Credit Scheme]] (LTCS) (in the UK) * [[Polluter pays principle]] * [[Tax horsepower]] * [[Tobin tax]] * [[Carbon pricing]] ==Notes and references== {{reflist}} ==External links== * [http://www.carbontax.org/ Carbon Tax Center] — carbon tax policy, issues, FAQs, updates, blog * [http://www.globalpolicy.org/socecon/glotax/index.htm Global Taxes] — analysis by Global Policy Forum ** [http://www.globalpolicy.org/socecon/glotax/carbon/index.htm Energy Taxes] — analysis by Global Policy Forum * [http://www.rprogress.org/programs/sustainableeconomy/sctm.htm State Carbon Tax Model] - downloadable (spreadsheet) model * [http://www.thomas.gov/cgi-bin/bdquery/z?d110:h.r.02069: Save Our Climate Act 2007] — bill introduced by Rep. Pete Stark (CA-13) * [http://www.carboncapture.us/?page=converter Carbon Tax Conversions Calculator] — for various currencies, fuels, volumes, and carbon units * [http://petitions.pm.gov.uk/carbon-tax/ UK petition to introduce a carbon tax] * [http://www.businessspectator.com.au/bs.nsf/Article/The-great-carbon-debate-8XBYH?OpenDocument Business Spectator -Authoritative piece supporting carbon taxing over carbon trading] *[http://www.cheap-parking.net/flight-carbon-emissions.php Carbon Emission Calculator] *[http://www.aere.org/ Association of Environmental and Resource Economists] (AERE). *[http://www.elsevier.com/wps/find/journaldescription.cws_home/622870/description#description - JEEM: Journal of Environmental Economics and Management] (AERE's official "technical" journal). *[http://reep.oxfordjournals.org/ — REEP: Review of Environmental Economics and Policy] (AERE's official "accessible" journal). *[http://gemini-e3.ordecsys2.com GEMINI-E3 web] is a web application which simulates world climate change policies and their impacts at the world level. {{Global warming}} [[Category:Taxation]] [[Category:Environmental law]] [[Category:Environmental economics]] [[Category:Climate change policies]] [[Category:Low-carbon economy]] [[fr:Taxe carbone]] [[it:Carbon tax]] [[hu:Szénadó]] [[ja:炭素税]]